The covid-19 pandemic, the global shortage of semiconductors, and the recent rise in energy prices all show how interconnected and vulnerable international trade has become. Germany has benefited hugely from this form of globalisation. However, in a world in which industrial end products often contain components from hundreds of suppliers on different continents, a problem at a single point in the global supply network – be it caused by technical difficulties, human error, or simple sabotage – can have grave consequences.
The arteries that carry goods, finance, and data around the world, as well as technical standards and norms, have long been hotspots for geo-economic rivalry and the exercise of political influence. China is ready for this kind of world, thanks to its large-scale investment in transport projects in Asia and Africa, and its acquisition of transport infrastructure in Europe, as part of the Belt and Road Initiative (BRI).
The Trump administration was not the first government to resort to trade policy, sanctions, and punitive tariffs as a means of geo-economic confrontation. It did, however, take trade wars to a new level with not just China but also its close partners and allies. China reacted by re-emphasising the domestic market in its economic policy; it is now following a “dual circulation” strategy that aims to strengthen the country’s resilience in the face of geo-economic risks.
As the effects of the rivalry between the US and China make clear, an intelligent connectivity policy is key to strengthening the European Union’s geostrategic competitiveness, sovereignty, and capacity to act. Economic considerations are by no means all that is at stake. At its heart, this is about defending our values, working to improve sustainability, and fighting climate change worldwide. And just as important as physical infrastructure, if not more so, are norms and technical standards in areas such as mobile networks, internet connections, container dimensions, and rail track gauges. The EU will need to set these norms and standards if it wants its companies to be competitive worldwide and imported goods to be safe and in line with European values related to environmental sustainability and human rights in the manufacturing process.
The EU’s Global Gateway
In her State of the Union address in September 2021, European Commission President Ursula von der Leyen announced the Global Gateway as a counterweight to the BRI. The European Commission unveiled its plans for the initiative on 1 December 2021, foreseeing the mobilisation of up to €300 billion by 2027. The initiative builds on several important steps the union has taken in recent years. For example, with its 2018 strategy on Connecting Europe and Asia, the EU demonstrated its readiness to cooperate with other regions to promote comprehensive, sustainable, and rules-based connectivity. Partly thanks to Germany’s efforts, the EU has expanded this regional strategy into a global policy attuned to the opportunities and challenges of connectivity. But the bloc still has more work to do to move towards smart, green, and sustainable connectivity within Europe and beyond. As well as a global outlook, we need cooperation and financing opportunities that are attractive to our partners and that strengthen Europe’s sovereignty.
To support this effort, the EU should signal that the smart, green, and sustainable connectivity it advocates will not only strengthen economic ties but also enhance peace and stability worldwide, as well as contribute to efforts to address climate change. All these factors are key to creating a strategic environment that benefits Europe.
How to implement the Global Gateway
The following core principles should guide the development and implementation of Europe’s global connectivity strategy and the projects it selects and supports in this context.
Connectivity as partnership
Due to its dependence on trade, the EU has an inherent interest in open, inexpensive, and efficient connectivity. Such connectivity is only sustainable when investment projects and cooperation agreements are designed in a spirit of partnership and serve the interests of all parties.
The EU should apply its rules for internal infrastructure funding and its covid-19 recovery programme to global connectivity projects. These rules – which cover areas such as transparency in public contracting, equal opportunities, the fight against corruption, and human rights – could help the union create a model to counter the BRI in close cooperation with like-minded partners, such as members of the G7. In some countries, BRI investment has been significantly lower than expected; in others, it has left governments with heavy debts and has excluded domestic businesses from important markets.
Indeed, many parts of the world still require large-scale investment in connectivity routes and hubs such as roads, rail lines, and ports. In this, the EU should implement equitable connectivity projects that account for the priorities of its partners. Such projects would help these partners access global markets for goods and services, improve mobility, and boost economic activity. To sustain a spirit of partnership, the EU should combine traditional infrastructure policy with support for innovative technologies.
Connectivity as an opportunity
Smart, green, and sustainable connectivity is central to protecting the climate and reducing greenhouse gas emissions, particularly in transport and logistics, energy production and supply, urban planning, and infrastructure. The EU is already engaged in significant efforts in these areas, not least as part of its regional policy. Germany, too, is helping a range of countries fight the effects of climate change through projects such as its Water Initiative in Central Asia and Green Central Asia, which have provided around €40m in funding for cooperative water management, biodiversity, and sustainable agriculture in the region since 2008. The EU and Germany are working at the international level to develop climate-neutral energy generation, as well as to build up infrastructure that can bring green energy to consumers. This requires strategies and structures that involve local businesses, private capital, and development banks.
If the EU aligns its connectivity initiatives with the principles of the Green Recovery, it will expand the reach of its ambitious climate policy far beyond its own borders. This could be especially beneficial in developing countries, where flagship projects could show how economic growth need not lead to an increase in harmful emissions.
Connectivity as European sovereignty
As discussed, the EU will only preserve its influence if it retains the ability to shape the technical norms and product standards that are essential to the global interoperability of systems in areas such as mobile communications and integrated logistics chains. Other actors – including China – have announced their aim to set these norms and standards. A sovereign Europe cannot allow itself to be sidelined in this area.
Sovereignty does not mean the ability to do everything alone. Rather, it means the capacity to achieve political aims alongside like-minded partners. That, in turn, involves support for these partners as they modernise their infrastructure. To harness the potential of the young, innovative populations in Africa and Asia, the EU should generate creative ideas for web-based education and promote access to fast and free data flows, which enable participation in the global digital economy. This will require improvements to digital infrastructure such as mobile networks, satellite communications, and server capacity. However, it also demands an attractive proposal for regulatory connectivity – a set of norms that govern the protection of personal information and the transmission and storage of large volumes of data.
Thanks to the size of its internal market, the EU has been able to set benchmarks and show leadership in the area. In the competition to develop the best connectivity strategies in the twenty-first century, the union benefits from the influence that it wields as a major regulatory power as much as it does from the amount of funding it deploys for the expansion of physical infrastructure.
Given the enormous global significance of the issue, Germany is now pushing for smart, green, and sustainable connectivity within other international institutions, too. These include the Organisation for Security and Co-operation in Europe, which made connectivity a priority for the first time under Germany’s chairmanship, in 2016. The effort also involves German and European policy in the Indo-Pacific and south-east Asia. Germany put the issue of maritime business and connectivity on the agenda in 2017 with a regional ambassadors’ conference in Sri Lanka.
The ability to maintain a competitive position in this field will depend not just on how many kilometres of road are constructed or gigawatt-hours of electricity generated. It will also depend on the vision behind these investments, on the norms and standards with which they are aligned, and on the political ambition with which they are made.
Miguel Berger is a state secretary in the German ministry of foreign affairs.
The European Council on Foreign Relations does not take collective positions. ECFR publications only represent the views of their individual authors.