Unpacking EU Policy-Making towards China: How Member States, Bureaucracies, and Institutions Shape its China Economic Policy [1st ed.] 9789811593666, 9789811593673

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PALGRAVE STUDIES IN ASIA-PACIFIC POLITICAL ECONOMY

Unpacking EU Policy-Making towards China How Member States, Bureaucracies, and Institutions Shape its China Economic Policy Bas Hooijmaaijers

Palgrave Studies in Asia-Pacific Political Economy

Series Editor Jean-Marc F. Blanchard Mr. & Mrs. S.H. Wong Center for the Study of Multinational Corporations Los Gatos, CA, USA

The series aims to publish works, which will be meaningful to academics, businesspeople, and policymakers and broaden or deepen their knowledge about contemporary events or significant trends, or enable them to think in new ways about the interaction of politics and economics in the APR. Possible candidates for the series include topics relating to foreign direct investment, bilateral investment treaties, multinational corporations, regional economic institutions, technology policy, economic globalization, corporate social responsibility, economic development strategies, and labor movements.

More information about this series at http://www.palgrave.com/gp/series/15638

Bas Hooijmaaijers

Unpacking EU Policy-Making towards China How Member States, Bureaucracies, and Institutions Shape its China Economic Policy

Bas Hooijmaaijers School of Advanced International and Area Studies East China Normal University Shanghai, China Leuven International and European Studies Institute KU Leuven Leuven, Belgium

Palgrave Studies in Asia-Pacific Political Economy ISBN 978-981-15-9366-6 ISBN 978-981-15-9367-3 (eBook) https://doi.org/10.1007/978-981-15-9367-3 © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2021 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. Cover credit: owngarden This Palgrave Macmillan imprint is published by the registered company Springer Nature Singapore Pte Ltd. The registered company address is: 152 Beach Road, #21-01/04 Gateway East, Singapore 189721, Singapore

To Liu Fang, for her support and endless patience.

Foreword

China’s economic comeback story is one of the most dramatic events of the last four decades. After representing more than 30 per cent of global gross domestic product (GDP) in the centuries up to 1820, China hit only five per cent in 1975; now, after 40 years of its opening-up, China’s economy stands at 15 per cent of global GDP. I first came to China in 1982, and have witnessed the many ups and downs of this continent-sized country, living in both Beijing and Shanghai for more than 30 years. Serving as the president of the European Union (EU) Chamber of Commerce in China for seven years provided me a ringside seat from which to observe not only China’s challenges, but also the successes it has enjoyed, since acceding to the World Trade Organization in 2001. While OECD countries’ economies were badly impacted by the global financial crisis in 2008, China’s took off in spectacular fashion. This created new opportunities and benefits for Europe, but it has also brought critical new challenges. These challenges include the impact of Chinese industrial overcapacity, dumping and subsidies on the EU market, but also the emergence of state-controlled Chinese companies in third markets. Meanwhile, China’s domestic market still does not offer reciprocity to European firms. It was against the backdrop of these issues that I met Dr Bas Hooijmaaijers for the first time in Beijing in June 2017, to discuss the EU-China solar panel dispute, the EU’s trade defence investigation into mobile telecommunications networks from China and the challenges for the SinoEuropean trade and investment relationship more generally. His research

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led to the publication of his insightful book Unpacking EU policy-making towards China. The EU has long been considering how to effectively respond to the challenge of China’s massive footprint across diverse sectors and locations. The analytical framework developed in this book helps to contribute to a better understanding of this challenge and uncovers which tools best illuminate the EU’s policy-making at various stages of the policy process. The three case studies on the dispute over Chinese solar panels, the investigation into Huawei’s telecommunication networks, and China’s rise in Africa and the subsequent response of the EU, shed light on the evolving nature of Sino-European trade relations, the internal workings of EU trade defence policy, and, more generally, the current challenges to globalisation and the international trading order. Although this book aims to reach a broader audience, it is also very much a treasure trove for academics, business people and policy-makers. It will help businesses carry out more effective risk and business environment assessments, facilitate business plans and develop government and public relations strategies. I wish this book had been published many years ago, and I hope that it will be as thought-provoking to other readers as it was for me. Beijing, China summer 2020

Jörg Wuttke President of the European Union Chamber of Commerce in China

Acknowledgments

I am writing these acknowledgments as we are experiencing unprecedented times with the impact of COVID-19 being felt across the world. However, every disadvantage has its advantage, and I was able to use the time that I had to stay at home in the Netherlands to finalize this book project. This book is the result of a long and exciting research journey that allowed me to broaden my view to discover many different facets of the rapidly changing global order. During this journey, which started in fall 2013 at Shanghai Jiao Tong University (SJTU) as a Ph.D. candidate, and was further strengthened and improved during my time at East China Normal University (ECNU), I encountered a variety of different individuals and institutions in both Europe and China, and I am deeply grateful for their support. To start with, I would like to thank my former Ph.D. supervisor, colleague, friend, and editor of this book series Professor Jean-Marc F. Blanchard, for his guidance and support. He deserves my warmest thanks. This book would not have reached this high level of quality without his intellectual input. I would like to express my appreciation to ECNU’s School of Advanced International and Area Studies, particularly Dean Liu Jun, and the Fundamental Research Funds for the Central Universities [grant number 2017ECNU-HLYT019] for their financial support to conduct and improve this research. I am also thankful to Professor Stephan Keukeleire, my former boss, and master thesis supervisor at KU Leuven, for his feedback throughout the Ph.D. process, including as an

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external reviewer, and the process of writing this book. I also would like to express my appreciation to the other two external reviewers of my Ph.D. dissertation, Professor Men Jing (College of Europe, Bruges, Belgium), and Professor Sebastian Bersick (Ruhr-Universität Bochum, Germany) for their feedback and suggestions. I would like to thank the Chinese Professors that participated in the various review rounds of the Ph.D. process: Professor Zhong Yang, Professor Zhang Junhua, Professor Lin Gang, Li Mingming (all from SJTU), Professor Liu Hongsong (Shanghai International Studies University), and Professor Chen Zhimin (Fudan University). I am also grateful to Dr. Sven Grimm and Dr. Anna Stahl for their invaluable comments on the EU-China-Africa trilateral cooperation case. I, too, would like to thank the KU Leuven for providing the opportunity to stay affiliated with them as a research fellow. This allowed me to benefit from their infrastructure, and this was and is very much appreciated. The research project has benefitted from interviews carried out in Europe and China. Each of the more than 100 interviews, consultations, and conversations with European, Chinese, and African officials and experts has contributed to connecting the pieces of the research puzzle. Writing this book would not have been possible without their invaluable insights. Many of the interviewees concerned cannot be named in person for anonymity reasons, but they know who they are, and I am incredibly grateful for their input. This work also benefited from a stay at University College Cork in the ERASMUS Plus training exchange framework in June 2019. I would like to thank Dr. Niall Duggan and Dr. Andrew Cottey for making this stay possible. Parts of this work were presented during the 30th Association of Chinese Political Studies Annual Meeting and International Symposium in Tianjin June 2017, the 59th Annual Convention of the International Studies Association in San Francisco in April 2018, the Europe-Africa-China Cooperation in the New Era: Opportunities and Challenges conference held in Shanghai in July 2019, and the Development Cooperation in a post BAPA+40 world Workshop hosted by Fudan University in October 2019. I would like to take the opportunity to thank the organizers and the participants of these events for their feedback. I am extremely thankful to Jörg Wuttke, President of the European Union Chamber of Commerce in China and EU Chamber staff Carl Hayward, Jacob Gunter, and Rachel Rapaport, for providing the foreword to this book. I would also like to thank my friends Caroline Hielegems, Willem-Pieter de Groen, Yf Reykers, Gert-Jan Put, Jef Smulders, Irina

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Petrova, Atena Feraru, and Javier Luque for sharing this book journey with me. I have saved my most fundamental debts for last. Without the affection and understanding of my family, I could not have written this book. Special thanks are due to my parents and my godparents Jeanne and Nico for believing in me and giving me the confidence to pursue my interests. I would also like to thank my wife, Liu Fang, for her continuous support and endless patience. Last but not least, I am grateful to the editors at Palgrave Macmillan— Jacob Dreyer, Balaji Varadharaju, Ashwini Elango, Shukkanthy Siva, and Aurelia Heumader—for their assistance in transforming the manuscript into this book, as well as to the anonymous reviewer for his/her feedback. For any errors or inadequacies that may remain in this book, the responsibility is entirely my own. Shanghai August 2020

Bas Hooijmaaijers

Praise for Unpacking EU Policy-Making towards China

“Unpacking EU Policy-Making towards China is a must-read for those wanting a richer understanding of the forces driving EU economic policy. Featuring in-depth analyses of EU disputes with China in areas like solar panels and telecommunications, this book reveals what analytical tools best illuminate EU policy-making at various stages of the policy process. It is invaluable to academics, businesspeople, and decision-makers interested in the EU and EU-China relations specifically, and foreign economic policy generally.” —Jean-Marc F. Blanchard, Ph.D., Founding Executive Director, Mr. & Mrs. S.H. Wong Center for the Study of Multinational Corporations “This book makes an innovative contribution to the theoretical and comparative analysis of the EU’s foreign policy towards China, as it evaluates the explanatory value of three theories in three stages of the policy cycle based on three case studies. The analytical framework developed by Bas Hooijmaaijers will be very valuable for other scholars specialized in EU-China relations, EU foreign policy, and trade policy.” —Prof. Stephan Keukeleire, LINES Institute, KU Leuven, Belgium “In view of the geopolitical turn in international affairs, and its impact on the EU’s international role, a thorough understanding of the factors that condition EU foreign policy-making is pivotal. “The challenge that China

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presents to the EU both internally and externally,” as Bas Hooijmaaijers rightly frames it, asks for innovative research. His book provides new analysis to better understand the EU’s China policy-making, as well as its limitations and should become essential reading for scholars, students, and practitioners of EU-China relations.” —Prof. Dr. Sebastian Bersick, Jean Monnet Chair, Ruhr University Bochum, Germany “This book offers an in-depth analysis on how different actors in the EU work together to shape its China policy. In particular, the three case studies give insights on the EU’s foreign policy making towards China and make the book a good read.” —Prof. Jing Men, Ph.D, Baillet Latour Chair of EU-China Relations and Director of EU-China Research Centre in the Department of EU International Relations and Diplomacy Studies, College of Europe, Bruges, Belgium

Contents

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Introduction Scope, Rationale, and Relevance of the Book An Introduction to EU–China Relations and the EU’s China Policy The Scholarly Literature on EU-China Relations and Its Limits Theoretically-Oriented Explanations of EU Foreign Policy-Making and Their Limits Research Design, Methodology, and Case Selection Findings Outline References Literature Review and Theoretical Framework The Bureaucratic Politics Model Limitations of the Bureaucratic Politics Model BPM Hypotheses for Each Stage of the Policy-Making Process Issue Identification Decision-Making Policy Implementation Neorealism Limitations of Neorealism

1 1 4 12 13 14 18 20 22 29 29 31 32 32 33 33 34 36

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Neorealism Hypotheses for Each Stage of the Policy-Making Process Issue Identification Decision-Making Policy Implementation Institutionalism Limitations of Institutionalism Institutionalism Hypotheses for Each Stage of the Policy-Making Process Issue Identification Decision-Making Policy Implementation A Summary of the Models and Their Hypotheses Conceptualization and Operationalization of the Policy-Making Process Concluding Remarks References 3

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The EU-China Solar Panel Dispute Background to the Solar Panel Case The European Solar Market: From Boom to Bust Trade Commissioner Vows to Take a Tougher Stance on China The Option Case Issue Identification: Solar Manufacturers up Against Something not Market-Driven Decision-Making: Politics Plain and Simple? Policy Implementation: An Uphill Battle from the Beginning? Conclusion Annex: Specification of the Solar Duties References The EU Investigation into Mobile Telecommunications Networks from China Background: Ex Officio Competences, and the Option Case Issue Identification: Concerns that the Chinese Firms Would Destroy the EU Market

37 37 37 37 38 40 41 41 42 42 42 44 46 46 51 51 51 52 52 53 56 71 78 80 82

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Decision-Making: Bargaining to Get a Good Outcome for Europe Policy Implementation: A Floundering Settlement Conclusion References

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The Rise of China in Africa and the Response of the EU: The EU-China-Africa Trilateral Dialogue and Cooperation Initiative Background to the EU-China-Africa Case The Rise of China in Africa The Traditional Primacy of Europe in Africa The EU’s Initially Muted Response Issue Identification: China’s Increasing Presence Decision-Making: Seeking Engagement with China Policy Implementation: A Bridge Too Far? Conclusion Annex: Overview European Dialogues with China on Africa References

117 118 118 120 121 123 127 138 143 144 147

Conclusion Evaluating the Competing Models Theoretical Implications The Business and Policy Value of the Analytical and Empirical Findings Limitations of This Study Venues for Further Research Closing Remarks References

Index

153 155 162 163 168 170 171 172 175

Abbreviations

ACP AFASE ASEM AU BBC BDI BPM BRI BRICS CAI CARI CCP CCSA CEEC CFSP COAFR COASI COFDI DAC DG DG DEV DG DEVCO DG RELEX DG TRADE ECFR

African, Caribbean and Pacific Group Alliance for Affordable Solar Energy Asia-Europe Meeting African Union British Broadcasting Corporation Bundesverband der Deutschen Industrie Bureaucratic Politics Model Belt and Road Initiative Brazil, Russia, India, China, and South Africa Comprehensive Agreement on Investments China Africa Research Initiative Common Commercial Policy China Communication Standards Association Central and Eastern European Countries Common Foreign and Security Policy Council Working Group for Africa Council Working Group for Asia Chinese Outward Foreign Direct Investment Development Assistance Committee Directorate-General Directorate-General for Development Directorate-General for International Cooperation and Development Directorate-General for the External Relations Directorate-General for Trade European Council on Foreign Relations xix

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ECJ EEAS EP EU EUFP FDI FOCAC GDP HR HR/VP IMF IR JAES LT MDG MEP MES MIP NATO NGO ODA OECD PCA PRC SAIS TCA TDI TEU TFEU UK UN US WTO

European Court of Justice European External Action Service European Parliament European Union European Union Foreign Policy Foreign Direct Investment Forum on China-Africa Cooperation Gross Domestic Product High Representative High Representative of the Union for Foreign Affairs and Security Policy/Vice-President of the European Commission International Monetary Fund International Relations Joint Africa-EU Strategy Treaty of Lisbon Millennium Development Goals Member of the European Parliament Market Economy Status Minimum Import Price North Atlantic Treaty Organization Non-Governmental Organization Official Development Assistance Organisation for Economic Co-operation and Development Partnership and Cooperation Agreements People’s Republic of China School of Advanced International Studies Trade and Cooperation Agreement Trade Defense Instruments Treaty on the European Union Treaty on the Functioning of the European Union United Kingdom United Nations United States World Trade Organization

List of Graphs

Graph 5.1 Graph 5.2

China-Africa trade, 1992–2018 (in billion USD) Chinese FDI Flow to African Countries, 2003–2018 (in billion USD)

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List of Tables

Table 2.1 Table 2.2 Table 3.1 Table 3.2 Table 3.3 Table 4.1 Table 4.2 Table 4.3 Table 5.1

Overview of the generic hypotheses Theories from the “stages approach” within public policy Chronology of the issue identification stage in the EU-China solar dispute Chronology of the decision-making stage in the EU-China solar dispute Chronology of the implementation of the solar measures Chronology of the issue identification stage in the EU-China telecoms case Chronology of the decision-making in the EU-China telecoms case Chronology of the implementation of the EU-China settlement on telecoms Political and institutional dialogues of the EU and the big three with China on Africa (by mid-2020)

43 44 54 57 72 91 95 107 145

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CHAPTER 1

Introduction

Scope, Rationale, and Relevance of the Book This book is about unpacking European Union (EU) policy-making toward the People’s Republic of China (PRC/China). It illuminates how member states, bureaucracies, and institutions shape the EU’s China economic policy. China’s rise and economic comeback story are among the most dramatic developments of the last decades, and present a challenge to the EU both internally and externally. When observing the EU’s China policy, one is often confronted with puzzling observations. They include, among others, the following questions. The EU stands firm against unfair trade practices and uses trade defense instruments (TDIs) to uphold its commitment to open markets and free trade. Why were some EU member states simultaneously sidelining the EU by engaging in parallel discussions with China regarding the dumping of Chinese solar panels on the EU market? If an EU industry was aware of unfair trade practices, for instance, by the Chinese side in telecommunication networks, why did the industry not lodge a formal complaint to the European Commission? Moreover, why are the member states that were aware of these practices influential in the decision-making stage but not in the issue identification stage of the policy process? When the European Commission’s Directorate-General (DG) concerned with development issues (DG DEV) was developing a strategy to deal with China’s rise in © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2021 B. Hooijmaaijers, Unpacking EU Policy-Making towards China, Palgrave Studies in Asia-Pacific Political Economy, https://doi.org/10.1007/978-981-15-9367-3_1

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Africa, why was there internal resistance from the Commission’s former DG involving external relations (DG RELEX)? Furthermore, why have no concrete EU-China-Africa trilateral development projects seen the light since the launch of the initiative in 2008? This book offers insights that contribute to a better understanding of these puzzles. Although the number of academic publications on EU–China relations is booming, there is a specific and general inability of contemporary literature to explain the above’s puzzles. Academic work on EU foreign policy (EUFP) toward China is heavily policy-driven, with very few works using theory. This indicates a lacuna in the current literature and current academic approaches regarding EU foreign policy-making vis-à-vis China because even fewer academic works seek to test theoretical approaches thoroughly (Bersick 2015). However, multiple international relations (IR) theories have the potential to illuminate EUFP vis-à-vis China and to explain (part of) these puzzles, including the bureaucratic politics model (BPM), neorealism, and institutionalism. The BPM emphasizes internal bargaining within an entity; neorealism stresses that state interests dominate; institutionalism highlights the importance of competences, and EU law and procedures, which is of particular importance in an EU context with different procedures per issue area.1 These theories assume universal applicability, which is problematic in two ways. First, these theories do not apply equally well to all issue areas. Second, these theories do not illuminate all stages of the policy-making process, even when we focus on one issue area; that is, economics. When scholars use theory, there is a failure to unpack the policy cycle. The universal applicability of theories is a problematic assumption. Indeed, the contemporary literature’s inability is that those works that use theory do not test them thoroughly because they do not focus on the various stages of the policy cycle and do not add scope conditions. Case studies on the EU and China, as well as studies more generally, often do not focus on the policy cycle, including issue identification, decision-making, and policy implementation.2 A more in-depth look into the policy cycle stages provides us with an analytical tool to gain more specific knowledge to explain the EU foreign policy-making process and add scope conditions. Scope conditions are universal statements that define the circumstances in which a theory is applicable (Cohen 1989: 83). As pointed out by Foschi (1997), they limit the applicability of the relationship proposed in a hypothesis. Scope conditions constitute the antecedent clause of a conditional statement. If a situation does not meet this, then nothing is being said about

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that relationship. A scope condition specifies what we can and cannot see as evidence relevant to the formulated hypothesis by limiting the claim a statement makes. Given the limits of the existing literature, there is a need to explore EU foreign policy drivers vis-à-vis the PRC anew. The issue I argue in this manuscript is not that these existing theories are wrong or lack potential, but that there is an inadequate appreciation of the fact they do not apply equally well to all domains. As discussed in the previous paragraph, there is a need to identify the range of applicability of these theories. When do they work and when do they not work? I show this by examining three distinct stages of the policy cycle in three political-economic cases. My three cases are the EU-China solar panel dispute, the EU investigation into mobile telecommunication networks from China, and the EU’s response to China’s rise in Africa where I look at the European Commission initiated EU-China-Africa trilateral cooperation initiative. These three cases are hot topics in EUChina relations, but they also have an apparent political-economic angle. I argue that neorealism works best to understand the decision-making stage in the solar and telecommunications trade defense cases, and it was visible in the background of the decision-making stage of the EU-ChinaAfrica case. Institutionalism illuminates virtually every stage of every issue area in EU foreign policy-making. The BPM, for instance, fits the stage of policy implementation. However, this is predominantly correct when there is more leeway. When key (bureaucratic) actors leave, then policy implementation will reflect this. Two main contributions make this project distinctive. The first one is my findings of theory scope conditions. The second is my empirical work because I am studying insufficiently studied cases and using more and better evidence to evaluate existing arguments and cull out these scope conditions. In more scientific terms, cutting the dependent variable into policy stages allows us to see if the independent variables highlighted by various analytical approaches are equally powerful through all policy process stages. These findings can provide useful analytical lenses for those studying EUFP toward other countries, regions, and issues. The policy relevance lies in predicting what might happen in EU foreign policy-making and understanding which actors and factors are most influential in the three distinct stages of the policy process. Readers will get more clarity about how policy stages affect EU identification of issues, policy selection, and implementation. Given the peculiar institutional framework of the EU, this is highly important. It is all about

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competences. Also, all three cases are part of a more significant challenge for the EU, which is how to deal with emerging powers in general and China in particular (see also Hooijmaaijers 2015, 2018, 2019; Keukeleire and Hooijmaaijers 2014; Hooijmaaijers and Keukeleire 2020). The first two cases enlighten the readers on the internal workings of EU trade defense policy, the evolving nature of Sino-European trade relations, and, more generally, the current challenges to globalization and the international trading order. The EU-China-Africa case illuminates the EU’s internal workings against the backdrop of a new party with its view on development with a focus on trade, investment, and infrastructure entering the African stage. This chapter will continue as follows. The next section provides an introduction to EU–China relations and the EU’s China policy, which serves as a background for a better understanding of their relations. A section that focuses on the limitations of current academic approaches to EU-China relations will follow this. The subsequent section discusses several potential theoretical candidates for analyzing EU foreign policymaking. After that, I will set out the research design, methodology, and case selection, followed by this manuscript’s main findings and the theoretical and policy implications of these findings. This introduction chapter ends with an outline of the entire manuscript.

An Introduction to EU–China Relations and the EU’s China Policy Over the past decades, EU-China relations have developed rapidly. There are various stages in the relationship, including the period of no diplomatic relations from the late 1940s until 1974, the period of mutual disregard (1975–1994), the period of mutual attraction (1995–2002), and the subsequent honeymoon period (2003–2004/2005), followed by a period of reflection and adjustment that started in 2005. Equally important is the move of the Commission and the High Representative of the Union for Foreign Affairs and Security Policy/Vice-President of the European Commission (HR/VP) in 2019. Against the backdrop of China’s growing economic power and political influence, they reviewed the EU-China relations and the related opportunities and challenges and called for a more realistic approach. In their Joint Communication, the EU side mentioned that “China is simultaneously a cooperation partner with whom the EU has closely aligned objectives, a negotiating partner,

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with whom the EU needs to find a balance of interests, an economic competitor in pursuit of technological leadership, and a systemic rival promoting alternative models of governance” (European Commission 2019).3 It is, however, important to emphasize that the systemic rival label is not official. The EU has and continues to designate the PRC as a strategic partner. The Commission called it something else but did not change the EU’s formal position. Still, the EU is in the nascent stages of a new debate about China. The Commission paper labeling China as a systemic rival reflected a sharp change in its balance of assumptions about EU-China affairs, and the recent COVID-19 pandemic is tilting that balance further (Small 2020). The EU and China established bilateral relations in May 1975, with Christopher Soames being the first European Commissioner to visit China, in line with the country opening up. There were limited developments from 1975 until 1995 (though the EU and China signed a trade agreement in 1978), because both parties were more inward-looking, due to ongoing reforms in China and European integration. The year 1995 marks a change because, in that year, the EU’s first policy paper on China titled a long term policy for China-Europe relations was issued. The 1985 Trade and Cooperation Agreement (TCA) is the principal legal framework for the relations between both parties.4 Nevertheless, it was only in 1998 that meetings of both parties’ leaders became institutionalized, and the first EU-China Summit took place. This first bilateral summit was de facto an offspring of the growing European and Asian interest in mutual interregional interaction. It was organized back-to-back with the second Asia-Europe Meeting (ASEM) Summit in London (Bersick, 2015). In 2003, the EU and China launched a strategic partnership to upgrade the status of their relationship.5 Both sides mutually recognized each other as a strategic partner in 2003, and the EU was on the receiving end of a “sticks and carrot” approach by Beijing to get to that point. The development of the Sino-European strategic partnership in the 2000s suits the broader context of the deepening of integration in the EU, including the establishment of the EU’s Common Foreign and Security Policy (CFSP) as well as China opening up and reforming and its subsequent rise (see Cottey and Gottwald 2010; Keukeleire and Delreux 2014). The 2003–2005 period was the honeymoon period in Sino-European relations. 2003, in particular, can be seen as the best time in the parties’ bilateral relationship because frictions between the EU and

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the US over the latter’s invasion of Iraq created an opening for the establishment of an EU-China strategic partnership. 2005 brought about a change in Sino-European relations due to a textile dispute, and the EU’s decision not to lift the arms embargo against China (see Eckhardt 2010; Zhang 2014). In the 2006–2010 period, it became clear that the atmosphere had changed. The EU was again inward-looking with the 2009 Lisbon Treaty and the subsequent establishment of the European External Action Service (EEAS), leading to internal EU changes. The EEAS now became in charge of organizing the EU-China Summit. Over the last decade, particularly in the economic field, the balance of power has changed dramatically. China’s agreement in June 2012 to contribute $43 billion to the International Monetary Fund’s (IMF) $430 billion bailout fund for the southern European countries illustrated this. Apart from the Eurozone crisis, the more recent migrant crisis, and the Ukraine crisis has made Brussels “less capable of providing global leadership” (Zeng 2017: 1173). After an upgrade in 2010, the EU-China strategic partnership now involves foreign affairs, security matters, and international challenges such as climate change and global economic governance. The 2013 EUChina Comprehensive Strategic Partnership has continued developing and diversifying from its original economic focus, creating opportunities for businesses and contributing to international security, environmental protection, and academic exchanges. Today, over 60 high- and senior-level dialogues are in place.6 The EU-China dialogue architecture comprises three pillars, including the High-Level Strategic Dialogue, the High-Level Economic and Trade Dialogue, and the People-to-People Dialogue (see Burnay et al. 2014). Since 2016, the EU’s China policy is defined by the Elements for a new EU Strategy on China that, together with the Council Conclusions EU Strategy on China, forms the EU Strategy on China, with the jointly signed 2013 EU -China 2020 Strategic Agenda for Cooperation being a critical policy document. Even after the 2019 review of the Sino-European relations, this remains the cornerstone of the EU’s policy vis-à-vis China. In 2015, the EU-China Connectivity Platform was established to strengthen connections between Europe and Asia. However, in the Platform, little coordination and cooperation occur due to the differences between China and the EU. The importance of Sino-European bilateral relations is manifest in the fact that the EU is China’s largest trading partner, while on the

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other hand, China is the EU’s most significant source of imports and its second-biggest two-way trading partner. There are extensive dialogues, too, in the economic realm like the annual High-Level Economic and Trade Dialogue established in 2009 and the sectoral dialogues such as the Economic and Trade Joint Committee, Trade and Investment Policy Dialogue, Economic and Trade Working Group, Dialogue on Intellectual Property, and Trade Defence Instruments Working Group. Moreover, at the 16th EU-China Summit in 2013, both parties announced that negotiations on an EU-China bilateral investment agreement—formally called a Comprehensive Agreement on Investments (CAI)—were to be launched. However, thus far, finding mutual agreement on the CAI has proven to be challenging. In part, the diverging interests and systems of both parties explain this. One key issue for the EU in the CAI is market access. This relates to a lack of reciprocity in EU-China relations. The EU wants China to treat the European companies in the PRC the same way that the Europeans treat Chinese firms in Europe. Another issue is how to deal with Chinese state-owned enterprises (SOEs). Cooperation and dialogue between the EU and China go beyond bilateral trade and investment and include policy areas such as foreign policy and security, energy and environment, global economic governance, and human rights. The rise of China is one of the main developments in international relations over the past few decades, not only in the economic field, but also in climate change, on the African continent, and concerning Asian security. This highlights the multiple dimensionalities of China as an international actor as well as its relations with the EU and its member states as they also have established bilateral relations with the Chinese, which makes that they meet on multiple locations and multiple levels, including on the multilateral, regional, trilateral and bilateral level. However, as also argued by Chang and Pieke (2018), the EU’s China policy as a whole, and of its member states is not principally about the PRC. Due to its starting point not laying in China, but in confronting challenges in Europe itself, the EU’s policy vis-à-vis China is first and foremost “a matter of choices about the future of European cooperation and union.” On a related note, a senior EU official described the EU’s relations with its then 28 member states as “having 28 mothers in law” (Interview senior EU official, June 14, 2018). This reality points out the challenges the EU is facing internally due to its hybrid nature, with Europe’s divided response to the Belt and Road Initiative (BRI)

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and increasing Chinese outward foreign direct investment (COFDI) in Europe just being two recent examples. The EU has been grappling on how to deal with China’s massive footprint in diverse sectors and locations. The EU aims at encompassing a strategic partnership with China. However, the member states are simultaneously sidelining Brussels by concluding bilateral agreements with the PRC (Keukeleire and Delreux 2014). The EU member states’ tendency to pursue bilateral agreements with China and China’s ability to use the EU’s internal disagreement is frequently brought forward as the primary explanation for the EU’s lack of strategic edge (Michalski and Pan 2017). In a 2009 power audit of the EU-China relations, Fox and Godement showed that the then 27 EU member states hold diverging positions over two main issues, including how to manage Beijing’s impact on the European economy and how to engage the PRC politically. The authors argued that “collectively as well as individually” the EU member states will fail to get more from the PRC unless they manage to find a way to overcome their internal divisions and “leverage their combined weight into a strengthened bargaining position” (Fox and Godement 2009: 7). The new HR/VP Josep Borrell admitted the EU had been naive about aspects of the PRC but stated this was now coming to an end. He urged more collective discipline toward China (The Guardian 2020). On the issue-level, numerous frictions are bedeviling bilateral relations. One is the EU’s enormous trade deficit with China. Beijing had pledged to ease market access significantly, however many on the European side argue that Beijing is very slow to address these obstacles. The earlier mentioned lack of reciprocity is relevant here. Furthermore, COFDI in Europe has recently increasingly drawn attention because of the opaque state-sponsored Chinese firms (or a suspected state-firm link), COFDI’s targeted sectors including technology and infrastructure, the suddenness of COFDI, the sensitivity coming with China’s continuing political rise, and, again, the lack of reciprocity, with the KUKA case, in particular, being a watershed moment (Hooijmaaijers 2019). One should see the developments regarding COFDI in the EU and Huawei 5G mobile telecommunication networks that recently attracted much attention from both politicians and the public in this broader context. In late 2018, the European Commission, the Council, and the European Parliament reached a political agreement on the EU framework for screening FDI, and there has been a reform of TDI. These developments illustrate that a reality shift has become visible regarding the EU’s trade

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policy and can be seen as two steps forward to a different EU policy vis-à-vis China. In the field of trade, there have been numerous disputes and investigations relating to solar panels, telecommunications, steel, and wine, with both parties calling for punitive tariffs. The fundamental differences between their legal frameworks and their different values and levels of development and the structural characteristics of their economic models complicate matters (Hallinan 2016). Another thorny issue is China’s market economy status (MES). Also, when China pressed the EU to launch a strong joint statement during the 2018 EU-China Summit against US President Donald Trump’s trade policies, Europe resisted. The EU shared the US’ assessment of China when it comes to, for instance, subsidies and Intellectual Property Rights (IPR). However, at the same time, it felt that by the way the US is doing it, it was destroying the multilateral order. Combining these factors makes the EU-China economic relationship, “an uneasy partnership” (Farnell and Irwin Crookes 2016). The 16+1 (or after Greece joining in 2019 17+1) policy of China with the Central and Eastern European Countries (CEECs) potentially challenges EU unity. Somewhat related to 17+1, the BRI that was launched in 2013 causes “a great deal of confusion” for the EU member states and Brussels (Yu 2018: 232). Beyond the trade statistics and new (proposed) railway connections, the role of Xi Jinping’s globalization project “is not yet entirely clear” for Europe. However, various member states have pledged their support for it (Yu 2018: 232). Moreover, problematic is the EU arms embargo against China that flowed from the 1989 Tiananmen crackdown. The internal situation in China, particularly on human rights and the situation in Tibet and Xinjiang, also causes friction in the EU-China relations. Also, against the backdrop of the imposition of the Hong Kong national security law in June 2020, EU concerns had intensified over the erosion of the “one country, two systems” principle and Hong Kong’s autonomy. The EU decided to limit exports of surveillance equipment to Hong Kong over concerns about this controversial new law, leading to Beijing’s warning not to interfere in Hong Kong matters (Euronews 2020a). Even though since the mid-1990s, a bilateral Human Rights Dialogue is in place, in the bilateral relationship between the EU and the PRC, the issue of human rights remains secondary to economic and geopolitical interests (Kaya 2014). Internal divisions among the member states play a role as well, as a recent report revealed that the EU member states adopt

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widely divergent stances on human rights issues in their dealings with the PRC (Rühlig et al. 2018). Another area of tension is climate change, in which both parties’ diverging views on multilateralism become visible. The PRC has won plaudits for its recent moves on climate change, but in 2017 it had allowed disputes over trade to impede a joint Sino-European declaration on the matter; consequently, just like after the 2016 EU-China Summit, no joint statement was launched after the 2017 Summit. On climate change, the PRC has never signed up to any commitment in a legal sense. Moreover, when it comes to legally binding issues, with the “deliberate dismissal” of The Hague’s arbitration ruling on the South China Sea issue, Beijing has demonstrated that it will ignore international law “when it does not suit its interests” (Godement and Vasselier 2017: 12). Furthermore, the African continent is an arena where one can question whether the EU and China are partners or competitors. One of the explanations for the differences between the EU and China lies in the existence of conceptual gaps. Per Pan Zhongqi, the same concept can often be interpreted and applied in very different senses by different people. A conceptual gap could breed misunderstandings in international communication, sometimes without the awareness of those involved, leading to problems and possible conflict in their bilateral relations, including in the Sino-European relationship (Pan 2010). Conceptual gaps exist because many concepts are multifaceted, dynamic, and ambiguous. In theory, conceptual gaps are neither inevitable nor prevailing over conceptual consensuses. However, in practice, it is common for different actors to convey connotations by using the same concepts in their discourse. Conceptual gaps in the Sino-European relationship occur on a wide range of topics and issues, including sovereignty, soft power, human rights, democracy, the rule of law, stability, strategic partnership, global governance, and multilateralism (Burnay et al. 2016; Pan 2012a). In the context of broader great power relations, for the EU, the Sino-European relations are essential. However, China is not the EU’s most important great power. The US still is the EU’s most important partner and security guarantor via the North Atlantic Treaty Organization (NATO), and Russia is still the main great power “threat.” For the PRC, the US is the most important power and its main great power threat

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and a role for US ally Japan. By contrast, Russia is considered a more reliable partner than the EU. For China, Europe is complementary. It is not a strategic rival, but it is useful for its market and experience platform. Per Philippe Le Corre, COVID-19 has been “the game-changer” in finally altering European perceptions of China (The Guardian 2020). Andrew Small noted that China’s handling of the COVID-19 pandemic had changed long-standing European assumptions about its reliability as a crisis actor and its approach to the European project. For now, Europe’s immediate medical-supply needs and dire economic situation will limit the scope of shifts in its policy vis-à-vis China. However, on issues ranging from supply chains to ideological competition, European governments have rebalanced their view of what dynamics with Beijing should look like in the aftermath (Small 2020). In late April 2020, HR/VP Borrell admitted that China did try to pressure the EU to dilute a COVID-19 disinformation report, adding that this was just normal diplomacy (EUobserver 2020). Be that as it may, around one week later, the EU expressed regret after its opinion article in the China Daily was watered down to remove references to the COVID-19 outbreak beginning in the country (Euronews 2020b). In sum, there are four main takeaways from the analysis of EU-China relations. First, countless thorny issues characterize the Sino-European relationship. Second, internal divisions and diverging interests on the European side play a substantial role in the EU’s China policy. Third, the Commission paper dubbing the PRC as a systemic rival reflected a sharp alteration in its balance of assumptions about Sino-European matters, and the COVID-19 crisis is tilting that balance further (Small 2020). Combined with the launch of an EU framework for screening FDI and TDI reforms, these developments exemplify that a reality shift has become visible regarding the EU’s China policy. Fourth, the issues in Sino-European relations fit into three categories, including areas for (potential) cooperation, negotiation, and difficult issues to talk about (see Godement and Vasselier 2017). The three selected cases in this manuscript mirror these four points (see below).

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The Scholarly Literature on EU-China Relations and Its Limits The number of academic publications on EU–China relations is booming. As argued by Bersick (2015), there are several main foci in the contemporary work on the EU-China bilateral relations, with a large share focusing on the historical development of the EU-China relations, providing analyses of the evolution as well as the implementation of these relations (see Sandschneider 2002; Shambaugh 2004; Cameron 2009). Another central theme is descriptions of the EU-China Summits that took place since 1998 (see Pan 2012b; Song 2012) and the strategic partnership between both parties (see Renard 2011; Holslag 2011; Casarini 2006; Maher 2016; Geeraerts 2019). Generally, these kinds of works focus on the partnership’s policy challenges and offer suggestions for the bilateral relationship. To the swiftly expanding work on the Sino-European relations we can also add scholarly work on China’s recently launched BRI and the role of and consequences for Europe as well as the EU (see Zeng 2017; Li et al. 2018; Van der Putten et al. 2016; Zhao 2016). A third category focuses on cataloging areas of cooperation and conflict in the contemporary relations including in the areas of the economy (see Algieri 2002; Farnell and Irwin Crookes 2016; Menegazzi 2017; Reilly 2017), Chinese investment in Europe (see Meunier 2019a, 2019b; Hanemann and Huotari 2015), human rights (see Kinzelbach 2015; Baker 2002), climate change (see Torney 2014; Belis and Schunz 2013), security (see Kirchner et al. 2016; Noesselt 2016), energy (see Umbach 2007; Liedtke 2017), and global governance (see Men and Linck 2017; Wouters et al. 2012; Gross and Jian 2012). Another category concentrates on EU-China relations and a third party including Africa (see Hackenesch 2018; Men and Barton 2011; Stahl 2018), the US (see Shambaugh 2005; Harris 2017), or Central Asia (see Kavalski 2007a, 2007b, 2012; Bossuyt 2015). However, these academic works are generally policy-driven, with few works using theory to explain EU-China relations (Bersick 2015).7 The lack of using theory suggests a lacuna in the current literature and current academic approaches with regard to EU foreign policy-making vis-àvis China because even fewer academic works seek to test theoretical approaches thoroughly or add theory scope conditions. Lastly, another limitation of the scholarly literature on EU-China relations relates to the cases studied and their quality. Indeed, the number of academic publications on EU–China relations is booming. However,

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many cases are still insufficiently studied, for instance, because they do not focus on the various stages of the policy cycle. However, issue identification (the stage where a specific issue secures the close attention of policy-makers), decision-making (the stage where the EU foreign policy actors that possess the ability decide to approve the course of action), and policy implementation (the stage where the follow through on the policy is critical) are all equally important and relevant when we want to understand a specific case fully. In this manuscript, I am studying insufficiently studied political economy-related cases and use more and better evidence to draw conclusions.

Theoretically-Oriented Explanations of EU Foreign Policy-Making and Their Limits While theoretical approaches to EUFP do not dominate the literature, there are some. These models include the BPM, neorealism, and institutionalism. Neorealism generally takes the position that the most powerful states’ security interests are decisive, followed by economic and other interests (see Waltz 1979). A neorealist argument would argue that not only state interests dominate, but that the most powerful EU member states dominate. Without consensus among the Big Three— France, Germany, and the United Kingdom (UK)—it will be hard to get anything of significant importance done (see Tallberg 2008; Bendiek 2012). Another potentially relevant candidate is institutionalism. Institutionalism looks into EU law, EU procedures, competences, norms, and regulations to illuminate EU foreign policy dynamics. A third candidate theory that might be relevant for explaining EUFP is the BPM model, given the growing bureaucratization of EUFP. BPM explains policy-making by focusing on internal bargaining within the state (Allison and Halperin 1972). As for the growing bureaucratization of EUFP, the different (European) institutions involved in the making of EUFP including their staff and Directorate-Generals (DGs), the division of competences, and the multiple decision-making methods give us reason to believe that BPM is relevant. These IR theories are often useful for illuminating a specific situation including in EUFP. However, just as often their explanatory value is unsatisfactory, and in these cases, there is a need for another, more appropriate theoretical tool (McGlinchey et al. 2017). Chapter 2 will provide information about the features and limits of these three theoretical models

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that I will test to identify their usefulness and, more importantly, their scope conditions. Here, I will suffice with emphasizing that these three theoretical explanations of EU foreign policy-making all have the problem of scope. The issue I argue in this manuscript is not that these three models are not useful to better understand the dynamics of EU foreign policy-making, but that there is an inadequate appreciation of the fact they do not apply equally well to all domains. Given the limits of the existing literature, there is a need to explore the drivers of EUFP vis-à-vis China anew. There is a need to identify the range of applicability of these theories. These scope conditions may include issues and policy stages. Some IR theories work better in some stages or even in specific policy fields than others. For instance, the BPM may be particularly powerful in illuminating the stage of policy implementation (Caldwell 1977). Given the nature of the EU with its various procedures, sometimes there may or may not be a formal institutional role for the EU member states to execute their power.

Research Design, Methodology, and Case Selection The case study method is best to examine the scope of the applicability of the three theories mentioned above. Case studies can serve several overlapping primary purposes that should be pursued simultaneously, including theory testing (Van Evera 1997: 55).8 The case study method, which has also been widely used by BPM analysts (Caldwell 1977; George and McKeown 1985), allows for cross-case comparison and allows for process tracing. Theory-testing process tracing “involves assessing whether a hypothesized causal mechanism exists in a single case by exploring whether the predicted evidence of a hypothesized causal mechanism exists in reality” (Beach and Pedersen 2016: 319). In particular, the process tracing is of critical importance because the objective of this research is to look at issue identification, decision-making, and policy implementation. I am not just doing case studies but comparative case studies. Per Knight, a comparative case study is a research approach to formulate or assess generalizations that extend across multiple cases. Comparative case studies can address theory, wherein the cases are selected to test hypotheses from the theory (Knight 2015). Multiple case studies can provide more substantial evidence and more robust findings and test the findings in (extremely) different cases.

