REROUTING EU-GULF TIES VIA PLURILATERAL COLLABORATION WITH ASIA

As the European Union (EU) and the Gulf countries explore innovative ideas to revitalise their partnership, these blocs and their members could benefit by taking a leaf out of thriving Gulf-Asia relations and expanding existing EU-Gulf connections to plurilateral arrangements with Asian countries. While China is often seen as the first link in this endeavour, Japan, India, South Korea, and Southeast Asian countries, among others, also have overlapping interests and offer interesting and mutually beneficial collaboration options in the economic and security domains. This paper identifies a number of such unconventional win-win-win templates that the EU and its members could explore.

REROUTING EU-GULF TIES VIA PLURILATERAL COLLABORATION WITH ASIA

Author

Dr. Narayanappa Janardhan

Date

March 16, 2022

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REROUTING EU-GULF TIES VIA PLURILATERAL COLLABORATION WITH ASIA

Introduction

Since the turn of the 21st century, the Gulf countries, particularly from the Gulf Cooperation Council (GCC) bloc, have shifted their focus towards Asia, first to tap the economic benefits and then to contemplate security alternatives in the wake of US misadventures in and subsequent disengagement from the Middle East. The Gulf’s ‘Look East’ policy naturally hurt the interests of the European countries, whose economic slowdown impacted their economic, diplomatic and security leverage in the region. 

Europe has also struggled with the changes in the world order because of its US- and West-centric global geopolitical outlook. Following the Trump administration-induced disruptions in transatlantic ties, Europe is still weighing its strategies. Since the Gulf region is a vital bridge for prosperity and peace for the entire world, including Asia and Europe, the EU and the Gulf countries must find new ways either on their own or by joining with Asian players.

As the EU now searches for new avenues to re-energise its involvement in the Gulf region, a few successful templates from the Gulf-Asia relationship could prove useful. More than borrowing and replicating these templates, it may be more productive for the EU, individually and collectively, to find common areas of interest within the realm of thriving Gulf-Asia ties to evolve some out-of-the-box three-way or plurilateral collaboration patterns. 

This policy-oriented paper begins with charting some of the finer details of the recent proactive economic and foreign policies of the Gulf countries and how they have enmeshed with the Asian countries, flourishing at the expense of the European countries. It then highlights some prevalent analyses on improving EU-Gulf ties and delves into why ‘minilateralism’ or ‘plurilateralism’ is more effective than bilateral and multilateral tactics. It follows up thereafter by identifying and recommending some overlapping interests that offer scope for countries in Europe, the Gulf and Asia to collaborate using flexible structures instead of competing against each other, thus enabling gains for all. 

Finally, the paper argues that this wide-angled Eurasian partnership, especially linking the economic, diplomatic and security dynamics, is crucial in a world that is more multipolar than ever before, one in which the Asian countries, including some in the Gulf, are playing significantly influential roles, and with which the EU, on its own, would find it hard to compete.

Reactive to proactive Gulf

The ‘new’ Gulf has transformed on multiple fronts. Economic diversification, which began nearly two decades ago, is gaining momentum now with heavy investment in non-oil sectors like financial services, green energy, healthcare, transport logistics, and tourism, among others. There are also attempts to build partnerships in more ambitious sectors such as space technology, artificial intelligence, blockchain, fintech and other applications of the fourth industrial revolution. These sectors have taken on a new urgency since the outbreak of Covid-19. Technology-enhanced trade and investment flows are poised to accelerate across virtual boundaries and within industries where firms and policymakers hope to build resilience – not only due to the pandemic but also to protect against future shocks. Technology now propels job generation and economic growth in the Gulf markets. The region’s youth bulge, both among nationals and expatriates, who form a significant share of the population, offers great potential to promote tech-businesses to ensure workforce rationalisation and serve as an attractive hub for artificial intelligence products and services. 

A string of economic and social reforms is being rolled out to generate foreign interest in a diversifying economy. Due to the recent trade disruptions, the GCC governments are also diversifying their supply chains and encouraging the private sector to pursue more resilient trade links like the GCC bloc adopting in 2020 a Kuwaiti proposal to create a joint food supply network across the subregion. The United Arab Emirates announced in 2021 that foreign nationals can own 100% of commercial companies in the country, eliminating the need for nationals to hold the majority share.  While VAT is a reality in many GCC countries, Oman could become the first to introduce income tax in 2022 as a source of diversified revenue.  Improving non-oil ties have the potential to impact markets beyond the Gulf region – in Asia, Africa and Europe too. 

In 2020 and 2021, the UAE announced a series of legal changes that make the country an attractive destination for foreign workers. The reforms include decriminalisation of alcohol use, permission for cohabitation among unmarried couples, and long-term residence and even citizenship schemes.  The need for overseas firms to have a regional headquarters in Saudi Arabia to qualify for government contracts from 2024 is just one of several economic and social reforms announced over the last five years. 

The UAE also unveiled in September 2021 an array of economic development initiatives – “Projects of the 50” – to boost the country’s growth over the next five decades. This includes signing comprehensive economic partnership agreements with eight countries – India, Indonesia, Turkey, UK, Israel, Kenya, South Korea, and Ethiopia – to widen access in emerging markets and consolidate its position as a gateway for global trade and investment. In addition, the 10×10 programme seeks to boost UAE exports by 10% to 10 high-priority markets – China, the UK, the Netherlands, Italy, Russia, Poland, Luxembourg, Australia, New Zealand and Indonesia. These plans are considered vital for the UAE to attract $150 billion in foreign direct investment and fulfil its goal of doubling its GDP to $800 billion by 2030.  Linking the economic to diplomatic and security strategies, the Gulf foreign policies have transitioned to a non-ideological and pragmatic framework over the last two decades. This is best evidenced in the UAE and Bahrain normalising relations with Israel via the Abraham Accords. After achieving varying degrees of success as soft powers, accompanied by a natural course of leadership changes, some countries shifted from ‘reactive’ to ‘proactive’ foreign policies. National security needs in an unstable regional milieu and a deliberate attempt to carve distinct identities in a competitive region further contributed to promoting ‘smart’ diplomacy. 

