Photo of Mr Peter Varghese

"The Lessons of European Integration for the Indo Pacific"

2014 Schuman Lecture, Centre for European Studies, Australian National University

Peter Varghese AO, Secretary, Department of Foreign Affairs and Trade

16 June 2014

Acknowledgements

Introduction

Tonight I want to speak less of Australia’s important relationship with Europe — a relationship undiminished by the siren calls of the Asian century — and more about what the so called European project might mean for the big challenges of peace and prosperity we face in the Indo Pacific.

But let me start where many would say the vision of a united Europe started — with Robert Schuman.

History doesn’t really like the quiet achiever.

It may be unfair, but it’s true: history reserves the larger chapters for men and women of drama and excess.

First and foremost, deeds done in war – great victories of generals, Churchillian declarations of defiance, the largest, bloodiest stories that forcibly reshape empires.

Then, those famous for unbending conviction, a willingness for self-sacrifice. History has a firm place for Joan of Arc.

And, last but not least, those famous for their sins, for the wrongs they have done or the pain they have caused.

Yet, we have Robert Schuman.

Words jump out of Schuman biographies that should have prompted history to leave him well enough alone.

Modest, self-effacing, courteous, benevolent, monk, priest: these are the commonly unloved adjectives and nouns that his contemporaries and historians use to describe him.

Consider this, from former US Secretary of State Dean Acheson:

“A lean man, slightly stooped, his long, serious, even ascetic face gives an appearance of baffled solemnity, enhanced by the bald dome and his habit of sinking chin in collar to peer over the top of his spectacles. He speaks quietly, often in the abstract generalizations natural to lawyers trained in the civil law. His sense of humour is keen, but almost furtive.”1

A furtive sense of humour?

It doesn’t sound like Napoleonic greatness.

And yet this quiet, unmarried, formal man, who failed his medical test in 1914, spent the First World War in civil administration, and was under house arrest or in hiding for much of the Second World War, had a profound role in reimagining Europe.

With Jean Monnet, and Konrad Adenauer, Schuman has as much right as anyone to claim credit for the birth of European integration, nearly six and a half decades ago.

Many have made something of Schuman’s almost accidental historical Europeanism as a root for his belief in the virtues of integration.

His birth in Luxembourg, his legal training in Germany, his political service in France.

Of course, he lived through an unimaginably turbulent period in European history, and was of the frontier, the shifting border between Germany and France.

In less than two months’ time the world will commemorate the beginning of WWI.

That war and the one which followed soon after devastated the most advanced continent on Earth, leaving over 40 million dead and incomparable, almost incomprehensible destruction.

The notion that this should never again be allowed was the driver for Schuman and his colleagues.

But Monnet believed Schuman’s belief in the virtue of European integration was determined “less by his memories of the past… than by his lucid vision of Europe's future.”2

In 2014, we live in that future. 

Today I want to speak about the European experiment that Schuman set in train, recalling most particularly three insightful sentences from the Schuman Declaration of May 9, 1950:

“World peace cannot be safeguarded without the making of creative efforts proportionate to the dangers which threaten it.”

And:

“Europe will not be made all at once, or according to a single plan. It will be built through concrete achievements which first create a de facto solidarity.”

In particular, I want to speak about the implications of the European project for Australia’s own region, the Indo-Pacific.

There are many differences, of course, between the European Union and the efforts of Indo-Pacific nations to build common institutions and a secure future.

Nevertheless, there are insights we can take from Europe’s successes, and from Europe’s failures, and I’d like to talk about some of them today.

Integration and identity

Let me start with two words that spring to my mind when I think of what Europe has achieved in the past sixty years.

Integration, and identity.

Integration is an awful word, really.

It’s cold, a little opaque, a noun that most sensible people leave behind as they go about their lives.

But in its blandness, it smothers something very important, particularly in the European context.

The supra-national integration of France, Germany, Italy, the Benelux countries, and later the UK and many others, into what we know today as the European Union, has been a signal achievement of the 20th Century.

It created an economic, social, legal and political union that is forging a new identity, existing beyond national identity: that of being European.

“Europe” – no longer just a geographical expression, but an aspiration of something more meaningful.

It is messy, certainly incomplete, and – for many – hard to follow.

But what it achieves, what it continues to achieve after six decades, is something very important – a broad European peace.

Schuman lived his life in a context of constant conflict and repeated wars between the competing European powers.

In retrospect, Schuman’s coal and steel community seems an extraordinarily sensible idea.

But it must have been one that was immensely hard to imagine in post-war Europe.

An economic bargain to secure a strategic objective.

