On 5 March 2024, the European Union (EU) unveiled its first-ever defence industrial strategy, outlining ambitious goals to bolster its strategic autonomy. Not only does this move affect Europe, but it also impacts many other regions, especially the Asia-Pacific region.

Background

According to international analysts, the EU's Defence Industrial Strategy (EDIS) aims to put the defence industry on a wartime footing by fostering cooperation in investment, research, development, production, procurement, and ownership among EU defence contractors. This marks a shift away from the EU's initial emergency responses to the Russia - Ukraine conflict and signifies a long-term commitment to bolstering the defence industry's readiness. In March 2022, right after the outbreak of the Russia - Ukraine conflict, EU adopted the "Strategic Compass" plan, outlining an ambitious plan to build independent military and defence capabilities. EU member states are now increasing defence spending and investing heavily in research, development, and procurement of advanced military equipment, such as command, control, and communication systems, unmanned aerial vehicles, next-generation tanks, and sophisticated air defence missile systems, etc.

Leaders of EU member states at EU Summit held in Brussels, Belgium on 22 March 2024 (photo: tapchicongsan.org.vn)

Before the Russia - Ukraine conflict, the EU had already begun to consider greater defence independence amid growing strains in transatlantic relations, particularly during the Trump administration. While ties with the United States have improved under President Biden, events such as the US withdrawal from Afghanistan and the formation of AUKUS have further incentivised the EU to pursue defence autonomy. These developments have underscored the need for the EU to reduce its overreliance on the US security umbrella.

Thus, EDIS represents a significant step towards realising the ambitions outlined in the "Strategic Compass" and, more broadly, advancing the EU's strategic autonomy.

Ambitious goals

According to international observers, between 2021 and 2022, European defence procurement was heavily reliant on non-European suppliers, with only 18% sourced from domestic companies. This overreliance on foreign suppliers, particularly the United States (which accounted for approximately 68% of European defence procurement), highlighted a significant gap in Europe's defence industrial base. To address this vulnerability and enhance the EU's ability to respond to security threats, particularly from Russia, EDIS sets ambitious goals. By 2030, the strategy aims to increase the share of European defence procurement to at least 50% of member states' budgets, rising to 60% by 2035. Moreover, EDIS seeks to promote cooperative procurement, with a target of at least 40% of defence equipment being acquired through joint ventures or other collaborative arrangements among EU member states.

The EDIS outlines five key measures to enhance the EU's defence industrial capacity including more effective and higher defence investments; more responsive and resilient defence supply system; stronger financial support for the defence industry; preparation for more appropriate warfare and increased cooperation with foreign partnerships. These measures are designed to promote a more integrated European defence market and reduce reliance on non-EU suppliers. "After decades of low spending, we must invest more in defence," said EU foreign policy chief Josep Borrell. "We need to do it better and together. A strong, resilient and competitive European defence industry is a strategic imperative." Jean-Paul Perruche, former Chief of Staff of the EU Military Staff, once said: “Defence autonomy is a prerequisite for strategic autonomy. If even the smallest European weapons systems and components are dependent on foreign supplies, strategic autonomy will be very difficult.” In prompt response to a potential war, the EU focuses on facilitating joint procurement and replenishing European reserves, with two highlights of the European Defence Industrial Enhancement through Joint Procurement Act (EDIRPA) and stepping up support for Ukraine through the Ammunition Production Support Act. In short, EDIS outlines an ambitious path towards greater integration and cooperation in defence procurement and industrial policy. It demonstrates the EU’s drive to turn Europe’s defence crisis into an opportunity to strengthen the continent’s collective security.

Vague prospects of success

The success or failure of a strategy is determined by two key factors, namely resources and political will. In terms of resources, there is no doubt about the EU's defence budget: in 2022, the EU's military spending was $240 billion, much lower than that of the US ($794 billion), but twice as much as Russia's ($92 billion) and almost equal to China's ($273 billion). The Russia - Ukraine conflict was a direct catalyst for the EU defence spending to reach a record high of $295 billion in 2023. In just over two years, the number of North Atlantic Treaty Organisation (NATO) members spending 2% of their GDP on defence has increased from 9 to 23 out of 32 members. In the first 16 months since the Russia - Ukraine conflict began (February 2022), EU members spent more than €100 billion on defence. However, nearly 80% of those contracts were spent outside the EU, with the US still accounting for more than 60%. Germany, for example, announced a €100 billion ($108 billion) upgrade of its armed forces, with much of the budget on US F-35 fighters and transport helicopters.

