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  • Author: Adam S. Czartoryski
  • Publication Date: 03-2021
  • Content Type: Special Report
  • Institution: The Polish Institute of International Affairs
  • Abstract: No other neighbour is as closely connected to Austria as Germany. For years, bilateral relations have been based on deep economic connection and mutual understanding of interests. However, Austria under Chancellor Sebastian Kurz is more and more often and more decisively able to express a different opinion from Germany on important issues in European politics.
  • Topic: Foreign Policy, Politics, Bilateral Relations, European Union
  • Political Geography: Europe, Germany, Austria
  • Author: Uri Dadush, Pauline Weil
  • Publication Date: 05-2021
  • Content Type: Policy Brief
  • Institution: Bruegel
  • Abstract: Despite tensions over China’s discriminatory business practices, China’s trade continues to thrive, and the country has taken over from the United States as the first destination for foreign investment. American and European businesses continue to be engaged in China’s large and growing market, even amid a trade war between China and the United States. Drawing on surveys of companies and international comparisons, we show that – contrary to the prevailing narrative – China’s business practices have improved significantly in recent years. China’s business environment is today generally more favourable than that in other large countries at similar levels of development and, in some though certainly not all aspects, is in line with the Organisation for Economic Co-operation and Development average. Differences over geopolitics and human rights must be addressed, but it is clear that trade and investment agreements conditioned on accelerated reforms in China would yield substantial dividends. The benefits of such deals would accrue not only to foreign investors in China and exporters to China, but also to consumers and importers in the European Union and, especially, in the US, where punitive tariffs on China remain in effect. Critical aspects in the negotiations would include better access for American and European investors to China’s market for services and improved enforcement of rules and regulations in China. As in many middle-income countries, uneven enforcement of the law (rather than the law itself) remains a critical problem in China.
  • Topic: Development, Bilateral Relations, European Union, Business , Investment
  • Political Geography: China, Europe, Asia, North America, United States of America
  • Author: Uri Dadush, André Sapir
  • Publication Date: 04-2021
  • Content Type: Policy Brief
  • Institution: Bruegel
  • Abstract: The European Union is very open to foreign direct investment. By comparison, despite considerable liberalisation in the past two decades, foreign investors in China’s markets still face significant restrictions, especially in services sectors. Given this imbalance, the EU has long sought to improve the situation for its companies operating or wanting to operate in China. After eight years of negotiations, the EU and China concluded in December 2020 a bilateral Comprehensive Agreement on Investment (CAI). The text awaiting ratification aims to give foreign investors greater market access, enforceable via state-to-state dispute settlement. It does not yet, however, cover investor protection (such as against expropriation). Meanwhile, investor protection is covered by bilateral investment treaties between EU countries and China, which remain in force. The CAI has been met in some quarters with scepticism on economic and geopolitical grounds. The main criticism is that it provides little new market access in China, and that this small economic gain for the EU comes at the price of breaking ranks with its main political ally, the United States. Our assessment, which focuses on the economic implications, is different. It is true the CAI provides only modest new market access in China, but this is because China has already made progress in recent years in liberalising its foreign investment regulations unilaterally. The CAI binds this progress under an international treaty, marking an improvement for EU firms insofar as their market access rights can be effectively enforced. Most important, the CAI includes new rules on subsidies, state-owned enterprises, technology transfer and transparency, which will improve effective market access for EU firms operating in China. These bilateral new rules could also pave the way for reform of the multilateral rules under the World Trade Organisation, with the aim of better integrating China into the international trading and investment system – a goal shared by the EU, the United States and other like-minded countries. From an economic viewpoint therefore, the CAI is an important agreement, and one worth having. However, its ratification by the European Parliament is unlikely while China continues to apply sanctions against some members of the European Parliament and other critics of China’s human rights record.
  • Topic: Science and Technology, Bilateral Relations, European Union, Investment, Liberalization
  • Political Geography: China, Europe
  • Author: Francesca Ghiretti
  • Publication Date: 03-2020
  • Content Type: Commentary and Analysis
  • Institution: Istituto Affari Internazionali
  • Abstract: The bilateral relationship between Italy and China is back in the spotlight one year after the signature of the Memorandum of Understanding (MoU) on China’s Belt and Road Initiative. To date, Italy is the second hardest hit country by COVID-19 pandemic after China. Despite strict measures in place to limit the crisis, numbers keep rising, placing the national health care system under severe strain.
  • Topic: Health, Bilateral Relations, Foreign Aid, Propaganda
  • Political Geography: China, Europe, Asia, Italy, European Union
  • Author: Charly Salonius-Pasternak
  • Publication Date: 06-2020
  • Content Type: Working Paper
  • Institution: Finnish Institute of International Affairs
  • Abstract: Defence cooperation between Finland and Sweden has a history that far predates the most recent ‘reignition’ of 2014, and is now deeper than at any time in the past. In 2020, Sweden and Finland can contribute to each other’s defence in an integrated and planned fashion; but any plans are best viewed as being supplementary to national preparations. While the security interests of Finland and Sweden have overlapped historically, cooperation has often been limited due to a combination of domestic drivers and foreign pressures, as well as the nature of the international security system. Yet these same variables are currently permitting even deeper cooperation. Four future paths of cooperation are identifiable, with the most likely being a continuation of bilateral deepening, with added trilateral cooperation with Norway and the United States.
