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SPEAKING FREELY: Europe's Asian Love Misplaced

June 1, 2008

By Andrew Bishop
Asia Times
May 30, 2008

Speaking Freely is an Asia Times Online feature that allows guest
writers to have their say. Please click here if you are interested in
contributing.

Throughout the Cold War, India adopted and refined a strategy of
non-alignment in world politics, thereby trying to free itself from
what its leaders perceived as the dangerous bets of a bipolar era.

After its 1965 war against Pakistan - fought over the yet-to-be
resolved issue of Kashmir - India nevertheless felt the need to find
new allies to nurture its arsenal.

In the context of a growing relationship between the United States,
Pakistan and - after 1972 - China, India turned to the Soviet Union
to fulfill its needs.

Since the end of the Cold War, however, India's leaders have tried to
rediversify their country's economic and political partnerships by
taking a new look at such ancient rivals as China and by making the
best of all opportunities available to them, most notably in the
Indian Ocean where their efforts to promote cooperation have gone as
far as Madagascar.

Wisely, the United States quickly understood how important India -
the world's largest democracy - would one day become in a region
where transnational threats coexist with traditional tensions among
nuclear-armed states.

In 2000, a US president - Bill Clinton - made a formal visit to New
Delhi for the first time in 22 years. This was a groundbreaking step
towards mutual understanding which President George W Bush felt was
important enough to reiterate in 2006.

In fact, with India and Pakistan going to war in 1999 and Pakistan
once again becoming a military regime the same year, the United
States easily built its case for getting closer to New Delhi.

This US decision to find a new grip in South Asia became even more
acute after Bush launched his "global war on terror" in 2001.

Yet another step was taken in the US-Indian relationship in 2005 when
Washington signed onto a civil nuclear cooperation agreement which
allowed US businesses to help India in its civilian nuclear endeavors.

Despite much criticism and a fragile history, this deal is evidence
of the United States' willingness to court India in the early years
of the 21st century.

The recent history of Europe's ties with India, on the contrary,
shows very little enthusiasm for this would-be superpower on the part
of both individual European states and the European Union (EU) as a whole.

India shares extensive trade flows with the United Kingdom, Germany,
and the Benelux countries. In addition, the EU has become India's
first trading partner and investor.

However, relations between the two communities are far from having
reached their potential peak, and neither India nor the EU seems to
be in a hurry to remedy this shortfall.

In fact, it seems Europe has rather become obsessed with China in
recent years, as it seems to bet on this Asian giant's ultimate rise
to a superpower status.

Many in Europe appreciate China's economic complementarity with their
own markets as well as the country's relative openness to foreign
direct investments.

To the contrary, India remains a difficult destination for European
investors to feel at ease.

Only recently has New Delhi renounced most of its socialist economic
principles - some of which still reappear from time to time, with
damaging consequences.

For the most part, in addition, India's undeniable economic dynamism
is privately driven and locally owned, thereby lacking the kind of
state-run incentives offered to outside investors by China's leadership. [1]

This has bumped India to a noticeably lower rank in Europeans'
short-term priorities.

A prime example of this European lack of interest in India can be
found in the Indo-EU Free Trade Agreement (FTA) project which was
first debated in October 2006.

Despite risking that a separate Indian agreement with Japan might
hurt the EU's prime position in New Delhi's trade structure, the
European Commission does not seem to be intent on solving the issues
which brought the FTA scheme to a serious slowdown in early 2008.

Instead, reports have been made that EU Commissioners have now
scrapped 2008 as a deadline for concluding the FTA. [2]

This lackluster process is evidence of Europe's relative indifference
towards its South Asian partner.

Such indifference, however, will sooner rather than later prove to
have been a strategic error. And so will Europe's current obsession with China.

Indeed, while Beijing may seem like a great bet today as its rulers
provide just the amount of infrastructure and legal security needed
to invest in their country, China's long-term political stability
might fail Europeans when they expect it the least.

India, on the other hand, appears to be the country where what you
see is what you get.

While New Delhi has yet to bring broader infrastructure, property
rights and political consensus to its partners, there is little risk
of its efforts suddenly slipping back in the years to come.

In fact, despite some punctual populist measures, all Indian
governments since 1991 have pursued the path of managed
liberalization with quite some success.

So, why the bilateral holdback?

One widespread theory has it that while India is desperately trapped
in a web of "old school" geopolitical dilemmas, its European partner
remains self-obsessed, caring only about its own economic
advancement, and disregarding India's regional woes. [3]

In this context, it is said, Indians find it hard to entrust Europe
with a larger stake in their destiny, especially as they know the
United States has more to offer and can better defend their positions
in the region.

Judiciously, other observers have pointed out that as New Delhi gets
closer to Washington, its leaders will most likely attempt to balance
this rapprochement with increased ties to Brussels, as India remains
much attached to its doctrine of non-alignment. [4]

This will represent a window of opportunity for Europeans to reassess
their bets in Asia.

Already it appears the EU has begun to make its case for adopting
India as a "strategic partner" since the two signed a formal
partnership agreement and a joint action plan in 2005.

Europeans have also proved their relative openness to India by
allowing it to participate in two high-tech endeavors: the next
generation global positioning system Galileo and the International
Thermonuclear Experimental Reactor.

However, few of the Indo-European projects currently underway hold a
significant amount of political relevance.

In order for this to change, it will be necessary for the EU to
undertake a truly political strategy of engagement in South Asia.

Currently, Europe's main strategy in the region has been focused on
promoting either bilateral trade - with China ranking high - or
inter-regional talks, most notably through the limited Asia-Europe
Meeting which was created in 1996.

This sub-optimal strategy will soon look short-sighted unless
Europeans face the need for both a more evenly spread gamble among
Asian nations and a more aggressive defense of India's essential
political significance in the 21st century.

There is no reason why such a new policy could not take root in the
years to come. After all, India was one of the first nations to
recognize the European Economic Community back in the 1960s.

Notes
1 Yasheng Huang and Tarun Khanna, "Can India Overtake China?" Foreign
Policy, July/August 2003.
2 Indronil Roychowdhury, "EU won't push India on FTA." The Financial
Express, March 3, 2008.
3 Rajendra K Jain, "India and the European Union - Building a
Strategic Partnership." In Subrata K. Mitra and Bernd Rill, eds,
India's New Dynamics in Foreign Policy (Munich: Hanns Seidel Stifung,
2006), pp. 83-92.
4 Charles Grant, "India and the EU: Strategic Partners?" CER
Bulletin, issue 46, February/March 2006.

Andrew Bishop is a graduate student of European politics at
Sciences-Po and at the London School of Economics. He is also an
active blogger and commentator on international affairs. Read more of
his work on his blog: WhatYouMustRead http://whatyoumustread.blogspot.com
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