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When it comes to theory testing with case studies, three steps are essential (Van Evera 1997). The first step is to state the theory. The second one is to state the expectations about what to observe in case the theories are valid. The third step is to explore the case (or for this manuscript the three selected cases) looking for congruence or incongruity between expectations and observations. The structure of the next chapter follows these three steps. I first discuss these three theories. Then I formulate hypotheses for each of the distinct stages of the policy-making process. I state the expectations about what to observe when the theories are valid. This research project’s comparative design highlights the multiple dimensionalities of the PRC as an international actor and of its relations with Europe. The selection of three cases, even though it remains rather exceptional being conducted by a single author, allows for better comparison. As mentioned before, given the limits of the existing literature, there is a need to explore the drivers of EUFP vis-à-vis China anew. It is not that existing theories are wrong, but that there is a lack of awareness of the reality they do not apply equally well to all areas. I show this by looking at three distinct stages of the policy cycle in three cases. The three cases are all political economy-related, and they also relate to the challenge that China’s rise presents to the EU. The cases involve EUFP sensu lato, which means that policy areas like trade and development are considered an inherent part of foreign policy (see Keukeleire and Delreux 2014).9 There are various justifications for focusing on them, as I will discuss. The first case involves the EU-China solar panel dispute of the early 2010s, when Belgian politician Karel De Gucht served as European Trade Commissioner. The following criteria led to its selection. First, it was the most significant investigation ever conducted by the Directorate-General for Trade of the European Commission (DG Trade) when it comes to volume. On a related note, the case is welldocumented by the Commission and is widely reported in the media. Second, my three theories make divergent, unique, and sometimes even opposite predictions about the case. Because I make a clear distinction between issue identification, decision-making, and policy implementation, this case allows us to see if the independent variables genuinely are powerful, which contributes to culling scope conditions. Third, a case in the trade field is of particular academic relevance, because the bureaucratic entities in the Commission that deal with foreign policy or external relations including DG Trade seem to have largely escaped the

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attention from bureaucratic politics, contributing to the justification of the case selection as it is as a new type of test (Delreux 2015). Another justification for selecting this case is its resemblance to current policyproblem cases as it touches upon how to deal with China on trade defense matters. Continuing tensions between its member states characterize the EU’s trade policy. These tensions mainly follow the North-South division of the EU. The Northern member states prefer an open trading system, whereas the Southern EU member states prioritize defending Europe’s economic interests against external threats. Moreover, there is a third group of countries that includes Germany, which is a swing state. Because our analytical model also focuses on the interests of the EU’s most powerful states, there is potential for critical importance. The second case focuses on the 2012–2014 EU investigation into mobile telecommunications networks from China. The case selection criteria for the solar case mostly apply to this case because it is also a case in the trade defense field. However, there are more arguments to warrant its selection. In a way, it was as an “extreme case.” It was a unique and unusual case, because it was the first-ever ex officio investigation conducted by the Commission. There was no formal complaint lodged by an EU industry. This case contrasts with the solar case that followed the standard procedure of a valid complaint lodged by an EU industry and had a clear timetable of events with set procedural deadlines. What makes it an even more unique case is that DG Trade decided in principle to open an ex officio anti-dumping and an anti-subsidy investigation concerning imports of Chinese telecom networks. However, that decision was not activated to allow negotiations toward an amicable solution with the Chinese authorities. The third case selected to test the merits of the various arguments is the EU’s reaction to China’s rise in Africa through the launch of the EUChina-Africa trilateral cooperation initiative in 2008. This case involves a new actor with its view on development with a focus on trade, investment, and infrastructure entering the African stage. Several reasons warrant the selection of this case (see Van Evera 1997: 77–88). First, this case is particularly compelling from an institutional analytical perspective because three competing visions from the Commission, Council, and Parliament existed within the EU that harmed its capability to engage with China in Africa constructively (see Carbone 2011; Austermann 2012). Second, competing theories make divergent, unique, and sometimes even opposite predictions about the case contributing to testing the relative power

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of these three theories. On a related note, even though several scholars have written about EU-China-Africa contributing to the availability of data, this has not been systematically done for three stages of the policy process based on various hypotheses flowing from my three candidate theories. The focus on theory and policy stages also relates to the earlier mentioned limitations of the existing literature regarding cases studied and the quality of the studies. An additional reason relates to the resemblance to current policy-problem cases. The EU has not yet been able to deal with China’s rise and the global power shift to the East. It is in this broader context that one should understand China’s rise in Africa. My analysis relies on multiple sources of data. The first set of data includes legal and policy documents such as the Treaties, Council Decisions, Commission documents, policy memos, and official statements from involved parties. Preparatory documents and the negotiation positions of the relevant actors are also of importance. However, official documents are not always available. I supplemented my analysis with other empirical sources such as newspaper articles from main media outlets, including Reuters and the Financial Times, and semi-structured interviews. I did over 100 semi-structured interviews, consultations, and conversations with a wide range of interviewees, contributing to more and better evidence. The interviewees include senior officials from the European Commission’s DG Trade, officials from the Union delegation (EEAS) in Beijing, and officials from the Permanent Representations of EU member states to the EU, senior EU and European business representatives, senior solar panel industry representatives, senior telecom industry representatives, and trade lawyers that were involved with the EU-China solar panel dispute and the EU investigation into mobile telecommunications networks from China. I also interviewed EU officials from Union Delegations in Africa, the EEAS headquarters in Brussels, the Commission’s Directorate-General for International Cooperation and Development (DG DEVCO), officials from the Union delegation in Beijing, Members of the European Parliament (MEPs), and African business representatives that worked on or were involved with China’s rise in Africa and the response of the EU, as well as Western and Chinese scholars from renowned universities and research centers with expertise in EU-China trade, or EU-China-Africa. I coded my interviewees to preserve their anonymity. Finally, I used a considerable amount of secondary literature on the respective topics to support my analysis.

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Findings The main theoretical contribution of this work is to specify the scope of the three selected theoretical approaches. These scope conditions involve both issue areas and policy stages. The three case studies showed that neorealism’s explanatory value in the issue identification stage is limited, partially due to the division of competences. Due to the formal procedures, there was relative power for the member states in the decisionmaking stage of the trade defense cases, because the Council has to vote on the final imposition of measures, supporting a neorealist argument for this stage. Given traditional national interests, countries have to assert themselves to defend their economic interests, which Germany demonstrated in the solar case. Even in the “extreme” telecoms case with no formal launch of an investigation, and thus no formal procedures that are part of such an investigation had to be followed, neorealism had explanatory value for the decision-making stage. In the EU-China-Africa trilateral cooperation case, the member state support meant the Commission could go ahead with its idea and launched a framework on which later member state initiatives could build. Neorealism was present, but in the background. The results from the decision-making stage affected the implementation stage as it created a space where the member states could launch their initiatives with China on Africa. This research found that institutionalism sheds light on virtually every stage of the policy-making process and issue. It may not always have been the most dominant explanatory theoretical model. However, it almost always contributed to a better understanding of the various stages of the policy-making process. In short, EU law, procedures, and competences matter when we want to unpack EU policy-making. These findings provide useful analytical lenses for those studying EUFP not just toward China, but also vis-à-vis other countries, regions, and issues. Concerning the BPM, we saw bargaining throughout the entire case, on the EU level, and with the Chinese side, in both the solar and telecoms cases. Then Trade Commissioner Karel De Gucht predominantly drove this. The division of competences and the institutional setup partially facilitated the BPM’s explanatory value in the issue identification stage of the development case. We did detect “where you stand depends on where you sit” in most parts of both the development and trade cases. Where the agreements made in the decision-making stage were not legally binding, we saw there was leeway not fully to implement them as agreed

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upon. When key (bureaucratic) actors left in these situations, policy implementation reflected this. The theoretical and policy implications of my findings reveal that it is essential to take into account that it is all about competences and that EU law and procedures matter. The competences shape a position for actors and allow them to act. Different actors may be relevant and influential in the different policy stages, including the issue identification and decision-making stages. There still is and continues to be an essential role for the EU member states in EU foreign policy-making, including trade defense and development. Considering the role of the (most powerful) EU member states is critical, given the substantial influence they have over the broader context of the relations between the EU and China. The same goes for understanding the role of the EU institutions, including the Council, the European Commission, the European Parliament, and the EEAS. EU-China affairs thus always have to contemplate the EU institutions and the (most powerful) member states. Internal divisions and diverging interests on the European side remain. They mostly follow the traditional North-South and East-West lines. If a party wants to influence how the EU identifies policy in trade defense cases, it is essential to consider the formal procedures. In the case of unfair trade practices, industry parties can lodge a formal complaint. Some industries are better organized than others and thus file more complaints. Eventually, there is relative power for the (most important) EU member states in the decision-making stage. Whether the antidumping or subsidy cases are about Chinese solar, telecoms, or steel, the issue is mostly the same. The question is not whether there is dumping or subsidies from the Chinese side, which mainly relates to the issue identification stage. Instead, the question is whether “Europe” wants to do something about this situation or not, which involves decisionmaking. That is the ongoing debate in Europe. The Southern member states predominantly see it from a political perspective and feel that antidumping and subsidy practices are not acceptable. The Northern EU member states predominantly see it from a more economic perspective. They want to assess the overall effect of unfair trade practices on the EU when taking the interests of manufacturers, consumers, and users into account. The Commission predominantly feels they are working for the European industry. Interest groups are empowered in trade defense cases, but because of other issues, they do not have the full force in shaping economic globalization. Germany’s position is critical. Not only

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is it Europe’s biggest economy, but also it can be seen as a swing state regarding anti-dumping issues. Berlin has difficulties making up its mind on anti-dumping issues. If a businessperson wants to know who should get his attention at the policy implementation stage, the Commission is a suitable candidate, but so are the (most powerful) member states. In trade defense cases, there is a clear timetable of events that makes it easier to target the relevant DGs of the Commission and the relevant member states when a decision is about to be made. These findings will help businesses to do better government relations and to be more aware of the business environment.

Outline This manuscript will consist of five more parts. The next chapter will review the literature of the three selected theoretical models of (EU) foreign policy-making. This chapter also includes the comparative research design of the project, where I formulate hypotheses regarding the distinct stages of the policy cycle. I will provide information about the features and limits of the IR theories that will be tested later on in three case studies to identify their usefulness and, more importantly, their scope conditions. Chapters 3, 4, and 5 focus on these three case studies. The first case study (Chapter 3) of this book examines the EU-China solar panel dispute, the most significant trade defense case ever by volume that attracted much attention in the early 2010s when Belgian politician Karel De Gucht served as European Trade Commissioner. The second case study (Chapter 4) will look into the EU investigation into mobile telecommunications networks from the PRC. Similar to the EU-China solar dispute, this is a case study in the trade defense field. However, it substantially differs from the solar panel case, because this was an ex officio trade defense action initiated by DG Trade. Chapter 5 focuses on the EU’s reaction to the rise of China in Africa via the EU-China-Africa trilateral cooperation initiative. It specifically looks at the emergence of the EU’s perception of a China in Africa policy issue, its policy responses, and its implementation of these policy options. The concluding Chapter 6 will bring together the preceding chapters’ findings to unpack EU policymaking toward the PRC. Furthermore, I will discuss the theoretical and policy implications of my findings and the limitations of this study and the venues for further research.

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Notes 1. The EU Treaties established the EU. The EU member states are the parties to the treaties. Under the EU Treaties, the member states confer competences on the EU. The EU can only act within the limits of its competences. The Treaties founded the EU. The EU amended two key EU treaties several times. They are the Treaty on the European Union (TEU) and the Treaty on the Functioning of the European Union (TFEU). The Treaty of Lisbon (LT) that entered into force on December 1, 2009, reorganized these two Treaties. 2. Issue identification is the stage of the policy-making process where a particular issue secures the close attention of policy-makers. Decision-making is the stage where actors possess the ability to decide to approve the course of action. In the policy implementation stage, the follow through on the policy is critical (see also Carta, 2013; Versluis et al. 2011). For analytical purposes and manageability reasons, for this manuscript, we focus on these three stages. However, we encapsulated policy formulation in the decision-making stage. 3. In October 2020, the European Council reaffirmed the policy approach vis-à-vis EU-China relations as set out in this Joint Communication. 4. In early 2007, negotiations of a Partnership and Cooperation Agreement (PCA) between the EU and China started. However, the PCA negotiation process stalled. 5. Following the strategic partnership between the EU and China, the PRC launched bilateral strategic partnerships with various EU member states (Chen 2013). The various partnerships question the coordination between the EU and its member states. 6. Worth highlighting is that the over 60 dialogues are often a touted figure by officials on both the European and Chinese sides. However, the question is whether it is the more, the merrier. Also, in reality, many of these dialogues happened a few times then fell away. Others meet very rarely, with little to show in terms of substantive output. 7. Exemptions include Christiansen (2016); Cottey (2018); Jørgensen and Wong (2016); Algieri (2002). 8. Per Van Evera (1997), the five primary purposes are explaining cases, creating theories, testing theories, identifying antecedent conditions, and testing antecedent conditions. In this manuscript, the overlap becomes visible as the theory testing is used to explain what happens in the cases. 9. By contrast, EUFP sensu stricto is limited to an analysis of the CFSP and the Common Security and Defence Policy (CSDP).

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References Algieri, Franco. 2002. “EU Economic Relations with China: An Institutionalist Perspective.” The China Quarterly 169: 64–77. Allison, Graham T., and Morton H. Halperin. 1972. “Bureaucratic Politics: A Paradigm and Some Policy Implementations.” World Politics 24: 40–79. Austermann, Frauke. 2012. “Towards a ‘Unitary Actor’? Perceptions of China’s Role in Africa Across EU Institutions.” In China and the European Union: Concord or Conflict?, edited by Jan Van der Harst and P. C. M. Swieringa, 15–35. Maastricht: Shaker Publishing BV. Baker, Philip. 2002. “Human Rights, Europe and the People’s Republic of China.” The China Quarterly 169: 45–63. Beach, Derek, and Rasmus Brun Pedersen. 2016. Causal Case Study Methods. Foundations and Guidelines for Comparing, Matching and Tracing. Ann Arbor: University of Michigan Press. Belis, David, and Simon Schunz. 2013. “China and the European Union: Emerging Partners in Global Climate Governance?” Environmental Practice 15 (3): 190–200. Bendiek, Annegret. 2012. “European Realism in the Eu’s Common Foreign and Security Policy.” In EU External Relations Law and Policy in the Post-Lisbon Era, edited by Paul James Cardwell, 35–57. Basingstoke: Palgrave Macmillan. Bersick, Sebastian. 2015. “The EU’s Bilateral Relations with China.” In The SAGE handbook of European Foreign Policy, edited by Knud Erik Jorgensen, Asne Kalland Aarstad, Edith Drieskens, Katie Verlin Laatikainen and Ben Tonra, 615–633. London: SAGE. Bossuyt, Fabienne. 2015. “Engaging with Central Asia: China Compared to the EU.” In China, the EU and the Developing World: A Triangular Relationship, edited by Jan Wouters, Jean-Christophe Defraigne and Matthieu Burnay. Cheltenham: Edward Elgar. Burnay, Matthieu, Joëlle Hivonnet, and Kolja Raube. 2014. “‘Soft Diplomacy’ and People-to-People Dialogue between the EU and the PRC.” European Foreign Affairs Review 19 (3/1): 35–55. Burnay, Matthieu, Joëlle Hivonnet, and Kolja Raube. 2016. “Bridging the EUChina’s gap on the Rule of Law?” Asia Europe Journal 14 (1): 95–106. Caldwell, Dan. 1977. “Bureaucratic Foreign Policy-Making.” American Behavioral Scientist 21 (1): 87–110. Cameron, Fraser. 2009. “The Development of EU-China Relations.” European Studies: A Journal of European Culture, History & Politics 27: 47–64. Carbone, Maurizio. 2011. “The European Union and China’s rise in Africa: Competing Visions, External Coherence and Trilateral Cooperation.” Journal of Contemporary African Studies 29 (2): 203–221.

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CHAPTER 2

Literature Review and Theoretical Framework

This chapter discusses and critiques three theoretical models that I use to explain EU foreign policy-making: the BPM, neorealism, and institutionalism. I will provide information about the features and limits of the IR theories that I will test to identify their usefulness and, more importantly, their scope conditions. After presenting each theory, I state the expectations about what to observe in which stage of the policy-making process. I then look for congruence or incongruity between expectations on the one hand and observations on the other. Each theory will have three hypotheses, one for the policy identification stage, one for the policy development stage, and one for the policy implementation stage. The penultimate section conceptualizes and operationalizes relevant variables for this manuscript. In the final section, concluding remarks will be made.

The Bureaucratic Politics Model The BPM is a theoretical approach to public policy-making, of which Allison and Halperin were among the most prominent adherents (1972; see Allison 1969, 1971). They state that when it comes to the determination of foreign policy, the role of bureaucracies is neglected (Allison and Halperin 1972). There are several generations in the study of bureaucratic politics (Caldwell 1977; Art 1973). Extrapolating from the United © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2021 B. Hooijmaaijers, Unpacking EU Policy-Making towards China, Palgrave Studies in Asia-Pacific Political Economy, https://doi.org/10.1007/978-981-15-9367-3_2

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States (US) case, these first-generation scholars stated policy-making was a somewhat fragmented, decentralized process driven by bargaining among individual and organizational actors that hold diverging stands and that policy outcomes were compromises (see Neustadt 1960; Schilling 1962; Huntington 1961; Hilsman 1959, 1967). In the late 60s, early 70s Allison and Halperin reformulated and refined several propositions from existing decision-making approaches, constituting the second generation of bureaucratic politics theory (Caldwell 1977: 88–89). In his seminal article Conceptual models and the Cuban missile crisis , Allison describes three alternative models for analyzing American foreign policy and applies these three models to the Cuban missile crisis. The first model is the rational actor/rational policy model (also called Model I). Per this model, analysts see foreign policy-making as “the more or less purposive acts of unified national governments” (Allison 1969: 690). It focused on how the government chooses its action, given it faces strategic problems. Disagreeing with this Rational Policy Model, Allison suggests two alternative conceptual models for analyzing foreign policy, which he names an Organizational Process Model (also called Model II) and a BPM (also called Model III). Model II identifies the relevant organizations involved with foreign policy-making and describes the patterns of organizational behavior from which the action emerges, while Model III focuses on internal governmental politics. Because there was some overlap between these two new models and because it appeared to be rather hard to separate them analytically, Allison and Halperin integrated Model II into Model III, which evolved into the BPM. The BPM sees foreign policy as “a conglomerate of large, bureaucratic organizations and political actors” (Alden and Aran 2012: 32). Bureaucratic organizations are significant for foreign policy for several reasons. First of all, they generate specific outputs that arrange the environment where policy-makers make their decisions. Among these outputs are the standard operating procedures (SOP) and routines for dealing with situations that influence the implementation of a foreign policy decision, information provision to the government, and policy alternatives for the government (Allison 1969). Second of all, bureaucracies tend to develop shared attitudes (Allison and Halperin 1972). These shared attitudes are relevant when it comes to the framing of foreign policy issues and the perception of foreign policy-makers. Allison and Halperin explain the BPM as a model that sees no unitary actor. Players make governmental decisions not by a single rational choice, but by “pulling and hauling,” which by no means implies that individual

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players are not acting rationally, given their interests (Allison and Halperin 1972: 43). Consequently, there is no such thing as a single “maker” of foreign policy (Clifford 1990: 162). In this light, it is essential to highlight that administrative dynamics matter and point at their interests. Bureaucracies’ interests occur in light of several aspects, including budget allocation, organizational survival, power, autonomy, staff, and internal morale, which they all bring to the arena of political bargaining in the executive field. Here a political process brings conflicting interests of different parts of the bureaucracy together. Hence, a policy is the result of a process characterized by bargaining and compromises between actors driven by their different goals. The bargaining games that characterize the BPM do not proceed randomly. So-called action-channels structure the game and set out “who’s got the action” (Allison 1969: 710). These action-channels are regularized sets of procedures for producing actions (Allison and Halperin 1972: 45) Essential in the behaving of bureaucracies in the bureaucratic politics model is the so-called Miles’ Law “where you stand depends on where you sit.” Besides that, deadlines and events raise issues in the political game (Allison 1969: 709–710). Historically, the BPM was mainly an analytical tool for American foreign policy drawn from the American experience. However, several studies on EU foreign policy-making use BPM insights, demonstrating that BPM can explain EUFP (Delreux 2015). Although beyond foreign policy the Commission generally is the EU’s most studied bureaucracy, the bureaucratic entities in the Commission that deal with foreign policy or external relations, including the bureaucracies dealing with trade and development cooperation, seem to have largely escaped the attention from bureaucratic politics (Delreux 2015). Still, a few studies have examined these DGs from a bureaucratic politics perspective (see Frennhof Larsén 2007; Trondal 2012).

Limitations of the Bureaucratic Politics Model Scholars have criticized the BPM for multiple reasons. The BPM is an American tool for foreign policy analysis, which leads to the question of whether it applies to the analysis of foreign policy in other countries. Furthermore, in a significant number of cases, Miles’ law did not determine the position that a decision-maker held (Art 1973; Ball 1974). The approach is monofocal and underrates other actors and interest groups and the public opinion (Caldwell 1977: 105). The BPM focuses on crisis

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decision-making in security issue-related bureaucracies, rather than on the longitudinal analysis of more routine based foreign policy-making (Drezner 2000: 734). Bendor and Hammond state BPM “is simply too thick. It incorporates so many variables that it is an analytical kitchen sink. Nothing of possible relevance appears to be excluded” (1992: 318). It is also essential to raise the issue of scope conditions concerning the BPM. The BPM may be particularly powerful in illuminating the stage of policy implementation (Caldwell 1977: 104). Therefore, universal applicability may be a problematic assumption for this theory. As mentioned before, the issue I argue is not that existing theories like the BPM are wrong, but that there is an inadequate appreciation that they do not apply equally well to all domains. Despite these criticisms, the BPM can complement as well as enrich other approaches. Clifford points out that looking into the internal political processes provides an insight into the conflict within the national government, before arriving at the cooperative core values posited by the neorealists or corporatists. The BPM makes cognitive processes and personality the key aspects of understanding who wins in the decisionmaking process and why, as it stresses the importance of individual values and pulling and hauling by the main actors (Clifford 1990: 168). The BPM indeed can still be considered a viable candidate theory, because the growth of institutionalization and “bureaucratization” implies that EU foreign policy-making is no longer a form of purely intergovernmental cooperation where everything is decided upon by the EU member states in their national capitals (Vanhoonacker et al. 2010: 3).

BPM Hypotheses for Each Stage of the Policy-Making Process In this section drawing upon the BPM, I offer hypotheses for each stage of the policy cycle. Issue Identification The European Commission has privileged access to agenda-setting to attract attention for policy issues (Haverland et al. 2018). Regarding the identification of policy issues and agenda-setting, the BPM suggests it is based on bureaucracies’ consideration of their parochial interests regarding budget allocation, organizational survival, power, autonomy,

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staff, and internal morale (see Beach 2012). General EU interests will be secondary. Furthermore, the preferences and the perceptions of the bureaucratic actors involved correlate highly with their bureaucratic positions (Welch 1992). Given this, the following hypothesis obtains: Hypothesis BPM-ISID: EU bureaucracies are driven by their agenda and interests when identifying an issue.

Decision-Making Allison and Halperin distinguish at least three elements that shape decision-making or determine who decides: bargaining advantages, actors’ skill and will in exploiting these bargaining advantages, and the other actors’ perceptions of the first two elements (Allison and Halperin 1972: 50). Bargaining advantages include the control of implementation, information, identification of available/alternative options, and influence on other actors. Player preferences and perceptions correlate highly with bureaucratic positions. Following Welch, the decision-making process is a bargaining situation where actors promote their interests by “pulling and hauling,” leading to compromised outcomes and the net result that decisions of the government do not mirror the intentions of any actor in particular (Welch 1992: 128). Therefore, policy outcomes are not a solution to a problem, but the outcomes of compromise, competition, political bargaining, confusion, and coalition forming between government officials who see different aspects of a policy issue. Following the BPM, the influence an actor has in the decision-making process relates to its bureaucratic position. This leads to the following hypothesis: Hypothesis BPM-DM: The decision-making process is a bargaining situation where actors promote their interests by pulling and hauling, leading to compromised outcomes and the net result that decisions do not mirror the intentions of any actor in particular.

Policy Implementation The BPM may be particularly powerful in illuminating the stage of policy implementation (Caldwell 1977: 104). Decisions often lack tools that facilitate monitoring. Consequently, senior players experience great difficulty checking on the faithful implementation of a decision (Allison and

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Halperin 1972: 53). Decisions assign specific actions to players, but leave a certain amount of freedom, making that a certain degree of power comes with policy implementation and might lead to divergences from actual policy decisions, or poor implementation. As was argued by Allison and Halperin: “where a decision leaves leeway for the organization that is implementing it, that organization will act to maximize its organizational interest within constraints” (1972: 54). In line with the BPM, EU bureaucratic bodies aim to maximize their powers by claiming those areas that leave room for political interpretation. If the decisions are not clear and leave room for interpretation, bureaucratic politics might take place. Turf wars have occurred frequently in EU foreign policy-making, and in many cases, they hindered an efficient implementation of EUFP activities (Delreux 2015). When the BPM is fully operative, the implementation should reflect delays, contradictory actions, duplications, and distortions of original purposes. Officials that were not involved in the decision game feel less obliged to faithfully implement decisions (Allison and Halperin 1972: 54). When key bureaucratic actors leave, then policy implementation will reflect this. Based on the BPM approach, I formulated the following hypothesis for the stage of policy implementation: Hypothesis BPM-IMPL: Where a decision leaves leeway for the implementing body, the implementation should reflect delays, contradictory actions, duplications, and distortions of original purposes. When key bureaucratic actors leave, then policy implementation will reflect this.

Neorealism Neorealism sees states as autonomous actors rationally pursuing their interests in an international system characterized by the absence of a central authority. States are not the only actors in the international field, but they are the most significant ones. Furthermore, the most powerful states set the rules for other actors, including the EU (Waltz 1979: 94). This reality means that the EU acts as a tool for the collective interests of its member states (Hyde-Price 2006). Scholars commonly distinguish between “defensive” and “offensive” realists when it comes to the kind of inducements the international system stipulates (Rynning 2011: 25). Defensive realists believe that the global system’s anarchical structure encourages states to adopt moderate,

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controlled policies to achieve security (Waltz 1979). By contrast, offensive realists believe that to attain security by maximizing their power and influence (Mearsheimer 2001). All states strive to maximize their power relative to other states because only the most powerful states can guarantee their survival, and consequently, they strive for expansionist policies when and where one can speak of a favorable cost-benefit option (Taliaferro 2000–2001: 128). Criticisms of neorealism accept its central analytical categories that might be suitable for analyzing the European past characterized by its frequent wars but contend it does not suit the modern day’s postWestphalian European polity (Ruggie 1993). Thinking of Europe as a region where states aim to maximize their security is dubious given over half a century of European cooperation has led to the political reality that, for instance, Germany and France do not see each other as the enemy anymore. However, this criticism does not make realism irrelevant to EU foreign policy (Selden 2010). Despite the reality that the EU mostly managed to overcome traditional interstate security issues internally, the focus is on a more modern security policy, including safeguarding the state against new threats, such as terrorism, environmental degradation, and economic competitiveness (Sjursen 2005). Zimmerman argued: “Geostrategic and mercantilist interests, pushed particularly by the Commission, (…) figure prominently in EU trade negotiations. Realist theories, therefore, should not be neglected when analysing EU behaviour in international trade negotiations” (Zimmerman 2007: 828). On a similar note, Schweller claims that in the form of mercantilist propositions and concerns to “keep up with the Joneses,” realism is often better suited for the economic realm by stating that: “even when security is plentiful […] rapid growth will intensify a relative-gains orientation among essentially satisfied states, and so the realist perspective will continue to offer the best explanations of international politics” (Schweller 1999: 31). European Realism stresses three underlying assumptions regarding EU foreign policy’s interests, ideas, and institutions (Bendiek 2012: 47–53). First, while one can hardly speak of European national interest, national interests do exist and can even be regarded as significant for understanding EU politics. A significant number of EU member states have developed a well-established national foreign policy over the past. Naturally, their foreign policies are driven by their interests and concerns rather than by the “European” equivalents. Second, when it comes to ideas following the European Realism model, the EU should serve the national

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interests of its member states (Bendiek 2012: 50–51). Third, one should not overestimate the importance of the EU institutions. International institutions including the Common Foreign and Security Policy’s (CFSP) intergovernmental bodies do not produce policies but are by contrast the product of policies (Mearsheimer 1994/1995).

Limitations of Neorealism Neorealism identifies “a small number of big and important things” (Waltz 1986: 329). The flip side is that it cannot explain the vast majority of what happens in IR (Donnelly 2013: 54). Even when it applies, it does not provide in-depth or sufficient explanations (Wendt 1999). Neorealists tend to downplay the importance of institutionalized multilateral cooperation for the emphasis they put on the difficulties of achieving “co-operation under anarchy” (Hyde-Price 2006). Besides, neorealism is state-centric and overly concerned with hard power and “high politics” or international security (Keohane and Nye 1977: 23–24). Consequently, because the EU is an atypical international actor with somewhat limited coercive power resources and mainly focuses on “low politics” such as trade, development, and climate change, neorealism cannot offer a full and comprehensive explanation (Hyde-Price 2006). Bendiek argues that European realism is limited to explaining policymaking in the non-communitarized areas of EU politics and the areas of the new security agenda of politics. As legal integration has led to the transformation of parts of the EU from unregulated anarchy into a constitutionalized polity comprising strong elements of deliberative interaction, this approach is limited to the areas of EU politics that are non-legalized (Bendiek 2012: 47). Neorealism cannot explain all aspects of European affairs, and certainly not the nuances and intricacies of EU politics, and it cannot offer a full and comprehensive explanation of EUFP (HydePrice 2006, 2012). It is also problematic to assume that neorealism has the same explanatory value for the issue identification, decision-making, and implementation stages. Because universal applicability is a problematic assumption, this calls for the identification of theory scope conditions. While acknowledging the limits of neorealism, it does have its academic relevance and should still be considered a viable candidate for testing theories. I argue that the issue is not that neorealism is wrong or not useful, but that there is an inadequate appreciation of the fact it does not apply equally well to all domains.

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Neorealism Hypotheses for Each Stage of the Policy-Making Process A neorealist argument would argue that state interests dominate and that the most powerful EU member states dominate. Without consensus among the Big Three—France, Germany, and the UK—it will be hard to get anything of significant importance done (see Tallberg 2008; Bendiek 2012). Below, I formulated three realist hypotheses for each stage of the policy-making process. Issue Identification According to neorealism, states rationally pursue their interests with security interests getting the most attention, followed by economic interests and other interests. The model identifies the (security) interests of the most powerful states as the critical issues for the EU: Hypothesis Neorealism-ISID: The security, economic, and other interests (in this order) of the most powerful EU member states influence what issues the EU identifies as the key EU foreign policy-making issues.

Decision-Making Following neorealism, when the EU makes a decision, this follows the interests and preferences of the most powerful member states rationally pursuing their interests. This leads to the following hypothesis for the stage of the decision-making: Hypothesis Neorealism-DM: Decisions are made according to the security, economic, and other interests (in this order) of the most powerful EU member states.

Policy Implementation Following the theory of neorealism, states—particularly the most powerful ones—are the most important actors. The interests of the most powerful states determine the policies and practices of international institutions. When neorealism is fully operative the stage of policy implementation should reflect a clear demonstration of the most powerful states

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safeguarding their security interests, followed by their economic interests and other interests. Hypothesis Neorealism-IMPL: The most powerful EU member states exert pressure on the body implementing the decision to make it track with their security, economic, and other interests.

Institutionalism International institutions are “explicit arrangements, negotiated among international actors, that prescribe, proscribe, and/or authorize behavior” (Koremenos et al. 2001: 762). Alternatively, per North, institutions are generally considered as “the rules of the game” or as “humanly devised constraints that shape human interaction” (North 1990: 3). Institutionalism focuses on the role, function, and design of institutions in foreign policy-making because it examines why and how institutions actors create institutions and how institutions affect policy-making and policy-makers (Delreux 2015). There are many institutionalist approaches, so I only discuss some of the most prominent ones below. The first of the major institutionalist approaches is Normative Institutionalism that can be seen as the roots of institutionalism (see Peters 2012). March and Olsen advanced their understanding of institutions as involving rules and practices that involve norms, affective codes, and informal, habitual, and taken for granted knowledge. Following this approach, policy-makers base their behavior on a so-called logic of appropriateness (March and Olsen 1984, 1989). It substantially differs from Rational Choice Institutionalism (RCI) that supports the logic of consequences. Normative institutionalism distinguishes itself from the other strands of institutionalism as it emphasizes “the behavioural impact of standards of appropriateness established by the community’s normative and policy commitments” (Thomas 2011: 14). RCI focuses on formal institutional rules’ role and effect, including agenda-setting power or voting rules, policy-making processes, and outcomes (Delreux 2015). Per RCI, policy-makers follow a logic of consequences (March and Olsen 1989). Members make decisions based on the assumed outcomes of the decisions rather than on what is regarded appropriate within the institution (Peters 2016). Following RCI, actors’ preferences are exogenous to the institution; they come into the institution “seeking to maximize their utilities and that fundamental value

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is not altered by membership in the institution” (Peters 2016: 60). RCI concentrates on under which conditions EU bureaucracies matter, instead of focusing on whether they matter. It aims to serve as a “middle-range” theory between neo-functionalism, on the one hand, and the theory of intergovernmentalism, on the other hand (Dijkstra 2013: 7). When there is division among the member states, “European institutions cannot do more than paper over differences” (Chopin and Lefebvre 2010: 7). Another institutionalist approach is Historical Institutionalism, which has its main logic path dependency or a focus on the importance of history (see Fioretos 2011; Peters 2012). Per this approach, decisions are limited and influenced by decisions from the past. By contrast, another institutionalist approach, Discursive Institutionalism, touches upon institutions as meaning structures and constructs (Schmidt 2008). Similar to Normative Institutionalism, ideas predominantly define Discursive Institutionalism, however as pointed out by Peters, the difference between both approaches is that they come from different intellectual traditions and that they assume different extents of agreement on ideas within the institution (Peters 2016). Another variant of institutionalism is supranational institutionalism (Jupille and Caporaso 1999; Smith 2004). This approach identifies the EU’s policies with the European Commission, the Council of Ministers, and the European Council’s output (Bendiek 2012). In the supranational institutional analyses, a distinction between intergovernmental institutions on the one hand and supranational institutions, on the other hand, can be made. The main intergovernmental institutions of the EU, with a prominent role for the individual member states, are the Council of Ministers and the European Council. In contrast, in supranational institutions and supranational decision-making procedures of, for instance, the European Commission, policies are expected to be autonomously proposed and implemented by this supranational body. Possessing a veto right in some cases and the firmness of the EU’s individual member states on their national sovereignty is regarded to be of significant influence for a coherent and effective foreign policy (Zimmer et al. 2005). Although there are substantial differences between the various institutionalist approaches, Peters points out that certain features unify them (Peters 2000, 2016). The most important one is that structures (institutions) do matter, with another factor that tends to bind institutional analysis being “that structures persist while individuals come and go” (Peters 2000: 5). In other words, “the most obvious of those common elements in institutional theory is the capacity of institutions to create

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predictability” (Peters 2016: 62). The basic argument is that institutions matter, and “they matter more than anything else that could be used to explain political decisions” (Peters 2005: 164). Institutionalism also argues that “institutions create greater regularity of human behavior than would otherwise exist” and thus increase the “explanatory and predictive capacity” of the social sciences (Peters 2000: 5). Given the wide range of institutionalism versions, it is impossible to test them all because it would go beyond the scope and aim of this manuscript. Consequently, for theory testing purposes, I focus on formal institutional rules’ role and effect, including agenda-setting power or voting rules. The justification for this lies in the nature of the EU with its various policy-making methods, competences, actors, and procedures for various policy areas, suggesting that this version has the potential to illuminate the EU’s China policy in the three selected cases. The formal institutional rules, competences, and EU procedures define who identifies issues, how a decision is made, and how it will be implemented. Because institutions matter, EU law, and procedures are critical. In this light, it is worthwhile to reiterate that multiple actors and institutional procedures produce EU decisions, norms, policies, and actions, depending on the respective issue area (Smith 2008).

Limitations of Institutionalism The strength of the model of supranational institutionalism is also its main weakness (Bendiek 2012). It neglects national policy-making and the importance of the substantive member states’ national interests (Toje 2008). Similarly, Jeffrey Lewis (2011) quoted an EU official who pointed out the absence of a CFSP mechanism to overcome divergence among the big three EU member states, pointing at institutions’ limitations. Besides that, coherent models of complementary institutions rely on the traditional institutionalist idea that institutions impose constraints and enforceable obligations on actors. However, the reality is that they are much more incoherent, non-unitary, and provisional (Herrigel 2005). Actors allow themselves to be constrained by rules when they believe those rules solve problems. However, when they do not, creative actors dealing with uncertainty and guided by dispositions that are not reducible to specific institutional arrangements either alter the rules or agree to ignore them to construct new arrangements that address more directly identified problems (Herrigel 2005).

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Because universal applicability is a problematic assumption for institutionalism, this calls for the identification of scope conditions. I argue that the issue is not that existing theories are wrong, but that there is an inadequate appreciation that they do not apply equally well to all domains. One critical issue with the dominant institutional approaches is that they do not sufficiently consider the strength and bindingness of institutions. Institutions may vary in strength (see Levitsky and Murillo 2009), with institutions considered being strong when there is a binding structural environment where they have legitimacy and a respected judiciary. Weak institutions will allow for more latitude. Soft law is an example of legal rules that are not legally binding, and for which legal sanctions in case of noncompliance are absent (Mörth 2011). The latter predominantly is an issue of the magnitude of the variable. Nevertheless, while acknowledging the limits of institutionalism, it does have its academic relevance, as due to the nature of the EU, analyzing its competences, procedures, and involved actors contribute to a better understanding of the making of EUFP. This justifies the selection of this candidate theory.

Institutionalism Hypotheses for Each Stage of the Policy-Making Process Institutions are a collection of formal rules that structure the cooperation between member states, reflect their creators’ preferences, and facilitate decision-making as they provide solutions for collective action problems and reduce transaction costs (Delreux 2015). Institutions matter, and one can speak of a clear focus on the division of competences. In the next sections, I discuss the distinct stages of the policy-making cycle and formulate my hypotheses based on institutionalism. Issue Identification The focus in the stage of issue identification is on the question of who is identifying the issue. Different EU policy areas have different policymaking methods, different competences, and different actors involved. The Commission is an important actor in trade and development, while in the CFSP, the member states have a more dominant role; for instance, via the Councils. Thus the following hypothesis follows:

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Hypothesis Institutionalism-ISID: Issue identification flows from the interests or priorities of who is in charge as defined by the rules.

Decision-Making Institutionalism identifies the EU’s policies with the output of the European institutions. There is a substantial role for timing, deadlines, and voting procedures (including binding and non-binding and simple and qualified majority votes) to explain what occurs in EU decision-making. Policy-making methods, competences, and relevant actors differ per EU policy area. The Commission is an important actor in the fields of trade and development, while in the CFSP, the member states have a more dominant role; for instance, via the Councils. Based on institutionalism, the formal institutional rules and competences define decision-making. This leads to the following hypothesis for the decision-making stage: Hypothesis Institutionalism-DM: EU law and procedures determine the process and outputs of decision-making.

Policy Implementation Based on institutionalism, the formal institutional rules define the implementation of a policy. It is worth mentioning that not all the output has the same legal status, see, for instance, the difference between hard law and soft law. EU rules have a substantial impact on policy implementation, also regarding monitoring, reporting, and division. The effectiveness of policy implementation “clearly depends on its institutional foundation” (Araral and Amri 2016: 82). Therefore, I formulated the following hypothesis: Hypothesis Institutionalism-IMPL: The implementation of policies follows EU institutions (e.g., policies, decisions, EU law, and procedures).

A Summary of the Models and Their Hypotheses Table 2.1 provides an overview of the nine generic hypotheses formulated above for each stage of the policy cycle based on the respective theoretical models being the BPM, neorealism, and institutionalism.

EU bureaucracies are driven by their agenda and interests when identifying an issue

The decision-making process is a bargaining situation where actors promote their interests by pulling and hauling, leading to compromised outcomes and the net result that decisions do not mirror the intentions of any actor in particular Where a decision leaves leeway for the implementing body, the implementation should reflect delays, contradictory actions, duplications, and distortions of original purposes. When key bureaucratic actors leave, then policy implementation will reflect this

Issue identification

Decision-making

The most powerful EU member states exert pressure on the body implementing the decision to make it track with their security, economic, and other interests

The security, economic, and other interests (in this order) of the most powerful EU member states influence what issues the EU identifies as the key EU foreign policy-making issues Decisions are made according to the security, economic, and other interests (in this order) of the most powerful EU member states

Hypotheses based on neorealism

Source Author’s compilation based on the three candidate theories discussed in the sections above

Policy implementation

Hypotheses based on the BPM

Overview of the generic hypotheses

Policy stage

Table 2.1

The implementation of policies follows EU institutions (e.g., policies, decisions, EU law, and procedures)

EU law and procedures determine the process and outputs of decision-making

Issue identification flows from the interests or priorities of who is in charge as defined by the rules

Hypotheses based on institutionalism 2 LITERATURE REVIEW AND THEORETICAL FRAMEWORK

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Conceptualization and Operationalization of the Policy-Making Process The stages of the policy-making process are an essential aspect of this manuscript. Versluis, van Keulen, and Stephenson point out that scholars of public policy have their toolkits and conceptual frameworks for studying policy-making, which has developed independently of EU studies, often as a result of analyzing the US administration, and it is from these scholars that one can derive the stages approach to analyze policy processes. Integrating the theoretical IR approaches with those used in public policy and administration contributes to a better understanding of the EU policy process. These disciplines have much to offer, and when used together, they can provide an enhanced theoretical and conceptual toolkit (Versluis et al. 2011). In Table 2.2, the process of (EU) policymaking itself is given with a focus on the relevant issues and concepts for each distinct stage in public policy-making.1 The policy process comprises sequential parts or stages. In the stage of issue identification, the focus is not merely on the question of what is the issue, but also on according to whom it is an issue (see Baumgartner and Jones 1993; Kingdon 2003). A window of opportunity indicates a specific period during which there is a possibility to undertake some action to Table 2.2 Theories from the “stages approach” within public policy Theory

Focus of enquiry How…?

Key concepts

Issue identificationa

How problems become political issues and secure due attention or climb up the political agenda, how solutions search for problems How decisions are made (or not made) and the rules, procedures, and means of deciding How legislation resulting from decisions is transposed (absorbed) and put into place politically and technically

Policy/politics/political stream; windows of opportunity

Policy shaping/decision making

Implementation

Decision v. non-decision; rational v. incremental style Top-down, bottom-up, instruments; principal-agent

Source Versluis et al. (2011: 29) a In this manuscript, we will use issue identification instead of agenda-setting that Versluis et al. use.

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achieve an actor’s desired outcome. We operationalize issue identification as clearly identifying the root cause of an issue. In the decision-making stage, the focus is on deciding what course of action to pursue or not, the policy decision (see Peterson and Bomberg 1999). Rational decisionmaking processes focus on the idea that a decision-maker can always develop the best possible solution for any given issue via the systematic application of a process. By contrast, the incremental decision-making process is essentially a bargaining process and compromises characterize its outcome. This process goes step-by-step and bit-by-bit, which is the science of muddling through. It is useful for this stage to highlight that for explaining decision-making in the EU, procedures, and competences may vary across the different policy areas. Due to the complexity of EU rules, procedures, and jurisdictional boundaries, what is surprising “is not the rightfulness (or not) of EU decisions but the fact that any decisions are made at all” (Zahariadis 2013: 810–811). There are two ways to determine which actors can decide about a policy. The first way is per constitutional and administrative law. It involves the question of which actors possess the competences to make binding decisions. By contrast, in the political science approach, policy determination involves more factual questions, including which actors have executed the most influence on policy? Whose preferences were decisive? Who gets his way? (Herweijer 2003). Thus, we operationalize decision-making as the process of making choices by identifying a decision, gathering information, and assessing alternative solutions. When a policy is adopted, it must be put into effect, which happens in the stage of policy implementation (see Pressman and Wildavsky 1973; Falkner et al. 2005). As pointed out by Birkland, one can distinguish between what he calls the design and tools phase and the implementation phase to the degree that policy implementation relies on the implementers’ behavior and the policy target. Despite the hopes and beliefs of policy designers, policies are not self-executing. Thus, the follow through on the policy is critical in this stage of the policy cycle. The main question is, was the adopted policy implemented as agreed upon, and why or why not? It is worth emphasizing that policy failure is a subjective condition that relates to the policy domain (Birkland 2011). When it comes to policy areas such as aviation safety policy, people demand a (near to) 100% safety score, however in other policy fields one might argue that while for instance a 60% score indeed is not a perfect score, at least it is better than nothing and sometimes more realistic. Hence, we operationalize policy implementation as the follow through on the decided-upon policy.