The need for such a shift was necessitated, first, by the ineffectiveness of hitherto influential regional and international actors, especially Egypt, Jordan and the United States. It was felt that that the region’s and world’s problems could not be solved by one or a few countries. Instead, the new understanding was that regional problems required regional solutions. Second, from following a largely non-aligned foreign policy to turning West-centric, especially in the security domain, to slowly turning their gaze to Asia, Africa and even South America, the GCC countries diversified their foreign policies to reflect ‘omnibalancing’ or ‘multi-vector’ approaches. 

Third, from being security consumers, allowing several countries to establish military bases in their countries, some GCC countries transitioned into the role of security providers. Their role in Yemen and the Horn of Africa affirms their intention to keep pace with the changing geopolitics and securitisation of the region. This also served as an opportunity, especially for Saudi Arabia, to undermine Iran’s influence in the region and beyond. Fourth, their foreign policy spinoff was evident in the shift from ‘seeking mediators’ to ‘becoming mediators’. While their involvement in Lebanon and Sudan, among others, made news at the turn of the century, more recent examples include the Saudi-UAE involvement in settling the Ethiopia-Eritrea row, some GCC countries hosting the US-Taliban reconciliation consultations, Oman aiding US-Iran discussion, and Kuwait’s intervention in resolving the intra-GCC row in 2021.   

It is important to note that amid these changes, the GCC as an institution has become relatively weaker and the six countries of the bloc are not a homogenous entity anymore. They could be divided into three groups – one, Saudi Arabia, the UAE and Bahrain, all having principal differences with Iran; two, Qatar, which has amicable ties with Iran and is yet to be fully integrated into the GCC fold even after the Al Ula Declaration in 2021; and three, Kuwait and Oman, who don’t see themselves in either camp. 

Uptick in Gulf-Asia ties

Long before the United States announced its strategic rebalancing policy of ‘pivot to Asia’, the GCC countries had set their eyes and recognised Asia as an ally of the future. Though these ties were rooted primarily in ‘transactional’ economic activities, they have evolved into ‘strategic’ agents capable of impacting geopolitics. The defining developments of Gulf-Asia ties lie in the events that occurred at the turn of the century due to Asia’s economic boom, which increased oil trade and investments; and the impact of 9/11, which resulted in anti-Islam tensions in the West and the war on terror thereafter, all coinciding with Western economic slowdown and decelerating Gulf-West engagement.

The GCC’s exports to the United States and Europe declined from 60% to 41% between 2000 and 2018. Europe’s share in Gulf foreign trade declined from 24% in 1992 to 11% in 2016, with Asia becoming the new beneficiary.  The EU-GCC two-way trade in goods (without services and FDI) was $142 billion in 2019.  In comparison, GCC exports to emerging and developing Asian markets increased from 19% to 28% during the same period. This resulted in GCC trade with China increasing five-fold and that with India improving four-fold. 

Overall, the GCC’s total trade to emerging and developing countries (mostly in Asia) jumped from $124 billion in 2000 to $667 billion in 2018. This surpassed the GCC’s total trade with advanced economies, from $207 billion to $527 billion during the same period.  Further, following the success of the shale revolution, the United States imported less than 3% of its crude requirements in 2019, compared to Asia’s big four importers receiving 66% of their energy needs from the region. 

Given the healthy GCC financial liquidity, the lagging Asian infrastructure sector showcased scope for rich returns. The region also stood to benefit immensely from Asia’s expertise and investment readiness in the region’s key sectors such as desalination, power generation, gas exploration, minerals, air transport, airports, seaports, services and telecommunications. There was the profitability of business ventures too. With factors of production being cheaper than elsewhere in the world, some of the Asian countries sold their ideas and services to the GCC countries as ‘more value for money’.  None exemplifies this better than the South Korean-led consortium winning a $20 billion contract in 2009 to build four nuclear reactors in the UAE, overcoming ‘expensive’ bids by US and French competitors. 

These factors impacted the region’s West-centric security dynamics with diminished US interest, influence and impact in the Gulf and wider region, leading to green shoots of an alternative security architecture involving multiple players. While there are major differences within the GCC bloc on several regional issues, all have endorsed exploring alternative security scenarios. This means that the Gulf’s tactical ‘hedging’ plan with Asia, as a buffer against the diminishing influence of the West, will strengthen in the decades ahead. 

Politics Quells Economics

An important reason for Gulf-Asia economic ties trumping Gulf-West ties is that the former carried no political agenda, unlike the latter. Asia was and continues to be uninterested in linking political reforms in the region to economic ties. The US-UAE and EU-GCC free trade agreement (FTA) negotiations were suspended in 2006 and 2008, respectively, due to differences over this issue.  The UAE particularly opposed US demands for giving American expatriates salaries equal to nationals and permanent settlement rights and creation of trade unions, among others. Washington also insisted that Americans be treated on par with Emiratis in terms of ownership of business and property.  The EU’s demands revolved around fulfilling standards of democracy and human rights. Human rights groups demanded linking respect for freedom of the press, women’s rights and rights of migrant workers in the Gulf countries in return for trade concessions granted through the FTA.  

This trend has continued with EU members raising concerns over issues that the GCC countries view as domestic and thus ‘interference’ by an external power, leading to strain not just in the economic domain, but also in the diplomatic and security arenas. At least three examples in 2021 illustrate this.

  • The Dutch government postponed a trade mission in Qatar after a report was released on thousands of workers dying there since the country was awarded the 2022 World Cup.  Similarly, the European Parliament adopted a resolution deploring the “deteriorating” human rights situation in Bahrain. 
  • In a diplomatic-security fallout, Italy halted the sale of missiles to Saudi Arabia and the UAE due to concerns over the situation in Yemen.  
  • And the European Parliament passed a (largely unheeded) resolution encouraging member states not to participate in Expo 2020 Dubai due to human rights issues.  