Many countries in the EU are quite “concerned” about allowing the EU’s intervention in its members’ defence and security policies. Diverging perspectives between Western and Eastern European member states on issues such as the Russia - Ukraine conflict, coupled with concerns about national sovereignty, pose significant challenges to the effective implementation of the EDIS. In particular, that the EU and NATO continually relying heavily on the US in both policy and technology, with Germany’s purchase of US F-35 fighters instead of European ones, shows that talking about “strategic autonomy” is much easier than practising it.

Impacts on Asia-Pacific region

According to international observers, as a major power in the multipolar world, the EU's defence industry strategy set to have far-reaching implications beyond Europe. The growing need for strategic autonomy among EU member states, coupled with concerns about a potential resurgence of a more isolationist US under Donald Trump, has created a favourable environment for enhanced defence cooperation between the EU and key Asian partners, notably Japan and South Korea. There is no coincidence that Japanese Prime Minister Fumio Kishida warns: "East Asia tomorrow could be like Ukraine today". Since 2019, EU has publicly considered China as both a partner and a systemic rival. Concerns about China could be a driving force for EU and Japan to further strengthen cooperation in the defence industry. With the significant shifts in the security landscape of both Europe and Asia, the EU is seeking to deepen its defence ties with Japan and South Korea. After Russia and North Korea announced the upgrade of their relations to a Comprehensive Strategic Partnership during President Vladimir Putin’s visit to Pyongyang, the EU has more justifications to strengthen its cooperation with these Asian democracies.

In fact, South Korea has emerged as a “giant” in the global arms market, driven by surging arms exports to Europe. Since the Russia - Ukraine conflict began, Poland has ordered a large number of K2 tanks and K9 self-propelled howitzers from South Korea. Romania, Finland and Estonia have recently increased their arms imports from this country. Simultaneously, the EU will consider cooperation with South Korea in other areas such as space, cyber security, maritime security, as well as cooperation with Japan in the field of nuclear disarmament and non-proliferation. The fact that Japanese Prime Minister and South Korean President attended NATO Summits for the past three consecutive years further confirms that the cooperative trend between Europe and these two countries will grow in the coming years, especially in case Donald Trump being the winner of the November 2024 US election.

Another impact of EDIS on the Asia-Pacific region could be to further stimulate the military power race in the region, especially investment in naval and air force weapons. Over the past years, the Russia - Ukraine conflict and escalating tensions in the East Sea and Taiwan Strait have globally and regionally pushed up the trend of heavy spending on defence. According to the Stockholm International Peace Research Institute (SIPRI), in 2023 the total world defence budget reached a record high of over 2,400 billion USD. For countries in Pacific-Asia region, the source of weaponry mainly comes from the US, Russia and a certain part of China. However, EDIS promotion will make the regional arms market more bustling. Its members, especially Southeast Asian countries, will have more supply options besides Russia and the US. Of course, this is not a temporary change, but a long-term one which is difficult to stem the tide of the process.

According to researchers, in the long term, the EU's deepening involvement in the Asia-Pacific and its promotion of the EDIS are likely to foster a more multipolar regional order, gradually shifting away from the current “bipolar, multipower” dynamic. The EU has been making a concerted attempt to enlist the Association of Southeast Asian Nations (ASEAN) and upgrade its relationship to comprehensive strategic partnership. If defence cooperation between ASEAN and the EU continues to deepen, it is possible that in the short run, ASEAN could allow the EU to officially participate in its led mechanisms as a full dialogue partner. This would not only increase the complexity of the region's multi-layered power structure but also contribute to a more balanced regional order.

Doctor VU DUY THANH

Vietnam Ministry of Foreign Affairs