3. Money
3.4. EU: Common Foreign and Security Policy
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needed another two years before they completed all the procedures to ship their first products.
Thus, as a matter of fact, only the entry to the PRC market required a total of nine years.
The price of the beer puts it among the higher price goods – the recommended price was set to 26.00 元 for a bottle ("捷克原装百得福小麦白啤酒"). Local beers and foreign beers produced in the PRC are often half the price and hence, the competitiveness of the Czech beer in terms of price, is not very high. This is mainly due to the fact that in contrast to the international beer, Budvar is not produced in the PRC and is imported to the market. The future of the brand therefore seems to lie in front of the crossroad – it will either remain a rather high end goods or move its production to the PRC and thus, to easier attract a mass consumer.
3.4. EU: Common Foreign and Security Policy
EU Member states have committed themselves to a Common Foreign Security Policy (CFSP) for the European Union. The European Security and Defense Policy (ESDP) aims to strengthen the EU's external ability to act through the development of civilian and military capabilities in conflict prevention and crisis management. Creating the CFSP and ESDP enables the 27 EU member countries to speak and act together rather than 27 individual players.
All the EU members have established diplomatic relations with the PRC and also established non-official ties with the ROC. Since the ROC has lost membership in the United Nations, European countries did not participate in solving the so-called Taiwanese issue29 and despite the increasing number of economic and cultural exchanges between the ROC and Europe,
29With the exception of the United Kingdom's participation in the Cairo and Postdam inter-Allied conferences in 1943 and 1945.
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European countries have always maintained the One-China policy, recognizing the PRC as the only legitimate representative of China within the international community. As a consequence, the EU does not recognize the ROC as a sovereign state and does not have diplomatic ties with it.
The EU does, however, recognize the ROC as an economic and commercial entity and has solid relations with it in non-political areas. In fact, over the years Taiwan has become an important EU trading partner and is currently the EU’s third largest trading partner in Asia. Taiwan’s importance is nevertheless minor if compared to that of the PRC, which is currently the EU’s second largest non-European trading partner after the US.
Signing any contract with the ROC could be perceived as its recognition and hence, official diplomatic relations with the ROC are in the EU member countries substituted by parliamentary diplomacy and also by bilateral business and cultural relations on the non-governmental level. One of the Czech scholars however suggested that it would be nevertheless possible to initiate relations with the ROC on the governmental level between an EU member state and the government representing not the ROC but "Separate Customs Territory of Taiwan, Penghu, Kinmen, and Matsu.30 Yet, such a method of relations with the ROC has, expect for a EU members relations with the ROC via the WTO, not been executed yet.
The EU and the PRC established diplomatic ties in 1975. The relationship flourished and in 2003 entered the stage of strategic partnership. More than 50 consultation and dialogue mechanisms at various levels have been established, covering a wide range of fields, including politics, economy and trade, science and technology, energy and environment. The EU, as it is
30Report for Members of Parliament and Senators.
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well-known, in contrast to the US, does not have any territorial interest in the area and also, as opposed to the US has not been very active in addressing the human rights issue.
On the basis of the common EU position, the CR actively engages in interaction with the PRC also in multilateral fora, such as the UN system, the EU-ASEAN+3 events or at the events and activities within the framework of the Asia-Europe Meeting (ASEM). The most important question in relation to the conduct of foreign policy via the EU is whether the EU provides any room for maneuvering?
The EU-PRC's relations faced its first test in 2004–05 when the European Commission (EC) sought to lift the arms embargo that Europe had been placed on the PRC in the wake of the June 4th massacre in 1989. The PRC saw the embargo as an insulting Cold War relic, and also France and Germany argued strongly that after 15 years the embargo was an anachronism. Both sides framed the embargo as more of a symbolic issue than a strategic concern. In 2004 the European Council decided that the EU would work towards lifting the arms embargo in early 2005, and this statement was by the PRC perceived as a formal commitment for lifting the embargo. But due to criticism from many sides, including EU member states, the European Parliament (EP), the US and Japan, the campaign to lift the embargo went in 2005. After China’s National People’s Congress passed the Anti-Secession Law in March 2005, which threatened the ROC with military invasion, most of the EU’s enthusiasm for lifting of the embargo had drained away.
