Business or Politics?

For decades, Europe has followed a policy toward the former Soviet bloc which said you can always do business, no matter differences in political opinion. In fact, this first principle said, you?should?do business because good trade and business relations between countries will smoothen out political differences. It was widely practised, it worked, it became a mantra.

Until the assault on Ukraine.

?For that invasion violated another fundamental principle of European policies, namely the most important mantra governing relationships between states in Europe: Though shall never change anybody else’s border by force. Ever.

?Europe reacted by breaking fast and decisively with the first principle, the idea that it is good to maintain constructive business relations, no matter what happens in politics. ‘Economic warfare’ was swiftly added to supplement political and military support for the Ukraine. And if f there is an opposite to ‘business as usual’, it must be economic warfare.

?So – a swift but lasting change of principles, and on we go?

?Not quite. The world did not end in February; it is still larger than the EU, the Ukraine and Russia; and this makes things more complicated.

?As it happens, the EU and China are supposed to sit down and prepare a series of meetings these days, designed to explore how to develop their bilateral economic relationship into the future. The idea for this dialogue long pre-dates the war in Ukraine. Press reports state that the agenda China has proposed for these meetings is based on the principle of expanding constructive economic and business ties between countries, no matter what happens in politics.

?At about the same time – as it happens – a huge data leak in China allowed leading European media outlets to expose the system of prison camps used to suppress the Muslim minority in China, in greater detail than before. These publications caused a stir of public concern: It caused the public debate on ‘doing business with autocrats’ to flare up again.

?Now, what is the European Union supposed to do? Reject the Chinese agenda by saying “Sorry, we have a new policy, which means we can’t really discuss the expansion of our business ties, without having a close look at your political actions as well”? Or “Yes, we are engaged in economic warfare, but this is with Russia, not with you. We all understand that war is different, and so lets continue to expand our business ties as long as you stay neutral and they are mutually advantageous”?

?The truth is that the EU doesn’t even have the power to chose its own answer. Since February, whenever economic and commercial policies are discussed, more guests are sitting at the dinner table, whether invited or not. In this case, the US is an ally Europe urgently needs in Ukraine. But the US has its own agenda with China, and it is not an agenda based on the uninhibited expansion of trade and commerce for mutual benefit.

?The diplomatic tussle of preparing a meeting is a tiny example, of course. But this example is also a harbinger of things to come. Sooner or later the G-7 will have embargoed Russian energy and commodities for its own use. It will then face the question whether to extend its sanctions to those countries consuming Russian energy in its stead. Only at this point will the value of principles be tested. And only at this point will the true costs of sanction become clear.

Rami Chouchani and Mohamed Al Salti from Asharq Business prompted these musings, when they asked a couple of to-the-point questions, here. The interview is only available in Arabic (An Asharq practice which deserves some upgrading).