Synopsis
Clearly, China’s economic aggression and now Russia’s military belligerence is forcing the EU to align itself politically closer to the Indo-Pacific, in sync with the Quad approach.
New Delhi: The India-EU understanding to set up an EU-US like Trade and Technology Council (TTC) is a significant strategic move aimed at ensuring that political trust and convergences guide the economic relationship, not the other way round like it happened in the EU‘s case with China – an experience it’s starting to rethink and course correct.
This backdrop to the TTC idea is what makes it politically significant. It was first floated by the EU with the Donald Trump Administration in mid-2020 to lower the chill in ties and find ways to discuss setting standards for new technologies. But ironically, Germany under its EU presidency also moved on a digital dialogue that year with China. So, the idea stayed inactive till it became clear to Brussels after Joe Biden‘s electoral victory that Washington’s stand on China is unlikely to alter much.
Soon enough, the EU began to recalibrate its ties with China, started pulling back on the investment agreement and looked to reinvigorate the EU-US partnership through a more structured TTC. This happened in June 2021 and now the Council has some 10 working groups with the secretary of state and commerce secretary chairing the body at the highest level.
On Monday, the EU sealed a similar arrangement with India. Why? Because Brussels realised a constant political direction needed to resolve economic divergences which have always come in the way of both sides reaching any ambitious India-EU trade arrangement. Even nine months after agreeing to relaunch trade talks following the Porto Summit, the movement had been slow. Also, the EU is a big bureaucracy, just like India, where granular issues hold up progress in the bigger frame.
As the joint press release has stated, the TTC will provide a “political steer” in a rapidly changing geopolitical environment. Clearly, China’s economic aggression and now Russia’s military belligerence is forcing the EU to align itself politically closer to the Indo-Pacific, in sync with the Quad approach.
Unlike the US, where disputes and differences have dominated TTC discussions, India and the EU can also chart out a more positive agenda. But progress on FTA will clearly be the first big test case for TTC, which is likely to have the commerce minister, external affairs minister and the IT minister at the apex layer. The EU too is expected to field two executive vice-presidents, just like with the US.
The TTC with India, incidentally, has come ahead of the one between the EU and Japan, which is still under discussion. The emergence of a TTC-like body from the EU stables also shows that the Russian invasion of Ukraine has turned an essentially regional economic cooperation organisation into a more political entity. The EU will think politics and security first while moving on economic partnership from now on. And that’s where India counts in terms of trust, shared democratic identity and interests.
From an Indian standpoint, the tough political call will be to embrace European standards on the economic side. At some point, as India sits on the high table to discuss and influence technology standards for the future – many of which will be guided by political trust like nuclear technology in the Cold War era – it will have to raise its own profile by adopting improved and comparable benchmarks.
In many ways, the setting up of an India-EU TTC is a recognition of India’s increasing political value in an uncertain global strategic environment but the challenge for India will be to capitalise on this value in economic terms.
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