By Francesco Alberti
The signing on March 22 of the Memorandum of Understanding (MoU) for Italy to join the Belt and Road Initiative (BRI) has been surrounded by controversy.
While Italy is not the first EU country to join the BRI, it is the first G7 country and the EU largest economy so far to do so raising concerns among its allies.
The most vocal critics are the Unites States that sees the BRI as a means for China to expand its economic, political and military influence in regions that previously were exclusive domain of the North-American power and the European Union that fears that such bilateral agreements may undermine the unity of the bloc.
Italian politicians have been assuring its allies that Italy is looking at the BRI as a way to gain greater access to the Chinese market and that it does not mean a shift in foreign policy and that it is strongly anchored to the EU-NATO axis.
Few days before the MoU was signed and ever since, Italian Prime Minister Giuseppe Conte stressed that the initiative is a way to improve bilateral economic relationship and help reduce the Italian trade deficit with China that run at €17.6 billion with trade between the two countries worth €44 billion in 2018.
Similar comments were made by Luigi Di Maio, deputy prime minister, minister for economic development and leader of the Five Star Movement, who said that the new Silk Road initiative will not turn into a political alliance and that NATO is Italy’s natural home.
However, the signing may be seen under a different light. Western powers have been wary of the rising economic prowess of China. In recent years, the country’s economic strength has been accompanied by an increasing assertiveness in the international geo-political arena.
China has also been criticized for not being too concerned when it comes to environmental protection, human rights respect, trade practices and for the opacity of many of the agreements related to BRI, especially in South Asia and Africa. China has always rebuffed such criticism.
Anyways, while some of the concerns of the West have a solid basis, others, such as the strong US opposition to the Asian Infrastructure Investment Bank (AIIB) have proven unfounded.
The issue, however, is not “if” China needs to be contained but “how.”
In my opinion, there are three ways to contain China.
One is to invite it to join multilateral international bodies such as the World Bank, the World Trade Organization, the Asia Development Bank, etc. so that it plays by the same rules as everybody else.
The second is to create a network of bilateral and multilateral trade agreements (such as the now-defunct Trans-Pacific Partnership) among the parties that interact with China. Even though the agreements would not be bounding for China, they would be for the counterparties and this would ensure adherence to stricter rules for all parties dealing with China. It would also make the signatories less dependent on trade with China and strengthen their ties to the US. This effort was wiped out by the short-sighted policies of the United States under President Donald J. Trump who refused to sign the TPP, whose adoption hinged on the US participation. Also, the US withdrawal from the Paris climate accord handed China the leadership in environmental protection on a silver plate, and the opportunity to steer policies in a way that would benefit China.
The third is to join China-sponsored projects, such as the BRI and the AIIB, and try to put in place a check-and-balance mechanism from within. Italy, as a G7 member, has involuntary found itself at the forefront of this effort having also joined the AIIB as a founding member when the multilateral lending institution was launched in June 2016.
As I said in a recent editorial I co-wrote for the Global Timesin occasion of President Xi state visit to Italy, BRI is not necessarily bad. It is a massive investment in infrastructures that with the due safeguards in place can give a sizable contribution to the world’s economic growth. The involvement of AIIB to finance projects is the key. AIIB’s governance and lending practices have been recognized to be compliant with international best practices that satisfy EU requirements, such as competitive tender, environmental-impact studies and sustainable infrastructure projects.
While I am not fully convinced that there was a well-thought containment strategy behind the MoU, but rather the fear of missing the BRI train, it does not mean Italy cannot seize the chance and take the lead in the effort to make China play on a level field with the rest of the world.
Italy should spearhead a coordinated effort by the EU as a bloc to sign a framework agreement with China. This would allow the EU to create a master-plan for all EU members to follow on specific BRI-related projects reducing the possibilities of bilateral deals that may weaken the unity of the EU.
The words of Prime Minister Conte at the Second Belt and Road Initiative Forum, held in Beijing April 25-27, seem to point in the right direction. He said that in order to maximize benefits for all countries involved, it is necessary for the BRI to exist in a framework of shared principles, rules and criteria that define the scope of action. Conte added that for Italy this framework is clearly stated in the Euro-Asian connectivity strategy, which remains the country’s reference policy paper for Asia.