Amid such Western scrutiny and EU-Gulf differences, Gulf-Asia economic cooperation has strengthened, even impacting the arms sales domain, especially with China and South Korea.  While the Gulf-Asia non-political approach is not a value in itself, it may be useful for European policymakers to conduct a cost-benefit analysis of their normative agenda in their foreign affairs with the Gulf region and elsewhere.  

Collective Versus Piecemeal Approach

In this milieu, it has been proposed that the EU should recalibrate its Gulf ties by adopting an “independent, proactive strategy … to protect its interests and increase its leverage over GCC states … reassess the basic framework of its relationships with GCC states, and find a shared definition of its goals and priorities in the MENA region…” More pertinently it has been recommended that Europe overcome its internal “divisions that GCC states have sometimes exploited … adopt a ‘core groups’ framework in which they exchange traditional bilateralism for coordinated bilateralism.”  

One characteristic shared by the EU, GCC and Asian blocs and countries is the inability to coordinate their foreign policies. This has compelled them to act either individually or in smaller units composed of several members of their respective blocs or regions.  Brexit has intensified competition for Brussels as London steps up its own policies with the Gulf and Asian countries.  This means most countries prefer to operate outside the framework of formal institutions and opt for issue-based short-term partnerships rather than long-term alliances. 

Given the empirical evidence of Asian countries thriving without a collective approach in their engagement both with the Gulf and Europe, EU countries too could benefit from “a piecemeal approach rather than strategic planning (wherein) its multilateral nature can affect the implementation of a largescale and fast response.”  

The idea of ‘minilateralism’ or ‘plurilaterlism’ has gained traction in recent years. “It is a narrower — and usually informal – initiative to address specific problems with fewer states sharing the same interest; they are in essence, ‘task oriented’. The ‘tasks’ are often regionally focused, making them ‘less threatening’ to states that see themselves as the target of bilateral alliances. Thus, minilateralism can overcome barriers to collective action problems by insisting on fewer actors and a narrower convergence of interests, identity or power.”  It is practical because it is adaptable, economical and voluntary rather than shaped by institutional compulsions.

It has been suggested that Europeans need to ease the tension between EU multilateralism in, and its members’ bilateral strategies to, the Middle East. This would allow them to capitalise on their multifaceted strategic advantages over the Gulf countries. To achieve this, the EU should “adopt a flexible unifying approach: a core groups framework. Like coalitions of the willing or coordinated bilateralism, this approach involves issue-driven alignments in which key groups of European states take the lead on specific initiatives, perhaps flanked by representatives of the European Council’s presidency trio.”  

Two examples illustrate this arrangement. First, the E3 – France, Germany and the UK – and Italy worked together on the Iran nuclear deal. Second, after France decided to host the headquarters of a European maritime security mission at Camp de la Paix naval base in Abu Dhabi, it invited other European countries to contribute to the mission, which Belgium, Denmark, Germany, Greece, Italy, and the Netherlands joined. Yet, the GCC members view the EU as “a weak strategic partner in the MENA region.” 

Europe’s Asia Pivot

The biggest draw for the EU’s pursuit of robust ties with Asia, which includes the Gulf countries, is economic benefits first and security interests next. Asia is Europe’s largest trading partner, with China being the single biggest collaborator. Following free trade agreements with Japan, South Korea, Singapore, and Vietnam, Brussels is determined to deepen economic ties with other regional partners to level the playing field in the Indo-Pacific region. 

Following more than four decades of the EU-ASEAN (Association of Southeast Asian Nations) relationship, characterised as a “donor-recipient” engagement, their association was upgraded to a strategic partnership in late 2020. Though there is no clarity on the EU’s definition of strategic partnership, the shared objectives include cooperation on Covid-19 response, climate change, green economy, sustainable development and connectivity, maritime cooperation, and cybersecurity. While the EU’s potential role in the security arena of the Indo-Pacific region, especially countering China’s influence, has always been flagged as an area for collaboration, it is not the security developments that hastened the two blocs towards a strategic partnership.  Rather, it was announced soon after the world’s largest free-trade agreement – the Regional Comprehensive Economic Partnership (RCEP) – was signed in late 2020. 

The RCEP brings together 10 ASEAN members and its free trade partners – Australia, China, Japan, South Korea, and New Zealand. The fact that China is part of the RCEP provides the EU with an opportunity to engage with it holistically (DIME – diplomatic, information, military, and economy). The Gulf countries are individually expanding ties with the ASEAN members. One of the big deals that remains underplayed is the nearly $33-billion UAE-Indonesia agreements signed in 2020 and 2021.  Individual EU members or a core group could explore common areas of interest and collaborate, particularly in anticipation of an expected GCC future engagement with the RCEP.

The EU and ASEAN are still far from negotiating a free trade agreement. The EU does not have any strategic partnerships with ASEAN member countries like it does with South Africa (a member of the African Union) and Brazil (a member of MERCOSUR). The EU could consider ways of linking the GCC-Singapore FTA signed in 2008 with the EU-Singapore FTA signed in 2018. This could provide the EU-ASEAN strategic partnership scope to develop a broader strategy with the external partners of both blocs. For example, ASEAN’s other strategic partners are the United States, China, Russia, Japan, India, South Korea, Australia, and New Zealand. Many of these have robust ties with the GCC countries, which the EU members could utilise.

In 2019, the EU and Japan signed three agreements – economic, digital and strategic. Apart from the EU-Japan Economic Partnership Agreement, which is the world’s largest FTA dealing with economies worth $25 trillion, they also signed the EU-Japan Strategic Partnership Agreement (SPA). These target promoting free trade, multilateralism and the rules-based order. While the agreements are broad-based, covering a host of issues from trade, investment, technology, climate change, cyber security, etc., the SPA provides new ways to promote regional and global peace and security.  The EU and Japan have already cooperated in counterpiracy activities near the Horn of Africa. These efforts could be linked to, for example, the UAE-Japan Comprehensive Strategic Partnership Initiative signed in 2018,  which focuses on energy, trade, space exploration, and the environment.