Under the shadow of the US-UK invasion of Iraq in March 2003, which was leading to an insurgency by summer 2003, both the EU and China published very hopeful documents in autumn 2003 about their policies towards each other: ‘A Maturing Partnership – Shared Interests
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and Challenges in EU-China relations’ from Brussels and ‘China’s EU Policy Paper’ from Beijing. These reports demonstrate how, in the words of a European think-tank analyst, ‘EU-China relations have never been better.
Although a quick reading of EC and PRC policy papers makes many people think that a new ‘strategic partnership’ has been founded, a closer reading shows that the future perfect tense, which is used to express action completed by a specified time in the future and words such as ’growing’, ‘developing’, and ‘maturing’ relations, and ‘hopes’ are often used in these documents.
The expansion of ties between the EU and the PRC legitimize both sides in their domestic and international politics because the new relation reaffirms each side’s image of itself and the other: talk of a strategic partnership helps the EU’s project of crafting the image of Europe as a
‘civilian power,’ and on the other hand, it also helps the PRC to construct a view of the PRC as a non-hegemonic superpower. The US and the EU approach towards the PRC is by some scholars perceived as so different that it may be summarized by Robert Kagan’s argument that
"Americans are from Mars and Europeans are from Venus also applies to relations with China:
against US suspicion of China’s rise, Europe has been downright enthusiastic"(Callahan 779).
Since the EU’s close relations with the PRC are based on strong trade and investment ties with Germany, France and the UK, which have grown to include close cultural ties as well, the Czech Republic has not been a priority for the PRC. As the EU took on more responsibility for the PRC policy in Europe, a division of labor developed. After 1996, the EC concentrated on touchy issues like human rights through a bilateral dialogue, leaving member state governments free to pursue profitable economic ties.
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has, in fact, acted as a driving force within the EP and has become the promoter of most reports and resolutions adopted on the ROC. The EP has several times taken a critical stance towards the PRC’s policies. During the Taiwan Strait crisis in 1996, for example, it condemned the military exercises the PRC conducted in the coastal areas opposite the ROC while the presidential elections were about to take place on the island. And in 2002, it adopted two resolutions deeming"unacceptable" the fact the PRC reserved the right to use military force in the cross-strait dispute and asking for a peaceful resolution of the question.31
The EP, as has already been mentioned, has been particularly skilful in maneuvering within the lines of One-China policy. The EP's had repeatedly asked for the creation of a EU representative office in Taipei, which was consequently opened in March bearing the official title of the Economic and Trade Office in the ROC. Other area in which the EP's actively support the ROC is visible in inviting important ROC politicians to take part in their meetings, which is however met with opposition from the EU Member States which have refused to grant visa permits to ROC politicians.32 Furthermore, the EPs have also worked to decrease the ROC's isolation. In 1996, they supported higher representation of the ROC in the international community, including bodies under the UN General Assembly, whose membership is usually
31European Parliament, Resolution on the EU strategy towards China, 11 April 2002; and Resolution on a strategic Partnership between Europe and Asia, 5 September 2002.
32On March 2003, the Parliament invited Taiwan's President Chen Shui-bian to participate in an informal meeting.
The politician, however, was not granted a visa permit by the Belgium government.
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reserved for sovereign states, membership of the World Trade Organization,33 membership of the World Health Assembly (WHA)34 and others (Zanon). Many scholars view the EU's PRC policy and the EU generally as not unified. "Going forward, the EU-China relationship looks a little like a gigantic patchwork quilt, many coloured, many splendorous in places, but in need of greater coherence (Moran 5)" For this member states, especially the Germany, France and the UK, for their greedy lack of discipline.