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Concluding Remarks In this chapter, we reviewed the literature on the three theoretical approaches and developed the generic hypotheses. I provided information about the features and limits of these IR theories that I will test to identify their usefulness and, more importantly, their scope conditions. Also, I operationalized the process of EU policy-making itself, focusing on the relevant issues and concepts for each stage in public policy-making. In the subsequent Chapters 3, 4, and 5, I will test the hypotheses to evaluate existing arguments and cull out scope conditions.

Note 1. Carta (2013) also mentions that a simplified cycle of four main stages can be applied to EU foreign policy-making. She distinguishes policy initiative, policy formulation, decision-making, and implementation. As was mentioned in Chapter 1, for analytical purposes and manageability reasons, we focus on three policy stages hence not including the policy formulation stage. However, I encapsulated policy formulation in the decision-making stage. We also left out the policy evaluation stage.

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CHAPTER 3

The EU-China Solar Panel Dispute

This chapter examines the EU-China solar panel dispute, the largest trade defense investigation ever done by DG Trade. This chapter first provides background information about the European solar market, European Trade Commissioner Karel de Gucht, and the Option case. This provides useful context to the EU solar panel case. It then assesses which of the BPM, neorealist, or institutionalist models best illuminates the dynamics of issue identification, decision-making, and policy implementation to evaluate existing arguments and cull out scope conditions. I find that, eventually, neorealism explains best what happened concerning decisionmaking. Institutionalism contributes to a better understanding of all three stages. The Commissioner had an essential role in the issue identification and decision-making stages. The chapter’s conclusion provides a more detailed summary of the case and the theoretical findings drawn from it.

Background to the Solar Panel Case The European Solar Market: From Boom to Bust Over the last decade, solar energy has become an increasingly important source of energy, and solar and other renewables are ways to reduce dependence on crude oil and natural gas. The 2009 EU Renewable Energy Directive required the EU to achieve its 20% renewables target © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2021 B. Hooijmaaijers, Unpacking EU Policy-Making towards China, Palgrave Studies in Asia-Pacific Political Economy, https://doi.org/10.1007/978-981-15-9367-3_3

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by 2020. The European governments had to act to reach this goal, which led to feed-in tariff schemes.1 Thus, the EU created an artificial market leading to more demand for solar and an explosion in Chinese solar targeting the EU market, partly because in 2008, China had named the solar industry a strategic industry. After Italy terminated the feed-in tariffs in 2012, and Germany reduced them, the market slowed down. This led to a collapse in demand and oversupply because the Chinese suppliers tried to sell whatever they could. In 2011, Europe had a global market share of approximately 75–80%. In 2012, this already decreased, and in 2013–2016 Europe’s share was below 10% (SolarPower Europe 2017a; see also Kolk and Curran 2017). German solar companies, including Solar World, experienced severe troubles, and over a dozen firms had to file for insolvency. Exacerbating the pressures flowing competition from Chinese solar manufacturers were including enormous industry overcapacity, weak demand, decreasing government subsidies, and solar prices that plunged by almost half in 2011 and another 24% in 2012 (Financier Worldwide 2013). Trade Commissioner Vows to Take a Tougher Stance on China Early 2010, when the Belgian politician Karel de Gucht assumed office as European Trade Commissioner, he vowed an approving European Parliament to take a tougher stance on China (Financial Times 2012). De Gucht differed from his predecessors Commissioner Peter Mandelson and Catherine Ashton in terms of their policies vis-à-vis China. He believed that Mandelson’s policy was too naïve and too soft.2 He believed that China’s system was different from the European system, something he called state capitalism. De Gucht concluded that there was a vast government subsidies program and that there were threats to shut complaining EU firms out of the Chinese market. The Option Case Following a complaint lodged by Belgium-based dongle maker Option, in 2010, DG Trade had launched three parallel investigations against Chinese 3G dongle makers Huawei and ZTE. One on subsidies, one on dumping, and a safeguard request that had to be submitted via the Belgian government. Trade defense investigations are relatively timeconsuming. Thus Option’s strategy was to get a safeguard as soon as

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possible to seek protection. However, approximately one month after the Commission launched its probes, Huawei invested in Option, forcing the Belgian firm to request DG Trade to close the ongoing investigation, which ended the case. There was no case left, much to the dislike of De Gucht. As we will see later on in this case study, the Option case is relevant for a better understanding of the EU-China solar panel dispute.

Issue Identification: Solar Manufacturers up Against Something not Market-Driven On July 25, 2012, EU ProSun, an industry association representing over 20 European solar companies, lodged a formal complaint that solar panels and their key components imported from China were entering the European market at prices below market value. According to EU ProSun’s President Milan Nitzschke, who was also the Vice President of German solar panel firm SolarWorld: “China’s government has financed the domestic solar industry to the tune of 200 billion euros in the last few years. That’s how ‘dumping’ prices, or prices below the manufacturing costs, are achieved” (Deutsche Welle 2013).3 EU ProSun felt that highly innovative EU companies faced immediate bankruptcy threats because of unfair competition from Chinese exporters. The most important dates and events related to the issue identification stage are given in Table 3.1. The Commission is legally obliged to open an investigation when it receives a valid complaint from an EU industry, which provides evidence that exporting producers from one or more countries are dumping a particular product into the European market and injuring the EU industry. As the collective output represented over 25% of EU production, and the producers opposing the complaint did not represent more EU production than companies supporting the complaint, it met the legal requirements for initiating an investigation under EU anti-dumping regulations. EU ProSun brought sufficient elements showing possible price dumping by the Chinese solar manufacturers on the EU market, the injury suffered by the EU solar industry, and a possible causal link between the dumped imports and the injury suffered by the EU industry. Thus, the Commission found sufficient prima facie evidence to warrant the opening of an investigation. Consequently, on September 6, 2012, it launched a notice of initiation of an anti-dumping proceeding concerning Chinese solar imports. This was within the limit of 45 days after the receipt of the complaint. This is the term that EU law requires to decide

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Table 3.1 Chronology of the issue identification stage in the EU-China solar dispute Early 2010

September 2010

Fall 2010

September 6, 2012

September 26, 2012

November 8, 2012

De Gucht vows an approving European Parliament that he would take a tougher stance on China (Financial Times 2012) Following a complaint lodged by Option, DG Trade launches three parallel investigations against Huawei and ZTE (Financial Times 2010) Huawei invests in Option, forcing the Belgian firm to request DG Trade to close the ongoing investigation (Financial Times 2010) The Commission gives notice of initiation of an anti-dumping proceeding on Chinese solar (2012/C 269/04) (European Commission 2012a, 2012b) EU ProSun lodges an anti-subsidy complaint with the European Commission on Chinese solar (European Commission 2012c) The Commission launches an anti-subsidy investigation on Chinese solar (2012/C 122/17) (European Commission 2012c)

whether to initiate an investigation or not. It was a clear, standard procedure with the only discretion for DG Trade being what to consider as prima facie. Per a senior EU official, it was a “clear case” here (Interview senior EU official, August 11, 2017). The Commission’s TDI department automatically launching an anti-dumping procedure was very poorly perceived by the Chinese side, which regarded it as a direct public attack on China. Per a European official: “With other partners, anti-dumping disputes do not go to the political level, they live their own life in the trade defence investigation part of the relationship. With China, it’s different. They see it as attacks against China” (Brugier 2017: 208). Moreover, in fall 2012, the Commission launched an anti-subsidy investigation on solar imports from China after a complaint lodged by EU ProSun. Here, the EU is also legally obliged to open an investigation if it receives a valid complaint from an EU industry that provides evidence that a product exported from one or more third countries is subsidized and causes injury to the EU industry. As EU ProSun brought sufficient elements demonstrating the existence of possible subsidization by the Government of China, the injury suffered by the EU industry, and a possible causal link between the subsidized imports and the injury suffered by the EU industry, the Commission found that there was sufficient prima facie evidence to warrant the opening of an investigation.

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It also is essential to discuss the methodology used by the Commission to calculate. First, it is based on the facts available. Second, as it involved a pre-December 2016 case, China could be given so-called non-market economy treatment, because China does not have MES. The Commission uses the analog country method in these cases. This method intends to allow investigators to model production costs in the investigated country as if that country operated on market economy conditions. However, this frequently leads to a high price as a benchmark. It is challenging to find a country to make an exact comparison. This methodology already applies to the prima facie evidence. The industry includes in its complaint what a suitable proxy country would be. The reason for this is that they have extensive knowledge of the global market. This meant that, in the case of China, one can virtually always find dumping and subsidies. An industry association representative went as far as saying, “there basically is no methodology. If you are not a country with MES, you are guilty, more or less. This is deliberately done for China; the MES clause is a China clause” (Interview senior industry association representative, January 30, 2018). Be that as it may, in this case, the margins were that high that one could indeed speak of dumping. It was “so crystal clear there was both dumping and subsidies, so there were no doubts that the legal requirements were met” (Interview senior EU official, August 19, 2019).4 Aside from the above, one should not forget Commissioner De Gucht’s intent on taking a tougher stance on China. After the Option case’s closure, “EU ProSun on a silver platter offered De Gucht a chance to attack China’s strategic sector” (Interview senior industry association representative, January 30, 2018). I now turn to examine how well my three candidate theories explain what happened concerning issue identification. Hypothesis testing BPM-ISID: EU bureaucracies are driven by their agenda and interests when identifying an issue. There was a dual development, with on the one hand DG Trade acting in response to a valid formal complaint from an EU complainant. However, it is worth mentioning De Gucht’s political motivations, and the context of his complicated relationship with China, which influenced his perception and decision on the solar case. He also followed the legal procedures, and it was clear that there were both dumping and subsidies, but he wanted to impose anti-dumping measures. So the Commissioner

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played a personal role in the process of launching and implementing the anti-dumping measures. Hypothesis testing Neorealism-ISID: The security, economic, and other interests (in this order) of the most powerful EU member states influence what issues the EU identifies as the key EU foreign policy-making issues. The interests of the Big Three did not translate into policy action, which led the EU to recognize the dumping and subsidize of Chinese solar as an issue of critical importance. Instead, industry association EU ProSun was standing up for its economic interests. Consequently, neorealism does not illuminate this stage. Hypothesis testing Institutionalism-ISID: Issue identification flows from the interests or priorities of who is in charge as defined by the rules. Institutionalism illuminates this stage. EU industries have the right to ask for an investigation and lodge a formal complaint. Following these procedures, the Commission identified it as a case of anti-dumping (and subsidies), because EU ProSun delivered sufficient prima facie evidence. It was the Commission’s legal duty to act, the only discretion DG Trade had was what to consider as prima facie. The methodology, as used by the Commission at that time, is also relevant. Because China does not have MES, one could virtually always find dumping and subsidies. In this case, it was “crystal clear there was both dumping and subsidies, so there were no doubts that the legal requirements were met” (Interview senior EU official, August 19, 2019).

Decision-Making: Politics Plain and Simple? The Commission’s DG Trade Directorate H on Trade Defence did the investigation. It had to follow strict procedures, and it is legally bound to them, with a provisional decision after nine months and definitive measures after 15 months for the dumping case. For the anti-subsidy investigation, the total period is 13 months, with the possibility to impose provisional anti-subsidy duties within nine months. According to DG Trade, during the investigation it assessed the level of duty needed to counteract the injurious effects of dumping, meaning that the level of the duty is never punitive, but rather it was fixed at the strict minimum necessary to restore a level playing field for the EU solar industry. Table 3.2

June 5, 2013

June 4, 2013

May 30, 2013

May 27, 2013

May 27, 2013

May 27, 2013

Late May 2013

May 26, 2013

May 2013

May 15, 2013 May 15, 2013

May 8, 2013

May 8, 2013

(continued)

MOFCOM launches investigation into European polysilicon and puts requests for consultation at the WTO against Italian and Greek renewable policies Commission on the verge of a trade war with China over the import of solar panels, as it is considering imposing an average anti-dumping import tariff of 47% (BBC 2013c) Statement interest group AFASE that Commission’s provisional measures will severely hurt European solar markets (AFASE 2013) Consultation of trade specialists from all 27 EU countries (BBC 2013c) The Commission decides in principle to open an ex officio anti-dumping and an anti-subsidy investigation on Chinese telecoms (European Commission 2013j) The CCCME sends a delegation to meet the Commission for a consultation (Ministry of Commerce People’s Republic of China 2013b) During a meeting with Li Keqiang Merkel hints in favor of a negotiated agreement rather than punitive tariffs (BBC 2013a) In her efforts to avoid a trade war, Merkel called Barroso, which was followed by a call from Barroso to De Gucht (Reuters 2013b) A survey of member states shows that a majority of EU governments oppose a plan to impose hefty duties on Chinese solar (Reuters 2013a; BBC 2013b) An informal meeting between De Gucht and China’s Vice Commerce Minister Zhong Shan takes place (European Commission 2013a) EU states readiness to negotiate an amicable solution in solar panels case with China (European Commission 2013a) Position paper of various NGOs criticizing the Commission (WWF International, Natuur & Milieu, E3G and Change Partnership 2013) The Commission decides to impose provisional anti-dumping measures on imports of solar panels from China (European Commission 2013b) China announces the launch of an anti-dumping and anti-subsidy probe into European wine (Ministry of Commerce of the People’s Republic of China 2013a; Xinhua 2013a)

Chronology of the decision-making stage in the EU-China solar dispute

November 5, 2012

Table 3.2

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(continued)

December 6, 2013

December 4, 2013

December 2, 2013

August 7, 2013

July 29, 2013 August 2, 2013 August 6, 2013

July 27, 2013

June 21, 2013

June 5, 2013 June 6, 2013 Early June 2013

Table 3.2 At the same time, China calls for dialogue after EU solar panel duties (Xinhua 2013a) The tariffs as announced on 4 June 2013 come into effect (European Commission 2013b) The Commission sends a senior EU official to Beijing for a few weeks, to seek agreement on the price and the volume of Chinese solar Following a ministerial-level meeting, China and the EU agreed to solve the case through price undertaking talks (Xinhua 2013a) After six weeks of talks, China and the EU defused their biggest trade dispute by far (European Commission 2013c) Statement by De Gucht on the amicable solution in the solar case (European Commission 2013a) The Commission accepts an undertaking offered by the Chinese side (European Commission 2013f) Legal acts on setting a MIP and a volume limit on EU imports of Chinese solar through 2015, a regulation exempting participating companies from paying any anti-dumping duties come into force (European Commission 2013f) European Commission continues the anti-subsidy investigation on solar panels from China without duties (European Commission 2013g) EU imposes definitive measures, confirms undertaking with Chinese exporters. Council implementing regulation (EU) No 1238/2013 (Council of the European Union 2013; European Commission 2013d) Commission implementing decision of December 4, 2013 confirms the acceptance of an undertaking (2013/707/EU) (European Commission 2013e) Solar duties enter into force and will apply for two years (European Commission 2013e)

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provides an overview of the myriad of dates and developments in the decision-making stage. Particularly in May 2013, the case attracted a lot of media attention. De Gucht wanted to take firm steps against China. EU officials were frustrated with the Chinese leadership’s unwillingness to negotiate. By imposing provisional duties, the Commission felt it had leverage because under EU law the measures could be cemented for up to five years if no negotiated solution was found (Reuters 2013a).5 In an advisory vote late May 2013, a majority of EU governments opposed a plan to impose hefty duties on solar imports from China. The fear of Chinese reprisal and potential loss of business led Germany and the UK to be among at least 14 member states that opposed the sanctions proposed by De Gucht.6 Illustrating the tug of war that kept escalating at that time, on May 15, 2013, the Commission also decided in principle to open an ex officio anti-dumping and an anti-subsidy investigation concerning imports of mobile telecommunications networks from China, not activating it for the time being to allow for negotiations toward an amicable solution with the Chinese authorities (see also Chapter 4). The solar panel dispute revealed a divided EU in terms of how to deal with China on an economic dispute, with, on the one hand, Germany and the UK standing up for their economic interests by claiming that their companies could be disadvantaged in China’s growing markets if the Commission took action against China. In late May 2013, German Chancellor Angela Merkel said she wanted to reach an agreement with China over import tariffs and avoid triggering a damaging trade war. Merkel called for “intense” talks between the EU and China and said that Germany would use its power within the EU to ensure that the talks were productive (BBC 2013a). According to Merkel, tariffs would not help either side. Merkel met with Chinese Premier Li Keqiang in Berlin, and Germany was the only EU stop during the leader’s first overseas tour, highlighting the importance of the bilateral relationship between the PRC and Germany. Simultaneously, Germany’s economics minister, Philipp Rösler, expressed his government’s opposition to duties during lunch with Chinese Premier Li Keqiang (Financial Times 2013a). Germany initially supported De Gucht’s plans for duties, and it was a German company SolarWorld who first raised the complaint against the Chinese manufacturers of solar panels. However, Merkel changed her opinion and favored a negotiated solution rather than punitive measures, wary of the potential impact on German exporters if China were to take

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retaliatory steps (Reuters 2013a). According to a senior EU official in her efforts to avoid a trade war, Merkel called then European Commission President José Manuel Barroso, which was followed by a call from Barroso to De Gucht (Reuters 2013b). Even though De Gucht did not alternate his policy (for the time being), the message was clear. Merkel irritated EU trade officials when, during a visit to China, she publicly suggested that De Gucht should not impose duties, but instead, he should opt for a negotiated solution, a move that the EU interpreted as undercutting the Commissioner (Financial Times 2013a). Indeed with Merkel late May stating we prefer a negotiated solution, she de facto overruled De Gucht. Besides Germany, the UK publicly undermined the tough approach taken by De Gucht, with then Prime Minister David Cameron systematically undercutting the Commission and promoting Britain as far more progressive on trade matters than other EU member states during his trip to Beijing in late 2013 (ECFR 2014). As Britain’s exports to the PRC had fallen behind those of other EU countries, London aimed to boost the bilateral trade relations. Various European parties voiced their opinion against the provisional duties. In late May 2013, then British Energy Minister Greg Barker made “a special trip” to Brussels to express his government’s anger at De Gucht’s move to impose provisional duties that, according to him, hurt the British PV sector. The German Chamber of Industry called for an instant ending of the “trade war” after over a thousand PV firms petitioned the Commission not to impose tariffs. In a similar vein, the Swedish Board of Trade published a report entitled “Targeting the Environment,” which condemned the negative consequences of the Commission’s trade defense practice for climate policy (Goron 2018: 111). In contrast, countries like France and Italy held the opinion that Chinese firms were unfairly benefiting from state support, allowing them to flood the EU market with cheap goods and weakening local producers and manufacturers’ position. Per French Industry Minister Arnaud Montebourg: “Countries that use protectionism, and China is one of them, should accept reciprocal rules” (BBC 2013b). However, analysts claimed that France’s position in favor of severe duties could be explained by its domestic debate on its energy policy and the need to diversify energy resources (China Daily 2013a). These divided positions held by the member states point at the absence of the EU’s capability to operate as a firm and cohesive bloc. The European Parliament, which only

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had a consultative role here, held a few debates in which MEPs called for a strong defense of the EU’s PV industry, as was for instance reflected in the oral question to the European Commission put by MEP Vital Moreira on behalf of the International Trade Committee (INTA) on September 22, 2012 (Goron 2018). During an informal meeting on May 27, 2013, De Gucht made it very clear to the Vice-Minister of Commerce Zhong Shan that he “was aware of the pressure being exerted by China on a number of EU member states, which explains why they are positioning themselves as they are in their advisory positions towards the European Commission” (European Commission 2013a). During this informal meeting, De Gucht also expressed his readiness to negotiate a solution on the solar panels case. Aside from the diverging opinions among the member states, European businesses did not have a single mindset regarding anti-dumping duties. Some solar firms, mainly importers and installers, and polysilicon firm Wacker and ArcelorMittal opposed duties because cheaper Chinese solar panel parts were critical inputs for them.7 The Alliance for Affordable Solar Energy (AFASE) was one of the actors that opposed these duties.8 In a position paper on the proposed punitive import tariffs on Chinese solar, WWF International, Dutch environmental group Natuur & Milieu, E3G, and Change Partnership stated that they supported the firm opinion of now 18 EU member state governments and requested immediate withdrawal by the Commission of the proposed import duties. They strongly urged the Commission to embark on “amicable dialogue” with the PRC to solve this trade dispute and “avert the specter of a wider trade conflict.” This group of environmental non-governmental organizations (NGOs) found that “this rude action is fully undeserved,” adding that “the last thing we need is a trade war with China on clean technologies” (WWF International, Natuur & Milieu, E3G and Change Partnership 2013: 1). This led to a situation of various complaints coming from different parties with diverging interests, where DG Trade had to look at the EU interest. There were tough discussions, as it was difficult to strike a balance on conflicting interests. Alternatively, per a senior EU official: “They were damned if they did, and damned if they did not” (Interview senior EU official, June 14, 2018). If the Commission had not done anything, there would have been dumping, and it would be problematic for European solar manufacturers. However, if they would act, there would still be the dependence of EU importers and installers on

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cheap Chinese solar. Nevertheless, it is worth mentioning that DG Trade works with a hierarchy of value, and production is considered “higher up the hierarchy” than the so-called downstream (Interview senior industry association representative, January 30, 2018). The member states’ majority vote against the Commission’s proposal was non-binding because it was an advisory vote. Consequently, following EU procedures, even in cases where most member states oppose sanctions, the Commission can implement the measures it deems appropriate. A senior EU official illustrated this by stating: “the European Commission is not an implementing organ of the will of the member states. It is a player on its own” (Interview senior EU official, August 11, 2017). After it had completed its investigation, on June 4, 2013, the Commission decided to impose provisional anti-dumping measures as it found that the fair value of a Chinese solar panel sold in the EU should be 88% higher.9 The Commission argued that because the market for and imports of solar panels in the EU is vast, it is essential for this duty not to disrupt it. As in every other investigation, the Commission carried out the Union interest test and provisionally considered that the economic gains would outweigh any potential adverse effects of the measures for the EU producers.10 The Commission reiterated its readiness to pursue discussions with the Chinese to find a solution in line with Article 8 of the Basic Anti-Dumping Regulation. That would involve suspending the provisional duties and finding a negotiated solution between the parties. Hence, it is worth stating that the investigation on the dumping of Chinese solar is “not a policy instrument that the European Commission may use or not, but as rules to govern that fair concentrations of these solar panels enter the EU market” (Interview senior EU officials, July 22, 2015). Alternatively, per a Head of Unit of DG Trade: “We are not making trade policy. We are implementing European law” (Freudlsperger 2014: 4). Be that as it may, the vice-president of the European Parliament’s INTA Committee Robert Sturdy warned that the Commission’s measures would cost European jobs, force up prices for EU consumers, breach environmental policy and damage the EU’s trading relationship with the PRC. By contrast, MEP Vital Moreira, Chair of the INTA Committee, stated that he fully supported the provisional measures “as it is all about getting ‘trade justice’ for European companies and workers” (European Parliament 2013).

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On the Chinese side, as reported by the People’s Daily (2013), several days before the imposition of the provisional measures, Li Keqiang, Premier of the State Council, said in a call with Commission President Barroso that the Chinese government was highly concerned about the current trade dispute. According to the Chinese state media outlet, the solar case involves primary Chinese economic interests, and it would not only severely damage China’s interests if not handled well, but also inevitably hurt the EU’s interests and affect the China-EU relations. Beijing firmly opposed trade protectionism and abuse of trade remedy measures and strongly defended China’s interests, and mentioned the hope that the two sides will resolve their trade disputes via dialogue and consultation, rather than by fighting trade wars, as there is no winner in a trade war. The methodology, as used by the Commission, is critical for a better understanding of this case (see the issue identification section). This means that in the case of China, one could virtually always find dumping and subsidies. From the Chinese side, there were complaints that the EU survey was not open and transparent. The proxy country that was selected by the EU was India. However, according to Fan Zhenhua, legal director of Yingli Green Energy Holdings Co., Ltd., the development of the solar industry in India is relatively slow, and technological innovation and scale effects are much worse than those of Chinese firms. Thus, its costs are relatively high, making it unfair to use as a proxy for Chinese companies (People’s Daily 2013). Moreover, the EU did not disclose its survey involving Indian companies. Be that as it may, in this case, the margins were that high that one could indeed speak of dumping. Following the provisional decision, the EU launched a phased approach with the duty set at 11.8% for two months until August 6, 2013. From August 2013 on, the duties would be set at the level of 47.6%. Per the Commission, this was the level required to remove the harm caused by the dumping to the European industry. These temporary tariffs would initially stay effective until early December when the Commission had completed its investigation and the procedure demanding the Council of Ministers to make the final decision. The Council can impose these definitive measures unless a simple majority is against them. If the Council voted the same on the definitive measures as during the provisional vote, the measures would not have passed. The provisional measures would not survive the Council, “unless there would be a change. This was clear for De Gucht” (Interview senior

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EU official, August 11, 2017). The Council being against the Commission would weaken the Commission, yet the Commission felt it is not an implementing organ of the member states’ will. Instead, it saw itself as a player on its own. De Gucht decided to go ahead and impose EU law because he considered it a clear dumping case. However, because the non-binding vote demonstrated that the member states were not on the same side as the Commission, DG Trade had to make a move, eventually leading to the price undertaking. By doing so, the Commission could keep its measures, but the majority of the Chinese solar panels would fall under the undertaking. Consequently, the non-binding vote did have a political effect in telling the Commission if they do the same thing, and the Council votes the same during the final vote there will be no measures at all, and the Commission would look awkward. “It would be an outright defeat for the Commission” (Interview senior EU official, August 11, 2017). Consequently, the European Commission tried to negotiate an agreement. Trade policy is an exclusive EU competence; however, because of the Northern European member states’ will even after Lisbon, the Council remained an essential decision-maker in anti-dumping cases. When it comes to trade defense issues apart from the North-South divide, the third group of member states is the swing states, including Germany. Thus Germany’s vote is crucial because, in the slipstream of Germany, other countries will follow, shifting the power balance and creating a blocking majority. This would make it politically very difficult for the Commission. Consequently, the moment (in late May) that Merkel expressed her preference for a negotiated solution, DG Trade was forced to accept a negotiated solution. It left De Gucht no other choice than to go and negotiate an agreement with the Chinese side. Because the Chinese solar panel exports to the EU had a value of approximately 21 billion euro, accounting for 7% of China’s total export to the EU, this case was not just a technical, judicial case but also political. Beijing was aware of the situation that the Commission was going to find dumping, there was political pressure from the European side, damage to the EU industry, and causal relationships between these factors. Consequently, China developed the following fourfold strategy targeting various member states. The first move involved a WTO case against Italy and Greece, because of their national regulations stating that EU manufactured solar panels would benefit from a higher feedin tariff than non-EU manufactured solar panels, which is against the

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local content rule. Second, China launched a Chinese anti-dumping case against German, US, and Korean polysilicon. German firm Wacker is one of the leading exporters of polysilicon to China. Third, the Chinese government threatened with an anti-dumping case against German luxury cars and car parts. Mainly driven by the big car manufacturers, Germany’s economic ties with the PRC dwarf those of its European counterparts. Fourth, China announced the launch of an anti-dumping and anti-subsidy probe into European wine, mainly affecting France, Italy, and Spain.11 Allegedly, China also targeted particular vineyards that De Gucht owned. Parallel to these actions, China called for dialogue after the EU solar panel duties announcement, a call that came from the EU as well (see Xinhua 2013a). The Commission had frequently mentioned its readiness to pursue discussions with Chinese exporters and with the CCME to find an amicable negotiated solution to suspend the provisional duties. In late June 2013, then French President Francois Hollande said that both parties should avoid unilateral measures of protectionism or market closure that could damage both parties’ interests, adding that “France has always supported that these disputes should be resolved through negotiation instead of pointing fingers at each other” (China Daily 2013b). Hollande also said that his country wanted to attract more COFDI and that “Europe needs China for its own growth and China needs Europe to develop its business and to gain access to the technology of tomorrow” (China Daily 2013b).12 Yet, per EU law, formal discussions between China and the EU toward reaching a negotiated settlement could only begin after the duties on solar became EU law early June 2013.13 The Commission sent a senior EU official to Beijing early June 2013 for a few weeks, intending to seek agreement on the price and the volume. On June 21, 2013, following a ministerial-level meeting, China and the EU agreed to solve the dispute through “price undertaking” talks (Xinhua 2013b).14 The Commission does have discretionary space to choose between several measures including tariffs or accepting a price undertaking, however, “the goal of the measures is the same: removing the injuries of dumping, and both measures have the same net effects” (Interview senior EU officials, July 22, 2015). Per the World Trade Organization (WTO) and EU law, a price undertaking is possible under strict conditions. These conditions include a commitment made by exporters to respect minimum import prices (MIP), which does not aim to fix prices at specific levels, but rather prevent them from falling below a specific floor price. The alternative measure must remove the injurious

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effects of dumping, the Commission must be able to monitor the undertaking, and besides that, general policy considerations can play a role, including stability of supplies. Following the EU procedures, the Chinese side needed to come up with the price undertaking. Like the EU industry needed to lodge a complaint on the dumping of solar panels on the EU market, the Commission could not act in this case (Interview senior EU officials, July 22, 2015). A group of Chinese exporting solar panel producers gave a mandate to the CCCME to submit a price undertaking. Before accepting the price undertaking, the Commission had some considerations to make. It had to make a risk assessment, it had to see whether it could monitor the price undertaking, and it also had to do a Union interest test to see whether what is happening is in the interest of the EU. Due to the product being volatile, the volume of the price undertaking was an issue as well. Eventually, it followed the historical trade patterns, but then of around 60-70% of the exports. Monitoring the price undertaking takes “a lot of effort,” yet the Commission still went for this option because there were “so many economic interests involved and the supply of the solar panels was at stake, and that is why a price undertaking was considered as the best solution” (Interview with senior EU official, July 22, 2015). Eventually, after six weeks of talks on July 27, 2013, the EU and China defused their most significant trade dispute by far with an agreement to regulate Chinese solar imports and avoided a wider trade war.15 The Commission endorsed a negotiated settlement with the PRC that set a MIP and a volume limit on EU imports of Chinese solar through 2015. Chinese manufacturers agreeing to this deal will avoid punitive duties that the EU had planned to impose. The Commission said it had received almost unanimous support from the member states with a vast majority voting in favor and none voting against it. According to De Gucht: “We found an amicable solution in the EU-China solar panels case that will lead to a new market equilibrium at sustainable prices. Upon consultation of the advisory committee composed of Member States, I intend to table this offer for approval by the European Commission” (European Commission 2013c). The member states accepted the package of the undertaking plus the measures, but it had to be this package (Interview senior EU official, August 19, 2019). The Chinese side wanted the measures to last as short as possible. The consideration for DG Trade was that nobody knew its effect. It was not easy to foresee what was going to happen in this sector.

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In the EU internal market, there were also changes with the feed-in tariffs under revision, so having a clear idea of the market evolution for five years was challenging. The compromise became two years, with the possibility of adaptation based on the mechanism of quarterly reports and the world reference price based on Bloomberg data. The member states were “happy” with the price undertaking move because it showed unfair trade practices, but at the same time, it was a way of using measures that were “relatively more acceptable” to the Chinese (Interview senior EU official, August 11, 2017). For China, a negotiated solution is face-saving. By contrast, the EU imposes anti-dumping measures or anti-subsidy measures unilaterally. The Chinese authorities accepted the deal, “instead of gambling on a better outcome when the Member States’ final vote came in December [2013]” (Goron 2018: 111). The compromise “was widely regarded as a victory for China” (Bollen De Ville and Orbie 2016). Per Zhang Xiaotong (2014: 72), “The solar panel case is a litmus test, which shows that China has skillfully used its economic diplomacy built upon its increasing strengths and confidence.” When De Gucht got asked to reflect on his relations with the member states after the solar case, he mentioned that 28 governments would inevitably have diverging opinions. However, the Trade chief also said that: “If everybody stays within his role …then we will have a strong trade policy” adding that: “They [EU governments] should not engage in parallel discussions – be it with China, or anybody else” (Financial Times 2013b). Per DG Trade, the Chinese suppliers participating in the undertaking (70% of the current Chinese exports) will save the anti-dumping duties for a significant volume of sale, yet this relates to a market segment that European suppliers could not cover in any event, and for those exporters who are not participating in the undertaking (up to 30% of the current Chinese exports) after the undertaking enters into force the duties would go up from 11.8% to 47.6%.16 Eventually, on August 2, the Commission formally accepted the solution, and on August 7, 2013, it announced it would not impose provisional measures in the anti-subsidy case. On December 2, 2013, the Council of Ministers backed the Commission’s proposals to impose definitive anti-dumping and anti-subsidy measures on imports of Chinese solar. In parallel, the Commission confirmed its decision accepting the undertaking with Chinese solar panel exporters applied since the beginning of August, a MIP, and a volume limit on EU imports of Chinese solar panels through the year 2015.

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According to the Commission’s press release, the imposition of definitive measures should fit the context of the amicable solution reached with the PRC that resulted in the undertaking. The undertaking, applied as part of the anti-dumping proceedings, was now confirmed and had been extended to the anti-subsidy proceeding. Council Implementing Regulation (EU) No 1238/2013 of December 2, 2013, imposed a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of crystalline silicon photovoltaic modules and key components originating in or consigned from the People’s Republic of China. For a better understanding of the deal, it is worth considering that “without the provisional measures imposed by the Commission, there would not have been a floor price” (Interview senior EU official, August 11, 2017). Noteworthy is that there was a lack of support from the member states from the very beginning. As mentioned by an industry association representative, “The initial tariffs would not have been imposed if the Commission had not included them in a basket of other products,” continuing that “this basket involved various other products including telecoms products and PV” (Interview senior industry representative, November 13, 2018).17 From day one, the Commission services had been fighting an uphill battle. Everything has happened per EU law and procedures, but reluctantly. Eventually, it was a mixture of products to target and the introduction of the MIP that won member states’ support. “It was politics plain and simple, and all due to the Belgian dongle producer Option being bought by the Chinese to end a trade case” (Interview senior industry representative, November 13, 2018). Besides the fear of retaliatory action and the avoidance of a trade war that seems to have been a significant factor in shaping member states’ positions (Curran 2015), it is worth examining the EU procedures for the Council voting to explain what happened and why.17 The cost of opposing the Commission proposal and disagreeing with member states in favor of TDI in a non-binding vote is relatively low. However, a binding vote as is the case here in the Council against the Commission and the “Friends of Trade Defence Instruments” might be disadvantageous in future or parallel cases when the member state(s) in question would itself have to rely on the loyalty and “solidarity” of the “like-minded.” The former goes in particular for swing member state governments that do not attach a high value to a given case holding this position in a final vote might ultimately be the more attractive option (Feudlsperger 2014:

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19). Or per a senior industry association representative: “Germany swings and everybody moves” (Interview senior industry association representative, January 30, 2018). EU procedures and voting rules are deemed to be even more critical when considering that abstentions are counted as a silent yes, rather than a silent no (Nordström 2011). Although its ultimate relevance depends on the rationale that member states attach to an act of abstention, it might allow them to use abstentions without antagonizing both political factions and thereby “burning political capital” (Feudlsperger 2014: 19). This is the Brussels game. Member states want to be part of the winning coalition. Without the Germans, there was no majority support. Thus everyone started to count their chickens. Also, the 2003 Eurocoton case (see Giannakopoulos 2006) meant another limitation for the member states, because the European Court of Justice (ECJ) ruled that if they decide not to follow the Commission on trade defense measures, the Council has to issue a legally binding statement of reason. Political considerations and arguments relating to broader policy areas such as foreign policy, labor standards, and regional policy are considered being not within the scope and thus not applicable (European Commission 2006). Hence, rejecting a Commission proposal for legal reasons is very difficult since the Commission’s reasoning is already so waterproof that it can be defended before the ECJ (Feudlsperger 2014: 19). Alternatively, per a senior EU official, it was “legally bulletproof” (Interview senior EU official, August 11, 2017). Commission implementing decision of December 4, 2013, confirmed the acceptance of an undertaking (see Annex for a specification of the duties). Below, I will evaluate how well the BPM, neorealism, and institutionalism illuminate the decision-making stage. Hypothesis testing BPM-DM: The decision-making process is a bargaining situation where actors promote their interests by pulling and hauling, leading to compromised outcomes and the net result that decisions do not mirror the intentions of any actor in particular. Relating to the components of hypothesis BPM-DM, the decisionmaking process was a bargaining situation. De Gucht wanted to impose anti-dumping measures, but the pulling and hauling, including on the European side and with the Chinese, led to compromised outcomes. The Commissioner had an important role, and “where he stood did depend on where he sat,” a class BPM aphorism. There was state bargaining with an

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essential role for Germany, and Berlin swinging to get a better outcome was critical. Hypothesis testing Neorealism-DM: Decisions are made according to the security, economic, and other interests (in this order) of the most powerful EU member states. The solar case was an example of China using leading member states to push EU decisions toward an outcome that was more in its interests (and those of one or two member states) rather than the EU’s interests (Farnell and Irwin Crookes 2016: 141). During the final vote, there is some relative power for the member states. In addition to the North-South divide, there is a third group of swing states, including Germany. It was clear for De Gucht that the provisional measures would not survive the Council unless there would be a change. Merkel changing her position and calling for a negotiated solution was critical. If Germany votes against a solution, other countries will follow Berlin. Thus, neorealism illuminates this stage. The procedures for a trade defense case shape a position where there is some power for the member states with the binding voting procedures for the definitive measures, and eventually, Germany stood up for its economic interests. Hypothesis testing Institutionalism-DM: EU law and procedures determine the process and outputs of decision-making. There are strict deadlines for the provisional and definitive measures, and there is a clear timetable of events. The voting procedures contribute to a better understanding of the decision-making process. During the final vote, there is some relative power for the member states. Germany swinging was critical because, in Germany’s slipstream, other member states followed, leading to a blocking majority. Consequently, the Commission tried to negotiate something. A negotiated solution per price undertaking is an option per EU procedures. The methodology, as used by DG Trade at that time, played a role. There is some role for institutionalized meetings, including a session of the China-EU Trade and Economic Joint Committee. Rejecting a Commission proposal for legal reasons is very difficult since the Commission’s reasoning was legally bulletproof. Everything has happened per EU law and procedures but reluctantly. What was decisive for the outcome of this case was Germany

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swinging and favoring a negotiated solution. The procedures shape a position where there is some power for the member states with the definitive measures.

