Essay: EU’s external policy and its academically ‘accepted’ nexus soft power

The actions of a controversial Dutch politician, Geert Wilders, seems to have put the Royal Dutch Shell-Saudi relationship in serious difficulty by defiling the devout Muslim message on the Saudi flag. The Dutch minister of foreign affairs, threatened by possible sanctions for more Dutch companies, is currently in negotiations to diffuse the situation. The possibility of sanctions against Dutch Multi-National Corporations (MNG’s) and investments astonished the tiny nation that is already experiencing relative economic difficulty because of growing unemployment. Trade between the countries came to nearly $5 billion in 2010 and the Netherlands accounted for nearly 4 percent of foreign direct investment in Saudi Arabia that year. The Kingdom of Saudi Arabia mainly offers the Netherlands oil and oil products with the port of Rotterdam as an important hub in the worldwide network. Trade between the two nations is asymmetric in the sense that Gulf States, unlike states that possess little natural resources, have exceptional leverage in the political arena.
This became evident during the first real economic and political conflict between the Dutch and the Gulf States. The conflict started because of the Yom Kippoer War (1973), where the Dutch supported the Israelis ‘ a policy not widely carried amongst the other European Community (EC) Member States. During this conflict, the EC Members were utterly divided in their position which resulted in an oil embargo imposed by the OPEC Members towards specific members of the EC ‘ i.e. the Netherlands. The historical continuation of Gulf state-policy ‘ in this case the decision by Saudi-Arabia (SA) to sanction and seek confrontation with an EU-Member State on the basis of ideational and political purposes ‘ and the lack of a joint EU response revealed certain theoretical incompatibilities in regards to EU power. We may argue that the Gulf States, have an unique geopolitical and ideological position in the globalized world which limits the efficacy of EU power over a third party. This is reinforced further still when we consider that the EU’s general strategy ‘ unlike China’s and Russia’s ‘ includes strengthened cooperation on areas that are highly sensitive for the GCC’s authoritarian regimes, such as democratization and the promotion of human rights.
If EU power is based on the premise of soft power, then how can the EU exert influence through ideational structures if the third party has a completely different set of ideas and normative interpretations? Would this not lead to a collision and actually be counterproductive? Thus, the EU-GCC relations have been limited and strained, because of ideological and economical differences. The EU’s push for democracy in the Middle-East and the attention it pays to human rights, make it difficult for the autocratic Sheiks of the GCC to build a lasting and economically beneficial relationship between the two regional markets. Furthermore, the premise of an interdependent world comes in question when one understands the unique position of the GCC States. As rentier states, the economic costs of closure are very low, especially for SA. This study is an attempt to address these issues.
If we are indeed to assume that the EU has notable leverage in its relations with the region, it is important to examine to what extent this assumption relates to existing theoretical and empirical considerations of the EU’s engagement with the GCC. Therefore, a reassessment of the political and economic relationship between the Gulf States and the EU is required. By examining EU’s external policy and its academically ‘accepted’ nexus soft power, I hope to gain a better understanding of the power the EU exerts over these mostly autocratic Islamic rentier-states. The scientifically beneficial results could be twofold; firstly, it will offer a better understanding of the EU-GCC relationship and the efficacy of EU foreign policy. Secondly, this paper will attempt to make a critical analysis of theoretical assumptions regarding EU power over a third party and consequently provide a better understanding of the power the EU wields in the GCC region. To sum up the key contribution of the thesis: the research presented in this thesis seeks to produce new theoretical perspectives and provide new empirical findings for the literature on EU-GCC relations. Also, it seeks to contribute to the development of the theoretical debate on the EU’s power over the region.

Methodology
This study uses explorative research through all five phases of the empirical cycle. This means that variables and relationships among variables which describe the manual performance of a planning task cannot be determined in advance, but will logically follow out of the research. This inductive-empirical approach uses the empirical cycle in order to understand and explain problems with the emphasis on the development of theories. A theory refers to a body of knowledge consisting of a particular number of coherent rules. A theory is used for prediction and explanation of relationships among variables. It is attained by testing hypotheses with empirical data in order to reach general statements. The empirical cycle represents the hypothetical-deductive research approach. The observation phase puts the emphasis on the collection of empirical facts. In the next phase, induction, the aim is to specify explicitly the hypotheses on the basis of the observed facts. Hypotheses need to be defined in measurable variables in order to derive concrete predictions. This is the main focus in the deduction phase. Next, these predictive statements are checked in the testing phase by collecting new empirical data in order to examine whether the relationships among variables as predicted can be found in the new data. In the last phase, evaluation, the results are interpreted within the framework of the specified hypotheses and theories. The evaluation phase is interpretative by nature, generating ideas for new hypotheses and research. The evaluation phase runs smoothly into the first phase of
the empirical cycle. Thus, the foundation of this research is based on Popper’s logic of scientific discovery, which is ‘falsification,’ ‘ testing the validity of a theory (or finding) by how well it withstands attempts to ‘falsify’ (i.e. disprove) it.