A sign of these new partnerships expanding to acquire a wider Europe-Gulf-Asia collaboration was exemplified by a French-Japanese consortium winning a $147.5 million annual contract in 2021 to operate and maintain the Dubai Metro and Tram. The contract was awarded to Keolis, Mitsubishi Heavy Industries Engineering and Mitsubishi Corporation. It is valid for nine years, translating into $1.33 billion, and can be renewed for six more.  

In the EU’s other forays in Asia, it agreed with India in 2021 to relaunch trade talks that had remained suspended since 2013. They signed a ‘connectivity’ partnership to reinforce infrastructure links and cooperate on developing cutting-edge technology using 5G technologies.  The two sides also agreed to build joint infrastructure projects in Africa, Central Asia and the Indo-Pacific.  This could resemble the plurilateral partnerships that India has with Japan and the UAE to build a cancer hospital in Kenya and an ICT centre in Ethiopia, respectively. 

Over the last decade, the EU has complemented its economic pivot by building key security partnerships with Asian countries. The EU’s growing strategic presence in Asia as a soft security actor – dealing with issues such as ocean governance, disaster prevention and recovery, piracy, cybercrime, and trafficking – is now on the threshold of transforming into hard security cooperation. Two recent examples are the France-India-Japan and France-India-UAE trilateral cooperation, discussed in this paper.  Besides France, a host of European countries are boosting their naval presence in the Gulf region.  All these could find more collaborative synergies with Europe’s quest to improve economic-security ties with Asian and Gulf countries. 

Building into the Belt and Road Initiative (BRI)

China’s ‘project of the century’, the BRI, has already enlisted the participation of several European, Gulf and Asian countries. About two-thirds of EU members are formal BRI partners, including Greece, Portugal and Hungary, among others. China has also funded projects beyond the EU bloc, in the Western Balkans and Eastern Europe. It is estimated that BRI-related rail projects in Europe are worth about $13.5 billion.  

After careful consideration of Iran’s involvement in the BRI, the GCC countries are now part of the initiative. The UAE’s DP World could play a significant role in offering plurilateral opportunities. It is contributing to increasing connectivity between west and east Europe, while enhancing global links, including along BRI projects. In 2019, it had at least nine deep-sea terminals in Europe.  In 2021, the port operator announced expanding its European inland network, adding three key ports in the Alsace region of France to “improve transport connections in the border triangle region between France, Switzerland and Germany” and also connect with ports in the Netherlands and Belgium.  The port’s presence in the Middle East, the Horn of Africa and the EastMed region and plans in Central Asia, enable it to geopolitically link its ‘string of ports’ from the UAE to the heart of Europe through BRI corridors.

A Gulf-Asia precedent of broader BRI plurilateral cooperation in a third country already exists with the UAE and Saudi Arabia investing in the China-Pakistan Economic Corridor and Oman’s Duqm port project. Europe could join China and the Gulf countries to replicate the Pakistan and Oman cooperative projects elsewhere. The China-UAE comprehensive partnership and China-Iran 25-year agreements are two possible options that the EU and its members could explore via co-investment with the Beijing-based Asian Infrastructure and Investment Bank. This could take the form of EU-China-Gulf collaboration in Africa or borrow from the 2018 ‘EU Strategy on Connecting Europe and Asia’, which is based on three strands:

  • creating transport links, energy and digital networks and human connections;
  • offering connectivity partnerships to countries in Asia and organisations;
  • promoting sustainable finance through utilising diverse financial tools. 

Further, the EU’s Trans-European Transport Networks are being extended to countries bordering Asia, which could be connected with networks in Central Asia. The EU could specifically look at collaborating with the GCC countries on BRI projects in the “Stan” countries. The UAE is particularly interested and has invested in Kazakhstan, Turkmenistan and Uzbekistan. DP World has signed two framework agreements with the government of Kazakhstan for Special Economic Zones in Aktau and Khorgos. China’s and the Gulf’s focus on hard infrastructure projects could be coupled with the EU’s focus on soft infrastructure projects, which could contribute to sustainable development. 

Apart from Central Asia being important for the EU’s future energy security, which has encouraged plenty of investment and assistance, extremism and drug trafficking are common areas that the EU, Gulf and Asian and countries could focus on, particularly in the wake of US withdrawal from Afghanistan and the potential volatility that lies ahead with the resurgence of Taliban.

Speaking at the 2019 Asia-Europe Cooperation Dialogue, which stressed multilateralism and more open free trade, United Nations former secretary-general Ban Ki-Moon said the BRI could serve as a tool to further the cause of Eurasia and “turn Asia and Europe into one continent, instead of merely a geographical concept”.  

Alternative plans to counter the BRI are also being floated. One of them is President Joe Biden’s push for an alliance between the United States and European countries to counter China. At the 2021 G7 Summit, Washington announced plans for a “green belt and road” and “build back better”. Another is the EU’s $350 billion ‘Global Gateway’ project announced in December 2021 to promote EU’s economic, foreign, and security interests, as well as European values. These goals are an extension of the 2018 ‘Connecting Europe and Asia – building blocks for an EU Strategy’.  While there may be merits in these initiatives, it is premature to forecast their impact. 

The Abraham Accord Bridge

The 2020 Abraham Accords normalised Israel’s relations with the UAE and Bahrain, marking an inflection point in the Middle East and global affairs. The agreement promotes “warm peace”  in the regional space, creating wide-ranging opportunities. With Bahrain, Sudan and Morocco signing similar accords, based on the suspension of Israel’s plans to extend its sovereignty in the Palestinian territories, the accord frees the region from the rhetoric of stagnation and pushes it towards positive action. Abu Dhabi also revoked the decades-long UAE Boycott Laws, pertaining to Israel, which has already facilitated partnerships in numerous sectors. 

Moreover, the accord assists the quest of the signatories and their partners to enhance their strategic autonomy, by setting their priorities and making their own decisions on foreign policy matters either as individual countries or in cooperation with other like-minded actors. This opens doors for a broader network with several Asian countries, which have parallel and complementary relationships with the UAE and Israel.