Policy Implementation: An Uphill Battle from the Beginning? DG Trade H4 was concerned with the monitoring of the undertaking. The Commission has to follow strict procedures for implementing the measures and has to assure restoration of fair competition. The monitoring includes quarterly reports, trade statistics, and on spot verifications, which the Commission did. Since late 2013 the Commission adopted Implementing Decision 2014/657/EU clarifying the implementation of the undertaking. Table 3.3 shows the relevant dates and events in the implementation stage. There was some criticism with, for instance, the President of EU ProSun, stating: “Anti-dumping measures introduced in 2013 have only been half-heartedly enforced for a long time, allowing further damage to the domestic industry” (EU ProSun 2017). According to them, the MIP was too low. The negotiated price was lower than the dumping margins and the damage margins because it was a negotiated price. However, another industry association representative stated that “the Chinese made money” because this MIP was higher than what they otherwise would have received (Interview senior industry association representative, January 30, 2018). The MIP could be considered relatively high, and the volume limit could realistically never be reached. The representative also mentioned that given that custom authorities are understaffed and underfunded, as well as the number of products they have to look at, “they enforced them as well as they could do” (Interview senior industry association representative, January 30, 2018). Moreover, the measures had an impact because the Chinese rate of imports decreased from 70 to 28%. A natural result of TDI is that it drives exporters to circumvent them, making it difficult to enforce them. Some producers created new factories out of China and withdrew from the undertaking. Moreover, the Commission “would not have the appetite to go after circumvention” (Interview senior industry association representative, January 30, 2018). Still, several reports claimed shipment from solar panels from the PRC to third countries, including Malaysia and Taiwan, and then imported

June 4, 2015

May 28, 2015

May 23, 2015

May 22, 2015

April 15, 2015

October 31, 2014 November 1, 2014 January 29, 2015

October 18, 2014

September 10, 2014

June 5, 2014

April 30, 2014

March 27, 2014

March 21, 2014

Wacker reaches a deal with the Chinese authorities on the probes on EU imports of polysilicon (PV Magazine 2014; European Commission 2014c) Ahead of Chinese President Xi Jinping’s visit to Europe, China and the EU reached an agreement to end the wine dispute (Reuters 2014) Commission announces not to pursue the anti-dumping investigation on Chinese telecoms (European Commission 2014a) MOFCOM confirms that it would apply anti-dumping and anti-subsidy tariffs to polysilicon imported from the EU for the next two years. Wacker Chemie is exempted per an earlier deal (PV Tech 2014) EU ProSun submits over 1.000 pages of documentation to the DG Trade, containing about 1.500 proposals by Chinese solar companies offering prices below the minimum level Commission Implementing Decision 2014/657/EU clarifies the implementation of the undertaking 2013/707/EU The EU and China settle the telecommunications case at the Joint Committee (European Commission 2014b) End of De Gucht’s term as Trade Commissioner New Trade Commissioner Malmström assumes office The Commission received a request for a partial interim review from EU ProSun. The request was limited in scope to the benchmark used as a reference for the MIP adaptation mechanism set out in the undertaking SolarWorld lodges an official request for an anti-circumvention investigation of imports of solar products from Taiwan and Malaysia (EUProSun 2015; European Commission 2015a) OLAF is investigating producers and importers of Chinese solar on suspicion that they are evading import duties designed to ensure a fair market (Reuters 2015a) SolarWorld mentions that it will apply to the Commission for an extension of duties on Chinese panel imports that are due December 2015 (Reuters 2015b) The Commission launches an investigation on the possible circumvention of the anti-dumping measures (European Commission 2015a) Commission Implementing Regulation (EU) 2015/866 withdraws the acceptance of the undertaking for three exporting producers (European Commission 2015b)

Chronology of the implementation of the solar measures

March 18, 2014

Table 3.3

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Until October 2018

May 2017 March 2018 August 2018

October 2016 January 2017 Early 2017

January 7, 2016

Early December 2015 Early December 2015

December 7, 2015

Council Implementing Regulation (EU) No 1238/2013 will expire (Council of the European Union 2013) The Commission initiated an expiry review of the anti-dumping measures on Chinese solar The Commission initiated ex officio a partial interim review under Article 11(3) of the basic Regulation limited to the examination of whether or not it is in the Union interest to continue the measures Terminates the partial interim review of the anti-dumping and countervailing measures as lodged in January 2015. 2016/12, L4/1, 7.1.2016 Suntech voluntarily withdraws from the EU’s MIP undertaking (PV magazine 2016) During the extension vote on the measures, 18 member states opposed, while Germany was in favor Discussion precedes the Implementing Regulation of March 2017. Eventually revised proposal of 18 months SolarWorld applies to insolvency (PV Magazine 2016) New German government assumes office The Commission decided not to extend the trade defense measures on Chinese solar (European Commission 2018a) The Commission adopted fifteen Regulations withdrawing the acceptance of the price undertaking (European Commission 2018b)

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into the EU to avoid tariffs and the agreed MIP (see EU ProSun 2015). Consequently, on April 15, 2015, SolarWorld lodged an official request for an anti-circumvention investigation of solar imports from Taiwan and Malaysia (European Commission 2015a). Following the lodged request, on May 28, 2015, the Commission launched an investigation on the possible circumvention of the anti-dumping measures imposed by Council Implementing Regulation (EU) No 1238/2013 on imports of solar panels from the PRC (European Commission 2015a). Nevertheless, in most cases, there was no circumvention via Malaysia. What also occurred is that a Chinese company and an importer put a specific price on an invoice, but also made a side arrangement where the exporter delivers to the importer, but the next badge is free of cost— this “happened too frequent” (Interview senior EU official, August 19, 2019). Reports from late April 2015 showed that the Commission had monitored the undertaking and proposed excluding three Chinese solar makers because of an alleged violation of the conditions. EU manufacturers claimed that the MIP is often observed only on paper, as payments are refunded, meaning that the actual net price falls below the MIP and undercuts competitors (EU ProSun 2015). This led to Commission implementing regulation (EU) 2015/866 of June 4, 2015, that withdrew the acceptance of the undertaking for three exporting producers. When it comes to circumvention, the Commission depends on the information of the member states’ customs authorities. DG Trade “fully and quickly and speedily cooperated when given these kinds of facts,” however, they did not proactively try to search for circumvention, as the Commission does not have the workforce for that (Interview senior EU official, August 19, 2019). Naturally, some member states were more after circumvention than others. Still, these procedures take time; however, the damage has been done. In May 2015, media reports stated that the EU anti-fraud office (OLAF) was investigating producers and importers of Chinese solar panels on suspicion that they are evading import duties designed to ensure a fair market (Reuters 2015a). Thus, Chinese solar producers faced a series of challenges since the mutually agreed upon price undertaking entered into force. The implementing regulation of June 4, 2015, that withdrew the undertaking’s acceptance was only the first one to be withdrawn. The price undertaking was initially accepted from more than 120 companies/company groups, however, in the meantime, the Commission withdrew its acceptance for nineteen businesses, with seventeen of

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them found to have breached the price undertaking while the other two firms had business models that made it “impracticable” to monitor their compliance with the price undertaking (European Commission 2018b).19 Also, sixteen other Chinese firms voluntarily withdrew from the undertaking. The undertaking was voluntary. However, it was very strict. This led to the situation that various Chinese firms preferred the duties to the negotiated agreement. Anti-dumping measures expire automatically unless a review determines that dumping and injury would probably continue or recur if they were to expire. Following EU law, the EU industry has the right to request an expiry review, and in early September 2015, EU ProSun acted accordingly. In early December 2015, the Commission initiated an expiry review of the anti-dumping measures applicable to imports into the EU of crystalline silicon photovoltaic modules and key components originating in or consigned from China. At the same time, the Commission initiated ex officio a partial interim review according to Article 11(3) of the basic Regulation limited to the examination of whether or not it is in the Union interest to continue measures currently in force on cells of the type used in crystalline silicon photovoltaic modules or panels. Furthermore, during the extension vote in January 2017, 18 member states opposed, while Germany was in favor. It is also worth mentioning that the German Socialist Party is close to SolarWorld.20 In late 2015, the Commission extended the measures, and the member states were informed. However, a discussion preceded the implementing regulation of March 2017. According to DG Trade, the reasons for the measures were still there, but it needed to balance the interests of the EU industry plus the interests of the users, predominantly firms that wanted to build solar farms for industrial use. The Commission felt that the industry still needed protection, but users had become more critical over time. The Commission proposed measures for two years. However, the member states in the Trade Defence Committee voted against it. When there is a simple majority against, the Commission has to go to an appeal committee, which involved the same member states, but on a higher level (Interview senior EU official, August 19, 2019). There they needed a qualified majority, which is step two in the process. However, both parties are invited to propose a compromise. Thus, the Commission went to the appeal committee with a revised proposal of 18 months, plus a clear announcement that they were opening an interim review looking

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at the price evolution and build in more flexibility, to make sure that the MIP would decrease over time. Many member states did not have solar production anymore. Thus they favored cheap solar and a green economy. By contrast, EU member states Germany, France, and Lithuania still had solar production. They felt that the Chinese practices were unfair, but did not want to overdo it, because they also considered the consumer important. They thoroughly understood the reasoning of DG Trade, and “everyone could accept it” (Interview senior EU official, August 19, 2019). On the industry front, “5% of the overall value chain supports the measures, and 95% opposes them,” arguing that there is “no political support for the measures” (Interview senior industry association representative, January 30, 2018). 36 European and National Organizations signed a letter calling for the end of the measures. Moreover, there was more opposition for instance with a letter with 407 European signatories coming from all member states that called for the end of the duties, 22 MEPs involving all major political groups, and 5 NGOs including Greenpeace, WWF, CAN, E3G, and EkoEnergy making a statement on the issue and calling for the removal of the measures (SolarPower Europe 2017b). Alternatively, per McCarthy, “the trade barrier was both inefficient and ineffective, in that it both hurt the companies it aimed to protect, while those it sought to punish may simply have circumvented it” (McCarthy 2016: 156). It is indeed hard to say whether measures are doing what they are supposed to do. TDI regulations are relatively simplistic. Still, the alternative of letting the market be the market is also a tough call for officials to make. In late August 2018, the Commission decided not to extend the trade defense measures on Chinese solar. The Commission proposed dismissing the request for an expiry review made by EU ProSun and received backing from a majority of its then 28 member states. After considering the needs of both manufacturers and the users or importers of solar panels, the Commission decided it was in the best interests of the EU to let the measures lapse. The Commission’s decision also took into account the EU’s new renewable energy targets. The Commission observed that the market situation “has not changed to the extent that this would justify a further extension of the measures now beyond the scheduled 18 months” (European Commission 2018a). Thus, it rejected EU ProSun’s request for an expiry review investigation. In reality, the Commission’s political level was tired of fighting the battle to maintain the measures. Not one

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Commissioner supported the measures, and thus they were open to let them slide as they legislated to do in February 2017. On a political level, the new German government also signaled that they wanted the measures to go, which was “a huge catalyst” (Interview senior industry representative, November 13, 2018). In the DG Trade meeting to discuss the matter, allegedly, 19 EU member states supported the Commission in removing the measures as planned. A further handful abstained, and this left another four or five EU member states supporting an expiry review (Interview senior industry representative, November 13, 2018). EU ProSun disagreed with the decision not to extend the trade defense measures on Chinese solar. By contrast, industry association SolarPower Europe, who had campaigned for the removal for three years, described the move as a “watershed moment” for the EU’s solar industry and emphasized that it removes the solar sector’s most significant barrier to growth. On a related note, the PRC’s ministry of commerce welcomed the end of the measures because China stands to increase its exports. I will now examine how well my three candidate theories illuminate the policy implementation. Hypothesis testing BPM-IMPL: Where a decision leaves leeway for the implementing body, the implementation should reflect delays, contradictory actions, duplications, and distortions of original purposes. When key bureaucratic actors leave, then policy implementation will reflect this. The Commission has to monitor the implementation, as it concerns law enforcement. The monitoring included quarterly reports, trade statistics as well as on spot verifications, which the Commission did. Until October 2018, the Commission adopted fifteen Regulations withdrawing the acceptance of the price undertaking for several exporting Chinese producers (European Commission 2018b). When it comes to circumvention, the Commission depends on the info of the customs authorities of the member states. As custom authorities are understaffed and underfunded, “they enforced them as well as they could do” (Interview senior industry association representative, January 30, 2018). DG Trade “fully and quickly and speedily cooperated when given these kinds of facts,” however, they did not proactively try to search for circumvention, as the Commission does not have the workforce to do so (Interview senior EU official, August 19, 2019).

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Hypothesis testing Neorealism-IMPL: The most powerful EU member states exert pressure on the body implementing the decision to make it track with their security, economic, and other interests. The Commission must monitor the implementation, and there is no role for the member states because it concerns law enforcement. Nevertheless, there is a role for the customs authorities of the member states. Naturally, some member states were more after circumvention than others. Eventually, the Commission political level was tired of fighting the battle to maintain the measures, not one Commissioner supported the measures, and thus they were open to let them slide as they legislated to do in February 2017. On a political level, the new German government that assumed office in March 2018 also signaled that they wanted the measures to go, and this was a huge catalyst. In the DG Trade meeting to discuss the matter allegedly, 19 member states supported the Commission in removing the measures as planned. Due to the lack of member state support, the Commission services had been fighting an uphill battle from day one. Consequently, there is some neorealism in the background. Hypothesis testing Institutionalism-IMPL: The implementation of policies follows EU institutions (e.g., policies, decisions, EU law, and procedures). The Commission has to follow procedures to assure correct implementation of the measures. What was supposed to happen from the side of DG Trade was the monitoring of the measures by quarterly reports, trade statistics, and on sport verifications, which it did accordingly. Until October 2018, the Commission adopted fifteen Regulations withdrawing the acceptance of the price undertaking for several exporting Chinese producers. A fundamental problem of TDI is that it drives exporters to circumvent them, making it difficult to enforce these measures. After a bumpy ride, the measures were renewed for 18 months in February 2017, and could automatically expire if not renewed. Due to a lack of support, there was no renewal. Everything that has happened in this case has happened per EU law and procedures but reluctantly. Hence, institutionalism sheds some light on the implementation stage.

Conclusion In 2012, EU ProSun lodged formal complaints on dumping and subsidies of Chinese solar. As the complainant showed prima facie evidence,

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DG Trade was formally obliged to initiate an anti-dumping investigation. Because China is a non-MES country, it is relatively easy to find dumping and subsidies. Be that as it may, based on the merits of the case, Chinese firms were dumping on the EU market. Also, Trade Commissioner De Gucht had a complicated relationship with China. He played a personal role in the process of launching and implementing the measures. EU law and procedures require the Commission to come with provisional measures after nine months. The member states can express their opinion on these measures via a non-binding vote. In this case, a majority of member states opposed them. Merkel stated Germany preferred a negotiated solution, which was critical for this case because now De Gucht had no other choice than going for a negotiated agreement. There had been a lack of support from the member states for this case from the very beginning. Everything has happened per EU law and procedures but reluctantly. Eventually, a mixture of products to target and the introduction of the MIP won the support of the member states. Interest groups like EU ProSun are empowered, but because of other issues, they do not have the full force in shaping trade defense policy. The Commissioner played a personal role in the process of launching and implementing the measures. To some degree, the BPM decisionmaking hypothesis is correct because De Gucht wanted to broker political deals and bargain with China. This approach was driven by the perception that there was a need to invent new strategies to get a good outcome for Europe. What was critical for this case’s outcome was that Merkel changed her position and favored a negotiated solution. In combination with the binding voting procedures for the definitive measures, this meant that there was no majority support for De Gucht’s move. We also saw “where you stand depends on where you sit” regarding DG Trade. One cannot speak of implementation concerns in the implementation stage, such as delays, divergences from actual policy decisions, or deliberate poor implementation from the bureaucrats’ side. The Commission has to follow EU law with regard to the procedures. Neorealism does not illuminate the issue identification stage. However, it is critical in the decision-making stage. Merkel changing her position and calling for a negotiated solution was crucial. De Gucht’s proposed measures would not have survived the final and binding vote in the Council. Given traditional national interests, countries have to assert themselves to defend their economic interests, which Germany demonstrated in this solar case. Due to the lack of member state support, the

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Commission services had been fighting an uphill battle from day one. Thus, also in the implementation stage, it was visible in the background. Institutions matter, and EU law and procedures contribute to a better understanding of all three stages. It was the Commission’s legal requirement to act because the EU industry lodged valid complaints. Noteworthy are the voting procedures, the clear timetable of events, and the methodology used to measure dumping and subsidies. In China’s case, because of its non-MES virtually always dumping (and subsidies) could be found. The procedures shape a position where there is some power for the member states with the definitive measures, and eventually, Germany stood up for its economic interests. The Commission has to monitor the implementation because it concerns law enforcement. Everything happened per EU law and procedures but reluctantly.

Annex: Specification of the Solar Duties Commission implementing decision of December 4, 2013 confirmed the acceptance of an undertaking. According to the decision of the Council of Ministers, the following duty rates apply to Chinese solar panel exporters that do not participate in the price undertaking (European Commission 2013d): – The average duty for exporters that cooperated in the investigation is 47.7%, which is the duty rate applicable to the majority of exporters. – A duty of 64.9% will be applied to those exporters who did not cooperate in the European Commission’s investigation, which are estimated to account for less than 20% of exports. As announced by the Commission, the duties comprised an anti-dumping and an anti-subsidy duty of the following rates (European Commission 2013d): – Definitive anti-dumping duties will range from 27.3 to 64.9% for cooperating parties in the investigation, with a residual anti-dumping duty of 53.4% for non-cooperating companies in the investigation conducted by the Commission. – Definitive anti-subsidy duties will range from 0% (Delsolar) and 3.5 to 11.5% for cooperating companies in the investigation, with a

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residual anti-subsidy duty of 11.5% for non-cooperating companies in the Commission’s investigation.

Notes 1. A feed-in tariff is a government program designed to promote the uptake of renewable and low-carbon electricity generation technologies. It includes fixed electricity prices for renewable energy producers for each unit of energy produced and injected into the electricity grid. 2. Peter Mandelson served as Trade Commissioner from November 22, 2004 until October 3, 2008, and Catherine Ashton from October 3, 2008 until December 1, 2009. 3. Dumping is a form of international price discrimination, by which an exporter sells into a foreign market at lower prices than it sells them in its domestic market or sells below its cost price. 4. The subsidies “were varied and bestowed” for R&D, manufacturing, installation, or power generation, however contrary to what Western media often stated, the accounts of the investigated firms do not contain marks of financing by the China Development Bank (Plasschaert 2016: 33). 5. In May 2013, the China Chamber of Commerce for Import and Export of Machinery and Electronic Products (CCCME) sent a delegation to meet the Commission for a consultation. However, the Commission rejected China’s proposal and did not respond to the questions raised by the CCCME delegation (Ministry of Commerce People’s Republic of China 2013a). 6. Per a senior EU official, it was “clearly more than half” (Interview senior EU official, August 11, 2017). 7. The case illustrates that global value chains are increasingly changing the balance of interests within “domestic” industries meaning a shift toward buyer-driven dynamics, and paving the way for import-dependent EU companies to mobilize and lobby in favor of a liberal EU trade policy (Eckhardt 2018: 162). 8. Over 570 European PV companies representing over 60.000 jobs, with a turnover of e20.9bn in the EU, supported AFASE. Per the Solar Trade Association (STA), it encompassed “8.000 manufacturing jobs” compared to “up to 200.000 jobs” in the wider industry (Solar Power Portal 2013). However, per a senior EU official, this number was “exaggerated,” and the balance of interest was “in favor of the complainants” (Interview senior EU official, August 11, 2017). 9. The analysis based on which the Commission concluded that dumping had taken place was not made public (Curran 2015).

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10. This test means that the Commission will examine whether the potential imposition of measures would be overall more costly to the Union economy than the benefit of the measures would be to the complainants. 11. Goron also speaks of rumors reporting lobbying actions vis-à-vis “smaller Central and Eastern Europe Member States” (Goron 2018: 111). 12. Or per Pepermans, a combination of attractive COFDI and retaliatory threats convinced 18 of the then 27 EU member states to refrain from supporting the Commission (Pepermans 2017: 1406). 13. This “specific European way of handling things” allows Beijing to avoid the WTO Dispute Settlement Mechanism and provides for a middle ground between “the law and procedure-driven EU and China’s preference for negotiations” (Brugier 2017: 210). 14. The announcement followed a session of the China-EU Trade and Economic Joint Committee. This included Commerce Minister Gao Hucheng and Commissioner De Gucht. 15. In March 2014, ahead of Chinese President Xi Jinping’s visit to Europe, China, and the EU reached an agreement to end the wine dispute, and France, in particular, was eager to see the probe called off. 16. All involved actors and press reports concurred that the undertaking was e0.56/watt and the quantity was 7 gigawatts, between 60% and 70% of the expected market size in 2013 (Curran 2015). 17. In March 2014, Wacker reached a deal with the Chinese authorities on the probes on EU imports of polysilicon. 18. Over the last decades, EU member states have reduced the decision threshold in the Council to approve proposals of DG Trade to impose definitive duties (Scharf 2015; see also Gstöhl and De Bièvre 2018). 19. Until October 2018, the Commission adopted fifteen Regulations withdrawing the acceptance of the price undertaking (see European Commission 2018b). 20. In May 2017, SolarWorld applied for insolvency (PV Magazine 2017). In March 2018, it filed for bankruptcy for the second time.

References AFASE. 2013. “Provisional Measures Will Severely Hurt European Solar Markets—Duties over 15% Will Destroy 85% of EU PV Demand.” Brussels, May 8. BBC. 2013a. “German Chancellor Moves to Cool EU-China trade Dispute.” May 27. Available at http://www.bbc.com/news/business-22677755. BBC. 2013b. “Half of EU Members’ Oppose China Solar Tariffs’” May 28. Available at http://www.bbc.com/news/business-22684663.

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BBC. 2013c. “EU China Solar Panel Trade War Looms.” May 8. Available at https://www.bbc.com/news/business-22445640. Bollen, Yelter, Ferdi De Ville, and Jan Orbie. 2016. “EU Trade Policy: Persistent Liberalisation, Contentious Protectionism.” Journal of European Integration 38 (3): 279–294. Brugier, Camille M. 2017. “The EU’s Trade Strategy Towards China: Lessons for an Effective Turn.” Asia Europe Journal 15 (2): 199–212. China Daily. 2013a. “China’s EU Wine Probe Sparks Worries”. June 13. Available at http://www.chinadailyasia.com/business/2013-06/13/con tent_15075836.html. China Daily. 2013b. “France Wants More Chinese Investment.” June 26. Available at http://www.chinadaily.com.cn/business/2013-06/26/content_1666 4653.htm. Council of the European Union. 2013. “Council Implementing Regulation (EU) No. 1238/2013 of December 2 2013 Imposing a Definitive Anti-Dumping Duty and Collecting Definitively the Provisional Duty Imposed on Imports of Crystalline Silicon Photovoltaic Modules and Key Components (I.E. Cells) Originating in or Consigned from the People’s Republic of China.” Available at http://trade.ec.europa.eu/doclib/docs/2013/december/tradoc_151944. def.en.L325-2013.pdf. Curran, Louise. 2015. “The Impact of Trade Policy on Global Production Networks: The Solar Panel Case.” Review of International Political Economy 22 (5): 1025–1054. Deutsche Welle. “‘China Wants a Solar Monopoly.’” June 6, 2013. Available at http://www.dw.com/en/china-wants-a-solar-monopoly/a-16864139. ECFR. “European Foreign Policy Scorecard 2014.” London: European Council on Foreign Relations, 2014. Available at http://www.ecfr.eu/page/-/ECF R94_SCORECARD_2014.pdf. Eckhardt, Jappe. 2018. “Business-Government Relations in EU Trade Politics.” In Handbook on the EU and International Trade, edited by Sangeeta Khorana and Maria Garcia, 152–168. Cheltenham: Edward Elgar. European Commission. 2006. “Note to All the Members of the Anti-Dumping Committee and to All Delegates to the Council Working Party on Trade Questions. Clarification Paper: The Community Interest Test in AntiDumping and Anti-Subsidy Proceedings.” TRADE.B.1/AS D(2005) D/568: Brussels, January 13. European Commission. 2012a. “Notice of Initiation of an Anti-Dumping Proceeding Concerning Imports of Crystalline Silicon Photovoltaic Modules and Key Components (I.E. Cells and Wafers) Originating in the People’s Republic of China (2012/C 269/04).” September 6.

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European Commission. 2012b. “EU Initiates Anti-Dumping Investigation on Solar Panel Imports from China.” Brussels: September 6. Available at http:// trade.ec.europa.eu/doclib/press/index.cfm?id=829. European Commission. 2012c. “EU Initiates Anti-Subsidy Investigation on Solar Panel Imports from China.” Brussels, November 9. Available at https://ec.europa.eu/growth/content/eu-initiates-anti-subsidy-invest igation-solar-panel-imports-china-0_en. European Commission. 2013a. “Statement by EU Trade Spokesman John Clancy: EU Ready to Negotiate an Amicable Solution in Solar Panels Case with China.” May 27. Available at http://trade.ec.europa.eu/doclib/press/ index.cfm?id=905. European Commission. 2013b. “EU Imposes Provisional Anti-Dumping Tariffs on Chinese Solar Panels.” June 4. Available at http://trade.ec.europa.eu/doc lib/press/index.cfm?id=909. European Commission. 2013c. “Commissioner De Gucht: ‘We Found an Amicable Solution in the EU-China Solar Panels Case That Will Lead to a New Market Equilibrium at Sustainable Prices.’” July 27. Available at http:// europa.eu/rapid/press-release_MEMO-13-729_en.htm. European Commission. 2013d. “EU Imposes Definitive Measures on Chinese Solar Panels, Confirms Undertaking with Chinese Solar Panel Exporters.” December 2. Available at http://europa.eu/rapid/press-release_IP-131190_en.htm. European Commission. 2013e. “Commission Implementing Decision of December 4 2013 Confirming the Acceptance of an Undertaking Offered in Connection with the Anti-Dumping and Anti- Subsidy Proceedings Concerning Imports of Crystalline Silicon Photovoltaic Modules and Key Components (I.E. Cells Originating in or Consigned from the People’s Republic of China for the Period of Application of Definitive Measures (2013/707/EU).” December 5. Available at http://trade.ec.europa.eu/doc lib/docs/2013/december/tradoc_151946.UT.en.L325-2013.pdf. European Commission. 2013f. “Commission Decision of August 2 2013 Accepting an Undertaking Offered in Connection with the Anti-Dumping Proceeding Concerning Imports of Crystalline Silicon Photovoltaic Modules and Key Components (I.E. Cells and Wafers) Originating in or Consigned from the People’s Republic of China (2013/423/EU).” Brussels, August 2. Available at http://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri= CELEX:32013D0423&from=EN. European Commission. 2013g. “European Commission Continues Anti-Subsidy Investigation on Solar Panels from China Without Duties.” Brussels, August 7. Available at http://trade.ec.europa.eu/doclib/press/index.cfm?id=958.

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European Commission. 2013j. “Statement by EU Trade Commissioner Karel De Gucht on Mobile Telecommunications Networks from China.” May 15. Available at https://ec.europa.eu/commission/presscorner/detail/en/MEMO_1 3_439. European Commission. 2014a. “EU Not to Pursue the Anti-Dumping Investigation Against Mobile Telecommunications Networks from China.” March 27. Available at http://europa.eu/rapid/press-release_IP-14-339_en.htm. European Commission. 2014b. “EU and China Settle the Telecoms Case at the Joint Committee.” October 20. Available at http://trade.ec.europa.eu/doc lib/press/index.cfm?id=1165. European Commission. 2014c. “Trade Defence Instruments: European Commission welcomes EU industry’s agreement with China in the Polysilicon AntiDumping and Anti-Subsidy Cases.” Brussels, March 18. Available at http:// trade.ec.europa.eu/doclib/press/index.cfm?id=1044. European Commission. 2015a. “Commission Implementing Regulation (EU) 2015/833 of May 28 2015 Initiating an Investigation Concerning the Possible Circumvention of Anti-Dumping Measures Imposed by Council Implementing Regulation (EU) No 1238/2013 on Imports of Crystalline Silicon Photovoltaic Modules and Key Components (I.E. Cells) Originating in or Consigned from the People’s Republic of China by Imports of Crystalline Silicon Photovoltaic Modules and Key Components (I.E. Cells) Consigned from Malaysia and Taiwan, Whether Declared as Originating in Malaysia and Taiwan or Not, and Making Such Imports Subject to Registration”. L 132/60 Brussels. Available at http://trade.ec.europa.eu/doclib/docs/2015/may/tra doc_153491.init-circum.en.L132-2015.pdf. European Commission. 2015b. “Commission Implementing Regulation (EU) 2015/866 of June 4 2015 Withdrawing the Acceptance of the Undertaking for Three Exporting Producers under Implementing Decision 2013/707/EU Confirming the Acceptance of an Undertaking Offered in Connection with the Anti-Dumping and Anti-Subsidy Proceedings Concerning Imports of Crystalline Silicon Photovoltaic Modules and Key Components (I.E. Cells) Originating in or Consigned from the People’s Republic of China for the Period of Application of Definitive Measures.” Brussels, June 4. European Commission. 2018a. “Commission decides not to extend trade defence measures on solar panels from China.” Brussels, August 31. Available at http://trade.ec.europa.eu/doclib/press/index.cfm?id=1904. European Commission. 2018b. “Commission Implementing Regulation (EU) 2018/1551 of October 16 2018 Invalidating Invoices Issued by two Exporting Producers in Breach of the Undertaking Repealed by Implementing Regulation (EU) 2017/1570.” Brussels: European Commission. Available at https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32018R 1551.

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European Parliament. 2013. “Trade Committee Chair Moreira and Rapporteur Scholz on Anti-Dumping Duties on Chinese Solar Panels.” June 5. Available at http://www.europarl.europa.eu/news/en/press-room/20130605IPR1 1104/senior-trade-meps-respond-to-anti-dumping-duties-on-chinese-solarpanels. EU ProSun. 2015. “Illegal Solar Trade: New Action against Chinese Dumping.” Brussels, April 29. EU ProSun. 2017. “Chinese Dumping Claims Biggest Solar Industry Victim. EU ProSun: SolarWorld Insolvency Terrible Blow for European Solar Sector.” May 11. Available at www.prosun.org/en/component/downloads/downlo ads/308.html. Farnell, John, and Paul Irwin Crookes. 2016. The Politics of EU-China Economic Relations. An Uneasy Partnership. Basingstoke: Palgrave Macmillan. Financier Worldwide. 2013. “SolarWorld Steps Up Debt Restructuring.” June. Available at https://www.financierworldwide.com/solarworld-steps-up-debtrestructuring/. Financial Times. 2010. “Huawei and Option Forge Telecoms Technology Alliance.” October 28. Available at https://www.ft.com/content/b64ffb80e1ec-11df-a064-00144feabdc0. Financial Times. 2012. “EU Trade Officials Face China Dilemma.” September 2. Available at https://www.ft.com/content/7873f2d2-f4e9-11e1-b120-001 44feabdc0. Financial Times. 2013a. “Germany Thwarts EU in China Solar Fight.” March 27. Available at http://www.ft.com/cms/s/0/3feec642-c6dc-11e2-8a3600144feab7de.html#axzz3ag1lvJ00. Financial Times. 2013b. “Karel De Gucht: Frustrated and Outflanked.” July 31. Available at https://www.ft.com/content/aa79490a-f8f6-11e2-86e1-00144f eabdc0. Freudlsperger, Christian. 2014. “The Politics of EU Trade Defence.” Les Cahiers européens de Sciences Po 4. Giannakopoulos, Themistoklis K. 2006. A Concise Guide to the EU AntiDumping/Anti-Subsidies Procedures. Alphen aan den Rijn: Kluwer Law International. Goron, Carolina. 2018. “Fighting Against Climate Change and for Fair Trade: Finding the EU’s Interest in the Solar Panels Dispute with China.” China-EU Law Journal 6 (1–2): 103–125. Gstöhl, Sieglinde, and Dirk De Bièvre. 2018. The Trade Policy of the European Union. Basingstoke: Palgrave. Kolk, Ans, and Louise Curran. 2017. “Contesting a Place in the Sun: On Ideologies in Foreign Markets and Liabilities of Origin.” Journal of Business Ethics 142 (4): 697–717.

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McCarthy, Killian J. 2016. “On the Influence of the European Trade Barrier on the Chinese pv Industry: Is the Solution to the Solar-Dispute “Successful”?” Energy Policy 99 (December 2016): 154–157. Ministry of Commerce People’s Republic of China. June 17, 2013. “Timeline: China-EU, China-US Tug of War on Solar Duties.” Available at http://english.mofcom.gov.cn/article/zt_solar/column2/201307/ 20130700218603.shtml. Ministry of Commerce People’s Republic of China. 2013b. “Timeline: ChinaEU, China-US Tug of War on Solar Duties.” Available at http://english.mof com.gov.cn/article/zt_solar/column2/201307/20130700218603.shtml. Nordström, Håkan. 2011. “The Political Economy of EU Anti-Dumping Policy: Decoding Member States Votes.” In [unpublished]. Available at https://www.wto.org/english/res_e/reser_e/gtdw_e/wkshop11_e/ nordstrom_e.pdf, 2011. People’s Daily. 2013. “贸易战争没有赢家 欧盟 “光伏” 挑事里外不讨好 [Màoyì zhànzh¯eng méiyoˇ u yíngji¯a o¯ uméng “gu¯angfú” ti¯ao shì lˇı wài bù tˇaohˇao].” June 5. Available at http://finance.people.com.cn/n/2013/0605/c100421738074.html. Pepermans, Astrid. 2017. “The Sino-European Solar Panel Dispute: China’s Successful Carrot and Stick Approach Towards Europe.” Journal of Contemporary European Research 13 (4): 1394–1411. Plasschaert, Sylvain. 2016. “Assessing the Solar Energy Dispute between the European Union and the People’s Republic of China.” ECIPE WORKING PAPER No. 01/ 2016. PV Magazine. 2014. “Wacker Strikes Polysilicon Deal with Chinese Government.” March 18. Available at https://www.pv-magazine.com/2014/03/ 18/wacker-strikes-polysilicon-deal-with-chinese-government_100014538/ Commission. PV Magazine. 2016. “Suntech Withdraws from EU Price Undertaking.” October 17. Available at https://www.pv-magazine.com/2016/10/17/suntech-wit hdraws-from-eu-price-undertaking_100026532/. PV Magazine. 2017. “Breaking: Solar World Insolvent.” May 10. Available at https://www.pv-magazine.com/2017/05/10/breaking-solarworld-insolv ent/. PV Tech 2014. “China Announces Trade Tariffs on EU Polysilicon.” April 30. Available at https://www.pv-tech.org/news/china_announces_trade_tar iffs_on_eu_polysilicon. Reuters. 2013a. “EU Duties on Chinese Solar Panels Losing Member: State Support.” May 27. Available at http://www.reuters.com/article/2013/05/ 27/us-eu-solar-china-idUSBRE94Q07T20130527.

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Reuters. 2013b. “Merkel’s Europe—How Her Men Run Brussels.” October 24. Available at http://www.reuters.com/article/2013/10/24/us-eu-germanyinfluence-insight-idUSBRE99N05320131024. Reuters. 2014. “EU, China End Wine Dispute Ahead of Xi’s European Tour.” Available at https://www.reuters.com/article/us-china-europe-wine/euchina-end-wine-dispute-ahead-of-xis-european-tour-idUSBREA2K0QE20 140321. Reuters. 2015a. “EU Anti-Fraud Office Probing Imports of Chinese Solar Panels.” May 22. Available at http://www.reuters.com/article/2015/05/ 22/eu-china-trade-solar-idUSL5N0YD1FV20150522. Reuters. 2015b. “Solarworld Wants EU Duties on Chinese Solar Goods Extended.” May 23. Available at https://in.reuters.com/article/usa-chinasolar-solarworld-idINL5N0YE0CU20150523. Scharf, Tibor. 2015. “Decision-Making in EU Trade Defence Cases After Lisbon: An Institutional Anomaly Addressed?” In Trade Policy between Law, Diplomacy and Scholarship: Liber Amicorum in Memoriam Horst G. Krenzler, edited by Christoph Hermann, Bruno Simma and Rudolf Streinz. Cham: Springer. SolarPower Europe. 2017a. “Global Market Outlook for Solar Power 2017– 2021.”. SolarPower Europe. 2017b. “SolarPower Webinar: The Trade Case on Modules and Cells—State of Play and What to Expect.” Available at https://www.you tube.com/watch?v=olefO_xu808. Solar Power Portal. 2013. “Eighteen EU Member States Vote Against Solar Duties.” May 28. Available at https://www.solarpowerportal.co.uk/news/eig hteen_eu_member_states_vote_against_solar_duties_2356. WWF International, Natuur & Milieu, E3G, Change Partnership. 2013. Position Paper on the Proposed Punitive Import Tariffs on Chinese Solar Panels, May 30. Available at. http://awsassets.panda.org/downloads/ngo_positionp aper_solarpvchina_final.pdf. Xinhua. 2013a. “China Calls for Dialogue after EU Solar Panel Duties.” June 5. Available at http://news.xinhuanet.com/english/china/2013-06/05/c_1 32433234.htm. Xinhua. 2013b. “China, EU Agree to Solve Disputes Through Negotiation.” June 21. Available at http://news.xinhuanet.com/english/china/2013-06/ 21/c_132474577.htm. Zhang, Xiaotong. 2014. “EU-China Economic Diplomacy: When Economics Meets Politics.” European Foreign Affairs Review 19 (3): 57–76.

CHAPTER 4

The EU Investigation into Mobile Telecommunications Networks from China

This chapter examines the EU investigation into Chinese mobile telecommunications networks (2012–2014). This case substantially differs from the solar case (see Chapter 3) because it was an ex officio trade defense action initiated by DG Trade. In the case of unfair trade practices, the EU industry can lodge a formal complaint. Because of the probability of retaliatory action by the country of origin, this is not always possible. Thus, the Commission can launch an investigation on its initiative. The sector in which the alleged unfair competition had place makes it a case of critical importance. After a brief introduction, the three theories will be tested across the three distinct policy stages to examine which theories illuminate which stages and identify scope conditions. The concluding section summarizes the main findings and expounds on their broader relevance. To preview my findings, the BPM works best in the decision-making stage, as it involved a bargaining situation where actors promoted their interests, leading to compromised outcomes. Neorealism also illuminates the decision-making stage, as driven by their interests, the member states were not eager to launching a formal TDI case. Neoliberal institutions illuminate virtually all stages.

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2021 B. Hooijmaaijers, Unpacking EU Policy-Making towards China, Palgrave Studies in Asia-Pacific Political Economy, https://doi.org/10.1007/978-981-15-9367-3_4

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Background: Ex Officio Competences, and the Option Case Before looking into the EU investigation into mobile telecommunications networks from China, it is essential to examine the EU procedures on unfair trade practices. An EU industry can lodge a complaint to DG Trade, for instance, because the country of origin subsidizes a product, or because it at the EU market below market value. However, this is not always viable for the respective industry due to the probability of retaliatory action. Therefore, the Commission possesses the competence to launch an ex officio trade defense action (see also Erixon 2013). This allows DG Trade to launch an investigation on its initiative, allegedly providing a shield for the EU industry. It can look into an anti-dumping investigation, an anti-subsidy investigation, or both. Prima facie evidence of unfair international trade practice and the economic difficulties caused by it should still support any launch of such an investigation. As discussed in Chapter 3, with the 2010 Option case, the Commission premises had already experience with an investigation in Chinese telecoms. With Huawei investing in the Belgian firm, there was no case left for the Commission, much to the dislike of De Gucht. Huawei’s investment concluded the first round of the mobile telecommunications networks case.

Issue Identification: Concerns that the Chinese Firms Would Destroy the EU Market An internal EU report from 2012 recommended that the EU should take action against telecom equipment makers originating from China because their increasing dominance of mobile networks made them a threat to security and homegrown EU companies.1 In May 2012, the Commission informed the EU member states it had compiled “very solid evidence” that Chinese telecommunications equipment firms Huawei and ZTE had benefited from illegal state subsidies (Financial Times 2012a). The Commission said the swift rise of Huawei in the EU telecoms equipment market from a market share of 2.5% in 2006 to 25%, could only have been realized with state aid that global trade rules say are prohibited. Per a senior EU official, the EU concerns were that the Chinese producers “were taking a too big of a market share in a short amount of time,” because Chinese companies “could benefit from loans by state

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banks” (Interview senior EU official, June 13, 2017). Per then Trade Commissioner De Gucht, cheap capital for Huawei and ZTE “creates a distorted playing field and that is what this is about” (Reuters 2013d).2 The concerns were that the Chinese firms would “destroy the European market like they did with the solar panels, as it could lead to a price battle” (Interview senior EU official, August 19, 2019). According to the report, prices of telecom equipment from Huawei and ZTE were on average 18% below those of EU producers, as it mentioned that “The situation has already led to serious job losses for one of the major EU producers,” referring to Nokia Siemens, “and the other two are expected to follow suit shortly” also saying that two, or even all EU makers could disappear, which would significantly increase the degree of EU dependency on Chinese-produced equipment with a corresponding increase in security risk (Reuters 2012).3 Table 4.1 provides an overview of the key dates and events in this stage. In 4G/LTE infrastructure, the Chinese telecoms firms had won 57% of all contracts awarded so far in the EU, and all EU participants in this sector, including industry experts, increasingly viewed the growing presence of Chinese parties in the telecoms market as a significant security risk. The report specifically mentioned the potential for spyware insertion into the telecom equipment that even operators would be unable to locate, with the arguments over competition and security being closely Table 4.1 Chronology of the issue identification stage in the EU-China telecoms case Early 2010 September 2010

Fall 2010 Fall 2011

May 2012

De Gucht vows an approving European Parliament that he would take a tougher stance on China (Financial Times 2012b) Following a complaint lodged by Option, DG Trade launches three parallel investigations against Huawei and ZTE (Financial Times 2010) Huawei invests in Option, forcing the Belgian firm to request DG Trade to close the ongoing investigation (Financial Times 2010) The Cabinet of De Gucht had already reached out to European telecom firms regarding this case. At that time, the Commission already mentioned they had input from the industry The Commission informs the member states it had compiled substantial evidence that Huawei and ZTE had benefited from illegal state subsidies (Financial Times 2012a)

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entwined. It also mentioned that higher reliance on Chinese firms, if EU firms went out of business, would increase the risk. The Commission prepared the report as it gathered evidence for a possible anti-subsidy case against the Chinese telecom firms. However, at that time, EU sources mentioned the report was still under discussion by the Commission and the member states. One option for the Commission was to start an investigation into possible trade subsidies. However, such a trade defense investigation would be a very unusual step. The Commission believed that from a technical perspective, these exceptional circumstances would justify it. Per an EU official: “We knew there was a big problem” adding that all parties involved knew what was going on, however, there was no formal complaint lodged by the EU industry; nevertheless “as a policeman, I can visit the house,” referring to the Commission’s ex officio competences (Interview senior EU official, August 11, 2017). The reason why the telecom companies did not lodge a formal complaint was not that they were unaware of the business conducted by the Chinese firms, but rather because of the fear of retaliatory acts, mainly as it happened at the time that China was awarding big 4G contracts. All European companies agreed there was a problem. However, at least one European telecom firm regarded China’s export subsidies as a generic issue and not as a telecoms specific issue. Thus, they found it more worthwhile to take them on a breach of China’s WTO commitments. According to various EU officials, the European telecom firms “did complain informally” (Interview senior EU officials, June 13, 2017; August 11, 2017). On a somewhat related note, according to a Brussels trade lawyer, “Everybody is going to guess that even before the initiation (of a case), the local industry to some extent participated and cooperated” (Reuters 2013a). It was an open secret that it came from Alcatel-Lucent. The firm was losing market share as it was struggling to adjust to globalization. Nokia was also in decline on a global level and was playing both sides. By contrast, Ericsson strongly opposed the case from the very beginning. Also, there was a strong rumor that the Commission activities emanated from the French labor unions that sought to protect European jobs because the unions saw it as a threat to jobs. Still, it would not have been easy to execute such a case given the telecom sector’s nature. The question is, when is it a product, and when is it a service? DG trade cannot launch an investigation into services. Also, telecoms in Europe are not entirely subsidy-free as well.

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For instance, Ericsson also used credit lines from Export Credit Agency Sweden and Alcatel from its French counterparts. These guarantees are sometimes a necessity given that otherwise, in certain markets, there would have been too much risk. I now assess how well my three candidate theories illuminate the issue identification in this case. Hypothesis testing BPM-ISID: EU bureaucracies are driven by their agenda and interests when identifying an issue. In May 2012, the Commission informed the member states it had compiled “very solid evidence” that Chinese telecommunications equipment firms had benefited from illegal state subsidies (Financial Times 2012a; Interviews senior EU officials, June 13, 2017; August 11, 2017; August 19, 2019). However, it is noteworthy that it happened against the backdrop of Commissioner De Gucht willing to take a tougher stance on China. The context is critical because it happened around the same time as various other TDI cases targeting China, and there was the history of the 2010 Option case. It was predominantly the Commissioner acting on his initiative, and the real target of De Gucht was Huawei. This somewhat limits the explanatory value of BPM. De Gucht is not a bureaucracy, but he was acting in a way befitting a bureaucracy’s leader, who brought his perspective to things. Hypothesis testing Neorealism-ISID: The security, economic, and other interests (in this order) of the most powerful EU member states influence what issues the EU identifies as the key EU foreign policy-making issues. In May 2012, the Commission informed the member states it had compiled substantial evidence that Chinese telecom firms had benefited from illegal state subsidies. All European companies agreed there was a problem. However, no complaints were lodged because of the fear of retaliatory action (Interview senior EU official, August 19, 2019). “Nobody would doubt the Commission analysis that there was a problem, but the question is how to deal with it” (Interview senior EU official, August 19, 2019). It was predominantly the Commissioner acting on his initiative, rather than that it was driven by the interest and the will of the most powerful member states, meaning that neorealism does not serve as an explanatory model for this stage.

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Hypothesis testing Institutionalism-ISID: Issue identification flows from the interests or priorities of who is in charge as defined by the rules. Trade defense is an exclusive EU competence, which means that the Commission is in charge here. The case was an anti-dumping and subsidies case. DG Trade only has the competences to execute anti-dumping and anti-subsidy cases. All sides involved knew what was going on. There was no formal complaint lodged by the EU industry. However, the Commission possesses ex officio competences and acted on this. Institutionalism, therefore, contributes to a better understanding of this stage of the policy-making process.