  • Topic: Defense Policy, Regional Cooperation, Military Strategy, Bilateral Relations
  • Political Geography: Europe, Finland, Sweden, Scandinavia
  • Author: Matti Pesu, Tuomas Iso-Markku
  • Publication Date: 10-2020
  • Content Type: Working Paper
  • Institution: Finnish Institute of International Affairs
  • Abstract: Finnish-Swedish defence cooperation has taken significant steps. Currently, the two countries engage in operative planning, which constitutes a significant part of their new cooperation agenda. Although interoperability between the Finnish and Swedish armed forces is crucial for the bilateral defence relationship, the countries should be ‘interoperable’ at the strategic level as well. Neither Finland’s and Sweden’s strategic cultures nor their decision-making systems or legislation are entirely similar. However, military non-alignment, similar threat perceptions and a shared assessment of their security environment facilitate their cooperation. In view of the future, questions remain about the two countries’ readiness to enter mutual defence commitments. There is also a need to ensure that their basic messages concerning the bilateral defence relationship are aligned. Over the longer term, the idea that one’s neighbour is worth defending should be entrenched in the strategic cultures of both states. This requires active nurturing of the already close relations between their national security communities.
  • Topic: Defense Policy, Diplomacy, Military Strategy, Bilateral Relations, European Union
  • Political Geography: Europe, Finland, Sweden, Scandinavia
  • Author: Kristiina Silvan
  • Publication Date: 11-2020
  • Content Type: Working Paper
  • Institution: Finnish Institute of International Affairs
  • Abstract: Under the leadership of President Shavkat Mirziyoyev, Uzbekistan has embarked on a moderate reform programme that aims to achieve socio-economic growth without undoing the country’s authoritarian political system. The programme has implications beyond Uzbekistan’s borders because it has changed the way Uzbekistani foreign policy is formulated and implemented. Uzbekistan’s former isolationist stance has shifted to a foreign policy opening, which is most noticeable in the improvement of its relations with its neighbours. This Working Paper analyzes “good neighbourliness”, the key concept of Uzbekistan’s new Central Asia policy. It details the amendment of Uzbekistan’s bilateral relations with its neighbours and points to the positive reception of Uzbekistan’s new regional policy in Russia, China, and the West. The paper argues that while “good neighbourliness” is a pragmatic strategy rooted in economic rationality, the policy’s regional implications are substantial. It is laying the necessary foundation for sustainable Central Asian co-operation from within in a way that is acceptable to the Central Asian states and big non-regional actors alike.
  • Topic: Regional Cooperation, Bilateral Relations, Authoritarianism, Reform, Leadership
  • Political Geography: Russia, China, Europe, Central Asia, Asia, Uzbekistan
  • Author: Rudolf Furst
  • Publication Date: 05-2020
  • Content Type: Working Paper
  • Institution: Institute of International Relations Prague
  • Abstract: The Euro-Japanese rapprochement stimulates the Japanese interest in the new EU member states, which are then matched with Japanese investments and Japan’s global trade strategy. The V4 countries benefit from their geographical position, existing infrastructure and political stability, industrial tradition, and low labour costs, emphasizes Rudolf Fürst.
  • Topic: Economics, Bilateral Relations, Labor Issues, European Union, Political stability, Industry
  • Political Geography: Japan, Europe, Asia
  • Author: Ian Anthony, Jiayi Zhou, Fei Su
  • Publication Date: 02-2020
  • Content Type: Working Paper
  • Institution: Stockholm International Peace Research Institute
  • Abstract: This SIPRI Insights Paper assesses EU security perspectives on connectivity, alongside and in relation to its evolving relationship with China. The EU’s relations with China have undergone an important shift in recent years, with a strengthened emphasis by the EU on the challenges to bilateral cooperation. In addition, since 2014, EU and EU member states’ security perspectives have undergone a wider reassessment, one that has increased the prominence of the military dimensions of connectivity, including military mobility, in EU security planning. The EU and China are currently pursuing synergies between their separate connectivity initiatives, namely the Belt and Road Initiative and the Connecting Europe programme. However, there remain barriers to sustainable cooperation that will need to be addressed between them moving forward. This Insights Paper outlines a number of those security concerns from the EU perspective, within the transport and digital sectors specifically.
  • Topic: Security, International Cooperation, Bilateral Relations, European Union, Belt and Road Initiative (BRI)
  • Political Geography: China, Europe, Asia
  • Author: Łukasz Maślanka
  • Publication Date: 03-2020
  • Content Type: Special Report
  • Institution: The Polish Institute of International Affairs
  • Abstract: In 2019, French President Emmanuel Macron initiated a Franco-Russian dialogue aimed at improving bilateral relations, as well as EU-Russia relations. This effort could be confounded by the growing Russian engagement in Africa, mainly through their military, business, and propaganda activities. These are increasingly harmful to France, which traditionally engages in the politics and economies of African states. The French government hasn’t yet prepared any coherent strategy vis-à-vis the Russian challenge, preferring to wait it out.
  • Topic: International Relations, Government, Bilateral Relations, Geopolitics
  • Political Geography: Africa, Russia, Europe, Eurasia, France