To make a genuine contribution to the literature, this research requires to be supported by coherent theoretical claims, an analytical model and a methodology. This implies that the analysis proceeds by way of a dialogue between theory and empirical evidence to present a theoretically informed and empirically supported account of the EU’s power in the GCC. The thesis seeks to engage in negotiating a constructive dialogue between theoretical propositions from the fields of IR, IPE and European integration, and the complex empirical reality of the EU’s power over the GCC. To discover whether the EU exerts ‘power over’ a particular region, this thesis will use supplementary visions and angles that will expand and problematize atomistic frameworks. This helps to assess the degree to which, in today’s globalized and interdependent world the EU exerts influence vis-??-vis a third party. This thesis is inspired by debates in IPE, in particular new realist and critical IPE perspectives, and combines these views with insights from neorealist, neo-institutionalist and constructivist approaches to EU external relations. The contribution of this thesis will lie in its holistic approach, which may also be its pitfall. After the elaboration of the theoretical argument and the explanatory framework, the thesis proceeds to examine the validity of the theoretical claims articulated in relation to the EU’s power over the GCC.
Because this paper analyses the EU’s external policy, it is important to explain what the thesis exactly understands by the EU and how it defines it before expounding on the methodological tools used in conducting the research. Moreover, how we define the EU also has implications for the outlines of the empirical analysis. The unique character of the EU has proved a major challenge to International Relations (IR) academics. In essence, the thesis views the EU as an international organization sui generis with some state-like properties, which operates through a hybrid system of supranationalism and intergovernmentalism. Among other things, such an understanding of the EU implies that EU Member States bilateral relations with third countries are mostly left out of the picture. Hence, the thesis will only consider EU Member State engagement with third countries (e.g. the GCC states) when it directly relates to or is conducted within the framework of the EU’s external policies and relations, most notably within the framework provided by the European External Action Service. Namely, the Common Foreign Security Policy (CFSP).
Particular parts of the research methods and the general scope must be limited, due to the length of this thesis. The EU attempts to disseminate its regionalist model by designing its policies and strategies for regional groupings of countries rather than individual states. Hence, due to the relational difficulties of the EU with the Gulf region, I will examine the EU-GCC relations. To further narrow it down, KSA will receive special attention, because of its position within the GCC as the most powerful and assertive actor in the region. Its structural ‘ population, military, political, economic ‘ and even ideational power ‘ Heart of Islam; Mekka and Medina) ‘ make KSA a key player in EU-GCC relations. The post-9/11 world changed and affected the world in many ways. With good judgment, we may state that this occurrence is a demarcation point in history. Especially the role of Saudi citizens in the 9/11 attacks alternated the perception and dealings with this nation and for this reason the papers focus will generally be on the period after. Also, present incidents provide an important complementary addition to the paper and therefore will be taken into observation. Lastly, the Kingdom and the United Arab Emirates (UAE) are the only countries where the EU has a permanent representation in the region which shows there relative importance for the EU.

Methodological tools and structure of the thesis
In order to falsify the hypothesis, the study relies on in-depth first- and second-hand empirical research, using qualitative research methods. The first category comprises official documents, project descriptions and evaluations, press releases and speeches, stemming principally from the Council (including the rotating Presidency of the Council), the EU Special Representative for the GCC, the European Parliament and the European Commission. Most of these sources are available on the websites of the respective EU governing institutions. The websites of DG Relex, DG Trade, DG DEV and the Delegation of the European Commission to Saudi-Arabia and Abu Dhabi. The documentary analysis examines the actors external perception of the EU’s power over states within the GCC. The latter is particularly useful for the empirical analysis of the ideational structure. This parameter captures the projection of power based on such ideational aspects as values, beliefs, norms, culture and identity. The second category includes secondary sources which will support the empirical research. Broadly speaking, three sorts of secondary sources will be used, notably: media sources, academic publications, and reports and briefings from NGOs and research institutes. This serves mostly to complement the empirical data retrieved from primary documents.
After the elaboration of the theoretical arguments and the explanatory framework, the thesis proceeds to examine the validity of the theoretical claims articulated in relation to the EU’s power over the GCC. In paragraph one, the paper will provide contextual background of the EU engagement with GCC countries. The next three paragraphs explore to what extent to which the EU’s power over the GCC effectively derived from a combination of material (2), institutional (3) and ideational (4) structures. Lastly, paragraph 5 will sum up the theoretical consequences for the understanding of EU external policy.