Decision-Making: Bargaining to Get a Good Outcome for Europe Whereas De Gucht felt it was necessary to undertake action, various member states did not agree with his view. For instance, Swedish Trade Minister Ewa Bjorling said that during a meeting of EU trade ministers in April 2013, a majority of her counterparts indicated that they did not support the launch of an investigation. Media reports suggest that only four EU member states, including France, Greece, Italy, and Poland, spoke in favor of an investigation. Diplomatic sources stated that: “Our feeling is that there were twice as many [member states] against as in favour at the Dublin meeting,” which is in line with observers commenting that Cyprus, Malta, Portugal, and Spain were expected to join the four EU member states favoring action (EURACTIV 2013a; see also Reuters 2013b). By contrast, Germany, the UK, and the Scandinavian countries opposed action. These vantage points reflect the traditional North-South divide within the EU. However, according to a senior EU official, it was mainly Sweden (the home of Ericsson) that opposed an investigation: “It was a political move of Sweden to play the good guy, but in reality, it would not hurt. The move of the Commission was in favor of the EU companies” (Interview senior EU official, August 11, 2017).4 Table 4.2 shows the myriad of dates and events related to the decision-making stage of the mobile telecommunications networks case. During a May 15, 2013, Commission meeting, De Gucht stressed multiple reasons the telecoms sector was strategically important. He highlighted that the pressure on European firms to exit the market due to pressure from Chinese firms was highly worrisome because there are

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Table 4.2 Chronology of the decision-making in the EU-China telecoms case June 26, 2012 January 2013

April 2013

April 2013

May 15, 2013

May 15, 2013

May 15, 2013 May 16, 2013

June 5, 2013

Late July 2013

August 2013

Late August 2013 Late August 2013

Late October 2013 March 21, 2014

Report of the informal consultations with China (Ares2012)1075064) Chinese diplomats complained to member states that De Gucht had demanded that EU companies should receive at least a 30% share of China’s network equipment market in exchange for dropping his investigation (Financial Times 2013a) A majority of member states indicated that they did not support the launch of an investigation (EURACTIV 2013a; see also Reuters 2013b) De Gucht asked for broad new trade powers to make it easier to launch anti-dumping cases (Reuters 2013a; EURACTIV 2013b) During a Commission meeting, De Gucht emphasized the telecoms sector’s strategic importance (European Commission 2013a) The Commission decides in principle to open an ex officio anti-dumping and an anti-subsidy investigation on Chinese telecoms, not activating it for the time being (European Commission 2013b) Huawei expresses disappointed about steps taken by the Commission (Reuters 2013c) MOC spokesperson Shen states that China will take firm measures to protect its legitimate interest in line with WTO rules and Chinese laws (People’s Daily 2013b) China announces the launch of an anti-dumping and anti-subsidy probe into European wine, (Ministry of Commerce of the People’s Republic of China 2013; Xinhua 2013) De Gucht expresses hope that the solution found in the solar case will set the tone for other cases (European Commission 2013c) EU to hold off deciding on whether to launch a trade case until after China Mobile has selected the winners for a big 4G contract (Financial Times 2013c) China Mobile awards initial 4G contracts worth $3.2 billion (Reuters 2013e) Alcatel-Lucent to provide about 11% of the work to deploy the first phase of the China Mobile project. NSN and Ericsson won a similar share (Financial Times 2013d; Ericsson 2013) Chinese Vice-Premier Ma said China and the EU agreed to push forward Sino-European relations (China Daily 2013c) Ahead of Chinese President Xi Jinping’s visit to Europe, China and the EU reached an agreement to end the wine dispute (Reuters 2014a)

(continued)

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Table 4.2 (continued) March 26, 2014 March 27, 2014

October 18, 2014 October 20, 2014

October 31, 2014

A special meeting of the Chefs de cabinet of as set out in RCC(2014) 35 took place (European Commission 2014c) Commission announces not to pursue the anti-dumping investigation on Chinese telecoms (European Commission 2014a) The EU and China settle the telecommunications case at the Joint Committee (European Commission 2014b) EIU reports the first point of the settlement to be demanded by DG Trade to allow EU telecoms businesses to benefit from Chinese 4G contracts (EIU 2014) End of De Gucht’s term as Trade Commissioner

significant obstacles to market re-entry. The intensity and the volume of the research required in the telecoms sector made it “virtually impossible” for operators to re-enter the market once they had left it (European Commission 2013a: 21). De Gucht suggested a two-stage procedure. The first stage was to reach an agreement on the principle of initiating anti-dumping and anti-subsidy investigations into telecommunications networks originating in the PRC. The second step, if appropriate, would then include formally adopting a decision to initiate those investigations. The Commissioner added the continuation of the unfinished negotiations with the Chinese authorities in parallel.5 Later on that day, the Commission decided in principle to open an ex officio anti-dumping and anti-subsidy investigation concerning imports of mobile telecommunications networks from China. Such an ex officio trade defense act allows the Commission to launch a trade defense investigation on its initiative without an official complaint by an EU industry. However, DG Trade instantly announced not to activate this decision to allow for negotiations toward an amicable solution with the Chinese authorities. As stated by De Gucht’s spokesman, “The clock is ticking. We have had an open-door policy for negotiations with our Chinese partners for approximately one year now, and we hope that the Chinese authorities step forward and engage with us in a serious manner” (EURACTIV 2013c). Per a senior EU official: “The way it was done was unusual. There was no experience on how to do this because there were no ex officio cases done before,” adding that “the only justification is the specific circumstances of those years” (Interview senior EU official, June 13, 2017).

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These circumstances included various high-profile trade disputes between both parties, including telecommunications, solar, polysilicon, steel, and wine (see Chapter 3). If DG Trade had opted for a formal procedure, it would have to follow the formal procedural rules. Now, there was political space to negotiate an agreement. If that would not work, there would still be the opportunity to go ahead by following the formal procedures. As was stated by an EU source: “We are putting our finger on the trigger, getting ready to fire, but leaving open the room for negotiation” (EURACTIV 2013c). De Gucht wanted to avoid a rules-based formal approach, hoping he could broker political deals and make a bargain with China. This reflected his view that there was a need for new strategies to deal with the PRC to achieve better outcomes. Noteworthy is that De Gucht did not get the support from the entire Commission. The Commissioners were not united in this case. Thus, it could not be activated, and this was what he could do: launching an ex officio investigation while not activating it for the time being. Also, within DG Trade, not everyone agreed with De Gucht’s move. For instance, the Director-General of DG Trade was not in favor of this move because it was far fetched. As mentioned before, it would not have been easy to execute, given the nature of the telecoms sector, and telecoms in Europe are not entirely subsidy-free. This made that it was more Commissioner De Gucht’s initiative than it was the initiative of the entire Commission (Interview senior EU official, January 11, 2019). Within DG Trade, the Commissioner can instruct the officials. However, the College of Commissioners eventually needs to agree. He has to present his plans and get approval from the College, which he did not get in this case. There was a discussion in the College, and De Gucht found there were reasons to act. In the College, he got “full understanding” for his position, but it was also agreed to have this “cautious approach” to have a decision in principle (Interview senior EU official, August 19, 2019). It was “not something that was imposed,” but the Commission agreed in principle. “And in principle was enough for the Commissioner,” as they found this to be the best way forward (Interview senior EU official, August 19, 2019). The move was indeed highly uncommon. Usually, it is the EU industry that lodges a complaint on which DG Trade has to act. However, in this case, no such complaint was filed.6 NSN formally stated it opposed “any efforts to erect trade barriers [and has] urged the Commission to refrain from taking such steps.” Simultaneously, Ericsson’s head of

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government and industry relations Ulf Pehrsson commented: “We see nothing beneficial coming out of this, any protectionist measures taken are bound to trigger other protectionist measures” (The Economist 2013). Alcatel-Lucent that had a joint venture with a government partner called Alcatel-Lucent Shanghai Bell released a statement urging the EU and Chinese parties to find a joint solution: “We maintain the strong hope that the parties find a solution to benefit both the E.U. and its trading relationship with China” (New York Times 2013). If the Commission initiates an ex officio investigation, it becomes very political because it is not just a commercial issue anymore. For European companies, the Chinese market is a market of critical importance. Moreover, nowadays, several European telecom firms have their manufacturing and research and development (R&D) in China as well. The telecom companies did not want to risk their position in China because of a political move, mainly because the Chinese market can be considered a highly sensitive market. Huawei stated it was disappointed that the Commission had taken the unprecedented step of threatening to launch a case on its initiative, and the company also dismissed the allegation that it was selling telecoms equipment below cost to secure market share (Reuters 2013c). Huawei denied receiving unfair government subsidies and insisted that its price advantages come from its technological innovation. The Chinese side took this case very seriously because they were concerned with their telecoms business, as the telecoms sector is an essential strategic industry for Beijing. Per Chinese state media, by launching an ex officio investigation into Chinese products for the first time, the Commission is signaling “it stands behind the rising protectionist force in Europe, and the aggressive approach risks a tit-for-tat trade war, which is in neither side’s interests.” It added that the Commission said its decision would not be activated for the time being to allow for negotiations toward “an amicable solution” with the Chinese side, however “with a threat of trade punishment, it can hardly be called amicable” (People’s Daily 2013a). On a related note, according to MOC spokesman Shen Danyang “Many EU member states disagree with the probe, and the EU’s industry circle also opposes it. So we hope that the EU stops doing things that do no good to each other” (People’s Daily 2013b). According to Shen, both sides had been in close dialogue and communication on the issue since the second half of 2012, however, “The EU made the decision without first making replies to China, which has cast suspicion on the EU’s sincerity in resolving

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the issue through consultation,” also adding a warning that if the EU insists on launching the probe, “China will take firm measures to protect its legitimate interest in line with World Trade Organization rules and Chinese laws,” adding that “The side that stirs up the friction should bear the consequences” (People’s Daily 2013b). Trade defense is an exclusive EU competence, and it is the task of DG Trade to find a balance between conflicting interests and philosophies among the member states. In late July 2013, in his statement on the amicable solution reached in the EU-China solar case (see Chapter 3), Commissioner De Gucht said, “We will need such a constructive approach between China and the EU also for other cases affecting our trade. And I sincerely hope that the solution we found in the solar panels case will set the tone for these discussions” (European Commission 2013c). A background condition affecting the above was De Gucht’s desire to open the Chinese telecoms market for European telecom firms. He viewed the telecoms case as a bargaining chip to open up the Chinese market. Reports in August 2013 mentioned that the EU would hold off deciding whether to launch a trade case against Chinese telecoms businesses until after China Mobile had selected the winners for a big contract to build a 4G network in the PRC. At that time, the EU companies were bidding in China for big telecom contracts, and according to a senior EU official, there were “complaints of discrimination.” However, “the Commission felt that China has to treat EU companies on an equal basis” (Interview senior EU official, August 11, 2017). According to officials, De Gucht was inclined to bury the case, if EU firms would be awarded “a healthy share” of a Chinese project expected to account for half the global telecoms investment for 2014 (Financial Times 2013c). In January 2013, it was already conveyed that Chinese diplomats complained to EU member states that De Gucht had demanded that EU companies receive at least a 30% share of China’s network equipment market in exchange for dropping his investigation. A senior EU official acknowledged that the Commissioner had outlined his views with the Chinese in December 2012, but suggested they had “either mistaken or misrepresented the exchange” (Financial Times 2013a). Under WTO regulations, such government-to-government arrangements are not allowed because grey area measures are forbidden since 1995. What De Gucht proposed was not permitted and is seen as managed trade. Therefore, after this story got leaked to the press, he denied it. After the Financial Times report, Huawei sent a statement to China Daily

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saying it believes that “only through an open and competitive market environment” can parties achieve “a sustainable development” of European and Chinese telecom industries “providing customers in both places with convenience” (China Daily 2013a). Apart from the guaranteed market share for European telecom firms, De Gucht had two more goals: a maximum volume of Chinese exports to Europe and a minimum price. However, for Huawei, the latter two demands were a no go. A MIP is problematic for exporters because eventually, minimum prices will leak, making competing firms offer their products below this minimum price. This is particularly the case in a transparent market like the telecoms market, where only a few firms operate. In late August 2013, China Mobile awarded initial 4G contracts with a total value of approximately $3.2 billion, with EU telecom firms Ericsson, Alcatel-Lucent SA, and NSN having obtained a share of approximately 10% each (Reuters 2013e). As Chen Haofei, a telecom analyst with China International Capital Corp Ltd mentioned right before the announcement of China Mobile’s 4G tender results that a total share of over 30 percent for foreign telecom firms would be a good result for both parties, because: [t]oo small a share for foreign vendors will harm the globalization of China’s 4G technology. The official result is likely to meet the European Union’s expectations. Because Chinese telecom firms still face investigation pressure from the EU, a mild resolution would help them reduce obstacles in Europe. (China Daily 2013b)

Buying base stations from various telecom firms is indeed in any mobile operator’s interest due to risk management. It is not that the Chinese side politically only wanted Chinese firms to be present in the Chinese market. They want foreign businesses, but not the lion share (Interview senior official European telecom firm, November 14, 2017). It is critical to take into account that China does nothing without taking its strategic interests into account, which is nothing new; “Beijing always considers its interests first, this is their equal treatment” (Interview senior European business representative, December 18, 2018). Whether the awarded market share was linked to the Commission’s actions remains challenging to say, but according to an EU official, there was “a fair assumption that it was.” The senior EU official stated he was

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“pretty convinced” it was initiated by the Commission’s demand (Interview senior EU official, August 11, 2017). Alcatel-Lucent confirmed that it would provide about 11% of the work to deploy the first phase of over 207.000 mobile base stations in China by the end of 2013, whereas according to “one person close to the situation” NSN and Ericsson won “a similar share” of the work as Alcatel-Lucent (Financial Times 2013d). Indeed, Ericsson’s press release also mentioned a share of 11% (Ericsson 2013). There were rumors that the Chinese side was considering a more significant share for the European telecom firms, however allegedly because of the Commission’s bid, these firms won a share closer to what DG Trade demanded. Be that as it may, some European telecom firms seemed to be displeased with the Commission’s demand. At the time, Ericsson was the global market leader with a market share on 4G (LTE) of 50%, meaning that for various reasons, they were not in favor of such a market share agreement. By contrast, Alcatel-Lucent and Nokia appeared to be pleased with around 11%, because these firms were in decline on a global level. This clearly shows the diverging points of view and interests of the European telecom firms concerning the market share arrangements. Late October 2013, months after the two sides settled the solar dispute, Chinese Vice-Premier Ma Kai said China and the EU agreed to push forward Sino-European relations “by fighting against protectionism, sticking to an open market and strengthening bilateral cooperation” (China Daily 2013c). Ma made the statement after co-chairing the China-EU High-Level Economic Dialogue together with then EU Vice-President Olli Rehn and Trade Commissioner De Gucht. He also said the two parties made “a commitment to prudent use of trade remedy measures,” adding that “[w]hen dealing with trade frictions, China and the EU agreed to turn to dialogue and consultation first” (China Daily 2013c). Moreover, in a written media interview, China International Trade Representative Zhong Shan said that “Since 2012, the EU has more frequently used trade remedy measures with more extensive coverage.” He added that in addition to the solar case, the EU is also considering mounting an ex-officio anti-dumping and countervailing investigation against wireless telecom equipment from China (China Daily 2013c). In late March 2014, the Commission issued a press release in which it announced that it would not pursue the anti-dumping investigation against mobile telecommunications networks from China, because further analysis showed that the essence of the problems posed by

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Chinese competition on the EU market lied in the subsidization of the mobile telecommunications networks.7 The press release read that the Commission’s decision to adopt “a two-step approach” facilitated the solution, deferring the actual investigations “to provide space for dialogue.” According to De Gucht: Today’s decision not to pursue the anti-dumping part of this possible trade defence action is a significant step towards addressing the mobile telecommunications case in its entirety. I am pleased that EU and China have recently been able to resolve a number of trade frictions, not least the polysilicon case and the wine case where China terminated their investigation without imposition of any duty. (European Commission 2014a)

Not pursuing the anti-dumping leg of this case was part of a political deal. The wine case was the main retaliation case from the Chinese side for DG Trade’s move on Chinese telecom firms because the Southern member states generally support TDI measures. German cars were targeted as well by Beijing. However, this was more rhetorical, while the wine case was a real case. The wine agreement was in exchange for DG Trade closing the anti-dumping part of the telecoms case. As put by a senior EU official, “While we firmly think this is law enforcement, the Chinese see it as politics which you can retaliate” (Interview senior EU official, August 19, 2019). The Commission revised its decision concerning the anti-dumping part. However, it did not do so concerning the anti-subsidy part (yet). De Gucht said the EU was “unlikely” to settle for President Xi’s visit in late March 2014. Attacking what according to him was “a culture of government subsidies in China,” he said the EU would have to secure “significant concession” from the Chinese side in order to settle the telecoms case (Financial Times 2014). Per the Commissioner, any settlement of the case would have to include a discussion of greater access to the Chinese market for the European telecom firms. In contrast, the EU was also pursuing more significant access to Chinese R&D facilities for European companies and full access to Chinese norms and standards. He was confident of closing a deal before a meeting of EU-China trade and economy ministers planned for later in June or early July 2014 in Brussels. The Commissioner was seeking to resolve the EU’s outstanding trade disputes with Beijing before

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October 31, 2014, when his term would come to an end. De Gucht said he believed Beijing was starting to take “a different and less confrontational approach to trade disputes that was paying dividends,” saying that “We now have a rational discussion with the Chinese,” adding that “We are really discussing things. They are not just throwing away our arguments” (Financial Times 2014). Eventually, after more than a year of discussions on October 18, 2014, the EU and China settled the case at the Joint Committee (European Commission 2014b).8 The main points of the “amicable settlement” included: • Tasking an independent body with the monitoring of the Chinese and EU telecoms networks markets. • Guaranteeing access to the relevant Chinese standard setting body for European companies without discrimination. • Equal treatment of companies bidding for publicly funded research and development projects. • The EU and China will also advance the work of the International Working Group (IWG) on Export Credits, whose objective is to adopt sectoral and horizontal disciplines in the field. The Chinese side did not propose anything regarding this settlement, the content of this settlement derived entirely from the European side. According to the Economist Intelligence Unit (EIU), the first point of the settlement was supposedly demanded by DG Trade to allow EU telecoms businesses to benefit from 4G contracts that were being tendered by China Mobile (EIU 2014). A senior EU official’s findings revealed the same, as the official stated: “the Chinese side did not like it, the EU wanted it” (Interview senior EU official, June 13, 2017). Despite the EU calling for market share monitoring, it is questionable how the EU would be able to act based on these market shares, and there was a lack of support for this monitoring from the European firms. Concerning the second point of the agreement, it is worth emphasizing that this was happening anyhow because including European companies in standardization and R&D was in China’s self-interest. Due to the telecoms market being a global market, they can benefit from tapping into issues and competences of foreign companies. For lawyers, it is hard to characterize the agreement. It is a settlement of a dispute, and ratification is not needed. However, the reality is that

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the question of the legal status of the settlement “was left open” (Interview senior EU official, August 19, 2019). It was agreed on the Joint Committee between Commissioner De Gucht and the Chinese minister of commerce. Still, it was more than a gentlemen’s agreement (Ibid.). The Commission not settling the case would have led to several risks. First, De Gucht’s term was coming to an end. Per a senior EU official: “Of course we wanted to finish the business before him leaving” (Interview senior EU official, August 11, 2017). However, an alternative view on the matter that was, for instance, outlined by industry sources revealed that the agreement was what the Commission managed to scrape together and that De Gucht needed to extract himself and save face. Dropping the ongoing telecoms investigation was also done “to provide its successor with a clean slate in regard to trade relations with China” (Farnell and Irwin Crookes 2016: 84).9 Indeed, De Gucht’s term ended on October 31, 2014, less than two weeks after the case settlement. Swedish Commissioner Cecilia Malmström succeeded De Gucht and assumed office on November 1, 2014. The second risk for the Commission was triggering a fully-fledged TDI case, which was “not seen by the member states as a good idea” (Interview senior EU official, August 19, 2019). They wanted to maintain good relations with China. De Gucht shelved the investigation amid “weak political support in Europe” for the move (Wall Street Journal 2016). De Gucht was under pressure from the EU member states to resolve the case because EU industries ranging from health care to water utilities became increasingly reliant on cheaper Chinese wireless technology (Reuters 2014b). It is also worth reiterating that there are only a few large EU players in the telecom business. Even though the Commission seeks to protect an industrial sector, it is relatively easy for third parties to trace which parties it needs to influence. Per an EU official: “China goes to the EU member states and says: ‘we want to invest in your country’” (Interview senior EU official, June 13, 2017). To better understand what occurred, it is also essential to take into account that this all happened at the time of the global financial crisis (see also Meunier 2014). Alternatively, per a senior EU politician: “The Chinese subsidise like hell, but they also cleverly invest in the Member States, spreading their money around and weakening the resolve of the Member States concerned to take action” (Farnell and Irwin Crookes 2016: 84). According to an EU official “In

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Finland and Sweden, the Chinese would suddenly propose very advantageous loans and R&D support for green energy, which would make it more difficult for these countries to go against China, for instance on telecom (…)” (Pepermans 2016: 550). Indeed, for instance, in June 2013, China and Finland agreed to further their inter-parliamentary cooperation. Chinese top political advisor Yu Zhengsheng told Finnish Parliament Speaker Eero Heinaluoma that China was willing to cooperate with the country on environmental protection, green development, and Arctic affairs. Aside from Chinese investment in Europe, an EU official highlighted that European investment in China also played a role: “If a Member State has companies operating in China and the Chinese are telling them: ‘well if you support the Commission in this case, your companies in China will suffer,’ then there is nothing much you can do” (Accessed in Pepermans 2016: 549). Still, per a senior EU official, “we settled because we were satisfied with this [agreement],” adding that “De Gucht would not have accepted an empty agreement” (Interview senior EU official, August 19, 2019). I now turn to examine how well my three candidate theories explain what happened concerning the decision-making in this case. Hypothesis testing BPM-DM: The decision-making process is a bargaining situation where actors promote their interests by pulling and hauling, leading to compromised outcomes and the net result that decisions do not mirror the intentions of any actor in particular. Driven by the perception that there was a need to invent new strategies in dealing with China to get a good outcome for Europe, De Gucht wanted to stay out of a formal rules-based approach and negotiate a deal with the Chinese side. We saw a bargaining situation on the European level and with the Chinese side, which led to a compromised outcome. To a large degree, the decisions did not mirror the intentions of any actor in particular. The “amicable settlement” was just what they ended up with. According to the BPM, deadlines raise issues in the political game (Allison 1969: 709–710). In this case, a relevant deadline was the end of De Gucht’s term in late October 2014. A deal had to be made before this deadline. Hypothesis testing Neorealism-DM: Decisions are made according to the security, economic, and other interests (in this order) of the most powerful EU member states.

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The EU member states and their interests seem to have played at least some influential role. Not pursuing the anti-dumping leg of this case was part of a political deal with the Chinese side. If DG Trade would not have settled the subsidy leg, there was a risk of triggering a fully-fledged TDI case, which was “not seen by the member states as a good idea” (Interview senior EU official, 19 August 2019). The member states wanted to maintain their good relationships with China. Them not being supportive of a formal case contributed to creating an environment in which the Commission had to settle. However, when it comes to the agreement’s content, De Gucht’s Deputy Head of Cabinet put down several points to discuss it with the services. Neorealism sheds some light on this stage. However, critical is to understand this in the context of the bargaining atmosphere. Hypothesis testing Institutionalism-DM: EU law and procedures determine the process and outputs of decision-making. Institutionalism contributes to a better understanding of this stage. Trade defense is an exclusive EU competence, and in exceptional cases, the Commission can launch an investigation on its initiative. The decision to open an investigation in principle, but not activating it, for the time being, is essential from an institutional perspective because it meant that the formal legal procedures did not start yet. Thus, there was more time and space to negotiate an agreement with the Chinese side. It was an unusual, unique move. However, it fits within the rules and institutional division of competences. We see different procedures than in the solar case because there were no formal, procedural deadlines or voting procedures, and there was no clear timetable of events. Other relevant deadlines included the ending of De Gucht’s term. There is also an institutional aspect with the Joint Committee where the EU and China settled the case, as it is a regular event on the EU-China trade meetings’ calendar. However, the question of the legal status of the settlement was left open.

Policy Implementation: A Floundering Settlement According to a senior EU official, “all the decisions De Gucht took could be reasonably implemented” (Interview senior EU official, August 19, 2019). However, in August 2016, the Wall Street Journal reported that the EU and China’s settlement was floundering. The PRC was not abiding by the terms of the deal. In July 2016, the EU already complained

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about the settlement at a high-level meeting with Chinese counterparts in Beijing. Two years after the conclusion of the settlement, the body still had to be set up, the PRC had not provided a budget for it, and China had rejected an EU demand that panel members of the body should have no ties to the PRC government (Wall Street Journal 2016). Table 4.3 provides an overview of the key dates and events in the implementation stage. Following the settlement, the Commission has engaged in a dialogue with the Chinese authorities, emphasizing the importance of implementing the telecom settlement, including the market monitoring mechanism. However, due to existing disagreements with China on specific terms of the market monitoring mechanism, the independent body has not been appointed so far. The implementation process is, therefore, ongoing. The existing disagreements between the EU and China concern the scope of market monitoring and its financing. The Chinese were not pleased with it. However, the EU wanted to include it in the settlement (Interview senior EU official, June 13, 2017). In August 2019, the monitoring was still not done, and the earlier described issues with its implementation remained. This led to the situation that “We think we agreed on something, but in fact, we did not,” commenting that it was “an agreement with Chinese characteristics” (Interview senior EU official, June 13, 2017). Moreover, there is a lack of support from the European telecom firms for this monitoring mechanism. Indeed, one could question how the Commission would be able to act on these market shares even if they were able to monitor them. Table 4.3 Chronology of the implementation of the EU-China settlement on telecoms November 1, 2014 August 2016 February 2017 April 2017

Ongoing

New Trade Commissioner Malmström assumes office WSJ reports that the settlement is floundering (Wall Street Journal 2016) The TC 260 publishes its Working Groups Constitution (Europe Direct 2017) The 13th official meeting of the IWG took place. A permanent Secretary General for the IWG has also been nominated (Europe Direct 2017) The market monitoring mechanism still has to be set up

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Points two, three, and four of the agreement are moving slowly. In general, access to the Chinese ICT-related standardization bodies and RDI programs for European companies remains “problematic” as in other economic sectors (Europe Direct, 2017). The EU-China Joint Declaration on 5G signed in 2015 also addressed the issue of reciprocity and openness. Both sides committed to reciprocity and openness in terms of access to 5G networks research funding and market access and membership of Chinese and EU 5G associations. According to the EU, following the Telecoms Settlement, “positive developments” have taken place in China. In February 2017, the National Information Security Standardisation Technical Committee (TC 260) published its Working Groups Constitution. It had the effect that almost all of its Working Groups are now open for European (and other foreignowned) firms. Recently, Beijing made amendments to the by-law on China’s Communication Standards Association (CCSA). The CCSA is now open to wholly foreign-owned enterprises. This was part of the Telecoms Settlement. In the area of 5G development, four out of the nine Working Groups of the key Chinese decision-making body, IMT2020 (5G) Promotion Group, have been recently opened to European companies. In terms of the openness of research programs, there has also been some progress over recent years. EU firms now have a full de jure openness vis-à-vis all Chinese ICT-relevant “mega-projects,” and better transparency regarding selection conditions plus more extended deadlines are also improvements for EU businesses operating in China (Europe Direct 2017). Indeed, including European firms in standardization and R&D has much improved over the past few years. However, per industry sources, this was not the result of the Commission’s action. These developments were already going on before De Gucht’s move because the Chinese authorities and telecom firms regarded it as beneficial. It was in their interest to do so. On export credits, China’s commitment at the time was rather general, making it difficult to measure the extent of progress. Indeed, assessing the progress made regarding the Chinese becoming more open to the IWG on Export Credits appears to be hard to guess, because it was a soft obligation. However, the Group remains operational five years after its creation. Its 13th official meeting took place at the end of April 2017, and a permanent Secretary General for the Group was also nominated. At the same time, progress on the substance of the text negotiations remains “very modest so far” (Europe Direct 2017).

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Misunderstanding also seemed to have played a role in the telecom settlement. Per an EU official: “The EU thought that the amicable settlement meant something to China.” Misunderstanding existed, for instance, on what to monitor and how to finance it. The official added: “A difficulty, in this case, was the cultural misunderstanding” (Interview senior EU official, July 13, 2017). With this remark, the official hinted at both parties having their understanding of the meeting and agreement. In this light, it is also worth mentioning that the Chinese were satisfied that both parties had reached an agreement. Because the EU did not launch a formal investigation, they had reached their goals. To better understand the implementation of the settlement, it is essential to take into account that it was not legally binding. Moreover, because De Gucht left, the person that was pushing for this case was gone. His Deputy Head of Cabinet, who drafted the four points of the settlement, also left. His successor Malmström came from a country with a more skeptical view on TDI, and she had different priorities. I now turn to analyze how well the BPM, neorealism, and institutionalism contribute to a better understanding of the policy implementation stage. Hypothesis testing BPM-IMPL: Where a decision leaves leeway for the implementing body, the implementation should reflect delays, contradictory actions, duplications, and distortions of original purposes. When key bureaucratic actors leave, then policy implementation will reflect this. The case analysis revealed the implementation of some parts but not of others.10 De Gucht’s term ended, and his successor had different priorities. The Deputy Head of Cabinet, who drafted the four points of the settlement, also left. The European telecom industry was not supportive of a monitoring mechanism. Critical was also that the settlement was not legally binding, making that legal power to enforce it was absent. Thus BPM sheds some light on this stage. Hypothesis testing Neorealism-IMPL: The most powerful EU member states exert pressure on the body implementing the decision to make it track with their security, economic, and other interests. DG Trade has “not been contacted” by any EU member state concerning implementing the market monitoring mechanism (Europe Direct 2017). The member states wanted to maintain good relations with China, and

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many were reluctant to support imposing measures on the Chinese telecom businesses in the first place. Muddled settlements lead to muddled implementation, and the muddled settlement was, in part, the result of the member states’ position. Part of the reason why the agreement was not fully implemented is that the Commissioner that pushed for this case left, the agreement was not legally binding, the Chinese side achieved its goal, and the European industry was not in favor of a market monitoring mechanism. Hypothesis testing Institutionalism-IMPL: The implementation of policies follows EU institutions (e.g., policies, decisions, EU law, and procedures). For various reasons, the implementation did not fully follow DG Trade and the Chinese authorities’ agreement. The question of the legal status of the settlement was left open. However, what is clear is that the settlement was not legally binding, making that legal power to enforce the deal was absent. A weak, non-legally binding settlement makes it easier not to enforce and not fully implement it as agreed upon, mainly because the Commissioner who pushed for this case left office. The value of institutionalism is limited here.

Conclusion In May 2013, the Commission’s DG Trade decided in principle to open an ex officio anti-dumping and an anti-subsidy investigation concerning imports of mobile telecommunications networks from China. An ex officio investigation is a highly controversial and political move, which allows the Commission to launch a trade defense investigation on its initiative without an official complaint by an EU industry. However, at the same time, the Commission announced that this decision would not be activated for the time being to allow for negotiations toward an amicable solution with the Chinese authorities. It was a highly unusual move. One can only understand this move by taking into account the specific circumstances of that time with various ongoing trade defense mechanisms by both the EU and China for instance regarding telecoms, solar panels, wine, and steel as well as Commissioner De Gucht’s pledge to take a tougher stance on China (see also Chapter 3). De Gucht sought, in particular, to target Huawei. It was more his initiative than it was a DG Trade or Commission initiative.

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This case had multiple sides. There was the EU investigation into mobile telecommunications networks from China, but De Gucht also wanted to use it as a bargaining chip to open up the Chinese market. One should see this in the context of it being part of the bargaining atmosphere. De Gucht wanted to stay out of a rules-based formal approach. He wanted to broker political deals and make a bargain with China. His perception was that there was a need to invent new strategies to get a good outcome for Europe. This bargaining occurred both on the European level and with the Chinese side. There was a lack of support from the member states and part of the industry with, for instance, Ericsson, actively opposing the case from the very beginning. After more than a year of discussions, eventually, in October 2014, the EU and China settled the case (European Commission 2014b). The settlement, in part, was not implemented as agreed. Its legal status was left open, and legal power to enforce it was absent. This case study is important for identifying the range of applicability of the three distinct theoretical models because it was an “extreme case.” Neorealism’s explanatory value in the issue identification stage is limited, partially because of the division of competences. Even in this “extreme” case, without the launch of a formal investigation, and thus no formal procedures had to be followed, neorealism had explanatory value for the decision-making stage. Given traditional national interests, countries have to assert themselves to defend their economic interests. The member states wanted to maintain their good relationships with China. Muddled settlements lead to muddled implementation, and the muddled settlement was, in part, the result of the position of the EU member states. Competences and EU law and procedures shed light on virtually every policy stage. Concerning the BPM, we saw bargaining throughout the whole case, both on the European level and with the Chinese side, however, this was predominantly driven by the Commissioner.

Notes 1. This involves the following document: “Note for the attention of all Delegations of the Anti-dumping and Anti-subsidy committee” ((2012)728896). 2. The real target of De Gucht was Huawei because they are the more important player when it comes to base stations.

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3. Big EU players in the field at that time included Alcatel-Lucent, Ericsson, and the Finnish-German joint venture Nokia Siemens Networks (NSN). In early August 2013, Nokia completed the acquisition of Siemens’ stake. Also, in early 2016, Nokia completed the takeover of Alcatel-Lucent. 4. Moreover, in April 2013, Commissioner De Gucht asked for broad new trade powers to make it easier to launch anti-dumping cases, particularly against the PRC (see Reuters 2013a). 5. See also the following EU documents: “Report of the informal consultations with China on 26 June 2012 (Ares2012)1075064)” and “Note for the attention of Commissioner De Gucht on the outcome of the informal consultations with China (trade.dgdir(2012)1255168).” 6. Because Ericsson, NSN, and Alcatel-Lucent had sought to distance themselves from the investigation, De Gucht had to rely on a consulting company to collect evidence for his case (Financial Times 2013b). 7. This was preceded by a special meeting of the Chefs de cabinet of 26 March 2014 as set out in RCC(2014) 35 (see European Commission 2014c: 14). 8. The Joint Committee is a regular event on the EU-China trade meetings’ calendar and was back then chaired by Trade Commissioner Karel De Gucht and Chinese Minister of Commerce Gao Hucheng. 9. This also meant that the opportunity for “a long-awaited (some would say overdue)” debate on the EU’s attitude vis-à-vis Chinese subsidies was removed (Farnell and Irwin Crookes 2016: 84). 10. Including European telecom companies in standardization and R&D has much improved over the past few years. However, opinions differ on what drove these changes. Industry sources emphasized this was not the result of the Commission’s action. Before De Gucht’s move, these developments were already going on. The Chinese authorities and telecom businesses found it valuable, and it was in their interest.

References China Daily. 2013a. “Huawei Seeks Fair Trading Environment in EU.” August 7. Available at http://www.chinadaily.com.cn/business/2013-08/ 07/content_16877852.htm. China Daily. 2013b. “ZTE, Huawei Win big in 4G Network Tender.” August 23. Available at http://usa.chinadaily.com.cn/business/2013-08/ 23/content_16915869.htm. China Daily. 2013c. “China, EU Agree on Free Trade, More Co-Op.” October 25. Available at http://www.chinadaily.com.cn/world/2013-10/ 25/content_17059038.htm.

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EIU. 2014. “EU Drops China Subsidy Probe.” October 20. Available at http://www.eiu.com/industry/article/1432396927/eu-drops-chinasubsidy-probe/2014-10-20. Ericsson. 2013. “Ericsson Continues Strategic Partnership with China Mobile for LTE.” November 19. Available at https://www.ericsson.com/en/pressreleases/2013/11/ericsson-continues-strategic-partnership-with-china-mob ile-for-lte. Erixon, Fredrik. 2013. “Solar Panels, Telecommunication Equipment—and the “Modernisation” of EU Trade Defence Policy.” ECIPE Bulletin No. 5/2013. EURACTIV. 2013a. “De Gucht Juggles Politics, Diplomacy in High-Stakes China Gambit.” May 6. Available at http://www.euractiv.com/section/dig ital/news/de-gucht-juggles-politics-diplomacy-in-high-stakes-china-gambit/. EURACTIV. 2013b. “EU Mulls New Trade Powers to Combat Dumping.” April 10. Available at http://www.euractiv.com/section/trade-society/news/ eu-mulls-new-trade-powers-to-combat-dumping/. EURACTIV. 2013c. “Commission’ Ready to Fire’ in China Telecoms Probe.” May 16. Available at https://www.euractiv.com/section/digital/news/com mission-ready-to-fire-in-china-telecoms-probe/. Europe Direct. 2017. Europe Direct Contact Center. May 9. European Commission. 2013a. “MINUTES of the 2046th Meeting of the Commission Held in Brussels (Berlaymont) on Wednesday May 15 2013 (morning).” May 29, 2013: PV(2013) 2046 final. European Commission. 2013b. “Statement by EU Trade Commissioner Karel De Gucht on Mobile Telecommunications Networks from China.” May 15. Available at https://ec.europa.eu/commission/presscorner/detail/en/MEMO_1 3_439. European Commission. 2013c. “Statement by EU Trade Commissioner Karel De Gucht on the Amicable Solution in the EU-China Solar Panels Case.” Brussels: July 29. Available at http://europa.eu/rapid/press-release_MEMO13-730_en.htm. European Commission. 2014a. “EU Not to Pursue the Anti-Dumping Investigation Against Mobile Telecommunications Networks from China.” March 27. Available at http://europa.eu/rapid/press-release_IP-14-339_en.htm. European Commission. 2014b. “EU and China Settle the Telecoms Case at the Joint Committee.” October 20. Available at http://trade.ec.europa.eu/doc lib/press/index.cfm?id=1165. European Commission. 2014c. MINUTES of the 2080th meeting of the Commission Held in Brussels (Berlaymont) on Thursday March 27 2014 (morning). Brussels: PV(2014) 2080 final. Available at http://ec.europa.

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eu/transparency/regdoc/rep/10061/2014/EN/10061-2014-2080-EN-F11.Pdf. Farnell, John, and Paul Irwin Crookes. 2016. The Politics of EU-China Economic Relations. An Uneasy Partnership. Basingstoke: Palgrave Macmillan. Financial Times. 2010. “Huawei and Option Forge Telecoms Technology Alliance.” October 28. Available at https://www.ft.com/content/b64ffb80e1ec-11df-a064-00144feabdc0. Financial Times. 2012a. “Beijing Faces Brussels Action on Telecoms Aid.” May 26. Available at https://www.ft.com/content/876632ae-a689-11e1aef2-00144feabdc0. Financial Times. 2012b. “EU Trade Officials Face China Dilemma.” September 2. Available at https://www.ft.com/content/7873f2d2-f4e9-11e1-b120-001 44feabdc0. Financial Times. 2013a. “China Anger at EU Telecoms Demands.” January 30. Available at https://www.ft.com/content/6a60518c-6a40-11e2-a3db00144feab49a. Financial Times. 2013b. “Brussels seeks China Concessions in Telecoms Trade Case.” May 15. Available at https://www.ft.com/content/ad7714ce-bd5b11e2-890a-00144feab7de. Financial Times. 2013c. “EU Defers China Telecoms Trade Case Ahead of Key Mobile Contract.” August 5. Available at https://www.ft.com/content/978 8fd92-fdc2-11e2-8785-00144feabdc0?mhq5j=e3. Financial Times. 2013d. “China Mobile awards $3.2bn worth of 4G contracts.” September 30. Available at https://www.ft.com/content/3a5ea822-29d911e3-bbb8-00144feab7de. Financial Times. 2014. “EU Commissioner Attacks China’s Telecoms Subsidies.” March 28. Available at https://www.ft.com/content/d6d0bcc6-b5cb-11e3b40e-00144feabdc0. Meunier, Sophie. 2014. “‘Beggars Can’t be Choosers’: The European Crisis and Chinese Direct Investment in the European Union.” Journal of European Integration 36 (3): 283–302. Ministry of Commerce of the People’s Republic of China. 2013. “MOFCOM Launched Anti-dumping and Countervailing Investigation on Imports of EU Wines.” Beijing: June 6. New York Times. 2013. “Europeans Press China Over Trade in Telecom.” May 26. Available at http://www.nytimes.com/2013/05/27/technology/ chinese-telecom-companies-caught-in-middle-of-trade-dispute.html. People’s Daily. 2013a. “Protectionism no painkiller for Europe.” May 16. Available at http://en.people.cn/90778/8247267.html. People’s Daily. 2013b. “Telecoms Probe Hurts Chinese, EU Interests: MOC.” May 16. Available at http://en.people.cn/90778/8247269.html.

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Pepermans, Astrid. 2016. “The Huawei Case and What It Reveals About Europe’s Trade Policy.” European Foreign Affairs Review 21 (4): 539–557. Reuters. 2012. “EU Report Urges Action Against Chinese Telecom Firms.” December 13. Available at https://uk.reuters.com/article/uk-eu-china-tel ecoms/eu-report-urges-action-against-chinese-telecom-firms-idUKBRE8B B18420121212. Reuters. 2013a. “EU Seeks New Anti-Dumping Trade Powers with China in Mind.” April 10. Available at http://reuters.com/article/amp/idINDEE93 90EV20130410. Reuters. 2013b. “EU Resistant to China Telecoms Trade Case: Sweden.” April 18. Available at http://www.reuters.com/article/us-eu-trade-china-idUSBR E93H11Q20130418. Reuters. 2013c. “EU Warns China it is Ready to Launch Telecoms Dispute.” May 15. Available at https://www.reuters.com/article/us-eu-trade-china/ eu-says-ready-to-launch-trade-dispute-over-china-telecoms-idUSBRE94E0I P20130515. Reuters. 2013d. “Exclusive: EU Cites Chinese Telecoms Huawei and ZTE for Trade Violations.” May 18. Available at http://www.reuters.com/article/ustrade-eu-idUSBRE94H03J20130518. Reuters. 2013e. “Huawei, ZTE Win Bulk of China Mobile’s $3 Billion 4 g Bonanza: Sources.” August 23. Available at http://www.reuters.com/article/ us-chinamobile-4g-idUSBRE97M02020130823. Reuters. 2014a. “EU, China End Wine Dispute Ahead of Xi’s European Tour.” March 21. Available at https://www.reuters.com/article/us-china-europewine/eu-china-end-wine-dispute-ahead-of-xis-european-tour-idUSBREA2 K0QE20140321. Reuters. 2014b. “Update 2-EU and China End Telecoms Row as EU Drops Threats against Huawei.” October 20. Available at http://www.reuters.com/ article/eu-china-telecommunications-idUSL6N0SF1XK20141020. The Economist. 2013. “Sino-European Trade Tensions. On Hold. The European Commission Threatens Chinese Telecoms Firms.” May 18. Available at https://www.economist.com/news/business/21578077-europeancommission-threatens-chinese-telecoms-firms-hold. Wall Street Journal. 2016. “EU Bid to Protect Telecom Companies from Chinese Rivals Flounders.” August 5. Available at https://www.wsj.com/art icles/eu-bid-to-protect-telecom-companies-from-chinese-rivals-floundering1470388349. Xinhua. 2013. “China Calls for Dialogue after EU Solar Panel Duties.” June 5. Available at http://news.xinhuanet.com/english/china/2013-06/05/c_1 32433234.htm.

CHAPTER 5

The Rise of China in Africa and the Response of the EU: The EU-China-Africa Trilateral Dialogue and Cooperation Initiative

This chapter focuses on the EU’s reaction to the rise of China in Africa via the EU-China-Africa trilateral cooperation initiative. It specifically looks at the emergence of the EU’s perception of a “China in Africa” policy issue, its policy responses, and its implementation of these policy options. The analysis will evaluate whether the BPM, neorealist, or institutionalist model best fits issue identification, decision-making, and policy implementation. The concluding section summarizes the main findings and expounds on their relevance. To preview my findings, we saw elements of the BPM in the issue identification and decision-making stages. When key bureaucratic actors left, the policy implementation reflected this. Regarding neorealism, the member states were supportive of the trilateral initiative, which created an environment in which the Commission could launch its initiative. Neoliberal institutions illuminate all stages.