Integration as a process, a prosaic means to an important end: peace.

Identity, too, can be a means to an end.

We tend to think of identity as something fixed, something intrinsic to who we are, maybe even a permanent fact.

But as the European project shows, identity can change, and new identities can be forged.  And we know from our personal lives that we can hold many identities at the same time.

Identity can be seen not only as something we give to ourselves, or others apply to us, but as a means of building a society, of forging prosperity and a common peace.

Whether by historical accident or design, Robert Schuman helped create the “European” identity – generating a bulwark against the mindless nationalism that had torn Europe apart for a hundred years.

The European Union

The EU is a big target – and so it has many detractors who, it must be said, have quite a lot of material to work with..

The Global Financial Crisis, and the years of slow recovery since 2008, provided large amounts of ammunition for Europe’s detractors.

The challenges faced by Portugal, Ireland, Spain and Greece in the wake of the GFC have posed difficult questions for the European project.

Greece’s domestic challenges raised the question of an exit from the Euro – and that seemed, for some, to threaten the viability of the common currency.

The EU has also faced strategic challenges in recent months, none more serious than that stemming from Russian aggression in Ukraine.

There is scepticism, for many Europeans, about what the whole project actually delivers.

As the Pew Research Centre pointed out recently, the GFC dealt a massive blow to the EU’s self-image – in the six years to 2013, support for the EU fell by 34 per cent in Spain, 21 per cent in France and 20 per cent in Italy.

Only one in three, across Europe, have positive views of the European Parliament, the European Commission and the European Central Bank.

But these pressures are not necessarily marks of the failure of the European project.

Rather, they are markers of just how hard a project this is, and how high expectations have been raised by the successes since 1950.

Indeed – the fact that there has been a broad European peace for more than 60 years means memories of the conflicts Schuman lived through are now faint.

Many Europeans have known only peace.

The European project is a work in progress of nearly 65 years – and it is far from over.

But measured against the original set of goalposts – that of contributing to European peace – it has been extraordinarily successful.

Indeed, the lure of European peace and prosperity has been so attractive that the EU has grown dramatically in the last two decades.

And there are still more countries which aspire to join.

The successes of Europe

In contrast to the failure at Versailles, the European model has been one based on collaboration and deepening interdependence.

Through integration, the EU has diffused national power – and diluted nationalism, although the resilience of history should never be underestimated..

As the idea evolved into reality, Europe has developed strong institutions, which have themselves become the connective tissue binding the various members.

Europe has aided the evolution of international human rights, and a broader application of the rule of law.

It has made a strong case, both internal and external, for democracy – which has had a powerful normative effect, including on Eastern Europe.

Remarkably for a continent that was the crucible of two world wars, Europe put the idea of pooling of sovereignty for common gain at the heart of its integration.

And its institutional structures made a virtue of Europe’s diversity.

While at times the mechanics of the EU’s internal decision-making can seem burdensome, it is a method that allows all members to feel confident that their interests are aired, and taken into account.

EU processes allow for reversals or revisions in the case of unexpected developments – and for members to opt-out of certain initiatives.

Like the UK’s decision not to be part of the Schengen zone or Denmark’s decision not to join the Eurozone.

The incentive of potential EU membership has given countries the political cover to implement difficult domestic reforms and transform their societies. 

Croatia, the EU’s newest member, which just 20 years ago was in the midst of conflict, serves as a telling example of the transformative effect of EU membership.

The creation of the single market, based on the free movement of goods, capital, people and services, has been a major achievement.

Not only has it lead to increased prosperity and opportunity for EU citizens, it has given Europe’s trading partners, like Australia, a huge potential market.

One with a harmonised set of regulations and 500 million potential customers.

The abolition of physical barriers and border controls within the Schengen Zone is a particular achievement.

Labour mobility remains a contentious issue globally in a way that is no longer the case with respect to capital or goods and services.

In strategic terms, the EU’s record is more mixed.

The EU has a developed a Common Security and Defence Policy which enables the Union to take a constructive role in peace-keeping operations, conflict prevention and in the strengthening of international security. 

Through this policy the EU has pioneered peace building efforts in the Western Balkans and has launched civilian and military missions worldwide. 

And while the EU’s formal diplomatic service is still in its infancy, only having been institutionalised by the 2009 Lisbon Treaty, the European External Action Service has already begun to make its presence felt.

The Service has promoted the EU’s role as an honest broker in some key international issues – such as on the Iran nuclear question – and has mobilised and focused the EU’s considerable resources to address foreign policy objectives, from sanctions to development assistance.