Building the theoretical foundations
In building the theoretical foundations of the thesis’s argument and framework of analysis, two key issues remain central to discussions in the social sciences: the concept of power and the agent-structure divide. In tracing a logical link between these two conceptual issues with respect to the EU’s external power, this thesis focuses on a number of insightful studies, thereby going from diverging understandings of power to theoretical propositions regarding structural power and the agency-structure dichotomy. Firstly, there is a need to provide for context surrounding the debate for a better understanding of how the concept of power and agent-structure divide transformed, because much has changed in IR theory since the end of the Cold War. We now live in a new multipolar post-modern world which emphasizes economic and political cooperation instead of the bipolar Cold War period with its emphasis on military and ideological competition.
Since the end of the Cold War, many would argue the world has entered an age of globalization. What is globalization? The IMF describes it as: ‘the process through which an increasingly free flow of ideas, people, goods, services, and capital leads to the integration of economies and societies’. It is often viewed as an irreversible force, which is being imposed upon the world by some countries and institutions such as the IMF and the World Bank. The current wave of globalization has been driven by policies that have opened economies domestically and internationally. In the years since the Second World War, and especially during the past two decades, many governments have adopted free-market economic systems, vastly increasing their own productive potential and creating countless new opportunities for international trade and investment. Governments also have negotiated dramatic reductions in barriers to commerce and have established international agreements to promote trade in goods, services, and investment. Taking advantage of new opportunities in foreign markets, corporations have built foreign factories and established production and marketing arrangements with foreign partners. A defining feature of globalization, therefore, is an international industrial and financial business structure.
Many developing countries have already taken advantage of the opportunities of the global economy. More rapidly globalizing countries, such as Brazil, China, Costa Rica, the Philippines, and Mexico on average doubled their share in world trade and raised per capita incomes by two thirds from 1980 to 1997. Their experience demonstrates that integration into the global economy can bring major advantages for developing countries. However, other countries have not done so well. A large part of the world’s population ‘ especially in sub-Saharan Africa ‘ has been left behind by economic progress. As a result, the disparities between the world’s richest and poorest countries are now wider than ever, with increasing incidences of poverty within countries. Poverty is not only unacceptable on moral grounds, it also forms the breeding ground for war and terrorism. It is, therefore, the greatest challenge to peace and stability in the 21st century. Therefore, many argue that globalization is a concept which describes structural change in the global political economy.
One of the main characteristics of the contemporary global system is its interdependence. Interdependence refers to situations where states or actors are determined by external events in a
reciprocal relationship with other states or actors, jointly limiting their autonomy. It is created
through the expansion of international transactions, insofar as the costs associated with them
constrain political activity. While these relationships impose costs, the benefits may exceed
them. This neoliberal notion brings us to the concept of power and its different ontological approaches.

Understanding Power
When the term ‘power’ is used in IR studies, usually, it implicitly refers to direct or relational power, most commonly defined as ‘the power of one actor to get another actor to do something it would not otherwise do. Waltz suggests that power in the international system can be understood as the capacity of a state to affect the behavior of other states while resisting unwelcome influence from those states. Traditionally, this has been associated with states, military capacity and deliberate behavior. According to McCormick, three conventional assumptions have been made about power. The first, in the traditional view of most scholars of IR, has been that great powers must be able to wage war. Military capacity remains important, but it has many limitations. Most recent threats to peace have sources that demand non-military action. They include poverty, terrorism, environmental degradation, natural disasters, international crime, the drug trade, illegal immigration, forced labor, trade disputes, and public health crises. Real on-going influence in the postmodern world must be measured not in terms of size and military strength, but as several international political economy (IPE) theorists attest, in the role of corporations in the global trading system, the strength and influence of currencies and banking systems, the control of budget deficits and trade balances, knowledge, and the availability of resources for foreign direct investment.
Keohane and Nye make a distinction between behavioral power ‘ the ability to obtain outcomes you want ‘ and resource power ‘ the possession of resources that are usually associated with the ability to reach outcomes you want. Behavioral power can be divided in hard and soft power. Hard power, argue Keohane and Nye, is the ability to get others to do what do would otherwise would not do through threats and rewards. Whether economic or military, the ability to coax or coerce has long been the central element of power. The ability of less vulnerable actors to manipulate or escape the constrains of an interdependent relationship at low cost is an important source of power. For example, in the 1970’s, rising oil prices, gave greater leverage for producers, and had major effects on world politics, reflected in the creation of OPEC and the Arab oil embargo of 1973.
