The news on a new economic corridor, announced at the G20 Summit, that will connect India, the Middle East and Europe through railroads and ports has been on the agenda in recent days. The details of the project and whether the new corridor could be an alternative to the Belt and Road Initiative (BRI) are still being debated.
At the summit, the United States (US), Saudi Arabia, the United Arab Emirates (UAE), France, Germany, Italy, France, Germany, Italy and the European Union (EU) signed a Memorandum of Understanding (MoU) on the multinational rail and maritime transportation project, but the signatories agreed to prepare an action plan for the establishment of the corridor within two months without binding financial obligations.[1]
The railway leg of the corridor is envisaged to run from India to the UAE, then via Saudi Arabia and Jordan to the Israeli port of Haifa, while the maritime leg will connect to Europe via the Greek port of Piraeus. The project also includes a hydrogen pipeline.
The initiative is expected to greatly facilitate the transportation of energy resources and trade from the Gulf countries to Europe by reducing transportation time, costs and fuel consumption. However, there are also comments in open sources that the project is more political than economic and that there are uncertainties about its actual viability. [2] The most important reservation about the viability of the project is the difficulty that the US will have in contributing to the financing of such a large infrastructure, given its current large expenditures for the Russian-Ukrainian War.
When the issue is evaluated in the context of Italy’s recent and much-discussed exit from the BRI, the fact that Italy is one of the signatories of the new corridor is not an obstacle to its exit from the BRI. The Port of Piraeus, which is planned as a transshipment point to Europe in the new corridor and is majority-owned by the Chinese state-owned China Ocean Shipping Company (COSCO), is not as central as Italian ports in terms of intermodal transportation and logistics connections. [3] As it will be recalled, the five-year Memorandum of Understanding signed by Italy, the first and only G7 member to join the BRI in March 2019, will expire in 2024 and a final decision on the issue must be taken by the end of 2023.
The argument of the proponents of exiting the BRI in Italy is that Chinese FDI in Italy is significantly lower than in other major European economies such as Germany and France, which have not ratified the BRI but have signed important trade and investment agreements with Beijing.[4]
China’s view on the issue is that the bilateral trade volume between China and Italy will increase by 42 percent from 2019 to 2022, reaching approximately 78 billion dollars,[5] which is an indication of the positive result of the cooperation Although statements and assessments show that the tendency to not renew the agreement under pressure from the United States is predominant, according to a survey conducted by the Italy-China Council Foundation, 84% of Italian companies have a positive outlook on the future of China-Italy economic and trade relations.[6]
On the other hand, Italy is an important partner of India in trade, investment, defense, science and technology, and culture. Therefore, Italy’s possible decision to withdraw from the BRI could be seen as positive for India to further strengthen its economic and strategic ties with this country and increase some infrastructure investments. However, it would be a win-win situation for Italy to be a terminal point of the BRI for Europe with its ports opening to Central and Eastern Europe such as Genoa and Trieste, where China’s state-owned enterprise “China Communications Construction Company (CCCC)” is a partner, and with Chinese investments in other ports , [7] it would be a more rational solution to stay in the BRI despite Atlantic pressures. Although the new transport corridor connecting India to Europe is considered a political project to limit China’s influence, like the EU’s Global Gateway Project, which was created in 2022 as an alternative to the BRI and promised to provide 300 billion euros for infrastructure investments in developing countries by 2027, China has stated that it welcomes the new corridor as long as it is not turned into a geopolitical tool.[8] The new corridor project may be a complementary project rather than an alternative to BRI, if it is realized within the framework of mutual respect, non-interference in the internal affairs of countries and win-win principles, which are the basic principles of Chinese foreign policy, which is India’s largest trading partner after the EU. After all, the products that Europe imports from India and China differ.
[1] Bahattin Gonultas, “7 Countries, EU Sign Memorandum of Understanding for Trade Corridor Linking Europe, Middle East and India”, Anadolu Agency, https://www.aa.com.tr/en/europe/7-countries-eu-sign-memorandum-of-understanding-for-trade-corridor-linking-europe-middle-east-and-india/2988027, (Erişim Tarihi: 12.09.2023).
[2] Ekaterina Blinova, “How US Could Turn India-Middle East-Europe Economic Corridor into Destabilizing Tool”, Sputnik International, https://sputnikglobe.com/20230911/how-us-could-turn-india-middle-east-europe-economic-corridor-into-destabilizing-tool-1113290474.html?ysclid=lmfy7jel8s141854184, (Erişim Tarihi: 12.09.2023).
[3] “Italy Needs a Clear Strategy to Catch the Tide of BRI: Italian Expert”, Global Times, https://www.globaltimes.cn/page/202307/1293554.shtml, (Erişim Tarihi: 13.09.2023).
[4] Giovanna De Maio, “Playing with Fire, Italy, China, and Europe”, Brookings, https://www.readkong.com/tmp/playing-with-fire-italy-china-and-europe-7027058.pdf, (Erişim Tarihi: 12.09.2023).
[5] “Don’t Let Quitting BRI Become Italy’s Regret: Global Times Editorial”, Global Times, https://www.globaltimes.cn/page/202308/1295423.shtml, (Erişim Tarihi: 12.09.2023).
[6] Yin Yeping, “China-Italy Partnership Foresees a Brighter Future; Narrative of The BRI Cooperation Being ‘Futile’ Is Baseless, As the Facts Speak for Themselves: Chinese Envoy”, Global Times, https://www.globaltimes.cn/page/202307/1295096.shtml?id=11, (Erişim Tarihi: 12.09.2023).
[7] Francesca Ghiretti, “The Belt and Road Initiative in Italy: The Ports of Genoa and Trieste”, Istituto Affari Internazionali, IAI papers 21 | 17- April 2021, (Erişim Tarihi: 12.09.2023).
[8] “China Says It Welcomes India-Middle East-Europe Economic Corridor So Long İt Doesn’t Become a Geopolitical Tool”, The Indian Express, https://indianexpress.com/article/world/china-says-it-welcomes-india-middle-east-europe-economic-corridor-8935470/, (Erişim Tarihi: 12.09.2023).
