Photograph Courtesy of Adobe Stock. Alejandro ©
The EU is commemorating its annual European Maritime Day and there are definitely reasons to celebrate. The EU is one of the world's largest fishing powers, with a well-established fishing industry. Additionally, it has a strong shipbuilding sector, with some of the world's largest shipyards located in Europe. Furthermore, the EU has a thriving port industry, with some of the world's largest ports located in Europe. It also houses some world-leading dredging companies, such as the Jan De Nul Group, Van Oord and the DEME Group. Nonetheless, caution is necessary.
Due to a strategic combination of spatial planning, government support and competitive advantages, China has been able to grow its ocean economy by 160% since 2009, compared to the EU’s growth of 20% (author’s own calculations). For the past decades, it has been building a network of maritime infrastructure and trade connections globally, for example through acquiring shares in port terminals. The country has also been following an upward trajectory in its shipbuilding industry with a planned launch of its first domestically-built cruise ship in June this year. Additionally, other parts of the Chinese blue economy, such as fisheries, aquaculture and offshore wind power, are also increasingly getting stronger.
The Strategic Importance of the Blue Economy
As ships deliver over 80% of world trade, foreign trade is a major component of a state’s international maritime relations and the development of its merchant marine (Heine, 1989; UNCTAD, 2022). The security of the seas is of utmost importance to the European Union and its Member States. Collectively, the Member States of the EU possess the world's largest exclusive economic zone. The EU's economy relies heavily on a secure and safe ocean, as more than 80% of global trade is conducted through maritime transportation, and two-thirds of the world's oil and gas are either extracted or transported by sea. Additionally, a significant portion of global data flows, as much as 99%, are transmitted through undersea cables, highlighting the critical role of ocean security in safeguarding not only economic interests but also digital communication networks (European Commission, 2023b).
Yet, despite this importance, the EU made no explicit mention of economic security in its Maritime Security Strategy (updated in March 2023). Admittedly, it did mention the need to ensure “the resilience of critical maritime infrastructure (onshore and offshore) … by addressing the risks and threats … that arise from foreign direct investment” and the need to protect “economic activities at sea, both onshore and offshore”, there was no reference to the need to strengthen civil maritime industries to sustain its position in the global playing field, nor to the EU’s competitiveness in the global blue economy (European Commission, 2023a, p.4). This holds true even though the EU Blue Economy Report of 2022 did mention the fierce competition from countries like China and South Korea (The EU Blue Economy Report 2022, p. 26). Moreover, this issue is not novel, as exactly the same language was already used in the EU Blue Economy Report of 2019 (The EU Blue Economy Report 2019, p. 53).
Meanwhile, Chinese policymakers have been stressing the importance of the blue economy for a state’s national survival since the early 2000s. Their efforts to strengthen the Chinese blue economy have been especially expanding since the Politburo’s 2013 study session on China’s growing maritime power. More importantly, the elite signals from Xi and the CCP have been explicitly translated into policy goals throughout different Chinese policy documents on China’s maritime economy. The documents mention the need for competitive maritime industries, with a growing global influence and standard-setting power. As an important condition to grow its blue economy, policymakers refer to the need for synergy and integration, both between different regions and different ocean industries. In this regard, much attention is paid to the development of maritime clusters that can benefit the optimization of maritime value chains and to synergy between different ocean industries (own research). It has, for instance, incentivized national shipping companies such as COSCO to purchase new ships from Chinese domestic shipyards (IFT, 2019, p. 43). It is clear that China, much more so and much earlier than the EU, reflected on its dependencies linked to its own position in the global blue economy. Since the 2000s, it has begun an upgrading trajectory to reach the more advanced parts of these value chains.
