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Begin New Search Political Geography United States of America Author Daniel Fiott

1. Sovereignty Over Supply? The EU’s ability to manage critical dependences while engaging with the world

Author:
Daniel Fiott and Vassilis Theodosopoulos
Publication Date:
12-2020
Content Type:
Policy Brief
Institution:
European Union Institute for Security Studies
Abstract:
Fears about the EU’s trade, resource and technology dependences have only grown since the outbreak of the pandemic, even though US-China trade disputes and the rolling out of 5G have played a significant role, too. Some analysts have pointed to the beginning of a ‘decoupling’ of certain supply chains away from China, and, while evidence suggests that some ‘reshoring’ has taken place since at least 2011, there are debates about whether the production of certain technologies should be relocated back to Europe after decades of de-industrialisation. Decoupling and/or reshoring are a reaction to geopolitically risky dependences, with the fear being that certain products, technologies or raw materials will be unavailable during times of crisis or that a reliance on third-party supplies will limit political freedom. In the digital age – where data dominates – there are also concerns that dependences may lead among other things to espionage or a curtailment of personal rights and freedoms. Despite the fact that decoupling is unfeasible, save perhaps for in very specific critical technology domains, the threat perception surrounding critical supplies has given rise to a different vocabulary and EU communiques and strategies are today replete with references to ‘technological sovereignty’, ‘open strategic autonomy’ and ‘digital sovereignty’. Yet, in conjunction with this rhetoric has come a raft of new policy initiatives. In February 2020, the European Commission released a bundle of strategies on data, Artificial Intelligence (AI) and the digital future, which stressed the importance of reducing technological dependences in strategic areas. This is why the Commission is to invest €8 billion in supercomputing and help leverage €20 billion per year for AI. In March, a new ‘Industrial Strategy for Europe’ was published that stated that critical raw materials are ‘crucial for markets such as e-mobility, batteries, renewable energies, pharmaceuticals, aerospace, defence and digital applications’. It will be much harder for the EU to develop supercomputers and batteries without secure supplies of raw materials. To this end, on 3 September a ‘Commission Action Plan on Critical Raw Materials’ was released along with an updated List of Critical Raw Materials and a foresight study looking at strategic technologies and dependent sectors over the 2030-2050 horizon. This bundle of initiatives has made the case for the EU to diversify resource supplies, especially in an era of digitalisation that demands increasing amounts of strategic resources found outside of the Union’s territory.
Topic:
Climate Change, Science and Technology, Sovereignty, European Union, Geopolitics, Supply, and Supply Chains
Political Geography:
China, Europe, and United States of America

2. The Poison Pill: EU defence on US terms?

Author:
Daniel Fiott
Publication Date:
06-2019
Content Type:
Policy Brief
Institution:
European Union Institute for Security Studies
Abstract:
It took two letters. One, sent to Brussels on 1 May 2019 by two US undersecretaries, accused the EU of damaging transatlantic cooperation and hindering US access to Europe’s defence market through the rules it plans to set for the participation of third states in the European Defence Fund (EDF) and Permanent Structured Cooperation (PESCO). The other, sent to Washington on 16 May 2019 by senior EU officials of equal standing, refuted these claims by showing the objective and transparent way in which the EU had established the EDF and PESCO. Unlike the letter from Washington, which was laced with robust language and questionable accusations, the EU response argued that, even with the introduction of the two initiatives, the European defence market would remain more open than that of the US. The EU institutions also stated that by creating the EDF and PESCO, the Union was showing its collective determination to reduce European capability duplication and enhance interoperability, while also ensuring the competitiveness of Europe’s defence industry. In essence, the EU pointed out that its security and defence initiatives are designed to contribute to transatlantic burden sharing – something the US has been requesting from European allies for some time. While the US welcomes that the Fund allows for the participation of third states, it objects to the fact that recipients and subcontractors supported by the EDF will not be permitted to transfer sensitive information and/or Intellectual Property Rights (IPRs) outside of the EU.1 Additionally, the US fears that the unanimity principle governing PESCO could ensure that any future US participation in the initiative could be vetoed by a single EU member state. At the core of Washington’s fears is the idea that EDF and PESCO could lock US firms out of the European market. However, the EU has made it clear that the EDF and PESCO will not alter EU defence procurement rules, lead to EU-owned defence capabilities, affect bilateral defence agreements between the US and individual member states and/or harm NATO defence planning targets and processes. Furthermore, given the US’ own long-standing and legitimate protection of its core defence industrial interests, there is a certain irony to its accusations of the EU because the Union has equally legitimate security interests. Following the exchange of letters between the partners, a number of questions have surfaced. First, despite a sustained campaign of influencing the EU to adopt favourable conditions for the US,2 why has Washington raised tensions with the Union now? Second, given that €13 billion has been earmarked under the EDF, and its own defence budget stood at $650 billion in 2018, why is the US so concerned? With a view to answering these questions, this Brief begins with an analysis of US government data that shows the asymmetry between US and EU defence markets. It then moves on to a discussion about a web of regulations and laws which effectively provides the US government with the discretionary power to control its defence market and technologies. The Brief ends with some reflections on why the US has decided to formally raise objections about the EDF and PESCO now and the deeper reasons underlying American concerns.
Topic:
European Union, Transatlantic Relations, and Defense Industry
Political Geography:
Europe and United States of America