Why Europe is looking at emerging markets

The new European Commission celebrated its first 100 days in office last week with key achievements including a new industrial strategy to underpin its digital and geo-economic ambitions. Yet it is on the foreign policy front that Brussels has put perhaps most effort with its goal to begin making Europe stronger in the world, post-Brexit.

One of the key focal points for this agenda has so far been engaging in areas from trade disputes with the United States through to climate change diplomacy, five years after the Paris treaty, as Europe seeks to become the world’s first climate neutral continent by 2050 and promote its Green New Deal.

From the great power game underway between the EU-27, Russia, China, the United States, among others, interest in the continent is only likely to grow, and Brussels is determined to double down to try to get ahead of the game

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However, it is specifically in relation to emerging markets across the world, from India to China and Africa, where this more prominent European international policy stance may be taking most root.

Emerging markets giant

On Friday, for instance Brussels was scheduled to host the EU-India Summit with Prime Minister Narendra Modi, but this was postponed because of the coronavirus outbreak. The EU (at just under 450 million in population), which is India’s biggest trading partner, wants to turbocharge ties, including agreeing a new trade deal with the approximately 1.3 billion population emerging markets giant.

Brussels is also making final preparations for the March 30-31 summit with the over 1.3 billion population China hosted by Prime Minister Li Keqiang in Beijing. This will be followed by an unprecedented second bilateral summit in a year when President Xi Jinping will travel to Germany to be hosted by German Chancellor Angela Merkel and the other EU-27 leaders at which meetings it is hoped that a big bilateral investment treaty may be signed.

Yet, critical as India and China are to Europe’s future, it is the approximately 1.2 billion population African continent which has assumed super-priority foreign policy focus for the new Commission in its first 100 days. This was symbolised last week when President Ursula von der Leyen launched the EU’s new Africa strategy.

Africa has become an EU super-priority for a range of both political and economic reasons, and last month new president of the European Council Charles Michel alone had some two dozen bilateral meetings at the African Union Summit as part of Brussels attempts to reshape relations with the continent. Michel’s visit follows Von der Leyen’s visit to the continent in December, her first month in post.

Infrastructure capital

Building upon a new Africa-Europe Alliance created in 2018, she is promoting a relationship increasingly based on investment rather than aid, rivalling China’s focus on providing infrastructure capital. As is apparent in the new strategy that Brussels released Monday, it increasingly sees itself as a counterweight in the continent to other prominent world powers, and wants to encourage Africa as a champion of the EU’s rules-based, multilateral approach to world order.

As much as Brussels sees Africa as a political partner, however, it is also aware of the continent’s forward economic growth potential. The IMF asserts for instance that in the years to 2023, Africa’s overall growth prospects will be among the best in the world with an increasing number of key emerging markets.

The growing economic weight of the continent is illustrated, for instance, by the fact that it houses six of the world’s fastest growing countries.

Yet another reason for Europe’s designation of Africa as a super-priority is that it knows it is playing ‘catch-up’ vis-a-vis others in the region, including China and Russia, while other western allies such as the United States and post-Brexit Britain are keen to steal a march too.

The most extensive diplomatic serenading of Africa lies with China which is aiming to better connect its huge Belt and Road economic initiative with the continent’s development. Trade between the two powers has risen dramatically and around 40 African countries having signed onto Belt and Road.

Economic and political foothold

With Africa rising, others are taking notice too. Take the example of Vladimir Putin who hosted last year the first ever Russia-Africa summit seeking to restore Moscow’s influence in the region that faded after the collapse of the Soviet Union. Putin is keen to entrench Russia’s economic and political foothold in the continent and he wants to double bilateral trade in the next five years.

Post-Brexit Britain, fresh from its departure from the EU, is also courting the continent and held in January a major UK-Africa Investment Summit. London increasingly wants to enhance economic ties with the continent as shown, for instance, by last September’s creation of a new Economic Partnership with the Southern African Customs Union.

Meanwhile, even Donald Trump’s United States is getting in on the act too after largely neglecting the continent during his presidency. Last month, Mike Pompeo finished up his first trip as US secretary of state to Africa to reassure allies of Washington’s commitment.

Taken overall, it is this combination of strategic rivalry, plus also the big economic and political opportunity that Europe sees in Africa, driving its upsurge in attention to the continent.

From the great power game underway between the EU-27, Russia, China, the United States, among others, interest in the continent is only likely to grow, and Brussels is determined to double down to try to get ahead of the game.

Andrew Hammond is an Associate at LSE IDEAS at the London School of Economics