It is here that EU-Israel’s ongoing efforts to improve relations could add value to EU-Gulf ties. In 2021, the European Union and Israel moved closer towards restoring a key annual bilateral forum that has remained stalled since 2012. If this materialises, a decade of strained ties due to prime minister Benjamin Netanyahu’s close ties with Central-Eastern European bloc within the EU could end.  This would reset Israel’s ties with the EU, its largest trading partner and an important strategic ally, and help replicate some plurilateral projects in the Gulf-Asia-Israel realm.

The Eastern Mediterranean Gas Forum (EMGF) is a prime example of Israel formally associating with the Arab and European countries, with bilateral structures giving way to more complex geopolitical arrangements. The EMGF facilitates cooperation among Mediterranean countries about exporting natural gas, collaborating on various energy issues and building an undersea pipeline that would transfer gas to the south of Europe. The forum came into existence amid a political controversy after Turkey signed a controversial maritime jurisdiction agreement with Libya’s Tripoli-based Government of National Accord, which infuriated Egypt, Greece and Cyprus, who claimed that the deal infringes on their economic rights in the Mediterranean. 

The Forum, established in early 2019, is the first international organisation that brings together gas producers, consumers, and transit countries in the world under one umbrella, unlike other international organisations that are limited to exporting or importing countries. It is an intergovernmental organisation comprising Egypt, Israel, Greece, Cyprus, Italy, Jordan, and Palestine. The United States is a permanent observer and the UAE climbed on board in late 2020.  France joined the Cairo-based forum in March 2021 and the European Union became a permanent observer in July 2021. It is expected other Mediterranean countries, along with some big gas importers from Asia, such as China, Japan and India will also join sooner rather than later, thus providing scope for greater synergy. 

The possibilities of EU-Gulf-Asia cooperation through the EastMed Forum could be linked to the agreement between Europe-Asia Pipeline Co. (an Israeli state-owned company) and MED-RED Land Bridge (a joint venture between Israel and the UAE) to extend to the UAE an oil pipeline, currently running from the Red Sea city of Eilat to the Mediterranean port of Ashkelon in Israel. This pipeline will increase operational storage capacity and allow transportation of crude from the UAE to European markets, making transactions cost efficient and providing East Asian countries access to oil produced in the Mediterranean and the Black Sea regions. “Along with UAE oil, the partners hope to use their ‘land bridge,’ which saves time, fuel, and costs versus crossing the Suez Canal, to transport oil back and forth between other countries. It could provide quicker access for consumers in Asia to oil produced in the Mediterranean and Black Sea regions.” 

Another project idea that could serve as a template for the EU and its members is the UAE-Israel-India trilateral agreement signed in 2021 with an Israel-based company, Ecoppia, which will produce an innovative water-free robotic solar cleaning technology in India for a project in the UAE. With the three governments confident of replicating such collaboration in other sectors, the innovation and international business potential of the UAE-Israel and India trilateral is pegged at $110 billion by 2030. 

In the agriculture sector, the UAE and India are tying infrastructure development to food security to develop ‘farm-to-port’ logistics solutions. This model could be coupled with the proposed UAE-Israel project to promote tech-powered agriculture across a broader geography. The UAE and Israel also have pacts with India for security cooperation and counter-terrorism intelligence, which open doors for multi-faceted teamwork aimed at wider peace and prosperity. 

There are other examples too with which the EU could consider linking up. South Korea and the UAE elevated their strategic relationship to a ‘special strategic partnership’ in 2018. As part of the plans to develop their future economies, they are keen to engage in projects promoting the fourth industrial revolution. Several of these niche technologies overlap with Israel’s, making it sensible for South Korea to bandwagon on the UAE-Israel deal to enable a win-win-win endgame. Similarly, arid farming is another area for which South Korea and Israel are famous. In a first for the Middle East, a smart farming project envisioned with South Korea in 2018 helped the UAE harvest rice in a desert plot in June 2020.  South Korean firms are also focusing on the UAE’s healthcare and medical tourism sectors and Israeli and UAE firms are cooperating on Covid-19 research and development, including the creation of new testing technology. 

Such broad-based collaboration would enable different countries, with minimal ideological baggage, to potentially pool their talent and resources. Another important factor is the common thread linking most of the EU, Gulf and Asian countries – their strategic partnerships with the United States. In a sign of increasing convergence of their interests across a wide range of sectors, both at the regional and global levels, the UAE-India-Israel trilateral partnership expanded into a quadrilateral arrangement with the inclusion of the United States in October 2021. The focus is on expanding economic and political cooperation in the Middle East and Asia through trade, technology, big data and maritime security. 

France-UAE-India Trilateral

The France-India dynamic has recently gained rapid momentum, finding common cause on regional and global issues. French and Indian companies are exploring joint projects in the Gulf in energy, technology, finance, and other sectors. Of particular interest is the France-India-UAE trilateral ecosystem which is pregnant with possibilities, both from geoeconomic and geostrategic perspectives. 

At the heart of the renewable energy revolution to mitigate the impact of climate change, France, the UAE and India joined hands to spearhead the International Solar Alliance (ISA) in 2018 to generate one terawatt of energy by 2030, which requires about $1 trillion funding. The alliance could ultimately involve more than 120 countries – home to 73% of the world’s population – “…that fall between the Tropics of Cancer and Capricorn, and are exposed to the maximum solar intensity of over 300 days a year”.  There is scope to link the ISA with the UAE-headquartered International Renewable Energy Agency.

On the security front, while Dassault Rafale fighter jets arrived in India in 2020, the two countries’ air forces conducted joint exercises in 2021. In a “cocktail of marketing and geopolitical tactic” of common interests, the Rafale jets en route from France to India were refuelled mid-air by the UAE Air Force and some of these jets even stopped over at the French base in Al Dhafra, UAE.  This could go a step further with the possible collaboration of the three countries in strategic joint manufacturing of defence equipment and aircraft. The UAE and India “are looking at armaments … armoured personnel carriers. We are looking at joint production of aircraft … For example, in the case of Rafale, which we are buying and the UAE is also using, there is some interest. This is something that we can do together in terms of a portion of the Rafale that would be built in India. These are the areas that we are identifying and will work together.” 

