The new geopolitics Annual Report 2020 About the CER The Centre for European Reform is an award-winning, independent THE CER IN think-tank that seeks to achieve an open, outward-looking, FEBRUARY 2021 FROM LEFT TO RIGHT, influential and prosperous European Union, with close ties to its TOP TO BOTTOM: neighbours and allies. The CER’s work in pursuit of those aims is Simon Tilford, Rosie guided by the same principles that have served us well since our Giorgi, Luigi Scazzieri, Jordan Orsler, foundation in 1998: sober, rigorous and realistic analysis, combined Daniel Keohane, with constructive proposals for reform. Sophia Besch, John Springford, Camino The CER’s reputation as a trusted source of intelligence and timely analysis Mortera-Martinez, Ian of European affairs is based on its two strongest assets: experienced and Bond, Katherine Pye, respected experts, plus an unparalleled level of contacts with senior figures Christian Odendahl, in governments across Europe and in the EU’s institutions. Since the UK’s Kate Mullineux, Charles Grant, Sophie Horsford referendum on EU membership we have reinforced our networks in and Sam Lowe Europe by opening offices in Brussels in January 2017 and Berlin in October 2018. The diverse perspectives and specialisations of our researchers, half of whom are from EU-27 countries, enhance the quality and breadth of our work on European politics, economics and foreign policy. The CER is pro-European but not uncritical. We regard European integration as largely beneficial but recognise that in many respects the Union under- performs, at home and beyond its borders. We look for ways to make it work better and then promote our ideas through publications, the media and various forms of direct engagement. The CER’s audience ranges from European politicians and officials, to journalists and the wider public who want to know more about the EU and its activities. The CER believes it is in the long-term interests of the EU and the UK to have the closest economic and political relationship that is compatible with the political realities. We follow closely the trials and tribulations of the eurozone and the European economies, as well as the EU’s single market and its energy, climate and trade policies. We also study the Union’s foreign, defence and security policies – including relations with its neighbours, and with China, Russia and the US; its approach to refugees and migration; co-operation on law-enforcement and counter-terrorism; the functioning of the EU’s institutions; and the state of democracy in Europe. Since the British referendum, the CER has played an active part in developing viable and practicable proposals for the UK’s future relationship with the EU. ANNUAL REPORT 2020 February 2021 3 [email protected] | WWW.CER.EU Deadly coronavirus, domineering China and divided America by Charles Grant A few weeks after the 9/11 terrorist attacks, Tony Blair gave one of the ABOVE: most powerful speeches of his career to the Labour Party’s annual Charles Grant conference. “The kaleidoscope has been shaken, the pieces are in flux, soon they will settle again,” he said. “Before they do, let us reorder this world around us.” That shake of the kaleidoscope led to wars in Afghanistan and Iraq, with profound geopolitical consequences. The kaleidoscope was further shaken by the financial crisis of 2008-10. Now the global order is once again being stirred, as a consequence of four years of President Donald Trump and the COVID-19 pandemic. This double whammy – like the earlier shake-ups 1) The US’s reputation will take time to recover – is strengthening an increasingly self-confident from the damage inflicted by Trump, but Biden China but creating profound problems for the US will breathe new life into multilateralism. and Europe. The liberal democratic values they espouse, and their leading role in international Trump had his friends overseas – such as fellow institutions, are being challenged. Can the arrival strongmen Jair Bolsonaro, Narendra Modi and of Joe Biden as US president, and renewed Benjamin Netanyahu. And he had a soft spot momentum for European integration, restore for dictatorial leaders like Vladimir Putin, Viktor the self-confidence of the Western democracies? Orbán, Mohammed bin Salman, Recep Tayyip This essay looks at 12 geopolitical trends that will Erdoğan and Kim Jong-un. Overall, however, matter for Europe. Trump’s four years as president have greatly weakened America’s standing in the world. Most 2) Every global crisis appears to strengthen of its democratic allies found his antics – the China’s self-confidence. But its increasingly incessant tweets and lies, the unpredictability assertive foreign policy will produce a hostile and narcissism, the disdain for allies and reaction. international organisations, the America-first rhetoric and the policies that sometimes veered Despite its