This chapter is derived in part from an article published in Journal of European Integration 2018 copyright Taylor & Francis, available online: http://www.tan dfonline.com/10.1080/07036337.2018.1465418. Hooijmaaijers, Bas. 2018. “China’s rise in Africa and the Response of the EU: A theoretical Analysis of the EU-China-Africa Trilateral Cooperation Policy Initiative.” Journal of European Integration 40 (4): 443–460. © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2021 B. Hooijmaaijers, Unpacking EU Policy-Making towards China, Palgrave Studies in Asia-Pacific Political Economy, https://doi.org/10.1007/978-981-15-9367-3_5

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Background to the EU-China-Africa Case The Rise of China in Africa Since the early 2000s, Africa has become an increasingly important arena for traditional donors and emerging powers, including China. Its need for economic growth partially drives the PRC diplomatic expansion in Africa. One should, however, also take into consideration the strategic impulse accompanying its accelerating emergence as a global power (Wang and Zou 2014). Africa should be regarded as one of China’s diplomatic “new frontiers,” as was illustrated by Chinese President Xi Jinping’s maiden foreign trip to Africa in 2013 (Ibid.). In 2000, this diplomacy started with the establishment of the Forum on China-Africa Cooperation (FOCAC), and this forum has since then become the leading institutional framework that governs Sino-African relations. These developments also need to be understood in the context of increasing South-South cooperation. China’s rise in Africa was a rather gradual process, and even if fast, it came with several steps, not as a big bang. China’s influence in Africa grew with its rising Gross Domestic Product (GDP) and increasing trade and overseas investment, not as a deliberate strategy to diminish Western influence (Wissenbach 2011). It also is in this context that in 2006 the PRC published a white paper on its Africa policy, suggesting an ambition to play a more significant role on the continent. In the same year, during the Beijing FOCAC Summit, the parties adopted a declaration establishing a strategic partnership. However, it was already in 1995 that the State Council for the Ministry of Commerce developed a mandate to combine aid to Africa, cooperation, and trade together, marking the starting point of China’s Great Economic and Trade Strategy (Brautigam 2009: 80). China does not perceive itself as a donor, but rather as a development partner (Liu 2011). Correspondingly, China’s development model in Africa can be described as “business instead of aid”, with infrastructure investment leading to the economic development of the African continent, providing an alternative compared to the traditional Westerndominated aid (Liu 2011: 12). China’s Africa policy is, however, not limited to trade, investment, and infrastructure. It includes various fields and sectors, making it more like a package (see also Shinn and Eisenman 2012; Raudino 2016; Grimm 2008). Contrary to the EU and its member states, China does not subscribe to the Official Development Assistance (ODA) criteria of the Organization for Economic Co-operation

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and Development (OECD), nor does it publish detailed accounts of its spendings (Barton and de Bellefroid 2015). The overall trade between China and African countries has increased substantially over the last decades (see Graph 5.1). However, this trade is limited to a few countries and a few commodities. China’s main interests are in raw commodities, including oil (Angola, Nigeria, and Sudan), minerals (the Democratic Republic of the Congo, South Africa, and Zambia), and timber (Equatorial Guinea and the Republic of Congo) (Mazimhaka 2013: 102). We see similar trends when it comes to COFDI (Renard 2011; see Graph 5.2). Recently, Africa has become an essential part of the BRI (see Blanchard 2021). On the institutional level, before China’s Ministry of Commerce (MOFCOM) was the entry point for foreign actors, including the EU, however, now the China International Development Cooperation Agency (CIDCA) is the key actor to discuss development cooperation. In short, one can see anything one wants to see in the Sino-African relationship. On the negative side, there is the extraction of resources, the risk of a debt trap, corruption, and the lack of transparency. On the 250

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Graph 5.1 China-Africa trade, 1992–2018 (in billion USD) (Source UNComtrade data. Retrieved via the SAIS China Africa Research Initiative 2020a)

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Chinese FDI Flow to African Countries. Total in billion USD

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Graph 5.2 Chinese FDI Flow to African Countries, 2003–2018 (in billion USD) (Source The Statistical Bulletin of China’s Outward Foreign Direct Investment published by China’s MOFCOM. Data retrieved via the SAIS China Africa Research Initiative 2020b)

positive side, now Africans have a choice, there is no paternalistic relationship, and there is a voice for them at the United Nations (UN) and the IMF. This also includes trade, market access, and cultural exchanges. The Traditional Primacy of Europe in Africa The Europeans have historically regarded Africa as their backyard. Until the 2006 FOCAC Summit, the EU was the only entity that had a summit with Africa. Traditionally, two frameworks governed the relations of the EU with Africa(n) countries. The first one is the 1975 Lomé Convention, which grouped the relations with the African, Caribbean, and Pacific (ACP) countries for the first time. After several revisions, this was replaced in 2000 by the Cotonou agreement. Positive conditionality characterized this agreement. In exchange for European aid, the ACP countries need to promote values that the EU regards as significantly important, including human rights, democracy, the rule of law, and good governance (see Zimelis 2011; Sicurelli 2010). The 2007 Joint Africa-EU Strategy (JAES) added a more continental approach to this policy and launched the EU-Africa strategic partnership.

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EU-Africa relations suffer from incoherent policies and an asymmetrical partnership (Carbone 2013). The EU’s Africa policy is not an EU exclusive policy, meaning that the member states conduct their policies toward Africa. Member states differ substantially in their historical and economic ties with African countries. The former colonial powers have relatively strong ties with and interest in the African continent. By contrast, for the Central and Eastern European Countries (CEECs), Africa is less critical. Although the EU and its member states provide approximately 60% of Africa’s development aid, only around one-sixth of this amount comes from Brussels (Holland 2008: 349; Huliaras 2012: 427). Although Brussels and Beijing have significantly different strategies vis-à-vis Africa, their African policies are primarily motivated by the same needs. This includes energy security, the quest for political allies, and markets for their goods, great power aspirations, fighting poverty, promoting economic growth, and achieving the Millennium Development Goals (MDGs) (Ogunleye 2011; Larik and Weiler 2011; Van der Putten and Shulong 2010; see also Grimm 2011: 1–2). Development is a declared common goal of both the EU and the PRC (see the Millennium Declaration and the Busan Declaration). However, besides “some common ground,” the strategies of both sides often differ (Wissenbach and Wang 2016: 251). The EU’s Initially Muted Response China’s rise in Africa has forced the EU to rethink its relationship with China and Africa. Although China’s rising presence on the African continent was increasingly evident by 2000, the EU and its member states were slow to recognize the magnitude of the changes (Alden and Sidiropoulos 2009). The initial perceptions in Europe on China’s rise in Africa were negative, with newspapers as well as civil society organizations speaking of the scramble for Africa’s resources (Marchal 2007; Mawdsley 2008), but with policy-makers not seeming particularly eager to address the issue (Carbone 2011). By October 2005, a kind of business-as-usual approach prevailed in the EU as the Commission prepared the release of its new strategy for EU-Africa relations (Bach 2008). The October 2005 Commission Communication on an EU Strategy for Africa only briefly touched upon it.

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Touching upon China’s rise in Africa was done through a tangential and low-key reference, carefully steering away from drawing conclusions (Bach 2008). In Mid-December 2005, the Council adopted a statement endorsing the strategy that was recommended by the Commission in its Communication. However, it did not refer to the PRC. Per Carbone, the debate in the Council before the adoption of this Strategy for Africa and predominantly the preparatory meetings showed that the member states did not have yet a clear grasp of the real impact of China’s rise in Africa. They were mainly basing their positions on what was being reported by the newspapers. They also worried about different things with the Nordic countries being concerned about the undermining of their efforts to promote human rights and democracy would, and the UK and Germany holding the opinion that the PRC was not a real threat because it lacked a policy toward the whole continent (Carbone 2011). France regarded the rise of China in Africa as a potential ally to counterbalance the US’ new interest in Africa (Marchal 2008; Carbone 2011). Generally, a look at Commission Communications, Council Conclusions, European Parliament discussions and deliberations in national legislatures, shows that—despite some sporadic exceptions—it would be hard to find references to China’s presence in Africa (Huliaras and Magliveras 2008). Both the Commission and the Council seemed each in their way unable or unwilling to address the consequences of China’s rise in Africa and its increasing relevance in global governance (Bach 2008). With its foreign policy mindset focused on other issues, including the 9/11 attacks and the War on Terror, the EU was caught short by China’s apparent opportunism (Barton and de Bellefroid 2015). Several factors can explain the absence of a coherent and noteworthy EU response to China’s rise in Africa. From a geopolitical perspective, China lies outside Europe’s strategic concerns. There are competing interests among the member states, and only a limited number of member states—predominantly former colonial powers—have placed Africa’s development relatively high on their foreign policy agenda. Also, there was the European feeling of superiority and a belief that newcomers cannot seriously undermine its dominant position (Huliaras and Magliveras 2008: 410–411). Another factor in “underestimating” the PRC is the EU’s internal matters. Because the Lisbon Treaty only entered into force in 2010, and the EEAS started operating only then, the EU level did not have a significant foreign policy. As long as China’s engagement did not (negatively) impact trade relations or aid payments, it was irrelevant to the previous

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EU setting. The EU side did not have the mandate to report or act otherwise. The next sections focus on the EU’s response to China’s rise in Africa. For analytical purposes, the focus is predominantly on the EUChina-Africa trilateral cooperation initiative to cope with China’s growing presence on the African continent.

Issue Identification: China’s Increasing Presence After the lack of initial response, the EU and its member states started to recognize the PRC’s increasing and multifaceted role in Africa meaningfully (Huliaras and Magliveras 2008). In late 2006, the former European Commission’s DG Development (DG DEV) acknowledged China’s rise in Africa for the EU.1 DG DEV was leading in making China in Africa an issue that needed a response (Interview senior EU officials, August 20, 2019; January 29, 2018; November 26, 2015). European Commissioner for Development Louis Michel conducted an active Africa policy, with frequent visits to Africa to meet with African heads of state and government. During these visits, “we observed that in many African countries there was an important presence of China,” and it was increasing “in both a financial and personnel way, particularly in resource-rich countries” (Interview senior EU official, January 29, 2018). DG Stefano Manservisi of DG DEV visiting China and having the first discussion with China when the FOCAC Summit preparations were going on marked the acknowledgment of the importance of China’s rise in Africa for the EU. In Beijing, there were meetings with MOFCOM, the Chinese ministry of foreign affairs, and the EXIM Bank of China. Michel and Manservisi found that China is making a significant imprint on the continent, in particular with the FOCAC Summit in 2006, and decided to start a dialogue with China on Africa and to explore areas of cooperation, “because the overarching objective of development is something that we shared” (Interview senior EU official, November 26, 2015; also mentioned in interview senior EU official, January 29, 2018). FOCAC 2006 and the ceremony it had in Beijing were a watershed moment. There was a summit of African countries with another power, and it also came with a China-Africa policy on paper. In reality, China’s rise in Africa started to become a topic “a bit before” the FOCAC Summit, although “obviously the Summit played a role in the public debate” (Interview senior EU official, November 26, 2015). For politicians, this emergence

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was not visible until then. However, China’s impact before 2005 was also relatively limited (Interview senior EU official, August 20, 2019). Commissioner Michel and DG Manservisi were very influential. However, they picked up realities that were on the ground. Already in 2003, there were discussions about COFDI in Africa. Many development officials in the delegations in Africa saw it as an opportunity because the Chinese were financing infrastructure work, and “at least a few of these works were useful for the development of Africa” (Interview senior EU official, December 3, 2018). There was a dual development here. China was rising, and Europe realized this, and the development specialists realized that China is not a developing country anymore. Moreover, the traditional development people who focused on Africa wanted Europe to engage again with Africa and were using this “China threat” to convince European policy-makers of the need to focus their attention again on the African continent. Alternatively, as put by Carbone, the EU’s renewed interest in Africa is not a response to China’s rise in the continent, but rather relates to the EU’s ambition (mainly the Commission) to become an influential global actor as well as its strive for a more coherent foreign policy (Carbone 2011). As an official of DG DEV has put it clearly on a new EU strategy for Africa: “We simply used the China scare to place Africa high on the agenda of the European Union” (Carbone 2011: 209). Indeed, Michel and Manservisi saw the trilateral dialogue as an opportunity for DG DEV to increase its political profile with regard to Africa, and gain greater political autonomy within the Commission, in particular concerning the DG for External Relations (DG RELEX), which was the general DG for foreign affairs at that time (Stahl 2018; Interview senior EU official, August 20, 2019).2 The Big Three were the first among the member states to identify China’s outreach to Africa as a new foreign policy priority. As former colonial powers with close political and economic links to Africa, for instance, France and the UK, were increasingly confronted with the Chinese presence as a new actor on the African continent (Stahl 2018). Melly and Darracq pointed out that when French firms, particularly in oil and infrastructure business, started to feel the pressure of Chinese competition in the mid-2000s, French diplomats took note of the rise of emerging powers on the African continent. However, in some ways, France could live with China’s increasing role, as, for instance, mining is not a significant area of strength for French business. Moreover, French companies

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present in Africa in sectors such as telecoms, shipping, port operations, railways, and air transport stand to benefit from increasing COFDI in Africa, because this generates more business for the services that they provide (Melly and Darracq 2013: 16). In November 2006, at the 16th Frankfurt European Banking Congress, around two weeks after FOCAC 2006, German chancellor Angela Merkel publicly mentioned the European strategic interests when it comes to trade and commodities, and that the Chinese presence including their quick way of doing business presents a challenge for Europe (Merkel 2006). After FOCAC 2006, the then German Development Aid Minister, Mrs. Wieczorek-Zeul, also emphasized in an interview that the Chinese aid approach presented “a wake up call” to Europe (Tywuschik 2007: 4). With FOCAC 2006, there was a Summit of African countries with another power, while the EU-Africa Summit experienced difficulties because the EU’s views on Zimbabwe’s President Mugabe were a major stumbling block in the process.3 Germany did not hide its annoyance at this development, arguing that Africa is a top priority for the EU, that the influence of China on this continent is increasing, and that a whole continent cannot become hostage because of one head of state (Huliaras and Magliveras 2008). Commission spokesman for Aid and Development Amadeu Altafaj commented on the situation that whereas the policy of the EU toward Zimbabwe will not change, the Second EU-Africa Summit should take place because “[t]he Africa-China Summit, in particular, has been an alarm bell for some.” Portuguese diplomats, whose country was holding the rotating EU Presidency during the second half of 2007, said the long delay in holding “a proper dialogue” with Africa “has cost Europe a lot, not least in losing business opportunities to China” (Reuters 2007). China’s Africa policy became a critical issue on the agenda of the China-EU political dialogue, as the Commission first raised the issue of EU-China-Africa trilateral cooperation in an October 2006 Communication to the Council and the European Parliament, after initial talks in 2005, and during the 9th EU-China Summit that was held in Helsinki in September 2006 during the Finnish Presidency (Berger and Wissenbach 2007). During that 9th EU-China Summit, both sides discussed China in Africa, marking a shift in the EU’s policy that dialogue on the issue is needed (Huliaras and Magliveras 2008; Carbone 2011). China’s presence was heatedly debated in the EU, and African issues have been high on the EU-China-Summit agenda since then.

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The Commission argued that there are significant downsides if both parties are not able to co-ordinate effectively. Per a senior EU official: “What we saw was that a confrontational debate was emerging,” hinting at papers being under preparation by DG RELEX and DG Trade that were critical on China. However, from their development point of view, a confrontational attitude between Europe and China in Africa “would not be very good,” suggesting it would lead to competition rather than cooperation (Interview senior EU official, November 26, 2015). DG Development had no concerns with the increasing Sino-African trade and infrastructure investment because they saw it as “a good opportunity” to maximize the benefits for “the common goal” development in Africa (Interview senior EU official, November 26, 2015). Also, in a September 2006 resolution on EU-China Relations, the European Parliament stated that China’s engagement and influence in Africa have increased considerably over the last decade and stressed the importance of promoting human rights, democracy, and good governance. I now turn to examine how well the BPM, neorealism, and institutionalism explain what happened concerning issue identification. Hypothesis testing BPM-ISID: EU bureaucracies are driven by their agenda and interests when identifying an issue. We saw a dual development here. In late 2006, Commissioner Michel and Director Manservisi “discovered” China was making a significant imprint in Africa, as evidenced by the upcoming FOCAC Summit. DG DEV made it an issue of critical importance for the EU because a new, big player with its vision on development became increasingly present on the African continent (see Stahl 2018; Alden and Sidiropoulos 2009; Interview senior EU official, August 20, 2019; Hooijmaaijers 2018). However, the EU’s renewed interest in Africa is not a response to China’s rise in the continent but rather relates to the EU’s ambition (mainly the Commission) to become an influential global actor as well as its strive for a more coherent foreign policy (Carbone 2011). Michel and Manservisi saw the trilateral dialogue as an opportunity for DG DEV to increase its political profile with regard to Africa, and gain greater political autonomy within the Commission, in particular concerning DG RELEX (Stahl 2018; Interview senior EU official, August 20, 2019).

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Hypothesis testing Neorealism-ISID: The security, economic, and other interests (in this order) of the most powerful EU member states influence what issues the EU identifies as the key EU foreign policy-making issues. The Big Three were the first among the EU member states to start identifying China’s outreach to Africa as a new foreign policy priority, as they were increasingly confronted with a growing Chinese presence. However, in this specific EU-China-Africa trilateral cooperation case, DG DEV acted as the agenda setter against the backdrop of the above-discussed dual development (Alden and Sidiropoulos 2009; Interview senior EU official, August 20, 2019). Based on the Commission’s work, the General Secretariat of the Council started to realize the need for the EU to review its diplomatic relations with Africa and take Beijing’s growing geopolitical influence into account (Stahl 2018). Hypothesis testing Institutionalism-ISID: Issue identification flows from the interests or priorities of who is in charge as defined by the rules. Development cooperation is a shared competence (see Keukeleire and Delreux 2014: 94–95). Per these competences, DG DEV was in the position to identify the issue (see also Gavas and Maxwell 2009). The Big Three and the European Parliament also observed China’s increasing engagement and influence in Africa and are in the position to identify the issue, however in the context of the trilateral cooperation initiative it was DG DEV that identified it as an issue of critical importance (see Stahl 2018; Alden and Sidiropoulos 2009; Interview senior EU official, August 20, 2019).

Decision-Making: Seeking Engagement with China Within the Commission, several policy-makers were more than eager to launch a policy initiative to tackle the PRC’s new role in international development directly (Carbone 2011; see Stahl 2011). In 2006, an EU official was put in charge by DG Manservisi to deal with China in Africa and formulate a policy response. As pointed out by Wissenbach, the EU had several strategic choices for consideration to deal with China’s rise in Africa (Wissenbach 2009: 663; see also Grimm 2008)4 :

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– – – –

Confronting the PRC where it undermines the EU interests; Not acting and observing how the situation evolves; Continue with the existing EU-China dialogue on Africa; Convincing China to join existing frameworks including the OECD and the DAC (Development Assistance Committee); – Getting involved with the PRC in a new process where it is regarded as a partner with valid interests in the African continent, where mutual interests among the three parties EU, China and Africa will be identified, that will be pursued following dialogue and cooperation and where there is place to address the differences among the parties as well. There are multiple “decisions” made in this stage, with the first one being this decision to pursue a dialogue and cooperation. DG DEV discarded the option of doing nothing (Interview senior EU official, 20 August 2019). The latter option prevailed because a possible confrontation over Africa could have negatively affected the balance in the EU-China strategic partnership, which already experienced severe issues (Wissenbach 2011). However, it is worth mentioning the non-existence of concrete ready-to-implement policy instruments through which the EU could limit Chinese influence in Africa (Huliaras and Magliveras 2008). Commissioner Michel got involved with the trilateral cooperation and took political responsibility for it, although it was a DG Development officials’ initiative (EU Diplomat, September 2010, retrieved in Carbone 2011: 212).5 Other essential issues concerned the forms and features of this dialogue and cooperation. Hosting a conference in June 2007 can be seen as a starting point of the European Commission’s efforts for a trilateral dialogue with Africa and China. The Commission regarded the event as an initial informal meeting between officials from DG DEV, and Chinese and African stakeholders, to explore the prospects of EU-ChinaAfrica trilateral cooperation (Wissenbach 2007). During this conference, Commission officials tried to show African participants the advantages of European development standards and practices and to Chinese policymakers the EU’s positive experience in development cooperation with African countries. After this conference, the Commission started considering the publication of a specific policy document in the form of a Commission Communication to provide the basis for trilateral cooperation with the Chinese and African sides (Stahl 2018).

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When developing the features, forms, and tone of its policy vis-à-vis China in Africa, DG DEV faced substantial resistance, not only between the various EU institutions, but also between the Commissions’ various DGs, and there were diverging opinions as well concerning Europe’s industrial interests. Per a senior EU official: “It was not an easy one” (Interview senior EU official, 26 November 2015). Construction companies lobbied because they were afraid of Chinese competition, which was unfair in their opinion (see also Carbone 2011: 214–215; Hackenesch 2009). This did not result in any effects, because the Commission felt that there was enough room for infrastructure construction in Africa, and protectionist instincts are not particularly helpful to develop more infrastructure in Africa (Interviews senior EU officials, November 26, 2015; January 29, 2018; Interview EU official, August 8, 2018). The trilateral cooperation initiative did not consider the consequences for the EU member states’ business opportunities (Interview senior EU official, 29 January 2018). Besides a China critical resolution of the European Parliament that we will discuss below, DG DEV had to deal with internal resistance, mainly coming from the Commission’s Secretariat-General and the Commission’s former DG RELEX, because they did not want to add another layer to the already highly complicated EU-China bilateral relationship (Carbone 2011). At the Secretariat-General, there were “some mid-level officials” that wanted to stop the initiative, yet their superiors overruled them (Interview senior EU official, November 26, 2015). It created difficulties at some stages, writing the process and discussing it at the political level with the cabinet’s involvement and the DG’s involvement. The initiative was controversial because it meant a particular way of engaging with China, which received critique in the public debate. DG RELEX was not in favor because they felt they were in charge of China policy, and they wanted DG Development to focus on Africa rather than on China. DG RELEX was concerned about its prerogative in dealing with China and saw that it was a significant development, but then as a sectoral development. In this light, it is essential to mention that in 2006 when preparing the EU—China: Closer partners, growing responsibilities document (see European Commission 2006), there had been a strong internal discussion. DG Trade wanted to publish its own China paper, separate from the DG RELEX paper, with DG RELEX being adamant of that paper being part of the overall strategy paper that

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they were working on.6 Thus, DG RELEX was sensitive about their leadership on China affairs, which was contested by DG Trade in 2006, who had a more critical view of China than RELEX, because of anti-dumping issues (see also Chapters 3 and 4). When DG DEV initiated another paper in 2008, DG RELEX was “not particularly happy” because they were contested again (Interview senior EU official, November 26, 2015). DG DEV contributed a paragraph to this 2006 paper, and RELEX found this was sufficient. However, both parties managed to overcome this issue fairly quickly. On a related note, Commissioner Michel and the other Commissioners supported DG DEV, the President’s cabinet was in favor, and the EU Delegation in China was also somewhat supportive of the initiative. The divergent opinions on the Commission’s trilateral communication predominantly resulted from two competing visions of the objective of trilateral cooperation with China and Africa: whereas some EU officials regarded trilateral cooperation as a means of establishing a genuine partnership with China, others considered it as a policy tool to socialize China to European development norms and procedures (Stahl 2012: 17). However, according to a senior EU official “within DG DEV, no one had the illusion that we could socialize the Chinese via trilateral cooperation. We were pragmatic” (Interview senior EU official, January 29, 2018). The substantial differences in approaches and visions within the EU became visible when in April 2008, the European Parliament adopted a resolution on China’s policy and its effects on Africa (European Parliament 2008a). This resolution stressed their strong commitment to the importance of human rights, democracy, and good governance in EUFP. The key message of the Parliament’s resolution was that the threats of China’s Africa policy outweigh its potential benefits (Austermann 2012). The normative approach of the Parliament contrasted with the more pragmatic approach of the Commission’s DG DEV. The resolution of the European Parliament created tension with the Chinese side because the Parliament took on the China critical voices in the debate about China in Africa with this resolution, which was not surprisingly not well received by Beijing (see Ministry of Foreign Affairs of the People’s Republic of China 2008). As mentioned by an MEP, “the Chinese government was upset. They were not happy with the report” (Interview MEP, January 22, 2018). Another MEP stated: “the Chinese government and embassy attach great importance to the European Parliament’s reports. European critique hurts” (Interview MEP,

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January 24, 2018). According to an EU diplomat, “The Members of the European Parliament were influenced, probably too much, by the media, civil society organizations, and the evidence given by some skeptical experts during the hearings that preceded the resolution” (EU diplomat, September 2010, retrieved in Carbone 2011: 213). By adopting this resolution, the Parliament got ahead of DG Development and “countered its endeavors” (Interview senior EU official, November 26, 2015). Against this backdrop, during his China visit Commissioner Michel used a somewhat different tone in a written contribution to the China Daily in late August 2008, where he pointed out that the objectives of the Chinese are in no way incompatible with European views and priorities, but instead offer opportunities for the African continent. He also stressed that he wanted to explore a triangular partnership (Michel 2008). This constructive approach was necessary because “the Chinese always perceived that the EU strategies are in place to restrict China’s influence in Africa” (Interview senior EU official, January 29, 2018). The Commission responded to the resolution of the Parliament by stating that already since 2006, the EU and the PRC have conducted a dialogue on Africa’s peace, stability and sustainable development, as have some EU member states. The Commission wrote it agreed with the Parliament that “a well-coordinated approach needs to be developed” by the EU institutions and the EU member states in response to the new challenges posed by emerging donors in Africa, including the PRC (European Commission 2008b). The Commission added that this should include a dialogue with the African Union (AU) and other African partners. With this in mind, the Commission was preparing a Communication on trilateral dialogue and cooperation for autumn 2008. The Commission and the Council have been the primary forces behind the trilateral cooperation initiative. The European Parliament did not contribute to this initiative as it did to the bilateral EU-China dialogue on Africa. Unlike the Commission, the Parliament does not possess competences to carry out development projects. Moreover, despite the European Parliament’s involvement in the formulation of EU development policy (mostly through its Development Committee), it did not identify trilateral development cooperation as a relevant topic. Most of the MEPs were “rather skeptical” about the idea of trilateral cooperation, with the EP’s draft report on China’s policy and its effects on Africa and its resolution indicating the Parliament’s critical stance vis-à-vis a

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trilateral dialogue with China and Africa (Stahl 2018: 111; see European Parliament 2007, 2008a). By contrast, the member states, in general, were supportive of the initiative, because they realized that the EU had to do something and felt that “We could not just let the whole issue of China in Africa sort of poison the relationship” (Interviews senior EU officials November 2015; January 29, 2018). The Council was “not against it” because they followed the same logic as DG DEV: “The facts are the facts, so let us engage in a dialogue” (Interview senior EU official, January 29, 2018). This does not mean that all member states were enthusiastic about the initiative. Some felt there was not much else they could do, but other countries like Germany were devoted to ensuring that the strategic relationship between Africa, China, and the EU was not deteriorating into antagonistic competition for Africa. Regarding the tone, features, and purposes of the dialogue and cooperation, there was a discussion about whether to include human rights and good governance. The Nordic countries, the Dutch, and to some extent, Germany were pushing to put good governance in the Council Conclusions. DG DEV found this to be a provocation because this would mean they would go back to anti-Chinese rhetoric. It was a controversial debate at the time with the Parliament stressing human rights. DG DEV wanted to make an offer to the Chinese side to engage in certain areas. If DG DEV had started its document in the same vein, it would undermine the initiative’s intended effect. This was discussed with the member states in the Council Working Group, and “they all agreed” introducing these problematic issues into the paper was not a good idea if they wanted to give China a paper to build trust and to build bridges in order to overcome the antagonistic debate (Interview senior EU official, November 26, 2015). Also, the EU’s position on good governance and human rights had already been made clear in various other papers (see European Commission 2006). It is valuable to mention that within the Council, the Council Working Group for Africa (COAFR) and not by the Asia Council Working Group (COASI) primarily addressed the Commission’s trilateral cooperation initiative. An explanation for this is that the trilateral cooperation policy initiative was elaborated under the lead of DG DEV, which formally only had competences related to Africa and not to Asia and China (Stahl 2018; see also Gavas and Maxwell 2009).

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At the time, the French government was supportive and was willing to give it a try, although “some French companies” were among the firms that lobbied against it (Interview senior EU official, November 26, 2015). Because the against-lobby was overruled mainly, there was considerably strong support from France on this approach. Likewise, the UK supported the Commission’s proposal, as led by the Department for International Development (DFID) it had also started a dialogue and trilateral cooperation proposals with China and Africa (Hooijmaaijers 2018). Within the Council, the Big Three were most supportive of the Commission’s proposal because of their economic interests in Africa. Government representatives of France, Germany, and the UK identified the trilateral dialogue as a suitable response to the increasing Chinese economic presence in Africa, and a tool for defending European economic interests in the continent (Stahl 2018). Still, the member states and DG DEV both hesitated whether the initiative would succeed. Even though DG DEV took responsibility for the overall coordination of the trilateral dialogue, it also cooperated with other Commission DGs, in particular with DG AIDCO. Cooperation between the two was “crucial” for the trilateral dialogue because concrete projects are a critical part of trilateral development cooperation (Stahl 2018: 112). However, DG AIDCO is just an implementing agency for the projects, which means they were only consulted, but not on politics (Interview senior EU official, August 20, 2019).7 Given its forthcoming Communication, the Commission held a public consultation. The Commission considered it time to understand what the impact of Chinese activities in Africa are on Africa’s development and the EU’s relations with China and Africa and take action, proposing trilateral cooperation between Africa, China, and the EU on peace, stability, and sustainable development (European Commission 2008c, 2008d). Per the consultation’s report, its purpose was to gather information and opinions from all African, Chinese and European stakeholders on the idea of setting up a trilateral dialogue and cooperation and on possible joint actions to be taken by the EU, its Member States, China, and Africa to support it. The Commission received 47 replies, including 32 on behalf of an organization and 15 from individuals. Following the public consultation, DG DEV issued a draft communication named The EU, Africa and China: Towards Trilateral Dialogue and Cooperation on Peace, Stability and Sustainable Development. Africa was mentioned second, after the EU and before China because DG DEV wanted to put particular emphasis on

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Africa’s role in the initiative. Thus, they identified the AU as the primary African partner for the trilateral dialogue. Consequently, the draft policy document particularly emphasized the benefits of trilateral cooperation in peace and security as the main area of expertise of the AU. Overall, the Commission’s public consultation process played only a minor role in the formulation of the trilateral agenda, but its actual content was predominantly decided via informal political discussions between the EU and the African and Chinese sides (Stahl 2018). Eventually, in October 2008 in a Commission Communication, the Commission proposed that Africa, China, and the EU should work together flexibly and pragmatically to identify and address a specific number of areas that are suitable for trilateral cooperation and to link this cooperation where possible with existing commitments in multilateral fora and in particular the UN. The Commission Communication suggested three key principles for dialogue and cooperation: pragmatism and a progressive approach, a shared approach, and the effectiveness of aid (see European Commission 2008a). As Sven Grimm outlined, pragmatism was necessary because the Chinese understanding of cooperation does not follow the Western definition of development cooperation. He also commented that dialogue needed to go beyond Brussels’ and Beijing’s bilateral debates, adding that discussion about Africa, as envisaged by the EU-China strategy, is not sufficient. Also, better coordination among various actors is likely to increase aid effectiveness (Grimm 2008). The Commission designated four fields for cooperation: peace and security in Africa, support for African infrastructure, sustainable management of the environment and natural resources, and agriculture and food security (European Commission 2008a: 5–6). The rationale for choosing the first three fields was that they were in common interest where cooperation could produce results and not areas with direct competition. By contrast, the Chinese side informally suggested the fourth subject to the Commission’s original three ideas (Interview senior EU official, November 26, 2015; Hooijmaaijers 2018). The Commission Communication came with a Commission Staff Working Document, which was longer and contained several annexes that outlined what the three sides are doing and what they can do together in the four distinguished sectors (European Commission 2008e). Per a senior EU official: “rather than a grand strategic and principled approach, we opted for a pragmatic and local approach” (Interview senior EU official, January 29, 2018; see Grimm 2008). Per Commissioner Michel,

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this initiative’s aim was: “to demonstrate the seriousness of our intent but without going into too much detail or being too ambitious, so as not to scare off or antagonize proposed African and Chinese partners” (Carbone 2011: 214). This cautious language underlines the struggles met by the Commissioner in his efforts to engage with the Chinese side. Although the Chinese side had not publicly opposed the principle of such a dialogue, it wanted to limit it to a simple exchange of information. Michel wanted to turn China’s increasing role on the African continent into an opportunity for development. However, his August 2008 visit to China had fallen short of his expectations, which let to him scaling down his ambitions. Therefore, his proposal for trilateral dialogue and cooperation is “likely to be limited for the time being” to an increased number of “exchanges and visits” between EU, Chinese, and AU officials (Falletti 2008). In its Communication, the Commission requested the Council and Parliament to endorse its proposals, “with a view to further discussion with the EU’s African and Chinese counterparts” (European Commission 2008a: 8). In November 2008, the Council stated that it supported the Commission’s trilateral cooperation proposal (Council of the European Union 2008). While pragmatically endorsing the Commission’s Communication it stressed that the trilateral dialogue would support the efforts undertaken by Africa and the international community “to promote democratization, political and economic integration, good governance and respect for human rights” (Council of the European Union 2008; Alden and Barber 2015). Moreover, the Council requested the Commission, the Member States, and the competent Council bodies “to examine these proposals in greater detail and participate actively in the process of implementing concrete proposals” (Council of the European Union 2008). The short period between the Commission’s proposal and the Council Conclusions can be attributed to the cooperative approach of France, that held the Presidency at that time and the consensus that confronting the PRC would be “pointless” and “detrimental” for the EU and the development of Africa (EU and European diplomats 2009; 2010 retrieved in Carbone 2011: 214). As in most other cases, the Commission drafted the Council Conclusions. However, Stahl points out that there are some differences with the Council Conclusions calling for transformative engagement with the PRC, illustrating that most member states saw trilateral cooperation as a tool to bring China closer to EU and international development practices. The Council Conclusions stressed that “particular

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attention should be given to cooperation in the area of peace and security” (Council of the European Union 2008: 2), which contrasts with the Commission’s paper that, in response to Chinese concerns regarding the principle of non-interference, only put “a more subtle emphasis” on trilateral development cooperation in the field of peace and security (Stahl 2018: 123). This Council is more security-focused, which partially explains this. The main idea was to signal that they were ready to engage and to recognize that China is interesting for African partners rather than creating a scramble. Below, we will evaluate how well the three candidate theories illuminate the decision-making stage. Hypothesis testing BPM-DM: The decision-making process is a bargaining situation where actors promote their interests by pulling and hauling, leading to compromised outcomes and the net result that decisions do not mirror the intentions of any actor in particular. DG DEV had to deal with resistance, difficulties, and diverging opinions among other European actors, including the European Parliament, the Commission’s Secretariat-General, and DG RELEX. It had to take the member states into account. Otherwise, the trilateral cooperation would not receive the Council’s endorsement, and it had to be careful not to antagonize the African and Chinese partners. DG DEV approached the case from a development perspective, while DG RELEX approached it from their perspective as the general external relations DG. RELEX was not pleased with another DG increasing its focus on China, because they felt they were in charge of China policy, mainly because DG Trade already challenged them back in 2006. This means that both DGs’ preferences correlate highly with their bureaucratic positions. We cannot speak of a bargaining game, especially not between the Commission and the Council. The parties were “developing a policy line,” seeking engagement with China on a sensitive issue (Interview senior EU official, November 26, 2015). The policy for dialogue and cooperation fits the preferences of many, but the forms, features, and tone of the trilateral dialogue were a blend of the preferences of multiple actors. At least in part, the policy outcomes can be seen as a solution to a problem, because the main idea was to give a signal that Europe was ready to engage and to recognize that China is interesting for African partners rather than creating a scramble. Michel encountered difficulties in engaging his Chinese counterparts and had to

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scale down his ambitions (Falletti 2008). Noteworthy is that there are differences between the documents of the Council and the Commission. There was no single policy-maker, which is, to some degree, in line with the BPM. Hypothesis testing Neorealism-DM: Decisions are made according to the security, economic, and other interests (in this order) of the most powerful EU member states. The general attitude of the EU member states had been “considerably positive” toward the move of the Commission, because they also realized that China is present in Africa with a clear agenda and that it was better to start a dialogue (Interviews senior EU officials, January 29, 2018; November 26, 2015). We did not see the powerful member states taking the lead in this case, because DG DEV was the driver of the initiative. However, following EU procedures, the member states were consulted in the Council Working Group, with the consensus being that they could not let China in Africa poison the relationship. Germany was devoted to making sure that the strategic relationship between Africa, China, and the EU was not deteriorating into antagonistic competition for Africa. The French government was supportive and willing to give it a try, also within their role as EU Presidency, because they saw that Chinese investment was beneficial to stabilize the country in several countries. Moreover, the UK supported the Commission’s proposal (Hooijmaaijers 2018). As pointed out by Stahl, based on the Big Three’s support, the Council started “undertaking more concrete efforts” at entering into a trilateral dialogue with Africa and China (Stahl 2018: 122). While neorealism does not tell us what policy was selected, it created an environment in which other explanatory variables became critical. The member states were supportive of the initiative, which created an environment in which the Commission could launch its initiative. Hypothesis testing Institutionalism-DM: EU law and procedures determine the process and outputs of decision-making. EU procedures were not decisive. However, they do contribute to a better understanding of the decision-making process. Following EU procedures, DG Development made the first draft as the lead DG. This draft went into inter-service consultation within the Commission, where other DGs could have their input. After that, it went into a discussion in the Council

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Working Group, where the member states had their role (Interview senior EU official, November 26, 2015). Within the Council, COAFR primarily addressed the Commission’s trilateral cooperation initiative and not by COASI, because the initiative was elaborated under the lead of DG DEV, which formally only had competences related to Africa and not to Asia and China (Stahl 2018: 122). It is worth emphasizing that the October 2008 Commission Communication had no legal effect. A Commission Communication is a policy document with no mandatory authority. The Commission takes the initiative of publishing a Communication when it wishes to set out its thinking on a topical issue. Alternatively, per a senior EU official, the Commission’s trilateral cooperation initiative “was seen as a political concept, not as a legally binding framework” (Interview senior EU official, January 29, 2018). Similarly, EU procedures also make that the November 2008 Council Conclusions endorsing the trilateral cooperation initiative are not legally binding; they are not actionable. Moreover, as in most other cases, the Commission (in this case predominantly the initiative’s policy entrepreneur) drafted the Council Conclusions (Interviews senior EU official, November 26, 2015; August 20, 2019). There was no formal role for the European Parliament, as unlike the Commission, the EP does not possess competences to carry out development projects.

Policy Implementation: A Bridge Too Far? The EU’s trilateral cooperation proposal faced significant resistance from the Chinese and African partners (see Stahl 2011; Carbone 2011). Beijing did not adopt any official statement in response to the proposal (Stahl 2018). It did not reject the proposal directly, but was hesitant and would only like to start trilateral cooperation if African countries would agree with it. The African parties complained that the EU did not consult them. Some got the impression that the foreigners were colluding without consulting them to exploit them better. The African countries sought to play as many donors off against each other and get as much out of them as possible because it gave African countries options (Interview senior EU official, November 26, 2015; Wikileaks 2010; Hackenesch 2009). The AU Commission stood behind the paper and the approach because they saw it as strengthening the AU. However, the AU did not come out in any way opposing or supporting the initiative, because there was no

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consensus among its member states. This led to a lack of taking up the initiative in the beginning. Additionally, momentum was lost on the EU level, with Michel, Manservisi, and the policy entrepreneur of the initiative changing jobs. In January 2009, the Czech Presidency had taken over from France. Prague is far less Africa focused than Paris. Similarly, the successors of the politicians and officials that left were “skeptical” and were not interested if there were no concrete projects. However, “the original idea was exactly this engaging in dialogue” (Interview senior EU official, January 29, 2018). Catherine Ashton, who served as the HR/VP from 2009 to 2014, was “not interested in Africa,” while Andris Piebalgs who served as Development Commissioner from 2010 until 2014 “was mainly interested in energy affairs” (Interview senior EU official, January 29, 2018; see also Grimm and Hackenesch 2017; Furness and Gänzle 2017). The establishment of the EEAS in late 2010 changed the dynamics significantly. The EEAS now became in charge of organizing the EUChina Summit and the EU-China Dialogue on Africa. The original idea was that this dialogue should be on development issues because the people who pushed for it were DG DEV people. They did not have any competences on security issues. However, after Lisbon and the establishment of the EEAS, they were in charge, and it became much more security-driven. Thus, the whole issue of trilateral cooperation became “no longer that big of an issue” for the EEAS as it was for DG Development (Interview senior EU official, November 26, 2015). The institutional reforms led to an adjustment period because “the top-down approach that is necessary for implementation was absent” (Interview senior EU official, January 29, 2018). Alternatively, per another EU official, “It is like walls going up that people have to try and bridge somehow” (Interview senior EU official, November 26, 2015). A true trilateral dialogue is non-existing. However, the Africa Dialogue is related to the trilateral cooperation initiative and was an outcome of engaging with China on Africa. Due to a lack of consensus among the 54 African states, they ended up with a dialogue on Africa rather than a trialogue (Interview senior EU official, August 20, 2019). Moreover, the financial crisis made that the EU put economic issues high on the EU-China agenda, and in the Joint Summit statements, the African issues almost dropped. The brief conclusion is that no concrete joint development projects have seen the light (Stahl 2015; Interview senior EU official, September

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3, 2019). There is no trilateral cooperation in an institutionalized way. However, at the diplomatic level, there is (some) local level coordination. Proceeding to operational coordination in the field was “a bridge too far” (Interview senior EU official, January 29, 2018). The lack of concrete examples of cooperation can be explained by the reality that “things take time. The methodology, language, and mindsets of the involved parties are not the same” (Interview EU official, August 8, 2018). Trilateral cooperation is not within reach because both China and the EU want to keep their distinct approaches (Cameron et al. 2016; senior EU official, August 20, 2019). However, the initiative “was seen as a political concept, not as a legally binding framework. So it was not something that had to be enforced” (Interview senior EU official, January 29, 2018). The Commission Communication suggested cooperation in four different fields. Recently, former “Western” policies, including violent extremism, security issues, and infrastructure for Africa, became “more acceptable and neutral” for the Chinese officials (Interview senior EU official, November 26, 2015). There are some initiatives where more cooperation has started, for instance, in EUNAVFOR Atalanta, to secure the Horn of Africa. The Chinese navy switched their way, aligning with the EU. However, this cooperation was more pragmatic and not strategic (Interview senior EU official, August 20, 2019). Thus far, the EU has not been able to reproduce it. The reason why cooperation was successful here was that “it was a maritime operation,” because it was an operation to defend the seas, and China was as interested in keeping traffic in the traditional routes going, “so there was a clear common target to cooperate” (Interview EU official, August 8, 2018).8 However, according to another Brussels interviewee, in reality, there was no real cooperation regarding operation Atalanta; “it was just some vessels next to each other” (Interview EU official, August 31, 2018). Indeed, there is only minimal cooperation, but it is one step up compared to taking a ceremonial picture together (see also Duggan 2017). Moreover, one should understand Somalia in the context of broader international cooperation. The situation in Sudan is sometimes also mentioned as an example of cooperation between the parties. However, this was also a case where the Chinese side realized that politics and their economic interests are interlinked. Initially, the trilateral cooperation initiative was a development cooperation project. On the ground, the Chinese and the EU could work

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together on concrete development projects. However, when the Europeans realized this was not going to work, they took it to the political and security level. Cooperation results are minimal for support for African infrastructure. What does occur is that African states launch a tender, for instance, with European money, and a Chinese contractor wins the bid. However, this should is not active cooperation. Instead, it is the implementation of a tender. Regarding sustainable management of the environment and natural resources, there was one concrete proposal filed on forestry. The Chinese side had benefitted from training by DFID for state forest certification of sustainable harvest of wood. This was an area of potential interest because if the Chinese side wants to sell its products on the international market, they need certification. However, for political reasons, eventually, they could not engage (Interview senior EU official, August 20, 2019). The fourth topic of agriculture and food security, which was (informally) suggested by the Chinese side, did not lead to any cooperation. The EU expected that the Chinese would propose projects for cooperation, but they did not do so. Despite the lack of concrete projects, there has been a turn in the debate on China and Africa. It took out the antagonism of the debate, which was already one of the main objectives of the endeavor. Per an EU official: “lurking behind this there was the intention to make sure this does not become a problem between China and the EU in a critical phase of the strategic partnership” (Interview senior EU official, November 26, 2015).9 Before 2008, the Chinese side did not want to discuss this topic, because they were blamed, or afraid to be blamed. The endeavor showed policy-makers in Europe that China is not a developing country anymore, but a relevant actor on the African continent. In October 2008, right before the Commission Communication was issued, there were already reports that the proposal was “likely to be limited for the time being” to an increased number of “exchanges and visits” between the three parties (Falletti 2008). Over a decade later, we found that “neither has the EU to date pursued structured trilateral cooperation with China and the AU,” nor would the EU “keep track of such visits in a systematic and consolidated manner” (Europe Direct, October 25, 2019). Therefore, it is challenging to keep track of when and where meetings take place. However, over time various political and institutional dialogues have been established (see Table 5.1 in Annex). DG DEV’s objective of building trust and bridges played a role for subsequent

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individual member states’ initiatives because they could build on the EUagreed policy platform (Hooijmaaijers 2018). The initially controversial debate about China-Africa in Europe reflected in the Parliament’s report (see European Parliament 2008a), subsided, making China-EU dialogues on Africa fairly pragmatic (Hooijmaaijers 2018). These developments are all related to the initiative because they can be considered a follow-up of the ideas initiated by DG DEV. I now turn to examine how well the three candidate theories illuminate policy implementation. Hypothesis testing BPM-IMPL: Where a decision leaves leeway for the implementing body, the implementation should reflect delays, contradictory actions, duplications, and distortions of original purposes. When key bureaucratic actors leave, then policy implementation will reflect this. The initiative came and went with the politicians and officials involved. Per the BPM, officials who were not involved in the decision game feel less obliged to implement the policy decision (see Allison and Halperin 1972). Implementation is more likely to succeed when people at the top take a personal interest in it. However, in this case, “the top-down approach necessary for implementation was absent” (Interview senior EU official, January 29, 2018). So far, no trilateral development projects have seen the light (Stahl 2015; Interview senior EU official, September 3, 2019). The original idea was that the EU-China Dialogue on Africa should be on development issues because DG DEV people initiated it. However, after the establishment of the EEAS, trilateral cooperation became “no longer that big of an issue” (Interview senior EU official, November 26, 2015). Hypothesis testing Neorealism-IMPL: The most powerful EU member states exert pressure on the body implementing the decision to make it track with their security, economic, and other interests. For various reasons, momentum was lost, and the initiative was not implemented as agreed upon (see Hooijmaaijers 2018). We did not see that the most powerful member states exert pressure on the body implementing the decision to make it track with their interests. However, the Commission initiative created an environment in which the member states could further develop their dialogues because they can have their own China and Africa policies. Thus, neorealism does shed some light on the implementation and adds scope conditions.