It is in the maritime security domain that there is the best opportunity for plurilateral cooperation. France supports “a free and open Indo-Pacific” not only with India, but also with Japan, which pioneered the two-plus-two meetings, involving the foreign and defence ministers, and co-hosts them with both countries, among others. The new push to build France-India collaboration could be viewed as an attempt to fill the void created by the United States’ increasing propensity to pursue an ‘America First’ policy.  Even as Washington is expected to remain New Delhi’s preeminent partner in the Indo-Pacific, Paris’s “resident power” status renders it New Delhi’s partner of choice in the Indian Ocean region.  Enmeshed in this are associated security concerns in the Gulf waters, the mainstay of Asian-European trade and energy supply routes.

In 2020, France invited India to join forces with the European Union’s naval monitoring mission in the Gulf. “EU has operations and China is also developing influence in the region. India is invited to join us in this monitoring mission by bringing capacities. This will be an occasion to demonstrate convergence and the capacity to operate together,” French President’s Diplomatic Adviser, Emmanuel Bonne, said. The cooperation possibilities revolved around military equipment, maritime cooperation in the Indian Ocean, exchanging information and working on doctrinal and operational aspects of naval, air and space coordination.  

Further, in an indication that France and India may have a different approach on China compared to the one promoted by the United States as part of the Quad, Paris said: “We should not counter China but compel China to walk in the same framework as us,” a line that New Delhi would be happy to work with despite its differences with Beijing. Such a non-confrontationist approach would suit the interests of the Gulf countries and encourage their participation as part of a potential Quad-Plus arrangement in the future, which could include France, Germany and the Netherlands, all of them with Indo-Pacific strategies. Ruling out a role for NATO in the Indo-Pacific, Paris said: “We would be happy to work with Japan, India, Malaysia, and Singapore, while Quad members, being close to France, can develop a more integrated strategy.”  

In more concrete developments in the maritime domain, the UAE joined France and India for trilateral naval exercises in the Gulf waters in 2021.  India is looking to post Navy Liaison Officers at the European maritime surveillance initiative in the Strait of Hormuz for improved Maritime Domain Awareness.  France is also conducting another trilateral with the Indonesian Navy. Since the focus of the GCC bloc is on linking and enhancing political-economic-security cooperation, these countries offer potential cross-regional and cross-sectoral collaborative opportunities. 

Since losing a major submarine deal with Canberra, which joined Washington and London to form AUKUS, Paris has intensified collaboration with leading Asian nations for deeper strategic ties in the Indo-Pacific region. The French president’s meetings with Indonesian, Indian and South Korean leaders at the G20 Summit and his visit to the UAE, Saudi Arabia and Qatar in 2021 attest to this consolidation of new partnerships.  Apart from France eyeing Asian-Gulf defence markets, as demonstrated by the late 2021 weapons deals, including Rafale jets, Emmanuel Macron’s visits to the Gulf enabled focus on diverse economic-security cooperation. With Qatar, the UAE and India now part of the Rafale Club, and Indonesia considering adding the French jets to its armoury, there is scope for these countries working together. These overlap with other partnerships taking shape between and among Asian, Gulf and European countries that offer broader collaborative prospects. Further, amid growing China-US competition in the Gulf, these new engagements serve as test cases for surveying alternative strategic partnerships. 

Cooperation on hard security issues is an extension of soft security issues, especially countering extremism and terrorism, which is a common agenda among these partners. New Delhi and Abu Dhabi officially backed Paris’s call to fight “Islamist separatism” after a French schoolteacher was beheaded in 2020 by a terrorist.  Similarly, the UAE and France had a common approach to the Libyan Civil War. Saudi Arabia is also showing rapid signs of shifting towards a more liberalised post-Wahhabi social order as it transitions towards a post-oil economy. For example, of 24 terror suspects turned in by Gulf countries to India between 2012 and 2018, 18 were from the UAE and Saudi Arabia.  Given Indian, other Asian and Gulf countries’ economic interests in Africa, this potentially opens doors for Gulf-Asia-France counter-terror and stabilisation efforts in the Sahel region, for example. 

These resonate well with the UAE-India joint statements issued between 2015 and 2018, which focus on a region-wide security collaboration. They include the need to “work together to promote peace, reconciliation, stability, inclusiveness and cooperation in the wider South Asia, Gulf and West Asia region”; and the resolve to expand the partnership “for the benefit of their countries, for peace, stability and prosperity in their region, and for the betterment of the world”.  Identifying the common threats and challenges of “extremism and terrorism in all forms and manifestations, irrespective of who the perpetrators are and their motivation”, they reiterate that any justification for terrorism and any link between extremism or terrorism and religion should be strongly rejected.

Amid the US-Iran standoff on the Joint Comprehensive Plan of Action (JCPOA), the European approach of preventing nuclear proliferation by Tehran and advocating a diplomatic solution to the crisis is closer to the Asian approach. The E3, European Union, China, Japan, India, and South Korea have emphasised the need to support de-escalation efforts and evolving a diplomatic initiative on regional security. This needs to be continued without undermining the concerns of the GCC countries, especially Saudi Arabia and the UAE, on ballistic missiles. Combining the mediation services of Oman, Kuwait, as well as Asian and European powers – all of them with good ties on either side of the Gulf – could offer greater stability to the region compared to the limited players that are currently negotiating with Iran. With both Saudi Arabia and the UAE recently showing interest in dialogue with Iran,  it could be an opportune time to test the possibility of a wide-angled collective negotiation before diving into a potential collective Gulf security architecture, which is discussed later.