embarrassing cover-up of the early towards racism – contemptible. America’s image phases of the pandemic in Wuhan, China has has suffered further from Republican leaders performed relatively well during the coronavirus claiming that Trump had won the election, even crisis. It has suppressed the virus, achieving a after he had clearly lost, and from a majority of strikingly low death rate (officially, about 5,000 Republican voters believing that Biden cheated of the 1.4 billion Chinese have died of COVID-19). his way to victory. The US can no longer claim to That medical success helps to explain China’s be a shining beacon for democracy. impressive economic performance: growth of nearly 2 per cent in 2020 and 8 per cent Meanwhile America’s handling of the COVID-19 expected in 2021. pandemic has been among the worst: by January 2021 it clocked up 24 million cases and 400,000 As happened during the financial crisis, China’s deaths. As in other countries, failure to contain many admirers, notably in developing countries, COVID-19 led to poor economic performance: can argue that its authoritarian system of having grown respectably during Trump’s first government delivers better outcomes than three years, the US economy shrank by 3.6 per Western democracy. China’s leaders, and as far as cent in 2020 (though most European economies one can tell, many of its citizens, are convinced of did much worse). that point. China's many admirers can argue that its China’s out-performing the West has reinforced Xi Jinping’s self-confidence and his emphasis on authoritarian“ system of government delivers better the importance of one-party rule, the need to outcomes than Western democracy. combat Western ideology and the necessity of ” his own personal leadership. Economic success The arrival of the more predictable Biden, who also makes it hard for cadres to oppose the respects allies and takes multilateral institutions centralisation of power in Xi’s own hands. In the seriously, will improve the US’s image, at least coming years both a build-up of debt and an in the more democratic parts of the world. But ageing population are likely to moderate China’s Biden’s ability to push through new legislation growth rate. Nevertheless China will remain – for example on climate change – will be politically stable for the foreseeable future, and – constrained by the Republicans holding half the in relative terms – economically successful. seats in the Senate. In the 21st century China has learned to play Most of Biden’s priorities will lie at home – the multilateral game. Its citizens hold key jobs fighting COVID-19, reviving the economy and in numerous international bodies, such as the trying to heal social divisions – where he will World Bank and the International Monetary be in constant conflict and/or negotiation Fund. Four of the UN’s 15 specialised agencies with Republican leaders. But Biden will have are run by Chinese nationals: the Food and a relatively free hand in foreign policy, except Agriculture Organisation, the International where his policies require money or treaties in Telecommunication Union, the United Nations order to succeed. Biden will care much more Industrial Development Organisation and the than Trump about human rights and working International Civil Aviation Organisation. This is with friendly nations. He will take international the result of patient diplomacy and the calling institutions very seriously, including the World in of favours from countries that have received Health Organisation (which the US will rejoin), Chinese largesse, for example, in the Belt and the World Trade Organisation (which he will Road Initiative. try to reform), NATO (which he will support unequivocally) and the EU (with which he In its efforts to show that it is a good global will seek a constructive relationship). Under citizen, Beijing will probably sign up to ambitious Biden, the US has returned to the Paris climate long-term carbon-reduction targets. But it may agreement and will play a big role in the COP-26 talk the talk on climate change without walking climate conference. the walk, at least in the short to medium term: it is likely to push ahead with plans for the mass building of coal-fired power stations, including in other countries. ANNUAL REPORT 2020 February 2021 5 [email protected] | WWW.CER.EU China’s influence in international institutions is a research project with a Chinese university. likely to continue growing. But its conduct while Similarly, the large multinationals that invest in a member of bodies such as the UN Human China cannot ignore public opinion. Rights Council (where one term of Chinese membership ended in 2019 and another starts 3) The economic and strategic rivalry between in 2021) has undermined their credibility in the the US and China will dominate geopolitics – eyes of some democracies. and pose problems for the EU.