Where the EU has had less success is in creating a strategic grouping which is more than the sum of its parts.  Indeed the opposite is probably true:  in terms of strategic weight the EU is less than the sum of its individual parts.

This may well be a feature of regionalism more generally, namely, that in economic terms it tends to create a grouping which is greater than the sum of its parts but in strategic terms the whole carries less weight than the parts.  The same could be said of regionalism in Africa and Latin America.  ASEAN may go down a similar path.  All of which may reflect nothing more than that the logic of economic integration is easier to apply than the much more complicated matrix of security integration even among states which have converging strategic interests. 

We should always bear in mind that while regionalism can pay a strategic dividend it cannot override the realities of power.  Nor can it pretend that power is not still exercised primarily through nation states and that the relationships among great powers will always be more important to strategic stability than the quality of regionalism.

The Indo-Pacific in 2014

Wherever you land on the spectrum of the EU’s achievements, it is worth asking if we can draw lessons from the European project for our part of the world?

Does Europe’s approach to institution-building and identity offer options for us in the Indo-Pacific, as we struggle with our own strategic challenges?

Schuman’s idea was to use an economic approach – coal and steel union – to help solve a strategic problem.

But in our part of the world in 2014, we almost have the opposite challenge.

We aren’t broken like Europe in 1945, emerging from decades of repeated wars – we are a prosperous, peaceful zone that has grown tremendously through six or seven decades of peace.

Well before mid-century, three of the four largest economies in the world will be in Asia. When we talk about Asia in the 21st Century, we aren’t just talking about China, India and Japan. Korea, Indonesia, Thailand and Vietnam will all be big players in their own right. The Association of Southeast Asian Nations members will become more important.

For us, economic success now poses strategic challenges.

The overall direction of economic development – towards globalisation and further gradual reform – might look clear enough. But there is no large Asian economy which will not face serious challenges along the way.

And the strategic trajectory of the Indo-Pacific is less easy to project than its economics.

China has been the most dramatic graduate – its size, population and scale demand attention. As China has re-emerged as a global power, it is increasingly rubbing up against other regional players. Economics and strategy are converging in Asia in complicated ways. We continue to see rivalry and tension in contested spaces like the South China Sea, and countries across our region are modernising their militaries in line with their greater economic strength.

Other changing Indo-Pacific countries are also important. We talk about the Indo-Pacific because that phrase returns India to Asia’s strategic mix – and captures the central axis of so much of modern trade and transport.

Asia is not, of course, a self-contained strategic system. It sits in a wider strategic context of which the United States is a key component. And Asia’s economic links are global.
The defining phenomenon of the past few decades, in our region, has been the strategic stability provided by the United States. That stability allowed one Asian state after another to pull itself out of the colonial era, through independence, towards economic development and modernisation.

The US will continue to remain the key global power in our region for decades to come. The American dynamism and extraordinary capacity for reinvention mean the US economy will retain and renew its vigour and capacity in coming decades – and the US will remain, for many years, the only power capable of projecting force globally.

Its web of alliances, friendships and valued relationships through Asia – and its own commitment to maintaining an open, free international rules-based order – mean the US plays and will continue to play a vital peace-enhancing and stabilising role in the region.

Institutions here are less developed than in the North Atlantic. A number of important institutions have developed on the back of ASEAN that are critical for helping bring strategic stability – none more important than the East Asia Summit.

From Australia’s perspective, the EAS is the regional institution which has the highest priority. That should not be surprising. Its members account for 55 per cent of global GDP and more than half the global population. Eight EAS members are in the G20; there are three permanent members of the UN Security Council which, along with India, possess four of the five largest armed forces in the world.

As it grows and evolves, the EAS should serve three functions. First, it can build confidence and help nurture a culture of dialogue and collaboration on security issues. Second, it can help ensure that regional financial and economic integration keeps moving forward. And third, it can provide a vehicle to address transnational issues including resource and food security, non-proliferation and terrorism.

Our core objective is to nurture habits of consultation across the region. Consultation might not resolve problems but it can make the search for solutions easier and diminish the risk of miscommunication and miscalculation.
In one sense, we are working through the EAS to seek to entrench, deepen and expand across the Indo Pacific more broadly the type of cooperation that ASEAN has fostered in Southeast Asia – which itself echoes the stability provided in the north by the EU.

Lessons for the Indo-Pacific

It goes without saying that Asia is not Europe.

There are some big, perhaps fundamental, differences between these two parts of the world.

Europe is a place of diversity, yes – but I think it’s fair to say that the diversity in countries across the Indo-Pacific is far greater.