In 2020, E3 completed the first transaction through the Instrument in Support of Trade Exchanges (INSTEX), facilitating the export of medical goods from Europe to Iran.  The special purpose vehicle facilitates ‘legitimate’ Europe-Iran businesses in the wake of US sanctions on Iran after the US withdrawal from the JCPOA. Such an alternative financial system has a parallel in India trading with Iran through an unconventional system of depositing money into a rupee account in UCO Bank, which has no exposure to the US banking system. This India-Iran bilateral banking facility has been in vogue since 2012.  India, Japan and South Korea reluctantly stopped buying oil from Iran after the Trump administration withdrew from the JCPOA. South Korea said in 2021 that it had resolved a dispute, pending a US green light, over $7 billion blocked from Iran. The funds are likely to be used to pay bills outside Iran in line with US sanctions exemptions on “medical devices, Covid-19 vaccines, payment of UN dues”.  Perhaps the most significant development is the 25-year China-Iran ‘strategic cooperation pact’ encompassing political, strategic and economic sectors that was signed in 2021. 

There are also opportunities for Europe and Asia to work together on the Gulf-Black Sea International Transport and Transit Corridor, which, in addition to Iran, involves Armenia, Azerbaijan, Georgia, Bulgaria and Greece. This project links with China’s BRI and the Mumbai-Moscow International North-South Transport Corridor, whose transit routes pass through Iran. It also connects well with Iran’s cooperation with the Moscow-led Eurasian Economic Union, a preferential trade agreement signed in 2019.  

On the security front, while the GCC countries faced the wrath of US-Iran tension in the last few years, especially in late 2019 and early 2020, Washington’s diminished credibility and deterrence value in a region also became evident. To maintain their equidistance with both sides of the Gulf, Japan, South Korea, and India did not join the US-led coalition to protect the Gulf waterways. Japan opted for an ‘independent’ naval mission that avoided the Strait of Hormuz. In 2019, prime minister Shinzo Abe had visited Tehran, the first by a Japanese premier in over four decades, as an unlikely mediator of the US-Iran conflict. Though he suffered a setback with a drone hitting a Japanese commercial ship during his visit, the effort was viewed as “a new development for Japan on the global stage … to play the role of honest broker … to encourage dialogue between two sides seemingly at a deadlock.” 

It is likely that the Biden administration will eventually re-enter the JCPOA, irrespective of the election of Ebrahim Raisi as Iran’s President and the duration of the negotiations in Vienna. Europe and Asian partners should work with the United States and the concerned GCC countries to reduce tension by opening new channels of communication.  Even a modicum of improvement in Saudi-Iran and UAE-Iran ties would help de-escalation in, and stabilisation of, Yemen, Iraq, Libya, and Syria.

While the US-Iran antagonism leaves very little room for improvement in GCC-Iran ties, the new Russia-China-Iran counter-posturing naval exercise is equally detrimental. Beyond the JCPOA, it may be worth trying a more collective effort involving more stakeholders – Eurasian, United States and Gulf countries. Though a long shot, this may insulate against the misgivings of the principal parties in the turmoil. This could also provide a better incentive for the parties to adhere to the terms of the new rulebook, if any. 

Indo-Pacific Strategy and Collective Security

The Indo-Pacific – regarded as the ‘maritime underbelly’ of Asia – is now recognised as the global economic centre of gravity. It is home to nearly 65% of the world population and accounts for more than 60% of the world’s GDP. The region around the Indian Ocean is important as it connects Europe, Asia, and the Gulf countries, thus attracting the interest and attention of the world powers. This necessitates collaborations in various fields, especially maritime security, thus opening prospects for plurilateral partnerships beyond the Quad (United States, India, Japan, and Australia). Despite their contrasting identities, most countries have comparable interests in the Indo-Pacific. They can leverage logistics agreements between and among them, with more involvement between and among their navies.

Reflecting the awareness of the Indo-Pacific region’s growing strategic importance, the EU adopted the ‘Strategy for Cooperation in the Indo-Pacific’ in 2021. The main takeaways of this strategy include working with partners, not only in Europe, but with “third countries for mutual benefit” and enhancing cooperation within regional organisations like ASEAN and Asia-Europe Meeting; readiness to work with, not against, China; and advance a free, open, and secure maritime supply routes as part of its commitment to address transnational security challenges. 

Concepts and forums like the Indian Ocean Rim Association, which has Gulf, Asian and European members, SAGAR (Security and Growth for All in the Region) and the Indian Ocean Naval Symposium could add value in the maritime domain to sustain a safe and secure Indo-Pacific region.  Despite different geographies, the fact that their interests overlap was evident when France, the UAE, Bahrain, Saudi Arabia, South Korea, India, and the United States participated in Desert Flag – a multilateral air combat exercise at the Al Dhafra base in Abu Dhabi – in 2021.

Looking back on the GCC’s ‘Look East’ policy in the economic domain, it may have also been motivated by the long-term calculation that the shift in economic power to the East could impact the West-dominated global political and security order, with wider implications for the region. A combination of US-led ‘misadventures’ in Afghanistan and Iraq, and the US failure to rein in Iran made the GCC countries consider searching for alternative mechanisms. The chinks in the US security approach became more apparent after the attacks on oil tankers and facilities in the Gulf in 2019 and 2020. As the battle intensified between the US’s ‘maximum pressure’ and Iran’s ‘maximum resistance’, two interconnected trends stood out: Washington’s diminished credibility and deterrence value; and the increased security vulnerability for the GCC countries, especially Saudi Arabia and the UAE. Recalibrating the security arrangement to reflect the changing realities could mean several things, including a collective security architecture that brings together principal regional and extra-regional players, including those in Asia, the Gulf, Russia, Europe, and the United States too.

Several Asian countries – which have been riding piggyback on the US naval presence in the region’s waters – are also waking up to a new realisation. Amid Washington’s calls to end the “free riders” practice, they feel that their long-term interests would not allow them to remain dependent on the United States for the security of their energy supply chain.  This has given them another reason to expand their military capabilities, especially their navies, which may be useful to expand their roles in the Gulf .  

Striving to diversify and achieve a strategic balance, Oman allowed port access to all major stakeholders – China, India, the United States, and the United Kingdom. The best indication of China quietly extending its security presence is Chinese naval fleets escorting 6,600 ships between 2008 and 2018 as part of international counterpiracy operations in the Gulf of Aden and waters off Somalia. Of these, 3,400 were foreign vessels.  The UAE and India signed a Comprehensive Strategic Partnership in 2017, which facilitated their first joint naval exercises in 2018. Saudi Arabia and India institutionalised their bilateral dialogue, creating a Strategic Partnership Council in 2019, held their first joint naval exercise in 2020 and followed it up with the first-ever visit by an Indian Army chief to the kingdom.