Soft power, on the other hand, is the ability to get desired outcomes because others want what you want. This idea is mostly reflected in Nye’s concept of soft power. Non-coercive power mostly comes in the form of attraction. It works by convincing others to follow or getting them to agree to norms and institutions that produce the desired behavior. Soft power rests on the appeal of the ideas, culture or the ability to set the agenda through standards and institutions. Soft power varies over time and different areas. For example, not all aspects of America’s popular culture are attractive for everyone. In the Muslim world many of these aspects are considered ‘evil’ or haram (sin) by conservative groups.
Several neorealist academics would argue that soft power rests on hard power. Kagan discusses the widely held view that Europe has moved beyond the old system of power politics and has now discovered a new system, a system based on diplomacy, negotiations, inducements rather than sanctions, and compromise rather than confrontation, for preserving peace in international relations. In the words of the author, ‘Europeans have stepped out of the Hobbesian world of anarchy into the Kantian world of perpetual peace’. In this case, European soft power relies on American hard power in the form of military guarantees giving it the space to take current position. To put it bluntly, the Europeans have no other choice than to rely on non-military forms of ‘limited’ influence. Disagreeing, Keohane and Nye argue that soft power of the Vatican did not decrease because the size of the papal state diminished and that countries like Canada, Sweden and the Netherlands have more influence than some other states with equivalent economic or military capabilities. Furthermore, when there is no military threat, there is also less need for distrust.
The second conventional assumption made about power in the international system is that it is monopolized by states. In the new international system the power of states has reduced. Keohane and Nye developed the ‘complex interdependence theory’, which argues that societies are connected by multiple channels, and that the international agenda contains many different issues with no clear ranking. Several international political economy theorist also reject the idea of a state-centric international system and consider the state to be only one actor among many. For many neo-realist, the paradox that international cooperation occurs in some areas, despite the struggle for power between states needed explaining. The presumption of authority is just one indication of what is called structural power. For Krasner structural power is put forward in his regime analysis. In Krasner’s influential definition, ‘regimes’ are defined as ‘sets of principles, norms, rules and decision making procedures around which actors expectations converge in a given issue-area’. He was one of the first to embrace the notion of structural power, which he termed ‘meta-power’, and which referred to states indirect institutional power. According to Krasner, regimes, and normative structures can, after a certain amount of time, become independent sources of influence, and can thus be used as instruments to exercise power over other states. Meta-power, in this view, thus refers to the ability to change the institutions. These conceptualizations, of which Krasner’s was just one, were aimed at widening the notion of power by encompassing structural explanations for how power in the international realm operates.
For this part of the thesis, we will focus on Strange’s more pluralist approach which was one of the most important neorealist ontology and therefore crucial for the analysis of this thesis. Unlike Krasner and other state-centered theorist, Strange does not recognize the state as the only significant actor. Although critical of Krasner’s rational-choice and state-centric approach and assumptions, Strange did pick up on his conceptual distinction between meta-power and relational power, only to integrate it into her own distinct theory of structural power. Central to her ideas was the claim that traditional approaches to IR limited our understanding of power and of how it is exercised in the international system by concentrating almost exclusively on direct, agent-focused forms of power and on the ‘relational power’ of one state over another. Strange tried to pinpoint the central authorities whose decisions determine the course of events and power relations at the international level. She distinguished two types of power, relational power and structural power. Strange defines structural power as: ‘the international political economies power of indirect influence as the framework in which actors can act and evolve’. This refers to a different dimension of capabilities, signifying a hegemons capacity to create essential rules, norms and modus operandi for various dimensions of the international system. It describes the actor’s ‘power’ to decide how things shall be done, the power to shape frameworks within which states relate to each other, relate to people or relate to corporate enterprises. Strange also distinguished between four structural capabilities through which power is exercised (in casu security, finance, production and knowledge). This conceptual division into four structures indicates, among other things, is how Strange conceived of structural power as going beyond the traditional IR realm of material features to encompass non-physical (normative) factors. Strange asserts that what is common to all four structures of the global political economy is that the dominant power within the international system is able to pursue goals by changing the range of choices open to others within the respective structure, not just through coercion or by putting direct pressure on them, but equally by pre-empting or co-opting their consent.
Too sum up, Strange’s approach stresses the independent impact of institutions, the importance of leadership, the involvement of transnational NGO’s and companies, and the process of cognitive change, such as growing concern about human rights and the environment. Furthermore, we can conclude there is little sign that global commerce and the state are antithetical. On the contrary, the two have shown considerable mutual dependence. States have provided much of the regulatory framework for global trade and finance, albeit that they have shared these competences with other regulatory agencies.
The third conventional assumption made about power is that it must involve deliberate action and resistance, and that it can be measured only when one actor changes the behavior or the thinking of another against its wishes. According to Spruyt, the idea that agents engage in calculative behaviors to achieve their goals in utilitarian manner does not hold.

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