The European Approach
Equally aimed at comprehensive policy planning for its blue economy, the EU in 2007 adopted its Integrated Maritime Policy (IMP). Yet, it does not really focus on ports as DG MARE, who produces this report is not responsible for the policy area of transport (Helminen, Dooms & Geerts, 2017, p. 18). Additionally, though it is good that the EU developed an Integrated Maritime Policy and consulted different stakeholders in the policy formulation process, these stakeholders were generally divided along sectoral lines. Hence, the lack of cross-sectoral, collective debate resulted in little reflection on integrated ocean strategies that encompassed all ocean sectors. (Fritz & Hanus, 2015)
Targeting more clustered, synergized planning in its blue economy, the EU requested its Member States to develop maritime spatial plans (MSPs) through the MSP Directive that was adopted in 2014 (European Commission, 2020, p.1). Yet, research showed that stakeholders of different ocean industries hold divergent opinions on the MSP efforts (European Commission, 2020, p.19). The 5th International Forum on Marine/Maritime Spatial Planning (MSPforum) mentions a lack of leadership to discuss MSP’s of countries that might be at different stages, the coordination issues of different institutions in the development of MSP and the need for “an integrated and horizontal legislation for all developed and developing countries” (UNESCO-IOC & European Commission, 2023, pp. 17-20).
Finally, the EU’s Maritime Guidelines, published by the Commission on state aid to maritime transport by member states also highlight a lack of cross-sectoral focus regarding the protection of the EU’s maritime economic security. The guidelines restrict the scope of the aid to shipping activities to prevent spillovers to other sectors. Some ship types that thus cannot qualify are fishing vessels and oil rigs. Furthermore, towage and dredging ships are only sometimes included (IFT, 2019, pp. 50-51). Some member states, in addition, have included offshore vessels, cruise shipping, cable layers, research vessels and port terminal operations. Despite the straight-forward scope of the allowed state aid, the Guideline shows that the reality is much more complex. This uneven coverage by member states may cause distorted market competition (IFT, 2019, pp. 51-54).
The Need for More Institutional Clarity
One possible explanation for these issues is the EU’s institutional complexities with regard to its maritime policy areas. In 2008, a reorganization of DG Fish renamed this to DG Mare, whose mandate from then on not only focused on fisheries and aquaculture but also included responsibility for the EU’s IMP, though the then director-general stated that “the department would not take charge of new policy areas” (Politico, 2008; Wenzel, p. 165). Nonetheless, around 2010 there were some concerns about a tug-of-war between DG MOVE (responsible for maritime transport) and DG MARE (Stares, 2010; ESCA, 2010, pp.4-5). A 2017 report on "Study on New Trends in Globalisation in Shipbuilding and Marine Supplies – Consequences for European Industrial and Trade Policy” mentions no less than 13 different DGs of the Commission working on maritime industries (European Commission, 2017). In 2019, the part of MARE that dealt with state aid moved to DG Comp (European Commission, 2019). This evolution showed that, though DG Mare has the mandate to publish the IMP, it does not necessarily have the tools in hand to actually develop a comprehensive strategy that could aid the competitiveness of the EU’s blue economy.
The blue economy is critical for the EU's economic growth and development, yet besides the guarding of sea lines of communication to protect European economic interests and possible investment screening for European maritime infrastructure, there is no mention of economic security in the EU’s Maritime Security Strategy. The EU should take a page out of China’s book and address the strategic competitiveness connected to the development of a state’s blue economy. It should overcome the historically grown tangle of maritime mandates within the Commission and harmonize the EU member states divergent interests. In addition, to obtain collective, cross-sectoral input, it should support joint ocean industry groups at the EU level. Only this will allow the EU to maintain its strong position in the global blue economy and secure its economic future.
About the Author:
Anne-Marie Dedene is a Sinologist and Ph.D. candidate in Political Science at the Vrije Universiteit Brussel. She studies the PRC’s maritime power build-up in the economic domain. She can be contacted at anne-marie.dedene@vub.be and on LinkedIn at https://www.linkedin.com/in/anne-marie-dedene/
The opinions expressed here are those of the writers and do not represent the views of European Guanxi.
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