Estonia External Relations Briefing: a Possible Critical Juncture: a Continuation E-MAP Foundation MTÜ

ISSN: 2560-1601

Vol. 40, No. 4 (EE)

May 2021

Estonia external relations briefing: A possible critical juncture: a continuation E-MAP Foundation MTÜ

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Kiadásért felelős személy: Huang Ping china-cee.eu 2017/01

A possible critical juncture: a continuation

Closer to the end of May, a report came about on the European Parliament having voted “to freeze the legislative process for ratifying the EU’s investment pact with China”1. However, it was not the final news on the multi-faceted EU-China theme. In a day, Politico interviewed Gabrielius Landsbergis, Lithuania’s Minister of Foreign Affairs, who announced that “[t]here is no such thing as 17+1 anymore, as for practical purposes Lithuania is out”2. The media source noted that Lithuania “urged other EU countries to follow suit” and then further quoted the same Minister’s clarification of the decision made:

From our perspective, it is high time for the EU to move from a dividing 16+1 format to a more uniting and therefore much more efficient 27+1. […] The EU is strongest when all 27 member states act together along with EU institutions. […] Vaccination rollout, tackling pandemics are just [a] few recent examples of the EU-27 united in solidarity and purpose. Unity of [the] 27 is key to success in EU's relations with external partners. Relations with China should be no exception.3

There was no surprise that China’s reaction on such a development appeared to be fast. Global Times quoted Liu Zuokui, an influential representative of the Chinese Academy of Social Sciences, who noted that the Baltic nation’s “withdrawal will have no impact on the 17+1 cooperation”, adding that “withdrawal can help reduce ‘some negative assets’ from the mechanism”4. What does this all mean for Estonia?

From April 2012, when the then Chinese Prime Minister Wen Jiabao went to Poland to initiate the 16+1 and express his country’s hope to “to double trade with the countries of Central and Eastern Europe to $100 billion a year by 2015”5, Estonia has been keeping a rather low profile

1 ‘European Parliament votes to ‘freeze’ investment deal with China’ in Business Standard, 21 May 2021. Available from [https://www.business-standard.com/article/international/european-parliament-votes-to-freeze- investment-deal-with-china-121052100053_1.html]. 2 Gabrielius Landsbergis as cited in Stuart Lau, ‘Lithuania pulls out of China’s ’17+1′ bloc in Eastern Europe’, Politico, 21 May 2021. Available from [https://www.politico.eu/article/lithuania-pulls-out-china-17-1-bloc- eastern-central-europe-foreign-minister-gabrielius-landsbergis/]. 3 Landsbergis as cited in Lau. 4 Liu Zuokui as cited in Chen Qingqing and Yang Kunyi, ‘Lithuania’s decision to quit China-CEEC 17+1 won’t change fundamentals of platform’, Global Times, 23 May 2021. Available from [https://www.globaltimes.cn/page/202105/1224260.shtml]. 5 Melissa Eddy, ‘China Wants More Trade with Central and Eastern Europe’ in The New York Times, 26 April 2012. Available from [https://www.nytimes.com/2012/04/27/business/global/china-wants-more-trade-with- central-and-eastern-europe.html].

1 in the China-designated cooperational framework, which, with the time, appeared to be yet another integral part (one of many) of the Belt and Road Initiative (BRI). Objectively, via its BRI, China is trying to unify about all of the country’s foreign policy-associated directions, except its communicational channel with the United States. Within the framework, especially keeping in mind official Brussels’ initial 4-year-long ‘quietness’ in terms of expressing its reaction on the BRI, the EU as a politico-economic entity can be seen as just a destination for Chinese goods rather than a partner on the other side of the grand idea. However, this is where the EU started having a big problem with such an understanding, and this is where the EU- China communication is currently not having any visible successes. One may also argue that the shortcomings can be easily detected on either side – firstly, the EU’s true identity as a global actor is not quite comprehended in China, but it has also not been worked out properly by the EU as well; secondly, a relative level of stability in trade (when, in the pre-pandemic era, the EU and China were enjoying a mind-blowing one billion a day trading activity) does not necessarily mean a true geo-strategic ‘love’ existing between the two parties. In short, China is at the position that it has no right to even think that it can possibly fail with the BRI, the EU is still searching for its identity to be projected clearly to the international community, and countries like Estonia are left with the single option to stick with the most reliable frameworks they have access to and the most loyal partners they have been friendly with for decades. It appears to be a simple observation, but it has plenty of empirical evidence to support itself.