The EU is already the PRC’s number one trading partner and the PRC is the EU’s second largest trading partner behind the United States. Trade relations between the PRC and the EU have been developing very fast, more than doubling between 2003 and 2007 (Taneja 372-373), tying the two sides in a complementary and interdependent relationship. The economic crisis in Europe has not brought any sort of reversal in terms of the form or size of trade between the PRC and Europe. It must be noted that 2009 has been an important year for the EU-PRC relationship.
The EU-PRC trade has decreased in 2009. Yet, while the European imports from the PRC have gone down (about 13.6 per cent decrease) ("China – Trade Statistics"), EU exports to the PRC seem to have remained largely stable (7.5 per cent increase) ("China – Trade Statistics").
According to many scholars, in a remarkably short time frame, economies of the EU and the PRC have integrated to a point where it is difficult to imagine one without the other. The economic crisis has however raised a question whether it is not only the EU which cannot imagine its trade without the PRC.
33 Taiwan joined it in January 2002 as a “Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsù.” See for example: European Parliament, Resolution on the Accession of the separate customs territory of Chinese Taipei (Taiwan), Penghu, Kinmen and Matsu to the WTO, 25 October 2001.
34The Parliament approved two resolutions in this respect: Resolution on Taiwan, 14 March 2002 and Resolution on Taiwan 15 May 2003, both calling for Taiwan to be granted observer status respectively at the 54th and 55th annual World Health Assembly.
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Despite the common Western heritage there has been a different approach towards the PRC. Although in general the exchange of goods between the PRC and Europe has grown significantly, there is a clear distinction to be made between the West countries and the COMECON countries, one of which was the Czech Republic. Trade relations between West countries and the PRC developed rapidly from early on, while the latter experienced only sluggish growth in the beginning and started to show stronger growth only in the second half of the 1990 (Taing and Taube). A common feature in trade relations between all the Western countries and the PRC is that the importance of the PRC as a trading partner for Western Europe has risen steadily, with the PRC becoming much more important as a market to source imports than for exports. As a consequence, deficits in their bilateral trade structure are rising. It is interesting that whereas Haube concludes that from the point of view of the PRC, the importance of West countries for the PRC exports and imports have generally declined (Haube 80-81), Taube claims that as trade partners to West European economies are more important to the PRC than vice versa (Taube 90).
For the former COMECON countries the PRC has been definitely a much more important foreign trade partner than vice versa. East European countries had limited ability to adjust their export range to the rapidly increasing needs of the PRC customers. Taube describes that initially it had still been possible to sell goods in the PRC that would have been difficult to sell elsewhere.
But the technological and qualitative inferiority of the products became quickly evident during the PRC's rapid economic development. Meanwhile, the demand for Chinese goods in Eastern Europe was increasing.
Many scholars agree that the accession of the Czech Republic to the EU had a significant influence on the PRC increasing interest in the Czech Republic. The MFA itself admits it as it
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states that "[t]he current mutual relations between the Czech Republic and the PRC develop without significant problems, within the framework determined by differences in political systems and geographical size. The Czech Republic alone can hardly be compared to the PRC as far as its size and influence on international affairs are concerned. Its position, however, is significantly strengthened by the international importance of the whole European Union of which the Czech Republic is a member since 2004"("Mutual Relations between the Czech Republic and the People's Republic of China").
It is hence evident that the EU allows room for maneuvering in its foreign policy towards the PRC. The Czech Republic in this regard particularly emphasizes the EU-PRC summit held every year and which according to the Czech point of view focuses on the economic cooperation ("Čína: Zahraničně-politická orientace"). It is interesting to note that Czech national foreign policy line resembles the EP's strategy – maintaining the One-China policy, yet constantly looking for new room to maneuver within and beyond the official line.