7 April 2024

Europe and the Indo-Pacific: Convergence and Divergence in the Digital Order


As the US–China rivalry intensifies, Europe and the Indo-Pacific must navigate the shifting sands of digital diplomacy and technological competition. This research report unveils how these regions are responding to challenges in critical infrastructure, artificial intelligence, innovation protection and cyber disinformation, highlighting the importance of broadening the perspective beyond bilateral tensions to foster global digital cooperation.

European and Indo-Pacific countries are caught in the middle of the mounting systemic rivalry between the United States and China. The growing competition between these two countries in the digital domain is manifesting in different areas, including export controls, technological standards and national industrial policies. However, considering the technological-innovation debate solely through the lens of US–China competition risks overlooking the approaches and responses that other actors – namely the European Union and Indo-Pacific countries – are pursuing to enhance and safeguard their national digital ecosystems.

Shifting the focus away from US–China technological competition, this IISS research paper looks at the approaches of the EU and Indo-Pacific countries in selected domains of the digital order, identifying patterns of convergence and divergence in this space. Locating common practices and bringing to light gaps in policy regulation could delineate key areas for further cooperation between the EU and Indo-Pacific countries.

Therefore, the purpose of this report is to bring attention to how the EU and Indo-Pacific countries have responded and continue to respond to four key areas of strategy, regulation and international cooperation within the digital order: 1) the protection of national critical infrastructure (NCI) 2) harnessing AI 3) the protection of national innovation ecosystems 4) and countering cyber disinformation. These areas were selected as they are particularly revelatory in terms of indicating countries’ approaches to national resilience, competitiveness, prosperity and security. For each of the four domains, the analysis poses a number of questions in order to draw out key aspects of countries’ approaches, such as each country’s policy development; the governmental authorities and stakeholders involved; domestic debates over national security or prosperity; and partnership and cooperation with other regional and international actors.
After examining EU responses in the four areas of policy regulation, the report studies those of 41 countries, overseas territories and entities in the Indo-Pacific, excluding China. To facilitate comparison, the countries analysed are grouped into four subregions: Southeast Asia, Northeast Asia, South Asia and Oceania. The assessment of these countries’ responses relies on primary government-policy documents and secondary sources. The analysis also draws on insights from a workshop organised by the IISS, held in Singapore in Spring 2023, which brought together government officials and leading experts in this field.

With regards to the four domains, this report finds policy divergence in line with the examined countries’ diversity of economic growth and levels of technological development and connectivity. Nevertheless, trends can be identified for Indo-Pacific countries at the subregional and regional levels, as well as similarities with the EU in several of the areas considered.

Regarding NCI, the report highlights discussions currently taking place at the minilateral level. These include only a minority of Indo-Pacific states. On the other hand, out of necessity the EU takes a supranational approach, having made progress on transboundary critical-infrastructure protection among member states. The EU and Indo-Pacific countries could exchange best practices for the protection of cross-border infrastructure and in order to enhance the resilience and protection of their NCI.

Concerning AI governance and the development of national AI strategies, several countries in the Indo-Pacific and the EU have made significant progress in AI regulation in recent years and are seeking cooperation in this domain with other governments at a regional and international level while also pursuing a leadership role in standard-setting. As several emerging and developing countries in the Indo-Pacific lag behind in regulating AI, this could provide an opportunity for EU and more developed Indo-Pacific countries to share best practices to facilitate the process towards AI regulation and the development of national AI strategies. To ensure wider inclusivity in the adoption of AI technology and promote whole-of-society approaches to AI strategies, the EU and like-minded countries in the Indo-Pacific could build stronger ties with those countries predominantly concerned with prosperity (rather than security or ethical concerns). Additionally, while some obstacles to AI-strategy implementation derive from local contexts, countries across the analysed regions seem to share common challenges, such as unequal access to data, data security and national government-systems digitalisation, which points to the need for increased cooperation in this sphere.

Protection of national innovation ecosystems is a further area where the EU and Indo-Pacific countries present both similarities and differences. Like the EU, most Indo-Pacific countries participate in export-control regulation, and some have indicated their commitment to harmonise trade policies with international standards or in minilateral agreements on restricting exports of advanced technological components. On the other hand, Indo-Pacific governments’ approaches to investment-screening mechanisms are less homogeneous than that of the EU’s supranational regulations, targeting a range of different sectors but in some cases failing to thoroughly address critical sectors. The EU and more developed Indo-Pacific countries could redress the discontinuity of foreign direct investment-screening mechanisms by exchanging best practices with the regional countries that take a predominantly prosperity-focused approach to national innovation and critical-infrastructure development, in order to help them develop national policies that can both protect national innovation strengths and support national socio-economic development.

Lastly, disinformation in the cyber domain is a phenomenon faced by all EU and Indo-Pacific countries. However, governments’ responses differ greatly, ranging from fact-checking initiatives, legislation and the involvement of civil society and the private sector, to harsher measures like strengthening state control over the online domain. A further difference between the countries analysed is the origin of disinformation campaigns and fake-news proliferation: these activities can be traced back to domestic state and non-state actors in some instances, and to foreign perpetrators in others. To tackle this widespread and multifaceted phenomenon, states must first agree a clear definition of disinformation in the cyber domain. A definition could be the building-block of the necessary legislative and policy approaches to adopt effective countermeasures, facilitating a joint effort that would encompass the best practices from both the EU and Indo-Pacific countries.

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