Tue, Apr 12, 2005 - Page 8 News List

EU arms embargo must be kept

By Yang San-yi

When US Secretary of State Condoleezza Rice paid a visit to Beijing last month, she cautioned the EU not to lift the arms embargo on China because it would "alter the military balance in a place where the US has very strong security interests," a very clear signal for Brussels.

Almost simultaneously, the EU summit (European Council) in Brussels said that the EU would probably postpone lifting the arms embargo despite the fact that the EU had hoped to establish a closer EU-China relationship since Tiananmen Square.

The contentious issue of whether to lift the arms embargo is currently mired in fervent discussion between the EU and the US, but most of it has failed to sufficiently illustrate why the EU intends to construct a more comprehensive framework within a Eurasian context. I wish to discuss the reasons why EU intends to lift the arms embargo on China.

Most observers concentrate their attention on the importance of EU-Sino strategic alliances and commercial interests. This coincides with a realist approach and an institutional explanation: the Franco-German alliance aims for a multi-polar world. In this regard, they share common strategic interests. On the other hand, they also take into account the massive potential of the Chinese market.

With its emergence in Asia as a significant regional entity and rising power, no major corporation in the world can withdraw itself from the vast economic attractions of China. The EU is China's second-largest trade partner and vice versa. This is especially significant because the EU's defense industry faces harsh competition in both the domestic and international spheres.

Unlike standard commercial activities, the defense industry is currently exempted from normal competition rules that apply to the European internal market because it is considered a national security issue.

Nevertheless, when the European defense Agency (EDA) was formed in July, its main goal was to integrate the EU member states' defense industries as efficient and integrated when facing global competition (especially from the US). The decision to open up Europe's 30 billion euro (US$38.7 billion) defense market is likely to emerge as a key part of the member state co-operation within the EDA. A lack of competition would mean that member states would be paying too much for defense equipment from producers, which leaves them with fewer resources for research into new technology.

By prodding the EU into taking into account the Chinese market, the European Aeronautic Defense and Space Co and British Aerospace have better prospects. Indeed, they did a good job for the past several months in persuading the EU to lift the embargo.

Arguably, the EU's defense industry shares in China were marginal until 2002, but its prospects are quite positive. According to a report in The Economist, the volume of China's defense industry will rise to US$150 per year in the near future despite the fact that the EU's share of China's import trade was only 2.7 percent last year.

In this context, it is not difficult to imagine why France, Germany, Great Britain and other EU members want to meet China's vast commercial interests.

What's more, a political alliance between the EU and Russia on this issue is more likely as the arms embargo looms large.

Surprisingly, the EU possesses advanced technologies in the sphere of generators, communications and night-vision telescopes. With the help of the EU's technology, the People's Liberation Army (PLA) could easily promote their all-weather and digital warfare capabilities. It will tilt the balance across the Taiwan Strait and even deter the US from military action in the face of regional crisis or conflict. This is especially crucial as China becomes more and more confident in dealing with Asian affairs and intervening in cross-strait relations.

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