Interestingly enough, however, Estonia’s export to China has, indeed, nearly doubled from 2012, reaching USD 281.97 million during 20206, while China’s exporting trend to Estonia is going downhill (USD 864.08 million in 2020, or nearly 1.5 less than it was in the same 20127). One could argue that Estonia’s success in selling more to China cannot be entirely, if at all, attributed to the country’s quasi-participation in the 16/17+1. After all, there are many other methods to introduce Estonia’s products to different markets, including the vast market of the world’s most populous country. At the same time, one cannot deny some tangible effectiveness received by Estonia-based producers of good out of the Chinese government-promoted attempt to welcome more importers into the country, for example, via China International Import Expo in Shanghai (even though Estonian manufacturers and service providers have never been seen in high numbers over there).

6 ‘Estonia exports to China’ in Trading Economics. Available from [https://tradingeconomics.com/estonia/exports/china]. 7 ‘China exports to Estonia’ in in Trading Economics. Available from [https://tradingeconomics.com/china/exports/Estonia].

Suddenly, the pandemic has managed to irreversibly change the global political economy, significantly adjusting the EU-China relations and outlining the obvious – the two sides, while treating each other as strategic partners because of enormous trade, have never had a sincere conversation on each other’s geo-strategic intentions. In a way, it should not be considered an ‘unfinished’ discussion, because, objectively speaking, the actual talk has not even started. As it was already mentioned, for Estonia, in the absence of the EU’s common vision on the issue, there had been only one option left to be utilised – to try to comprehend the situation from its own, security-focused, perspective, considering its full membership in both NATO and the EU. The fact that one of the world’s major powers from Asia is trying to designate a region in Europe to cooperate with seemed rather extravagant for many decision-makers in Estonia. Back in August 2020, Urmas Reinsalu, the then Minister of Foreign Affairs, noted that Estonia is planning to “reinterpret the meaning of 17+1 in the near future”8. No decision on whether to stay in or leave the framework was made then, and, in February 2021, Eva-Maria Liimets, Reinsalu’s immediate successor, was planning to “definitely be present for the [then upcoming 17+1 summit]”9.

Characteristically for that particular high-level summit and knowing that China would definitely prefer for the framework’s participants to be represented by either Presidents or Prime Ministers, the Estonian delegation was headed by the Minister of Foreign Affairs, and a similar stance was adopted by Bulgaria and Slovenia (they sent Deputy Prime Ministers) and Lithuania and Romania (they sent other Ministers)10. On the Chinese side, President Xi Jinping represented the highest level of his massive country’s executive power. This representational disbalance clearly showed that the 17+1 became unstable, losing even the ephemeral ground it had before the pandemic. There is a likelihood that the Lithuanian demarche, which made the 17+1 dropping one point of the left side, can become a serious catalyst for further re-designing of what has now become the 16+1 framework. Most probably, this development, with necessity, will mean a more articulated ‘presence’ of the Three Seas Initiative in the same region, while China is likely to start concentrating more on the outer-EU ‘space’ – Serbia, Bosnia and Herzegovina, and, possibly, Montenegro and Albania. The latter two are NATO members,

8 Urmas Reinsalu as cited in ‘Reinsalu hints at Estonia's possible withdrawal from China's 17+1 format’, ERR, 26 August 2021. Available from [https://news.err.ee/1127434/reinsalu-hints-at-estonia-s-possible-withdrawal-from- china-s-17-1-format]. 9 Eva-Maria Liimets as cited in ‘Liimets says Estonia to attend 17+1 meeting with China’, ERR, 4 February 2021. Available from [https://news.err.ee/1608097300/liimets-says-estonia-to-attend-17-1-meeting-with-china]. 10 ‘Expert: Estonia right in distancing itself from 17+1 format’ in ERR, 10 February 2021. Available from [https://news.err.ee/1608104242/expert-estonia-right-in-distancing-itself-from-17-1-format].

3 which will be making the ‘story’ even more complicated. On the Estonian case, the country’s Prime Minister Kaja Kallas once mentioned that Estonia’s previous Governments used to attend the past 16/17+1 summits on the prime-ministerial level, but now the strategy is rather different:

In its relations with China, Estonia prefers bilateral cooperation and operating in the EU 27+1 format that enables the development of relations on the basis of EU unity, based on the EU’s common values and interests. This also applies to the protection of human rights, including in China. […] [W]e are reviewing our policies. An Asia strategy is being finalised, which takes a more systematic and meaningful approach to cooperation with Asia and Asian countries. This also applies to different formats and participation.11

In a more recent statement on the prospects of China-Estonia cooperation, Prime Minister Kallas underlined that “[e]ventually, our relationship will come down to finding a balance between challenges and opportunities”12. It looks like the ‘challenges’ part comes up first, before reaching the ‘opportunities’. With time.

11 Kaja Kallas as cited in ‘Expert: Estonia right in distancing itself from 17+1 format’. 12 Kaja Kallas as cited in ‘Prime minister: China appeal welcome address on concerning issue’, ERR, 16 April 2021. Available from [https://news.err.ee/1608180598/prime-minister-china-appeal-welcome-address-on- concerning-issue].