Great diversity might make it more challenging to build common understandings and bridge difference.

That said, the countries of the Indo-Pacific have admired Europe’s attempt to build stability and peace.

In our part of the world, ASEAN is an institution that, over more than 40 years, has made a significant contribution to building common ground in Asia.

And the countries of the Indo-Pacific have a different philosophical base to European cultures.

Where the EU is, in large part, marked by the formality of its structures and its application of rules-based processes and laws, Asian leaders have long talked about the “ASEAN way”.

An approach that focuses as much on understandings behind the scenes as formal undertakings, that venerates consensus much more than majority rule.

Asian diversity – and a strong sense that national identity is still very important – make it unlikely that the Indo-Pacific will ever see a supra-national institution in the EU mould.

Nevertheless, there are useful lessons.

One – it can be done. It is actually possible to build structures and institutions across a diverse region that bind states together, that build understanding and offer increased hope for peace and commerce.

Economic integration can be a powerful weapon in the cause of peace and prosperity. This is the idea at the heart of the Australian Government’s “economic diplomacy” – which puts the tools of growth, trade, business and investment at the centre of our international engagement.

Foreign Minister Julie Bishop likes to say that just as traditional diplomacy aims for peace, economic diplomacy aims for prosperity.

Two – nationalism won’t ever be completely vanquished, even if you think that is desirable. Just when our success and stability grows strong – a new threat, like a GFC or a sustained downturn – can give new vitality to nationalist instincts.

Three – structures and institutions aren’t enough on their own. We have to continually make sure people see the merit of inter-state collaboration, and that this can be managed without sacrificing identity and values.

As the European project has evolved, as it has become more complex, reached into more parts of people’s lives, a persistent challenge has been maintaining legitimacy. People who see a distance between their own lives and the institutions and processes politicians and bureaucrats put in place to protect their peace will find it hard to keep faith.

ASEAN nations face a significant challenge in this respect.

Malaysian Prime Minister Najib said recently:

“ASEAN and its institutions are playing an ever more prominent role in responding to the demands of our peoples for better governance and increased democratic space. [But] Southeast Asian governments now face a more sophisticated and demanding electorate…

“For forty years, governments of the region have signed agreements, and treaties; issued communiques, statements and declarations… But the instruments we have adopted will be of little use if people do not take advantage of them: to promote trade, to better protect human rights and to help preserve the environment. Involving all sectors of society in the formulation and implementation of these agreements will make it more reflective of their needs.”

If there is a lesson from the EU’s recent experiences, one must be the importance of deepening public understanding of the logic of integration – in effect securing a public licence to operate.

And four – sovereignty is important, but it doesn’t have to be an obstacle to closer cooperation and greater regional peace.

ASEAN leaders like to say they could never be like the EU, for sovereignty is too important to them.  The implication – that Europeans care not for their sovereignty – however, is nonsense.  Europeans care greatly about their sovereignty. 

European leaders, to some extent at least, recognised that in unity they were pooling rather than ceding sovereignty.  This is an idea that High Representative and Vice President Catherine Ashton has sought to convey in building up the European External Action Service and the idea of a common European foreign and security policy.  And it is clear in the way the EU goes about trade negotiations – the weight of 28 gets a better deal than the weight of, say, Estonia alone.  ASEANs still conceive their integration as a process of ceding.

Conclusion

To conclude – let me say this: if Robert Schuman were alive today, he would be astonished by the success of the peace and prosperity he helped found.

He would not see the flaws in the European project that are so obvious to the EU’s detractors.

What would strike him, first and foremost, is the absence of war – the absence, in the context of the European integration of several decades – of the defining condition of Europe in his time.

Even though in many cases the last decade has been hard for many Europeans, the European project has had many successes.  It has expanded economic opportunity and contracted strategic tensions across Europe.  And it has been a voice for the values of liberal democracy and open markets.

All achievements are unique.  But that does not make them unobtainable in different circumstances.  Europe is patently not Asia.  History, geography and culture converge in very different patterns.  But the idea of expanding prosperity and narrowing strategic risk through regional cooperation and regional institutions should not be alien to the Indo Pacific.  Indeed, as its economic and strategic weight further expands such cooperation will likely become crucial to the stability of the Indo Pacific.

We are living through a period of transition.  Our region struggles to reconcile the logic of economic interdependence with the legacy of strategic rivalry and historical animosities.  If we are to come through this transition peacefully we will need many things including wise and steady leadership and a commitment to open economies.  But we will also need to recognise that regional integration can strengthen economies and help manage strategic tensions.  That is a lesson Europe has learnt and we ignore at our peril.