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Hypothesis testing Institutionalism-IMPL: The implementation of policies follows EU institutions (e.g., policies, decisions, EU law, and procedures). We do not see that the implementation tracks with the policies and decisions made because, for various reasons, the initiative stalled, and the idea of trilateral development cooperation failed. The Commission’s initiative “was seen as a political concept,” not a legally binding framework. So it was not something that “had to be enforced” (Interview senior EU official, January 29, 2018). The idea was to give a signal that Europe was ready to engage with China on African affairs. The Commission initiative created an environment in which the member states could further develop their dialogues, also because development cooperation is a shared competence. Thus, it did follow the spirit of DG DEV’s initiative. Another institutional development was the establishment of the EEAS that changed the dynamics, as they now became in charge of organizing the EU-China Summit and the EU-China Dialogue on Africa.

Conclusion This chapter aimed to explore and explain the EU’s reaction to China’s rise in Africa via the EU-China-Africa trilateral cooperation initiative. In late 2006, it was Commissioner Michel and Director Manservisi of the Commission’s DG DEV who found China is making a significant imprint in Africa, particularly with the FOCAC Summit 2006. There was a dual development here. China was rising, and Europe realized this, and also, the development specialists realized that China is not a developing country anymore. The traditional development people were using the “China threat” as an argument to convince European policy-makers of the need to refocus on Africa. DG DEV launched and drove the trilateral cooperation initiative, however despite its effort, it had to deal with resistance and diverging opinions from other EU actors. The member states, however, in general, were supportive. The initiative faced significant resistance from the Chinese and African partners. Momentum was lost with Michel and several DG Development bureaucrats changing jobs and the subsequent EU presidencies not showing the same engagement as France. The idea of trilateral development cooperation failed. Nonetheless, to some degree, the trilateral cooperation initiative can be regarded as a success because it took the antagonism out of the debate, and that was one of its key objectives.

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There are various political and institutional dialogues of the EU and the Big Three with China on Africa, which follow up to the ideas initiated by DG DEV. This chapter’s theoretical relevance was to test the relative usefulness of the three theories across three policy stages and add scope conditions. Michel and Manservisi saw the trilateral dialogue as an opportunity for DG DEV to increase its political profile regarding Africa, and gain greater political autonomy within the Commission (Stahl 2018; Interview senior EU official, August 20, 2019). Elements of the BPM illuminated the decision-making stage. This case showed that when key bureaucratic actors leave, then policy implementation reflects this. Implementation is more likely to succeed when people at the top take a personal interest in it. The Commission and Council documents were not legally binding, and they are not actionable, which adds to this. Neorealism’s explanatory value in the issue identification stage is limited because DG DEV drove the initiative. Although neorealism does not tell us what policy was selected, it created an environment where other explanatory variables became critical, which adds scope conditions. The member states were supportive of the trilateral initiative, which created an environment in which the Commission could launch its initiative. The initiative was not implemented as agreed. However, the initiative created an environment in which the member states could further develop their dialogues, also because development cooperation is a shared competence. Institutionalism was not always the most dominant explanatory model, but it illuminates virtually every stage. Development cooperation is a shared competence, and DG DEV was in the position to make the issue identification. EU procedures were not decisive. However, they do contribute to a better understanding of the decision-making process. The trilateral cooperation initiative was not legally binding and not actionable. However, the initiative did create an environment in which the member states could have their dialogues with China on Africa.

Annex: Overview European Dialogues with China on Africa See (Table 5.1).

UK

France

China-EU Consultation on African Since 2006. 11th round held in July Affairs 2019 Occasional Meetings of the Delegation of the EU to the AU with Chinese colleagues in Addis Similar meetings in other African capitals Occasional concerning the respective host countries China-France High Level Economic and Since 2013. The 7th Dialogue had Financial Dialogue place in July 2020 China-France Joint Statement on 2015 Cooperation in Third Markets Sino-French Third Market Cooperation 2016 Steering Committee Sino-French Third Market Cooperation 2016 Fund Sino-French Consultation on African 13th round held in October 2019 Affairs China-UK business summit 2009 China-UK High Level Economic and Since 2009. Ten rounds so far Financial Dialogue

EU

(continued)

Africa Directors Level Chinese Vice Premier and British Chancellor of the Exchequer

Africa Directors Level

Premier Level

Ministerial Level

EU Delegations in African capitals

EU Delegation in Addis

Africa Directors Level

Level

Name of the dialogue

Party

Year

Political and institutional dialogues of the EU and the big three with China on Africa (by mid-2020)a

Table 5.1

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145

Level

2017

2004c 1st round held in 2016

German Federal Ministry for Economic Cooperation and Development and the PRC’s Ministry of Commerce

Africa Directors level

10th round held in November 2019 Africa Directors Level

Year

Source Zhou Yuyuan (2019); Hooijmaaijers (2018); EU official, 14 October 2019 a See, for instance, the website of the ministry of foreign affairs of the PRC for the most up to date information on when the most recent dialogues between the EU and the Big Three with China on Africa took place b The Ankerländer concept is not China-specific. Instead, it focuses on trilateral cooperation with China and other emerging countries. c Although this concept predates the trilateral cooperation initiative, it should be understood in the same context of how to deal with the rise of emerging powers.

Germany

Name of the dialogue

Party

China-UK Consultations on African Affairs Ankerländer concept b China and Germany Consultation on African Affairs Sino-German Center for Sustainable Development (CSD)

(continued)

Table 5.1

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Notes 1. Over the last decade, the Commission’s DG concerned with development and cooperation has experienced several reforms. Here we will mainly refer to DG DEV because this was the accurate name at that time. 2. Under the Lisbon Treaty, the EEAS took over RELEX’s functions, merging them with its counterparts in the Council of the EU as of 1 December 2010. 3. In 2003, no Summit took place. However, in December 2007 the second Africa-EU Summit was held in Lisbon, and the Joint Africa-EU Strategy was launched. 4. Moreover, the first Joint Africa-EU Strategy in 2007 was a kind of response to the increasing presence of China, Brazil, and India in Africa. 5. Triangular cooperation was fashionable at that time and occurred against the backdrop of the rise of Brazil, Russia, India, China, and South Africa, the BRICS countries (see Boillot 2012; Cabral 2014). 6. Because of issues with the RELEX 2006 China paper that took China by surprise, DG DEV had discussions with the Chinese side, which resulted in “at least some ownership of the Chinese” (Interview senior EU official, 26 November 2015). 7. In January 2011, AIDCO and DG DEV merged to form Development and Cooperation—EuropeAid, which in January 2015 became DG DEVCO. 8. China’s participation in several UN operations including South Sudan and Mali are “helpful” but they “do not feature the EU as a direct partner,” although EU staff in Mali has now established “some contacts” with the Chinese contingent (Godement and Vasselier 2017: 27). Also, at the UN the PRC has already opposed any further EU navy mandate in the Mediterranean to fight Libyan smugglers, prompting “genuine worry” in Europe (Godement and Vasselier 2017: 27). 9. The 2003–2005 period was the honeymoon period in Sino-European affairs. However, various issues, including a textile dispute and the EU that decided against lifting the arms embargo, marked the end of the EU-China honeymoon (see also Chapter 1).

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CHAPTER 6

Conclusion

This concluding chapter will bring together the preceding chapters’ findings to unpack EU policy-making vis-à-vis China. As outlined in Chapter 1 of this manuscript, one is often confronted with various puzzling observations when observing the EU’s China policy. This book’s purpose was to offer insights that contribute to a better understanding of these puzzles, as it aimed to unpack EU policy-making toward the PRC by illuminating how member states, bureaucracies, and institutions shape the EU’s China economic policy. This book started with various observations regarding the literature’s specific and general inability to explain the EU’s China policy. Academic work on EUFP toward China is heavily policy-driven, with few works using theory (see Bersick 2015). Multiple IR theories can illuminate EUFP toward the PRC, including the BPM, neorealism, and institutionalism. However, problematic is that these theories assume universal applicability. Also, when scholars do use theory, there is a failure to unpack the policy cycle. Given the limits of the existing literature, there is a need to explore the drivers of EU foreign policy toward China anew. I demonstrated this by investigating three policy-making stages—issue identification, decisionmaking, and implementation—in three different cases. I formulated hypotheses for each of the distinct stages of the policy-making process, and I stated the expectations about what to observe when the theories © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2021 B. Hooijmaaijers, Unpacking EU Policy-Making towards China, Palgrave Studies in Asia-Pacific Political Economy, https://doi.org/10.1007/978-981-15-9367-3_6

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were valid (see Chapter 2). These cases were the EU-China solar panel dispute (2012–2018) (see Chapter 3), the EU investigation into mobile telecommunications networks from China (2012–2014) (see Chapter 4), and the EU’s response to China’s rise in Africa via the EU-China-Africa trilateral cooperation initiative initiated by DG DEV of the European Commission in 2008 (see Chapter 5). The first two cases illuminated the evolving nature of Sino-European trade relations, the internal workings of EU trade defense policy, and, more generally, the current challenges to globalization and the international trading order. The EU-China-Africa trilateral cooperation case illuminated the EU’s internal workings against the backdrop of a new party entering the African stage with a focus on trade, investment, and infrastructure. Two aspects of this project made it a distinctive and novel contribution to the discourse. The first is the identification of scope conditions, bounding the applicability of various arguments about the determinants of EU foreign policy vis-à-vis China, focusing on the economics issue area. The second is my empirical work because I shed light on three understudied cases and proffer more evidence. My analysis relied on multiple sources of data, including legal and policy documents, other empirical sources such as newspaper articles from main media outlets, over 100 semi-structured interviews, consultations, and conversations with a wide range of interviewees, and a considerable amount of secondary literature. The findings that I will outline below are not just relevant to those interested in the EU and China’s economic relations. One can use the scope conditions enumerated herein to assess other issue areas, delve into different stages of the policy-making process in these issue areas, and unpack EU foreign policy-making vis-à-vis other third countries and regions, and issues. The findings are germane to academics, business people, and policy-makers, and my case studies will strongly interest such audiences, too. This final chapter summarizes the main findings of this book and expounds its relevance. Below, I will first evaluate the overall performance of my approach in the three cases. This discussion will be followed by a consideration of the theoretical implications of my study. Next, I will turn to the business and policy value of this book’s analytical and empirical findings. Furthermore, I will discuss the limitations of this study and the venues for further research. The final chapter of this manuscript ends with some closing remarks.

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Evaluating the Competing Models This book reveals what analytical tools best illuminate EU policymaking at various stages of the policy process. This section evaluates the three competing models, the BPM, neorealism, and institutionalism. As outlined in the introduction, there is a need to identify these theories’ range of applicability. When do they work and when do they not work? The findings of theory scope conditions are this manuscript’s most significant contribution. These scope conditions include issue areas and policy stages. This section predominantly focuses on two aspects. The first one is what theoretical approaches not just apply but apply best in different stages of the policy-making process. The second is why some approaches apply to multiple policy stages, and why some seem to work better than others in certain stages. For an extensive discussion of the three candidate theoretical models and the formulation of the hypotheses per policy stage, see Chapter 2. Overall, the results of the performance of the hypotheses based on the BPM are mixed. Per the BPM, their agenda and interests drive EU bureaucracies when identifying an issue. The value of the BPM is limited in the issue identification stage of formal trade defense cases, including the solar panel case. On the one hand, Trade Commissioner De Gucht wanted to take a tougher stance on China, and impose solar measures. On the other, per the formal procedures, it is up to an EU industry to lodge a formal complaint of unfair trade practices, after which the formal process starts. The telecoms case was a special case because it was the firstever ex officio move of the Commission. It was predominantly the Trade Commissioner acting on his initiative, and the real target of De Gucht was Huawei. This somewhat limits the explanatory value of BPM for the issue identification stage. De Gucht is not a bureaucracy, but he acted in a way befitting the bureaucracy leader, who brought his perspective to things. On a related note, also in ex officio cases, DG Trade needs to follow formal procedures. In the EU-China-Africa case, we saw a dual development. In late 2006, DG DEV, predominantly then Development Commissioner Michel and Director Manservisi, made China in Africa an issue of critical importance for the EU because a new, big player with its vision on development became increasingly present on the African continent. The BPM has some value for this stage, as Michel and Manservisi also saw the trilateral dialogue as an opportunity for DG DEV to increase its political profile

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regarding Africa, and gain greater political autonomy within the European Commission, in particular concerning DG RELEX, which then was the Commission’s DG for foreign affairs. The BPM in the decision-making stage emphasizes that the decisionmaking process is a bargaining situation where actors promote their interests by pulling and hauling, leading to compromised outcomes and the net result that decisions do not mirror any actor’s intentions in particular. In both the solar case and telecom networks case, the decisionmaking process was a bargaining situation. Driven by the perception that there was a need to invent new strategies in dealing with China to get a good outcome for Europe, De Gucht wanted to stay out of a formal rulesbased approach and negotiate a deal with the Chinese side. In the solar case, De Gucht wanted to impose anti-dumping measures, but the pulling and hauling, including on the European side and with the Chinese, led to compromised outcomes. The Commissioner had an important role, and “where he stood did depend on where he sat,” a class BPM aphorism. There was state bargaining with an essential role for Germany, and Berlin changing positions to get a better result for them was critical. In the telecom networks case, we saw a similar bargaining situation on the European level and with the Chinese side, which led to a muddled settlement. To a large degree, the decisions did not mirror the intentions of any actor in particular. The “amicable settlement” was just what they ended up having, and the case needed to be settled before De Gucht’s term as a Trade Commissioner ended. The explanatory value of BPM for the decision-making in the EUChina-Africa case is mixed. DG DEV had to deal with resistance, difficulties, and diverging opinions among other European actors. Also, it had to take the member states into account, and it had to be careful not to antagonize the African and Chinese partners. Both DG DEV and RELEX’s preferences correlated highly with their bureaucratic positions, aligning with the BPM approach. There was no bargaining game, particularly not between the Commission and the Council. The parties were “developing a policy line,” seeking engagement with the PRC on a sensitive issue (Interview senior EU official, November 26, 2015). The policy for dialogue and cooperation fit the preferences of many, but the forms, features, and tone of the trilateral dialogue were a blend of multiple actors’ preferences. There was no single policy-maker, which is, to some degree, in line with the BPM. At least in part, the policy outcomes can be seen as a solution to a problem, because the main idea was to give a

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signal that Europe was ready to engage and to recognize that China is interesting for African partners rather than creating a scramble. A BPM hypothesis argues that where a decision leaves leeway for the implementing body, the implementation should reflect delays, contradictory actions, duplications, and distortions of original purposes. When key bureaucratic actors leave, then policy implementation will reflect this. Policies come and go with the people that initiated them. In the EUChina-Africa trilateral cooperation case, the establishment of the EEAS in late 2010 changed the dynamics significantly, as the EEAS now became in charge of organizing the EU-China Summit and the EU-China Dialogue on Africa. The original idea was that this dialogue should be on development issues because the people that pushed for it were people from what was then DG DEV. They did not have any competences on security issues. However, after the EEAS became in charge of this dialogue, it became much more security-driven. Per the BPM, officials who were not involved in the decision game feel less obliged to implement the policy decision (see Allison and Halperin 1972). This is why this model works in this stage for this case. The analysis of the telecommunications networks case revealed the implementation of some parts but not of others.1 Trade Commissioner De Gucht’s term ended, and his successor had different priorities. His Deputy Head of Cabinet, who drafted the four points of the settlement, also left. The European telecom industry was not supportive of a monitoring mechanism. Critical was also that the settlement was not legally binding. Thus, the legal power to enforce it was absent. In the solar case, the Commission had to monitor the implementation, as it concerns law enforcement. The monitoring included quarterly reports, trade statistics, and on spot verifications, which the Commission did, limiting BPM’s potential for this case in this stage. In sum, why does the BPM work better in some stages or issue areas than others? An important factor is the availability of space to act. There are formal procedures in trade defense cases, for instance, in the issue identification stage and the decision-making stage. DG Trade needs to respect these procedures. In the EU-China-Africa trilateral development cooperation case, DG DEV could act. However, there was no obligation or legal duty to act for this DG. More space to act leaves more space for bureaucratic politics. We saw a dual development here, with one part being that Commissioner Michel and DG Manservisi saw the

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trilateral dialogue as an opportunity for DG DEV to increase its political profile regarding Africa, and gain greater political autonomy within the Commission, in particular concerning DG RELEX (see Stahl 2018; Carbone 2011; Interview senior EU official, August 20, 2019). As indicated above, predominantly when there is more leeway, the BPM fits the policy implementation stage. Also, in the two trade defense cases, we saw bargaining throughout the entire case. This is why the BPM approach had some value for multiple policy stages. However, the Trade Commissioner himself predominantly drove this. All three cases revealed the importance of people in key positions pushing for a specific case, starting from the issue identification stage. Nevertheless, there were limits, for instance, with the member states eventually being the decision-makers in trade defense cases. Formal procedures still matter. The second candidate approach neorealism appeared to work better in some policy stages (and cases) than in others. Per neorealism, the security, economic, and other interests of the most powerful EU member states influence what issues the EU identifies as the key EU foreign policy-making issues. The value of this explanation for the two trade defense cases was minimal. In case of unfair trade practices, it is up to the respective EU industry to file a formal complaint with DG Trade of the European Commission. Due to these procedures, the two TDI cases did barely reveal any evidence for support of realism in the issue identification stage. Regarding China’s rise in Africa and the response of the EU via the trilateral cooperation initiative, despite the most powerful member states (belatedly) having identified China in Africa as a topic of interest, in this particular case it was DG DEV that drove the initiative, limiting the value of neorealism in this stage for this case. The decision-making stage illustrates the difference in explanatory value per policy stage. Per the neorealism hypothesis for the decisionmaking stage, the EU makes decisions per the security, economic, and other interests of the most powerful EU member states. Given traditional national interests, states have to assert themselves to defend their economic interests. Germany demonstrated this in the solar panel case. The solar case was an illustration of Beijing using key EU member states to push EU decisions to an outcome that was more in its interests (and those of one or two EU member states) rather than the EU’s interests as a whole (Farnell and Irwin Crookes 2016: 141). The EU member states have relative power during the final vote in a formal trade defense investigation. It was clear for then Trade Commissioner De Gucht that

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the provisional solar measures would not survive the Council unless there would be a change. Then German Chancellor Angela Merkel changing her point of view and calling for a negotiated solution was critical, as in the slipstream of Berlin, other member states followed. Eventually, neorealism works best in this case. Trade defense case procedures shape a position where there is relative power for the EU member states with the binding voting procedures for the definitive measures, and eventually, Germany asserted itself and defended its economic interests. Even in the “extreme” telecoms case where DG Trade did not launch a formal investigation, and no formal procedures that are part of such an investigation needed to be followed, neorealism had explanatory value for the decision-making. If DG Trade had not settled the telecoms case, there was a risk of triggering a fully-fledged TDI case, which was “not seen by the member states as a good idea” (Interview senior EU official, August 19, 2019). The EU member states wanted to preserve their good relationships with Beijing. Them not being in favor of a formal trade defense case contributed to shaping an environment where the European Commission had to settle with the Chinese side. In the EU-China-Africa case, the member states’ support meant that then DG DEV of the European Commission could go ahead with its idea and launch a framework on which later individual initiatives of the member states could build. Neorealism was present, but in the background. Neorealism’s hypothesis for the implementation stage highlights that the most powerful EU member states exert pressure on the body implementing the decision to make it track with their security, economic, and other interests. In the mobile telecommunications networks from China case, the EU member states wanted to maintain good relations with the Chinese side. Many member states were reluctant to support imposing measures in the first place. Muddled settlements lead to muddled implementation, and the muddled settlement was, in part, the result of the position of the EU member states. On a related note, the Commission’s DG Trade must monitor the implementation in the solar case. There is no role for the EU member states because it concerns law enforcement. Eventually, the European Commission’s political level was tired of fighting the battle to maintain the measures. There was a lack of support among the Commissioners, and thus they were open to let them slide as they legislated to do in February 2017. The new German government that assumed office in March 2018 signaled that they wanted the measures to go, which was a huge catalyst. The Commission services

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had been fighting an uphill battle from day one, due to the lack of EU member state support. Consequently, there is some neorealism in the background. In the EU-China-Africa case, we did not see that the most powerful member states exert pressure on the body implementing the decision to make it track with their interests. However, the decision-making stage’s results affected the implementation stage due to its creation of a space where the (most important) EU member states could launch their initiatives for dialogues and cooperation with China in/on Africa (see also Hooijmaaijers 2018). Evaluating the performance of neorealism leaves us wondering why this model works better in certain policy stages than in others, and why it sometimes works best compared to its competing models. In part, the explanation for this is the EU member states’ role in the policy cycle. In trade defense cases, there is no formal role in the issue identification stage. However, there is a role in the decision-making stage. Given traditional national interests, states have the opportunity to assert themselves to defend their economic interests. Even after the entering into force of the Lisbon Treaty, which intended to make the EU more efficient, and more coherent on the world stage, there is an essential role for the Council as a decision-maker in anti-dumping cases. This is why neorealism seems to work better than others in the decision-making stage. In the trilateral cooperation case, it was a DG DEV initiative. However, development cooperation is a shared competence of the EU and the member states (see also below). Whereas the performance of the hypotheses based on the BPM showed mixed results, and neorealism seemed to work better in some policy stages than in others, overall, the hypotheses based on institutionalism performed relatively well in all three selected cases and all the stages. Per institutionalism, issue identification flows from the interests or priorities of who is in charge as defined by the rules; EU law and procedures determine the process and outputs of decision-making; the implementation of policies follows EU institutions. Institutionalism was not always the most dominant explanatory model. However, it virtually always contributed to a better understanding of each policy stage in each case. What explains the performance of institutionalism in virtually every stage of every case study? Nearly every EU policy area has its own rules and procedures, and it is essential to take this into account. It is all

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about competences, and EU law and procedures matter. The distribution of formal competences is critical to explain the nature of EUFP and the relationship between EUFP and the foreign policy of the member states (see Eeckhout 2011; Lenaerts and Van Nuffel 2011). Under the EU Treaties, the EU member states confer competences on the EU, and the EU can only act within the limits of its competences. Competences not conferred upon the EU stay with the EU member states, and competences are conferred upon the EU exclusively to meet the goals set out within the Treaties. This principle is essential for understanding the nature of EUFP. It indicates that the EU has no general, legal basis allowing it to act regarding external affairs. However, this does not mean that the EU has no specific external competences because various treaty provisions allow the Union to act internationally in a broad range of policy fields. Consequently, when evaluating EUFP, one should never expect the EU to have an exclusive or all-encompassing foreign policy (Keukeleire and Delreux 2014). The distribution of the competences between the EU and its member states varies per policy field. There are three general categories of competences, including exclusive, shared, and supporting competences. Given the EU’s nature, this is of significant importance, as EUFP is multifaceted, multi-method, and multilevel (see Keukeleire and Delreux 2014). These rather abstract terms mean that EUFP entails a broad range of areas, including CFSP, CSDP, trade, and development. It combines several policy-making methods, some with the EU member states in charge, and others with the Commission. Also, it comprises the national and European levels, plus it occurs in an international context. Multiple actors and institutional procedures produce EU decisions, norms, policies, and actions, depending on the respective issue area (Smith 2008). The different methods of policy-making include the intergovernmental method and the Community method.2 The EU’s CFSP is organized based on the intergovernmental method. The EU member states retain control over the development of the EU’s foreign policy via the European Council and the Council of Ministers’ dominant position and via the predominance of unanimity in decision-making (Keukeleire and Delreux 2014). The EU’s external action (including trade, development cooperation, humanitarian aid, association and cooperation agreements, enlargement, and sanctions), as well as the external dimensions of internal policies (energy, environment, climate change, but also health, which is of particular recent importance given the COVID-19 pandemic), are principally organized via the Community method. This method is

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based on an institutional equilibrium between the Council, the Commission, the European Parliament, and the ECJ. Also, there is the possibility of majority voting for most decisions in the Council (Keukeleire and Delreux 2014: 15–16). The Council is a forum whose attendees express and represent the position of their member state’s executive. This is why institutionalism applies to multiple policy stages in economic cases, for instance, regarding the EU’s common commercial policy (CCP) and other cases, including in the field of development. More specifically, regarding the three case studies, and related to these findings, different actors and procedures may be relevant in the various stages. Two examples illustrate this. In trade defense cases, there is a clear timetable of events. In the issue identification stages, the member states somewhat lack a formal role. Complaints have to come from the EU industry, after which the formal procedures with DG Trade in charge start. There is a role for the EU member states in the decision-making stage. The vote on the provisional decision is non-binding. However, the vote on the definitive measures in the Council is binding. In the EU-China-Africa case, then DG DEV was predominantly relevant in the issue identification and decision-making stage. However, when it comes to policy implementation, the creation of the EEAS in late 2010 changed the dynamics significantly, as they now became in charge of organizing the EU-China Summit and the EU-China Dialogue on Africa. This evolution meant that this dialogue became much less development-focused (see Chapter 5). On a related note, Africa policy is not an exclusive competence of DG DEV. The member states can establish and have their policies, dialogues, and cooperation frameworks with China on Africa. In the case of development policy, the EU is competent to carry out activities and conduct a common policy. However, in doing so, it does not prevent its member states from also carrying out activities and conduct a national policy (Keukeleire and Delreux 2014).

Theoretical Implications This research has several important implications for the study of EU foreign policy-making vis-à-vis third countries, regions, and issues. This book’s main theoretical contribution is to specify the scope of the three selected theories. As highlighted above, these scope conditions include both issue areas and policy stages. Theories, including the BPM, neorealism, and institutionalism, assume universal applicability, which is

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problematic. The findings of this book support a more scope related approach of theories that illuminate the EU’s policy-making vis-à-vis third countries. The issue, I argued throughout this manuscript, is not that the dominant theoretical models are incorrect or lack potential, but that there is an inadequate appreciation of the fact they do not apply equally well to all domains. The three candidate theories do not sufficiently illuminate all stages of the policy-making process, even when we focus on one issue area; that is, economics. When scholars use theory, there is a failure to unpack the policy cycle. The universal applicability of theories is a problematic assumption. This is one of the main theoretical implications of this study. Another contribution I made is to breathe life into the use of theory to illuminate the EU’s China policy, as work on the Sino-European relationship often still is (too) policy-oriented (see Bersick 2015). Theories are useful tools. However, their exact value depends on how one uses them. This work contributed to bridging various traditions, which appeared to be illuminating. Scholars of public policy—which is a larger realm of study than EUFP—often draw their assumptions and conceptual toolkits for studying policy-making from their analyses of US administrations, which has developed independently of the EU studies (see Versluis et al. 2011). Nevertheless, from these scholars’ insights, one can derive the stages approach to analyze policy processes. Ultimately, integrating theoretical approaches from international relations with those used in public policy and administration contributed to a better understanding of the EU policy process, as shown in this manuscript. This is another theoretical implication of this book for the study of EU policy-making toward third countries, regions, and issues.

The Business and Policy Value of the Analytical and Empirical Findings We now turn to the business and policy value of the analytical and empirical findings of this book. The implications of this book’s findings reveal that it is critical to consider that it is all about competences and that EU law and procedures matter. The competences and EU law and procedures shape a position for actors and allow them to act. Different European actors may be relevant and influential in the different policy stages. There still is and continues to be an essential role for the EU member states in EU foreign policy-making, including trade defense and development.

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Feng Zhongping has pointed out that one lesson the Chinese learned from their bilateral relationship with the EU is that the PRC’s basis for establishing relationships remains the member states. He characterizes the relationship between the EU member states and the EU institutions as follows: It may be hard to achieve anything without the EU institutions, but without the member states, nothing could be achieved (Feng 2009: 66–67). There is truth in that, although there are nuances per policy area and stage of the policy process. Internal divisions and diverging interests on the European side remain, for instance, via the traditional North-South and East-West lines. Despite the name European Union, the reality is that often Europe is divided. Coherence continues to be a challenge in EUFP (see Keukeleire and Delreux 2014; Marangoni and Raube 2014; Thomas 2012). It is critical to consider the (most powerful) EU member states’ role, given the substantial influence they have over the broader context of the relations between the EU and the PRC. Foreign policy often is a function of domestic policy. This means that understanding EU foreign relations (re)actions always has to start “at home.” EUFP is still in a nascent state, and its evolution is often enough slowed down by (some of) the member states. EU-China relations thus always have to consider the EU institutions and the (most powerful) EU member states. The same goes for understanding the EU institutions’ role, including the Council, the European Commission, the European Parliament, and the EEAS. The European Commission, for instance, cannot be seen as a unitary actor. Instead, it is an institution with different sectoral specializations and Directorate Generals that, over the years, have developed their own organizational identity, routines, sense of mission, and ideas of Europe (Carta 2013). An illustration of the EU institutions’ relevance and the (most powerful) member states was visible in the solar case. Due to the Northern European member states’ demands, even after entering into force of the Lisbon Treaty, the Council remained an essential decisionmaker in anti-dumping cases (see Chapter 3). The solar case also highlighted the tensions between some individual EU member states’ short-term interests in cooperating with the PRC and the formulation of a coherent EU strategy or to act cohesively to accommodate a re-emerging global power (see Farnell and Irwin Crookes 2016). For instance, Germany asserted itself to defend its economic interests in the decision-making stage of this case. This reveals the lack of strategic

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thinking on the EU side and the difficulties of developing a plan, mainly when the member states prefer to pursue their interests. Internal European dynamics limit the potential of the EU to act cohesively. This work illuminated the internal workings of EU trade defense policy, and, more generally, the current challenges to globalization and the international trading order. If a party wants to influence the way the EU identifies policy in trade defense cases, it is essential to consider that, in the case of unfair trade practices, industry parties can file a formal complaint, after which the Commission launches an investigation if all criteria are met. The industry includes in its complaint what a suitable proxy country would be. The reason for this is that they are believed to have extensive knowledge of the global market. Here is a clear opportunity for the European industry side to influence the issue identification. However, some industries know their way to the DG Trade offices better than others and are better organized. Two examples of industries that are relatively well organized are the European steel industry and the chemical industry. Thus, the EU has relatively many cases involving steel and chemical products (see also Wuttke 2017). Therefore, one of the takeaways for businesses from this manuscript is the added value for the European industry to organize themselves well. Interest groups are empowered in trade defense cases, but they do not have the full force in shaping economic globalization because of other issues. Eventually, the member states have some relative decision-making power in these cases. Germany’s position is critical. It is Europe’s biggest economy, but it can also be seen as a swing state regarding anti-dumping matters, as Berlin has difficulties making up its mind on these issues. If a businessperson wants to know who should get his or her attention at the policy implementation stage, the Commission is a suitable candidate, as are the (most powerful) member states. There is a clear timetable of events in trade defense cases that makes it easier to target DG Trade of the European Commission, and the relevant member states when a decision is about to be made. These findings will help businesses do better government relations and be more aware of the business environment. Whether the anti-dumping or subsidy cases are about Chinese solar, telecoms, or steel, the issue is generally the same. The question is not whether there is dumping or subsidies from the Chinese side, which mainly relates to the issue identification stage. Instead, the question is whether Europe wants to do something about this situation or not. This latter question involves decision-making. That is the ongoing debate

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in Europe. In this debate, again, we see EU internal divisions. The Southern member states predominantly approach these cases from a political perspective and feel that dumping and subsidy practices are unacceptable. By contrast, the Northern EU member states predominantly consider these situations from a more economic perspective. They prefer to assess the overall effect of these unfair trade practices on the EU when taking a broad range of factors into account, including the manufacturers, consumers, and users. The European Commission plays a vital role in defining, defining, promoting, and representing the common interests in the EU’s external action and the external dimension of internal policies (Keukeleire and Delreux 2014). The European Commission’s DG Trade predominantly feels it is working for the European industry. Italian nationals largely dominate the Commission’s anti-dumping club. They predominantly hold a more principled stance regarding dumping and prioritize the defense of the EU’s economic interests against external threats. However, the question is whether the Commission’s anti-dumping unit should prioritize the EU industry or the 500 million European citizens. In the case of China, one can virtually always find dumping and subsidies. Particularly at the time of the TDI cases of this book, the reality was that if a country does not possess MES, basically that particular country always was found guilty. This was deliberately done so for China. The MES clause was a China clause. There is a general discussion of how antidumping rules are evolving. A new anti-dumping methodology was put in place in December 2017, and new trade defense rules became effective in June 2018. China remains crucial regarding these matters. The case studies, including the one on Chinese solar, also revealed that it is difficult to make trade defense measures work. Firms will seek smart circumvention, and there is consumer demand for low priced goods. On a related note, a somewhat neglected dimension in these trade defense cases is the consumer perspective. Consumers prefer the cheaper the products, the better. It is worth emphasizing that the consumer will ultimately pay any increase in prices: “as always with Trade Defense Instruments, the consumer pays” (Interview senior industry association representative, 30 January 2018). The business and policy value of this manuscript’s findings includes that Beijing links together different issues, as pointed out by Godement and Vasselier (2017). It is realistic to expect retaliatory actions in case of a dispute. Even if one’s business was initially not involved, there is

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a chance of being dragged into this crossfire. An illustration of this was the Chinese action against German carmakers and Southern European wine in the trade defense cases discussed in Chapters 3 and 4. As put by a senior EU official, “While we firmly think this [an anti-dumping case] is law enforcement, the Chinese see it as politics which you can retaliate” (Interview senior EU official, August 19, 2019). The Chinese side knows exactly where to push and which sectors are critical for the European industry. For both policy-makers and business people, this is important to consider and anticipate when the possibility is there. Also, heightened tensions can lead to a more disorderly world, in which the EU and European countries may be affected, directly or indirectly. In the solar case, we mentioned that for Beijing, a negotiated solution was face-saving (see Chapter 3). The EU unilaterally imposing measures is not. However, the notion of saving face is also relevant to the European level. EU member states want to be part of the winning coalition. Opposing a decision or policy may cost political capital for the respective member state. Also, European heads of state or government or ministers need to head back to their respective capitals and defend in their parliaments or announce to the press and their citizens that they gained something from a particular EU deal. Everyone needs to get home with the opportunity to announce at least some gains. This is the Brussels game. It is critical to take this into account when one wants to understand policy-making in Europe’s capital. On the policy level, the three case studies revealed the struggles that the EU is facing regarding the global power shift toward the Asia Pacific in general, and China’s rise in particular (see Hooijmaaijers 2015, 2018, 2019; Keukeleire and Hooijmaaijers 2014; Mahbubani 2008). China continues to present a challenge to the EU, both internally and externally. Europe grapples with developing a strategy, a vision, and coherence to deal with these changes and challenges. In this light, the strategic partnerships that the EU launched around two decades ago continue to be a case in point and can predominantly be seen as rhetorical facades (see Hooijmaaijers and Keukeleire 2020; Renard 2011; Ferreira-Pereira and Vieira 2016). The case studies analysis has also pointed out the differences in systems between Europe and China (see also Small 2020; European Commission 2019). These differences include Chinese state capitalism, SOEs, and the links or the assumed links between the Chinese state and Chinese firms (see Hooijmaaijers 2019). Early in his term as a Trade Commissioner,

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Karel De Gucht came to two conclusions. First, he determined that a vast government subsidies program, including cheap electricity, financing, and property, was fueling China’s manufacturing dominance. Second, De Gucht believed Beijing was “stifling the usual trade complaints” from EU firms by threatening to shut them out of the Chinese market (Financial Times 2013). These are only a few of the many thorny issues in the SinoEuropean relationship that are likely to remain in the future (see Gabriel and Schmelcher 2018). This becomes, for instance, visible in the reality that dropping the ongoing telecoms investigation in 2014 (see Chapter 4) also meant that the opportunity for “a long-awaited (some would say overdue)” debate on the EU’s attitude vis-à-vis Chinese subsidies was removed (Farnell and Irwin Crookes 2016: 84).3 At least one European telecom firm regarded China’s export subsidies as a generic issue rather than a telecom specific issue. Thus, they found it more worthwhile to take them on a breach of China’s WTO commitments. The lack of reciprocity continues to be an issue in Sino-European affairs (see Hanemann and Huotari 2018). Brussels wants Beijing to treat the European firms in China the same way that the Europeans treat Chinese businesses in Europe. This is, to a large extent, not the case. For instance, in 2013, industry association EU ProSun claimed that while the EU market was wide open for Chinese companies to exploit, the Chinese market was effectively blocked for EU solar panels. There were virtually no EU manufactured solar panels exported to the PRC despite their technological advantages. Even though China was beginning to grow its installed solar energy capacity, there were no realistic opportunities for EU solar panel manufacturers to export to China (EU ProSun 2013). Still, the EU’s toolbox to deal with the lack of reciprocity is relatively limited.

Limitations of This Study As with most studies, there are certain limitations to this analysis. The first one relates to the case selection. Candidate case studies needed to be political economy related EU-China cases with sufficient data available, allowing for testing theories in three policy stages, to identify scope conditions. Moreover, cases could not be moving targets. Otherwise, analyzing the implementation of a decision would be problematic. This also means that the cases are sometimes “older” cases. Some practitioners already

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considered the trade defense cases as “ancient history,” and the trilateral cooperation initiative dates back to 2008. Still, I selected the three cases because they meet the criteria listed above for candidate case studies. However, this does mean that I only touch upon the EEAS as a EUFP actor to a limited degree, predominantly in the EU-China-Africa trilateral cooperation case. Two of the economic cases selected in this book are trade disputes and defense cases, a particular area of the EU’s CCP. They relate to the EU’s external action, not the CFSP. Though, also here, we have to consider that candidate case studies must meet the criteria outlined above. Second, China’s rise in Africa and the EU’s response is a rather broad topic with responses from various actors, including the European Commission, the European Parliament, and the Council. Also, the member states conduct their foreign policy toward Africa (and China) and can pursue their dialogues with China on Africa. For this book, the focus is on the DG DEV initiated EU-China-Africa trilateral cooperation initiative as a response of the EU to China’s rise in Africa because this fits this manuscript’s approach. Third, the policy cycle suggests a linear policy-making process. However, just like there is no exact beginning or end of a stage in this process, there is no exact moment where the policymaking activity proceeds from the one stage to the next (Versluis et al. 2011: 21–22). To some degree, this also goes for the selected cases. The solar and telecoms cases were part of one big political game and a situation that got heavily politicized. This means that both cases were not separate linear policy-making processes. Fourth, it is worth noting that given the complexity and the wide variety of processes within the EU, it is not possible to come up with a common all-encompassing EU policy process theory. By contrast, theoretical approaches to the policy process of the EU should rather be seen as attempts to capture specific “parts of the beast,” for instance the behavior of actors within the policy cycle or the stages of decision-making (Versluis et al. 2011: 29). Fifth, due to some interview candidates declining to participate, not everyone that we wished to interview was interviewed. This led to less empirical data, as was hoped for in an ideal world. Nevertheless, every researcher has to deal with these limitations. To limit this reality’s adverse effects, we made a stronger push for data triangulation by requesting internal EU documents and approaching a wide range of interviewees on the government, academic, and business levels.

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Although it is not a limitation as such, it is crucial to make some remarks regarding Brexit. The UK stopped being a member of the EU at 23:00 GMT on 31 January 2020, and a transition period was in place until 31 December 2020. However, at the time of the case studies, the UK was an integral part of the EU. The main analytical point of neorealism is traditional national interests (of the most powerful EU member states), which remains valuable with or without Brexit.