Japan unsuccessfully ventured in 2019 to ease US-Iran tensions. Undeterred, it is working with other countries, especially France and India, to boost its military presence in the Indian Ocean. The 2019-2020 deployment of ships in the region’s waters by the GCC countries, China, South Korea, India, the United States, and Britain, among others, could be a precursor to the envisaged alternative collective security system.

Such an arrangement does not mean the end of the road for the United States in the region’s security scenario. Rather, it would offer the United States a dignified exit strategy that is in sync with the new ‘America first’ policy. This would ensure Washington’s continued and cost-effective involvement in the region, without being the only one responsible for Gulf security.

But, while Asian and Eurasian cooperation on soft security issues is easy to realise, joint efforts on hard security issues that involve guarantees against perceived external threats are bound to be beset with challenges. This is due to the lack of consensus on shared strategic perceptions and a trust deficit among players involved in the mix.

Since its formation in 1981, the GCC has been preoccupied with security concerns. Yet, the region’s security continues to be perilous. The GCC countries could positively consider alternative arrangements that achieve a strategic balance among their global stakeholders and guarantee a better regional security environment. This strengthens the case for European and Asian countries to collaborate with the Gulf countries to evolve a collective security architecture.

Conclusion

Terming the ‘new’ assertive foreign policies of the Gulf countries, especially the UAE, as symbolic of the “New Middle East”, some have drawn attention to its partnerships with “New Europe” – countries in Eastern and South-Eastern Europe like Serbia and Greece. Apart from several economic deals in recent years, the UAE and Greece agreed in 2021 to participate in joint military exercises, with the possibility of the United States, Cyprus and Israel also partaking in it.

While the GCC countries have become major power players, Europe is largely focused on economic interaction with them. “Competitive European bilateralism has severely undermined efforts to formulate a common European policy on the region – and, accordingly, European attempts to use the EU-GCC format to shape developments there.”  The 2008-2009 global financial crisis added to the EU’s woes by exposing the myth of the infallibility of Western financial institutions. This drove the Gulf countries to shift investments homewards and to Asia and Africa too. Moreover, while the EU has found it difficult to take collective action, there are very few countries in the bloc that have the economic, political or security heft on their own to make an impact on the Gulf countries. 

The situation has become harder due to intensifying intra-European competition for economic opportunities. The EU’s problems are reflected in the GCC bloc too, with the discord over Qatar’s political affiliations leading to its boycott in 2017 and the UAE-Saudi economic competition that made the headlines in 2021. Thus, the EU and GCC are in similar boats in not being able to achieve consensus on strategic issues.


The EU has also struggled to develop a common European foreign and security policy, leaving the United States to lead on these issues. Asia, on the other hand, is advancing its economic interests through ‘quiet’ political and security investment and involvement. Some Chinese tactics that EU members could benefit from are: one, “quasi-mediation diplomacy,” which promotes defending “commercial, political and diplomatic interests rather than core security and strategic interests”; and two, investing in conflict ‘management’ over ‘resolution’ in dealing with Saudi and UAE’s differences with Turkey and Iran.  

Europe has to come to terms with not only the declining US dominance but also the growing influence of the Gulf countries in the region and beyond, and the increasing role of the Asian powers. A more strategically effective role, in coordination with the Gulf and Asian countries, individually and in groups, is the need of the hour. Such an approach will also give the EU opportunities in the wider Middle East, where the GCC countries are influential players now.

In dealing with the Gulf region by ‘cultivating’ Asia, the idea of minilateralism or plurilateralism could be beneficial. It is “voluntary rather than legally binding; disaggregated rather than comprehensive; trans-governmental rather than just intergovernmental; regional rather than global; multi-level and multi-stakeholder rather than state-centric; and ‘bottom-up’ rather than ‘top-down’.”  This approach is narrower in scope, informal, less bureaucratic, task-oriented, economical, and effective too. Institutionalised multilateral solutions to global problems may become tougher in future amid increasing competition and stress on strategic autonomy among members of various organisations and blocs. Even if the EU manages to find ways to evolve a common minimum programme to pursue, it is unlikely to garner consensus within the GCC bloc. The fact that the Gulf Union, promoted by Saudi Arabia after the outbreak of Arab Spring in 2011, did not gain traction, is proof of the misgivings within the bloc, which have only intensified thereafter.

While minilateralism has its advantages, there are risks too. If not delicately handled, it could undermine existing relations and promote rivalry over partnerships. But, in a milieu where existing mechanisms are insufficient, the pros of minilateralism or plurilateralism far outweigh the cons.

Another idea promoting plurilateralism is the “Eurasian age”, where the “new century” promises “not the emergence of a new centre but a world balanced between Western and Asian poles. Contrary to the Cold War, these two poles will be deeply integrated … For all their differences, the main political and economic blocs are increasingly integrated. Modern society by its very nature pushes towards larger spheres of action and technology breaks old barriers of geographic distance. By combining contradiction and integration, we are entering the second age of globalisation, where borders tend to dissolve but cultural and civilisational differences do not.” 


About the author


Dr N. Janardhan is a Senior Research Fellow in the Gulf-Asia Programme at the Anwar Gargash Diplomatic Academy, Abu Dhabi, and offers diplomats PGD and MA courses on foreign policies of the Gulf and Asia. His academic publications include – The Arab Gulf’s Pivot to Asia: From Transactional to Strategic Partnerships (Ed, Gerlach, 2020); A New Gulf Security Architecture: Prospects and Challenges for an Asian Role (Eds, Gerlach, 2014); and Boom amid Gloom: Spirit of Possibility in 21st Century Gulf (Ithaca, 2011). With a PhD from Jawaharlal Nehru University, New Delhi, he is Managing Assistant Editor of Journal of Arabian Studies (Routledge).

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