Venues for Further Research This book’s findings and analytical framework are not just relevant to those interested in EU-China economic relations. One can use the scope conditions enumerated herein to examine other issue areas, delve into different policy-making stages in these issue areas, and unpack EU foreign policy-making toward other countries, regions, and issues. Regarding China, two potential new case studies include the EU-China bilateral investment agreement, and the new investment screening mechanism. However, the investment agreement will only become a candidate case after a deal on the CAI. This has not happened yet, and it remains unclear if an agreement is ever to be reached. The analytical framework developed in this manuscript that focuses on administrative dynamics, the most powerful member states standing up for their economic interest, and EU law and procedures as possible explanations, does have the potential to illuminate the investment screening mechanism, as in September 2017, the European Commission proposed a Regulation establishing a framework for screening of FDI into the EU. The proposal followed a move by Germany, France, and Italy that earlier that year sent a letter to the Commission, arguing that EU member states should have more scope to investigate individual takeovers and, where applicable, block them (see Hooijmaaijers 2019). The investment screening mechanism, which is fully operational since October 11, 2020, is formally not targeted at China but applies to all third countries. To fully fit this analytical approach, it needs to be in operation for a substantial amount of time to draw valuable conclusions for the implementation stage. As was noted in the previous section, one “limitation” of this study is that it only touches upon the EEAS as a EUFP actor to a limited degree, with the selected cases being external action cases and not CFSP cases. Consequently, this is a potential venue for future research. The aim here could be to investigate the extent to which the BPM has explanatory

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value, for instance, regarding the EEAS versus other DGs of the European Commission. This has potential as the EEAS was launched after the Lisbon Treaty to bring more coherence in EU foreign policy. Other venues for further research could be multiple, focusing on actors, policy fields, and third countries. Regarding actors and policy fields, the theory testing could, for instance, be projected on a CSDP case as the naval operation EUNAVFOR Atalanta, to see if regarding the CSDP bureaucracies involved BPM can be detected, or whether the key interests of the most powerful member states illuminate the policy-making. Focusing on CSDP bureaucracies and the EEAS could further contribute to the theoretical study of international bureaucracies (see Ellinas and Suleiman 2014). The theory-guided research, as conducted in this manuscript, could focus on EU foreign policy vis-à-vis other third countries, including other emerging powers and EU strategic partners, to illuminate their relations with the EU. Russia would be a potential candidate, considering that it is a neighbor of the EU, a permanent member of the UN Security Council, a (former) EU strategic partner as well as the fact that it has different historical relations with for instance the Central and Eastern European countries, but also with the Big Three. India has potential given its different relations and background with the member states, the country’s status as an emerging power, and its strategic partnership with the EU (see Hooijmaaijers and Keukeleire 2020). As per the Withdrawal Agreement, the UK now officially is a third country to the EU, it is also a potential candidate. Last but not least, the US under the Trump administration would be another option for future research. This could also contribute to international comparative research. Moreover, scholars can use this approach on the multilateral level by selecting a multilateral case such as climate change.

Closing Remarks This manuscript specified the conditions under which the BPM, neorealism, and institutionalism are more useful and pointed at their applicability limits. Based on a study of three political economy-related cases, it demonstrated what approaches not just apply, but apply best in various stages of the policy cycle, and why some models apply to several policy stages, and why some seem to work better than others in certain policy stages. The PRC continues to present a challenge to the EU, both

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internally and externally, in virtually every policy field. The analytical framework developed in this book contributes to a better understanding of these developments. Those interested in EU-China affairs can apply this analytical framework to the three economic cases discussed in this manuscript and a wide range of other topics. These topics may be Chinarelated but can also relate to EU foreign policy vis-à-vis other third countries. It is critical to consider the role of the EU member states, given the significant influence they have over the broader context of SinoEuropean relations. The same goes for understanding the role of the EU institutions themselves, including the Council, the Commission, the Parliament, and the EEAS. It is all about competences.

Notes 1. Opinions between industry sources and senior EU officials differ whether some parts of the deal were implemented because of the deal or whether this was happening anyhow (see Chapter 4). 2. The reality of these methods is more complicated than the Community method and the intergovernmental method categorization. Unanimity is required for some external action decisions, including trade agreements on FDI; and cooperation between EU member states’ policies is an appropriate method for development policy (Keukeleire and Delreux 2014). 3. At least three recent documents indicate a change in the debate on these matters. Germany’s main business lobby, the Bundesverband der Deutschen Industrie (BDI), recently started describing Beijing as a systemic competitor, the Commission’s 2019 strategic outlook called China a systemic rival, and a 2020 BusinessEurope report highlighted the systemic challenge in EU-China relations (BDI 2019; European Commission 2019; BusinessEurope 2020).

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BusinessEurope. 2020. The EU and China: Addressing the Systemic Challenge. Brussels. Carbone, Maurizio. 2011. “The European Union and China’s rise in Africa: Competing Visions, External Coherence and Trilateral Cooperation.” Journal of Contemporary African Studies 29 (2): 203–221. Carta, Catherina. 2013. “The EEAS and EU Executive Actors within the Foreign Policy-Cycle.” In What Kind of Power and Diplomatic Action?, edited by Mario Telò and Frederik Ponjaert. Farnham: Ashgate. Eeckhout, Piet. 2011. EU External Relations Law, 2nd ed. Oxford: Oxford University Press. Ellinas, Antonis A., and Ezra Suleiman. 2014. The European Commission and Bureaucratic Autonomy: Europe’s Custodians. Cambridge: Cambridge University Press. EU ProSun. 2013. “Creating a Level Playing Field.” Available at http://www. prosun.org/en/call-for-eu-action/creating-a-level-playing-field.html. European Commission. 2019. Joint Communication to the European Parliament, the European Council and the Council EU-China–A Strategic Outlook. Strasbourg, 12.3.2019 JOIN(2019) 5 final: European Commission and High Representative of the Union for Foreign Affairs and Security Policy. Farnell, John, and Paul Irwin Crookes. 2016. The Politics of EU-China Economic Relations. An Uneasy Partnership. Basingstoke: Palgrave Macmillan. Feng, Zhongping. 2009. “Zhongou Xuyao Jianshexing Jiechu [China and Europe: Constructive Engagement Needed].” Ouzhou Yanjiu [Chinese Journal of European Studies] 5: 59–67. Ferreira-Pereira, Laura C, and Alena Vieira. 2016. “Special Issue: Strategic Partnerships of the EU. Conceptual Insights, Cases and Lessons.” Cambridge Review of International Affairs 29 (1): 3–208. Financial Times. 2013. “Karel De Gucht: Frustrated and Outflanked.” July 31, 2013. Available at https://www.ft.com/content/aa79490a-f8f6-11e2-86e100144feabdc0. Gabriel, Johannes, and Susanne Schmelcher. 2018. “Three Scenarios for EUChina Relations 2025.” Futures 97: 26–34. Godement, Francois, and Abigael Vasselier. 2017. China at the Gates: A New Power Audit of EU-China Relations. London: European Council on Foreign Relations. Hanemann, Thilo, and Mikko Huotari. 2018. EU-China FDI: Working towards Reciprocity in Investment Relations with China. Berlin: Rhodium Group (RHG) and the Mercator Institute for China Studies (MERICS). Hooijmaaijers, Bas. 2015. “The Asian Infrastructure Investment Bank: Another Wake-up Call for the EU?” Global Affairs 1 (3): 325–334.

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Hooijmaaijers, Bas. 2018. “China’s Rise in Africa and the Response of the EU: A Theoretical Analysis of the EU-China-Africa Trilateral Cooperation Policy Initiative.” Journal of European Integration 40 (4): 443–460. Hooijmaaijers, Bas. 2019. “Blackening Skies for Chinese Investment in the EU?” Journal of Chinese Political Science 24 (3): 451–470. Hooijmaaijers, Bas, and Stephan Keukeleire. 2020. “The BRICS Countries and the EU.” In The Encyclopedia of European Union Politics. Oxford: Oxford University Press. Keukeleire, Stephan, and Tom Delreux. 2014. The Foreign Policy of the European Union, 2nd ed. Basingstoke: Palgrave Macmillan. Keukeleire, Stephan, and Bas Hooijmaaijers. 2014. “The BRICS and other Emerging Power Alliances and Multilateral Organisations in the Asia-Pacific and the Global South: Challenges for the European Union and its View on Multilateralism.” Journal of Common Market Studies 52 (3): 582–599. Lenaerts, Koen, and Piet Van Nuffel. 2011. European Union Law. London: Sweet and Maxwell. Mahbubani, Kishore. 2008. The New Asian Hemisphere. The Irresistible Shift of Global Power to the East. New York: Public Affairs. Marangoni, Anne-Claire, and Kolja Raube. 2014. “Virtue or Vice? The Coherence of the EU’s External Policies.” Journal of European Integration 36 (5): 473–489. Renard, Thomas. 2011. “The Treachery of Strategies: A call for True EU Strategic Partnerships.” Egmont Paper 45. Small, Andrew. 2020. The Meaning of Systemic Rivalry: Europe and China Beyond the Pandemic. London: European Council on Foreign Relations. Smith, Michael E. 2008. “Researching European Foreign Policy: Some Fundamentals.” Politics 28 (3): 177–187. Stahl, Anna Katharina. 2018. EU-China-Africa Trilateral Relations in a Multipolar World. Hic Sunt Dracones. Basingstoke: Palgrave. Thomas, Daniel C. 2012. “Still Punching Below its Weight? Coherence and Effectiveness in European Union Foreign Policy.” Journal of Common Market Studies 50 (3): 457–474. Versluis, Esther, Mendeltje van Keulen, and Paul Stephenson. 2011. Analyzing the European Union Policy Process. Hampshire: Palgrave Macmillan. Wuttke, Jörg. 2017. “The Dark Side of China’s Economic Rise.” Global Policy 8 (S4): 62–70.

Index

A academic approaches, 2, 4, 12 acquisition, 112 action-channels, 31 actor, 3, 7, 10, 11, 13, 15–17, 19, 21, 30–34, 36–38, 40–42, 45, 61, 69, 82, 105, 119, 124, 126, 134, 136, 141, 143, 156, 157, 162–164, 169, 170 administrative dynamics, 31, 170 administrative law, 45 advisory committee, 66 advisory vote, 59, 62 Africa, 2, 3 African, Caribbean and Pacific (ACP) countries, 120 African Union (AU), 131, 134, 135, 138, 141 agenda, 36, 122, 124, 125, 127, 134, 137, 139, 155 agenda-setting, 32, 38, 40, 44 agriculture, 134, 141 aid, 90, 118, 120, 134

aid payments, 122 Alcatel-Lucent, 92, 98, 101, 112 Alcatel-Lucent Shanghai Bell, 98 Alliance for Affordable Solar Energy (AFASE), 61, 81 Allison, Graham T., 13, 29–31, 33, 34, 142, 157 American foreign policy, 30, 31 amicable settlement, 103, 105, 109, 156 amicable solution, 16, 57, 59, 66, 68, 96, 98, 99, 110 analytical kitchen sink, 32 analytical model, 16 Angola, 119 anti-dumping, 16, 19, 20, 53, 54, 56, 57, 59, 64, 65, 67, 68, 72, 79, 80, 94–96, 101, 102, 110, 160, 164–166 anti-dumping measures, 55, 57, 62, 67, 69, 71, 72, 74, 75, 156 anti-subsidy, 16, 54, 56, 57, 59, 65, 67, 72, 80, 92, 94–96, 110

© The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2021 B. Hooijmaaijers, Unpacking EU Policy-Making towards China, Palgrave Studies in Asia-Pacific Political Economy, https://doi.org/10.1007/978-981-15-9367-3

175

176

INDEX

anti-subsidy proceeding, 68 ArcelorMittal, 61 arms embargo, 6, 9, 147 artificial market, 52 Ashton, Catherine, 52, 81, 139 Asia, 6, 132, 138 Asia-Europe Meeting (ASEM), 5 autonomy, 9, 31, 32, 124, 144, 156, 158 B bargaining, 2, 13, 18, 30, 31, 99, 106, 111, 156, 158 bargaining advantages, 33 bargaining game, 31, 136, 156 bargaining situation, 33, 43, 69, 89, 105, 136, 156 Barroso, Jose Manuel, 60, 63 base stations, 100, 101, 111 Basic Anti-Dumping Regulation, 62 Beijing, 5, 8–11, 17, 60, 63–65, 82, 98, 102, 107, 108, 118, 121, 123, 127, 130, 134, 138, 159, 166–168 Belt and Road Initiative (BRI), 7, 9, 119 Berlin, 20, 59, 70, 156, 159, 165 Big Three, 13, 37, 40, 56, 124, 127, 133, 137, 144–146, 171 bilateral cooperation, 101 bilateral level, 7 bilateral relations, 5, 7, 8, 10, 12 Bjorling, Ewa, 94 Bloomberg, 67 Brazil, 147 Brazil, Russia, India, China, South Africa (BRICS), 147 Brussels, 6, 8, 9, 17, 60, 69, 92, 102, 121, 134, 140, 168 budget allocation, 31, 32 Bundesverband der Deutschen Industrie (BDI), 172

bureaucracy(ies), 1, 29–32, 39, 93, 126, 153, 155, 171 bureaucratic bodies, 34 bureaucratic entities, 15, 31 bureaucratic organizations, 30 bureaucratic politics model (BPM), 2, 3, 13, 14, 18, 29–34, 42, 51, 69, 79, 89, 93, 109, 117, 126, 137, 142, 144, 153, 155–158, 160, 162, 170, 171 bureaucratization, 13, 32 bureaucrats, 79, 143 business, 17, 59, 65, 92, 98, 104, 124, 125, 154, 166, 169 business models, 75 business representative, 100

C Cameron, David, 60 car manufacturers, 65 case study, 2, 14, 15, 18, 20, 53, 111, 154, 162, 166–170 cells, 75 Central and Eastern European Countries (CEECs), 9, 121, 171 central authority, 34 cheap capital, 91 Chef de cabinet, 96, 112 Chen, Haofei, 21, 100 China, 1–12, 15–19, 21, 40, 52–55, 59–61, 63–67, 70, 71, 75, 79, 80, 82, 90, 92, 93, 95–112, 117– 119, 121–144, 147, 153–159, 162, 166–170 China Africa Research Initiative (CARI), 119, 120 China Chamber of Commerce for Import and Export of Machinery and Electronic Products (CCCME), 57, 66, 81

INDEX

China International Development Cooperation Agency (CIDCA), 119 China Mobile, 95, 99, 100, 103 China’s Communication Standards Association (CCSA), 108 Chinese authorities, 16, 59, 67, 72, 82, 96, 107, 108, 110 Chinese contractors, 141 Chinese firms, 7, 8, 60, 63, 75, 79, 91, 92, 94, 100, 167 Chinese government, 63, 65, 130 Chinese investment, 12, 105, 137 Chinese outward foreign direct investment (COFDI), 8, 65, 82, 119, 124, 125 Chinese wireless technology, 104 civil society, 121, 131 climate change, 6, 7, 10, 12, 36, 161, 171 College of Commissioners, 97 colonial powers, 121, 122, 124 Commission Communication, 121, 122, 128, 134, 138, 140, 141 Commission implementing decision, 69, 80 common commercial policy (CCP), 162, 169 Common Foreign and Security Policy (CFSP), 5, 36 comparative case studies, 14 comparative research design, 20 competences, 2, 4, 13, 18, 19, 21, 40–42, 45, 64, 90, 92, 94, 99, 103, 106, 111, 131, 132, 138, 139, 157, 161, 163, 172 competitors, 5, 10, 74 Comprehensive Agreement on Investments (CAI), 7 constitutional law, 45 construction companies, 129 consumer, 19, 62, 166

177

consumer demand, 166 consumer perspective, 166 corruption, 119 Cotonou agreement, 120 Council Asia Working Group (COASI), 132, 138 Council Conclusions, 122, 132, 135, 138 Council Decisions, 17 Council Implementing Regulation, 58, 68, 73, 74 Council of Ministers, 39, 63, 67, 80, 161 Council Secretariat, 127 Council Working Group for Africa (COAFR), 132 country of origin, 89, 90 COVID-19, 5, 11, 161 credit lines, 93 crisis, 6, 11, 30, 31 cross-case comparison, 14 crystalline silicon photovoltaic modules, 68, 75 Cuban missile crisis, 30 Cyprus, 94 Czech Presidency, 139

D data triangulation, 169 deadlines, 16, 31, 42, 70, 106, 108 debt trap, 119 decentralization, 30 decision-making, 1–3, 13–15, 18, 19, 21, 30, 32, 33, 36, 37, 39, 41–43, 45, 46, 51, 59, 69, 70, 79, 89, 95, 105, 106, 108, 111, 117, 136, 137, 144, 153, 156, 158–162, 164, 165, 169 decisive, 13, 45, 70, 137, 144 defensive realists, 34 definitive anti-dumping duty, 68, 80

178

INDEX

definitive measures, 56, 63, 68, 70, 71, 79, 80, 159, 162 De Gucht, Karel, 18, 20, 51–53, 55, 57–61, 64–66, 69, 70, 79, 90, 91, 93–95, 97, 99, 101–104, 106, 108–112, 155–158, 168 Delsolar, 80 democracy, 10, 120, 122, 126, 130 Democratic Republic of the Congo, 119 Department for International Development (DFID), 133 dependent variable, 3 development aid, 121 development policy, 131, 162 DG AIDCO, 133 DG for International Cooperation and Development (DG DEVCO), 17 DG Trade Directorate H on Trade Defence, 56 DG Trade H4, 71 Dialogue on Intellectual Property, 7 Directorate General for Development and Relations with ACP States (DG DEV), 1, 123, 124, 126–130, 132, 133, 136, 137, 139, 141–144, 147, 154–160, 162, 169 Directorate-General for the External Relations (DG RELEX), 2, 124, 126, 129, 130, 136, 156, 158 Directorate-General for Trade of the European Commission (DG Trade), 15–17, 20, 52–56, 61, 64, 66, 67, 70, 74–79, 89, 90, 92, 94, 96, 97, 99, 101–103, 106, 109, 110, 126, 129, 130, 136, 155, 157, 159, 162, 166 Director General (DG), 13, 164 discretionary space, 65 discrimination, 81, 99, 103 Discursive Institutionalism, 39

distorted playing field, 91 diverging interests, 7, 11, 19, 61, 164 dominant institutional approaches, 41 dongle, 68 donors, 131, 138 downstream, 62 Drezner, Daniel W., 32 Drivers, 3, 14, 15, 137, 153 Dublin, 94 dumping, 1, 19, 52, 53, 55, 56, 61, 63–65, 78, 80, 81 duties, 58–61, 63, 65–67, 69, 72, 75, 76, 80, 82

E E3G, 57, 61, 76 Economic and Trade Joint Committee, 7, 70, 82 Economic and Trade Working Group, 7 economic interests, 16, 18, 37, 38, 56, 59, 63, 66, 70, 79, 80, 111, 133, 140, 158–160, 164, 166, 170 Economist Intelligence Unit (EIU), 103 economy, 8, 12, 20, 76, 82, 165 EkoEnergy, 76 Elements for a new EU Strategy on China, 6 emerging countries, 146 emerging powers, 4, 118, 124, 171 energy, 7, 12, 51, 161 energy affairs, 139 environment, 7, 20, 30, 41, 106, 117, 134, 137, 141, 142, 144, 159, 161, 165 environmental protection, 6, 105 equality and mutual benefit, 4 equal treatment, 100, 103 Equatorial Guinea, 119

INDEX

Ericsson, 92–95, 97, 100, 101, 111, 112 Erixon, Fredrik, 90 EU-Africa Summit, 120, 125 EU anti-fraud office (OLAF), 74 EU-China 2020 Strategic Agenda for Cooperation, 6 EU-China-Africa, 2–4, 17, 155–157, 159, 160, 162 EU-China-Africa trilateral cooperation, 3, 16, 18, 20, 117, 123, 127, 128, 143, 154, 157, 169 EU-China Comprehensive Strategic Partnership, 6 EU-China Connectivity Platform, 6 EU-China dialogue architecture, 6 EU-China Joint Declaration on 5G, 108 EU-China relations, 3, 4, 7–9, 11, 12, 126, 164 EU-China summit, 5–7, 9, 10, 12, 125 EU external action, 161, 166, 169 EU foreign policy-making, 2–4, 12, 14, 19, 20, 29, 31, 32, 34, 46, 56, 93, 127, 154, 158, 162, 163, 170 EU industry, 1, 16, 53, 54, 64, 66, 75, 80, 89, 90, 94, 96, 97, 110, 155, 158, 162, 166 EU law, 2, 13, 18, 19, 40, 43, 53, 59, 64, 65, 68, 70, 75, 78–80, 110, 111, 143, 160, 161, 163, 170 EU member states, 1, 7–9, 13, 14, 16, 17, 19, 21, 32, 35, 37, 40, 43, 56, 60, 61, 70, 76–78, 82, 90, 94, 99, 104, 105, 111, 118, 121, 123, 127, 129, 131, 133, 137, 142, 158–161, 163, 164, 167, 170, 172 EUNAVFOR Atalanta, 140, 171 EU ProSun, 53–56, 71, 74–79, 168

179

EURACTIV, 94–97 Eurocoton case, 69 Europe, 6–9, 11, 12, 15, 19, 35, 52, 72, 79, 82, 92, 97, 98, 100, 105, 111, 121, 122, 124, 126, 136, 141–143, 156, 164, 165, 167 EuropeAid Cooperation Office (AIDCO), 147 European, 5, 7, 11, 13, 21, 35, 92, 94, 100, 108, 111, 120, 122, 131, 141, 156, 161, 167, 168 European businesses, 61 European Commission, 3, 5, 8, 19, 32, 39, 54, 57, 61, 62, 66, 69, 74–77, 80, 82, 96, 103, 111, 112, 128, 129, 132–135, 154, 156, 158, 159, 164–166, 169, 171 European Commissioner, 5 European Commissioner for Development, 123 European Commission President, 60, 71 European companies, 62, 93, 98, 102, 103, 108 European Council, 39, 161 European Court of Justice (ECJ), 69, 162 European External Action Service (EEAS), 6, 17, 19, 122, 139, 142, 143, 147, 157, 162, 164, 169–172 European firms, 108, 168 European Parliament, 8, 19, 52, 54, 60, 62, 91, 122, 125–127, 129–132, 136, 142, 162, 164, 169 European Parliament International Trade Committee, 62 European realism, 35, 36 European solar manufacturers, 61

180

INDEX

European Trade Commissioner, 20, 51, 52 European Union (EU), 1, 58, 73, 100, 124, 135, 136, 164 European Union Foreign Policy (EUFP), 2, 3, 13, 35, 153, 154, 161, 171, 172 Europe Direct, 107–109 EU Strategy for Africa, 121, 124 EU Strategy on China, 6 EU-tariff exemptions, 74 examination procedure, 14, 40, 68 exclusive competences, 162 EXIM Bank of China, 123 ex officio, 16, 20, 57, 59, 73, 75, 89, 90, 92, 94–97, 110, 155 expiry review, 75–77 explanatory variables, 137, 144 export, 9, 60, 64, 66, 67, 77, 80, 92, 100 Export Credit Agency Sweden, 93 export credits, 108 external dimensions of internal EU policies, 166

F Fan, Zhenhua, 63 feed-in tariff schemes, 52 Feng, Zhongping, 164 financial crisis, 139 Financial Times, 17, 52, 54, 59, 60, 67, 90, 91, 93, 95, 99, 101–103, 112, 168 Financier Worldwide, 52 Finland, 105 Finnish-German joint venture, 112 5G, 108 5G associations, 108 5G networks, 108 FOCAC Summit, 118, 120, 123, 126, 143

Food security, 134, 141 foreign affairs, 6, 123, 124, 146, 156 Foreign Direct Investment (FDI), 8, 11, 170, 172 foreign policy, 7, 15, 29–31, 39, 69, 122, 124, 126, 161, 164, 169 foreign policy-making, 30, 32 formal institutional rules, 38, 40, 42 Forum on China-Africa Cooperation (FOCAC), 118, 123 4G, 91, 100, 101 4G network, 99 France, 13, 35, 37, 60, 65, 76, 82, 94, 122, 124, 133, 135, 139, 143, 170 free trade, 1 frictions, 5, 8, 9, 99 G Gao, Hucheng, 82, 112 gentlemen’s agreement, 104 German Chancellor Angela Merkel, 59, 125, 159 Germany, 13, 16, 18, 19, 35, 37, 52, 59, 60, 64, 65, 70, 75, 76, 79, 80, 94, 122, 125, 132, 133, 137, 156, 158, 159, 164, 165, 170 global economic governance, 6, 7 global financial crisis, 104 global governance, 10, 12, 122 globalization, 4, 9, 19, 92, 100, 154, 165 global telecoms investment, 99 global trade rules, 90 global value chains, 81 good governance, 120, 126, 130, 132, 135 governance, 5 government-to-government arrangements, 99 Great Britain, 60 Greece, 9, 64, 94

INDEX

green development, 105 green energy, 105 Greenpeace, 76 grey area measures, 99 Grimm, Sven, 118, 121, 127, 134, 139 Gross Domestic Product (GDP), 118 guaranteed market share, 100

H Hackenesch, Christine, 129, 138, 139 The Hague, 10 Halperin, Morton H., 13, 29–31, 33, 34, 142, 157 Hammond, 32 hard law, 42 hard power, 36 Headquarters of the African Union, 17 healthcare, 104 High Level Economic and Trade Dialogue, 6, 7 High Level Strategic Dialogue, 6 high politics, 36 high-profile trade disputes, 97 High Representative of the Union for Foreign Affairs and Security Policy/Vice-President of the European Commission (HR/VP), 4 Historical institutionalism, 39 history matters, 39 Hollande, Francois, 65 homegrown EU companies, 90 honeymoon, 4, 5, 147 Hong Kong, 9 Hooijmaaijers, Bas, 4, 8, 117, 126, 133, 134, 137, 142, 146, 160, 167, 170, 171 Horn of Africa, 140 host country, 145

181

Huawei, 53, 54, 90, 91, 93, 95, 98, 99, 110, 111, 155 Huawei technologies, 52, 90, 98 humanitarian aid, 161 human rights, 7, 9, 10, 12, 120, 122, 126, 130, 132 hybrid nature, 7 Hyde-Price, 34, 36 hypotheses, 14, 15, 17, 20, 29, 37, 41–43, 46, 153, 155, 160 I ICT, 108 illegal state subsidies, 90, 93 import, 57, 59, 61, 74 import-dependent firms, 81 IMT-2020 (5G) Promotion Group, 108 independent variables, 3, 15 India, 63, 147, 171 industry association, 53, 55, 56, 62, 68, 69, 71, 76, 77, 166, 168 industry representative, 68, 77 infrastructure investment, 118, 126 insolvency, file for, 52, 82 institutional framework, 3, 118 institutionalism, 2, 3, 13, 18, 29, 38–42, 51, 56, 69, 78, 106, 109, 110, 126, 144, 153, 155, 160, 162, 171 institutionalization, 32 institutional reforms, 139 institutional theory, 39 institutions, 1, 13, 19, 35–41, 80, 117, 129, 153, 160, 164, 172 integration, 5, 135 Intellectual Property Rights (IPR), 9 interest groups, 19, 31, 79 interests, 2, 5, 9, 10, 13, 18, 19, 31, 33–35, 37, 56, 63, 65, 70, 75, 76, 79, 81, 89, 99–101, 106, 109, 111, 122, 125, 126, 128,

182

INDEX

129, 137, 142, 155, 160, 164, 166 intergovernmental cooperation, 32 intergovernmentalism, 39 internal division, 8, 9, 11, 19, 164, 166 internal morale, 31, 33 international bureaucracies, 171 international challenges, 6 international law, 10 International Monetary Fund (IMF), 6 international relations (IR), 2, 7, 13, 20, 29, 36, 44, 46, 163 international system, 34 International Trade Committee (INTA), 61 international trade negotiations, 35 International Working Group on Export Credits, 103 inter-parliamentary cooperation, 105 investigation, 3, 9, 15–18, 20, 51–54, 56, 57, 59, 62, 63, 72, 74, 76, 79, 80, 89, 90, 92, 94, 96–102, 104, 106, 109–112, 154, 158, 159, 168 investment, 4, 7, 16, 90, 118, 170 investment screening mechanism, 170 issue identification, 1, 2, 13–15, 18, 19, 21, 36, 41, 43, 44, 51, 53, 55, 63, 79, 91, 93, 111, 117, 126, 144, 153, 155, 157, 158, 160, 162, 165 Italy, 52, 60, 64, 65, 94, 170 J Japan, 11 Joint Africa-EU Strategy (JAES), 120, 147 Joint Committee, 72, 96, 103, 106, 112 joint development projects, 139

joint venture, 98

K Keukeleire, Stephan, 4, 5, 8, 15, 127, 161, 162, 164, 166, 167, 171, 172 KUKA, 8

L labor standards, 69 lacuna, 2, 12 legal integration, 36 legally binding, 10, 18, 41, 69, 109, 110, 138, 140, 144, 157 Libya, 147 Li, Keqiang, 12, 59, 63 Lisbon, 64, 139, 147 Lisbon Treaty, 6, 122, 147, 160, 164, 171 lobby, 81 logic of appropriateness, 38 logic of consequences, 38 Lomé Convention, 120 low politics, 36 LTE, 91, 101 luxury cars, 65

M majority vote, 62 Ma Kai, 101 Malaysia, 71, 72, 74 Mali, 147 Malmström, Cecilia, 104, 109 Malta, 94 Mandelson, Peter, 52, 81 Manservisi, Stefano, 123, 124, 126, 127, 139, 143, 144, 155, 157 manufacturing jobs, 81 maritime operation, 140

INDEX

market economy status (MES), 9, 55, 56, 166 market re-entry, 96 market share, 52, 90, 92, 98, 100, 101, 103, 107 market share monitoring, 103 maximum volume, 100 Mearsheimer, John J., 35, 36 measures, 18, 59, 62–71, 73, 75–79, 82, 95, 101, 108, 155, 159, 166, 167 media reports, 74, 94 Mediterranean, 147 Melly, Paul, 124, 125 Member of the European Parliament (MEP), 61, 62, 130 member states, 1, 7–9, 16, 18–21, 34, 36, 37, 39–42, 57, 59–62, 64, 66–70, 73–79, 89, 91–94, 99, 104, 106, 109, 111, 117, 121, 122, 124, 132, 133, 135–137, 139, 142–144, 153, 156, 158–162, 164, 165, 169–171 Merkel, Angela, 59, 60, 64, 70, 79, 125 methodology, 4, 55, 56, 63, 70, 80, 140, 166 Michel, Louis, 123, 124, 126, 128, 130, 131, 134, 136, 139, 143, 144, 155, 157 migration, 6 Miles’ Law, 31 Millennium Development Goals (MDGs), 121 minerals, 119 minimum import price (MIP), 58, 65–68, 71–74, 76, 79, 100 Ministry of Commerce (MOFCOM), 119, 123 mobile operator, 100

183

mobile telecommunications networks, 16, 17, 20, 59, 89, 90, 94, 96, 101, 102, 110, 111, 154, 159 Model I, 30 Model II, 30 Model III, 30 monitoring, 33, 42, 66, 71, 77, 78, 103, 107, 109, 110, 157 Montebourg, Arnaud, 60 Moreira, Vital, 61, 62 Mugabe, Robert, 125 multilateralism, 10 multilateral level, 171 multi-level nature of EUFP, 161

N national capitals, 32 national foreign policy, 35 national governments, 30, 32 National Information Security Standardisation Technical Committee (TC 260), 108 national security, 9 national sovereignty, 39 natural resources, 134, 141 negotiation, 7, 11, 16, 21, 35, 59, 65, 96, 108, 110 negotiation benefits, 17 neofunctionalism, 39 neorealism, 2, 3, 13, 18, 29, 34–37, 42, 51, 56, 69, 70, 78, 79, 89, 93, 106, 109, 111, 117, 126, 137, 142, 144, 153, 155, 158–160, 162, 170, 171 Nigeria, 119 9/11 attacks, 122 Nitzschke, Milan, 53 Nokia, 92, 101, 112 Nokia Siemens Networks (NSN), 95, 97, 100, 101, 112 non-binding vote, 64, 68, 79

184

INDEX

non-communitarized areas of EU politics, 36 non-governmental organization (NGO), 57, 61, 76 non-market economy status, 79 non-market economy treatment, 55 Nordic countries, 122, 132 Normative institutionalism, 38, 39 norms, 13, 38, 40, 102, 130, 161 North Atlantic Treaty Organization (NATO), 10 Northern member states, 16 North-South divide, 16, 64, 70, 94

O offensive realists, 34 Official Development Aid (ODA), 118 officials, 17, 21, 33, 34, 59, 60, 62, 65, 66, 76, 92, 93, 97, 99, 123, 124, 128–130, 132, 135, 137, 139, 140, 142, 157 oil, 51, 119, 124 One Belt One Road (OBOR). See Belt and Road Initiative (BRI) One-China policy, 1, 153 Operation Atalanta, 140 operator, 91, 96 Option, 51–55, 68, 90, 91, 93 Organizational Process Model, 30 organizational survival, 31, 32 Organization for Economic Cooperation and Development (OECD), 119, 128 other interests, 13, 37, 38, 43, 70, 78, 93, 105, 127, 142, 158, 159 own initiative, 89, 90, 96, 110

P Paris, 139 parochial interests, 32

partners, 4, 10, 54, 96, 118, 131, 134, 136, 138, 143, 156 partnership, 130, 131 Partnership and Cooperation Agreement (PCA), 21 path dependency, 39 peace, 131, 133, 134, 136 Pehrsson, Ulf, 98 People’s Daily, 95, 98, 99 People’s Republic of China (PRC), 1, 3, 5, 7–11, 15, 20, 21, 57, 59–62, 65, 66, 68, 71, 77, 81, 96, 97, 99, 106, 107, 112, 118, 121–123, 127, 128, 130, 131, 135, 146, 147, 153, 156, 164, 168, 171 People-to-People Dialogue, 6 Peters, B. Guy, 38–40 photovoltaic (PV), 60, 61 Piebalgs, Andris, 139 Pieke, Frank N., 7 pillar structure, 6 Poland, 94 policy areas, 7, 15, 40–42, 45, 69, 160, 164 policy cycle, 2, 20, 153, 160, 163, 169 policy entrepreneur, 138, 139 policy formulation, 21, 46 policy implementation, 2, 3, 13–15, 19–21, 29, 32–34, 37, 42, 43, 45, 51, 77, 109, 117, 142, 144, 157, 158, 162, 165 policy line, 136, 156 policy-makers, 13, 21, 38, 121, 124, 127, 143, 154, 167 policy-making, 1, 2, 13, 18, 20, 29, 30, 36, 38, 40, 44, 46, 153, 161, 163, 167, 171 policy-making methods, 40, 41, 161 policy-making process, 15, 18, 21, 29, 38, 44, 94, 153–155, 163, 169

INDEX

policy-making stages, 153, 170 policy outcomes, 30, 33, 136, 156 policy relevance, 3 political capital, 69, 167 political deals, 79, 97, 102, 106, 111 political economy, 168 political engagement, 136 political interpretation, 34 political space, 97 polity, 36 polysilicon, 57, 61, 65, 72, 82, 97, 102 Portugal, 94 positive conditionality, 120 post-Westphalian, 35 power, 4, 10, 14, 16, 19, 31, 32, 35, 38, 40, 59, 70, 71, 109–112, 123, 125, 157, 159, 164 powerful states, 13, 16, 34, 35, 37 Premier of the State Council, 63 Presidency, 125, 135, 137 press release, 68, 101, 102 price undertaking, 58, 64–67, 70, 73–75, 77, 78, 80, 82 prima facie, 53–56, 78, 90 probe, 53, 57, 65, 72, 82, 95, 98 procedures, 2, 13, 16, 18, 19, 31, 39–41, 44, 45, 54–56, 62, 63, 66, 68–70, 74, 78–80, 90, 97, 106, 110, 111, 130, 137, 138, 144, 155, 157–163, 170 process trace, 14 producers, 53, 60, 62, 68, 71, 72, 74, 77, 78, 81, 91 protectionism, 60, 63, 65, 101 protectionist measures, 98 provisional duties, 59, 60, 62, 65 public administration, 44, 163 public policy, 44, 163 pulling and hauling, 30, 32, 33, 69, 105, 136, 156 PV companies, 81

185

Q qualified majority, 75 Qualified majority voting (QMV), 42

R railway connections, 9 rational choice, 30 rational choice institutionalism (RCI), 38, 39 Rational Policy Model, 30 raw commodities, 119 RDI programs, 108 ready-to-implement policy instruments, 128 reciprocity, 7, 8, 108, 168 regional level, 7 regulation, 13, 53, 58, 64, 74–76, 99 Rehn, Olli, 101 renewable energy, 76, 81 Republic of Congo, 119 Research and Development (R&D), 98, 103 retaliatory acts, 92 Reuters, 17, 59, 60, 72, 74, 91, 92, 94, 95, 98, 100, 104, 112, 125 risk management, 100 Rösler, Philipp, 59 rotating Presidency, 125 rule of law, 10, 120 rules, 34, 38, 40, 41, 44, 45, 56, 62, 94, 95, 97, 99, 106, 127, 160, 166 rules based formal approach, 97, 111 Russia, 10, 171

S safeguard, 52 Scandinavia, 94 Secretariat General, 129 sectoral dialogues, 7

186

INDEX

security, 6, 7, 10, 12, 32, 35–37, 90, 91, 109, 127, 134, 136, 139, 158, 159 security interests, 13, 37, 38 security matters, 6 17+1, 9 shared competences, 127, 143, 144, 160 Shen, Danyang, 98 shifting balance of power, 6, 64 Siemens, 91 Sino-African relations, 118 Sino-European bilateral relations, 6 Sino-German Center for Sustainable Development (CSD), 146 16+1, 9 smart circumvention, 166 Soames, Christopher, 5 Socialist Party, 75 soft law, 41, 42 soft power, 10 solar, 3, 16, 18, 51, 54, 56–59, 61, 65, 70–72, 74, 76, 77, 95, 97, 157 solar panel, 1, 9, 20, 53, 57, 58, 61, 62, 64, 66, 67, 74, 76, 80, 91, 99, 110, 155, 168 solar panel dispute, 3, 15, 17, 20, 51, 53, 154 SolarPower Europe, 52, 76, 77 Solar Power Portal, 81 solar technology, 63 Solar Trade Association (STA), 81 SolarWorld, 59, 72–75, 82 South Africa, 119 South China Sea issue, 10 Southern member states, 19, 102, 166 South-South cooperation, 118 South Sudan, 147 sovereignty, 10 Spain, 65, 94 staff, 13, 31, 33, 147

stage, of the policy cycle, 2, 3, 13, 15, 32, 42, 45, 171 Stahl, Anna, 12, 124, 126–128, 130, 132–139, 142, 144, 158 stakeholder, 128, 133 standardization, 103, 108 standardization bodies, 108 standard operating procedures (SOP), 30 state, 13, 15, 20, 29, 35, 60, 125, 164, 167 state banks, 91 state-owned enterprises (SOEs), 7, 167 steel, 9, 19, 97, 110, 165 strategic partner, 5, 171 strategic partnership, 5, 6, 8, 10, 12, 21, 118, 120, 128, 141, 167, 171 strategic sector, 55 strength and bindingness of institutions, 41 structures, 15, 31, 34, 39, 41 Sturdy, Robert, 62 subsidies, 9, 19, 52, 55, 56, 63, 78–81, 92, 98, 106, 112, 165, 166, 168 Sudan, 119, 140 Suntech, 73 supplier, 52, 67 supporting competences, 161 supranational institutionalism, 39, 40 Sweden, 94, 105 swing-states, 16 T Taiwan, 71, 72 technology, 8, 65, 100 telecom companies, 92, 98 telecom equipment maker, 90 telecom firms, 91–93, 98–102, 107, 108, 168

INDEX

telecom industry, 109, 157 telecommunication network equipment, 90 telecommunications networks, 96, 157 telecoms networks, 103 Telecoms Settlement, 108 terrorism, 35 textile dispute, 6 theoretical model, 13, 18, 20, 29, 42, 111, 155, 163 theoretical relevance, 144 theory, 2, 3, 10, 12–14, 17, 29, 30, 32, 36, 37, 39, 41, 153, 163, 169 theory testing, 14, 15, 21, 40, 171 third country, 171 thorny issues, 9, 11, 168 3G dongle makers, 52 Tiananmen crackdown, 9 Tibet, 9 timber, 119 timetable of events, 16, 20, 70, 80, 106, 162, 165 timing, 42 top-down approach, 139, 142 trade, 1, 3, 4, 9, 10, 15, 16, 20, 31, 36, 42, 57, 60, 61, 66, 81, 95, 99, 102, 104, 118, 119, 122, 125, 154, 161, 169 Trade and Cooperation Agreement (TCA), 5 Trade and Investment Policy Dialogue, 7 trade barriers, 76, 97 trade defence instruments (TDI), 8, 11, 54, 68, 71, 78, 89, 93, 102, 104, 106, 109, 158, 159, 166 Trade Defence Instruments Working Group, 7 trade defense policy, 4, 79, 154, 165 trade deficit, 8 trade dispute, 58, 63, 102

187

trade friction, 101, 102 trade war, 57, 59–61, 63, 66, 68, 98 trading partner, 6, 7 traditional donors, 118 transformative engagement, 135 Treaties, 17, 21, 161 Treaty on European Union (TEU), 21 Treaty on the Functioning of the European Union (TFEU), 21 trilateral cooperation, 127–136, 138–144, 146, 160, 169 trilateralism, 2, 7, 124, 133 turf battles, 34 two-stage procedure, 96 2009 EU Renewable Energy Directive, 51

U UN Comtrade, 119 unfair competition, 53, 89 unilateralism, 65 Union interest test, 62, 66 United Kingdom (UK), 13 United Nations (UN), 120, 134, 147 United Nations Security Council (UNSC), 171 United States (US), 6, 9, 10, 12, 30, 44, 65, 122, 163, 171 US President, 9

V Van Evera, Stephen, 14–16, 21 vantage points, 94 violent extremism, 140 voting procedures, 42, 70, 79, 80, 106, 159 voting rules, 38, 40, 69

W Wacker, 61, 65, 72, 82

188

INDEX

Wall Street Journal, The, 104, 106, 107 Waltz, Kenneth, 13, 34–36 War on Terror, 122 water utilities, 104 West, the, 17, 81, 134, 140 white paper on Africa, 118 Wikileaks, 138 wine, 9, 65, 95, 97, 102, 110 Wissenbach, Uwe, 118, 121, 125, 127, 128 Working Group, 108, 132, 137, 138 Working Groups Constitution, 107, 108 World Trade Organization (WTO), 64, 65, 92, 99, 168 World Wildlife Fund (WWF), 57, 61, 76 WTO Dispute Settlement Mechanism, 82

X Xi, Jinping, 9, 72, 82, 95, 118 Xinhua, 57, 58, 65, 95 Xinjiang, 9

Y Yingli Green Energy Holdings Co., Ltd., 63 Yu, Zhengsheng, 105

Z Zambia, 119 Zhong, Shan, 57, 61, 101 Zimbabwe, 125 ZTE, 52, 54, 90, 91