Economy

Interview: Why Does Poland Need ‘17+1’?

Interview with Michał Wójcik - Director of the Department of International Cooperation of the Ministry of Marine Economy and Inland Navigation (DWM MGMiŻŚ). In the Ministry, he is leading the  Coordinating Secretariat for Maritime Issues , monitoring the cooperation of Central and Eastern European States with China.

Instytut Boyma 08.06.2020

Krzysztof M. Zalewski: Many international visits have been postponed due to the pandemic. This has also been the case with the ‘17+1’ format summit previously scheduled for April this year. This temporary slowdown in the relations may prove to be a good opportunity for summarizing the experiences of the ‘17+1’ format and outlining the plans for the future.

Michał Wójcik: Perhaps by way of an introduction I will in a few words outline what the Coordinating Secretariat does in the frames of the Format. And so, in 2016 a decision was made to establish a separate secretariat for maritime issues and locate it – to the consent of all the seventeen countries, at that time still without Greece[1] – in Poland. Our unit specializes in these areas which have not been taken up by other secretariats, i.e. maritime routes and waterways, transport networks, and investments in strategic infrastructure in the territories of the states covered by the ‘17+1’ format. There are other secretariats, as the Logistics Secretariat which operates in Riga.

Our main task is to reverse an established logic in terms of the commercial and transport connections in the region of Central and Eastern Europe. So far, in the case of Poland, the majority of routes have followed the East-West line. We are trying to restore the balance and give the North-South axis a boost.

To promote the shipping routes, we have also developed a special map in which we have included connections, which provide development opportunities for the entire region. For Poland, it is important for these routes to pass through our seaports: Gdansk, Gdynia, or Szczecin-Swinoujscie. In the case of the freight traffic arriving in Europe by sea, the other Visegrad Group states, or countries which do not belong to the Format – Belarus and Ukraine – are the natural back-end for Polish ports. In the frames of the cooperation within the ‘17+1’ format, we want to build such connections which would direct the flows into our ports. We also want the transport corridors on the axis leading the Adriatic, to Slovenian Koper, or Croatian Rijeka, and to the Black Sea with the port in Romanian Constanța to develop. Even and steady development of the infrastructure is advantageous for the region’s cohesion.

Moreover, the trading routes which will begin or end in Poland may yield huge advantages for the Polish economy.

Both the Format and the Secretariat itself create an opportunity to coordinate these efforts above the present borders of the European Union as well as present us as a region to China. At the same time, we do not duplicate the Three Seas format or the Berlin process integrating the Western Balkans with the European Union. The ‘17+1’ Format aims at changing the perception of Poland and the region as merely transit countries on the way to the ports of Hamburg or Rotterdam. We are fighting for goods to be transhipped nowhere else but in Poland.

 

A charge sometimes can be encountered, especially raised by our partners from Berlin that the format duplicates the existing forms of cooperation with China, if only by cooperation via the EU, which will also hold a summit with representatives of the Middle Kingdom. What is the added value of both the Secretariat and the format?

Cooperation with China may take place on multiple planes and in many formats. For Poland, the bilateral cooperation is of most importance. The Chipolbrok Chinese-Polish Joint Stock Shipping Company hails back to the times of yore. These formats are not mutually exclusive, on the contrary – they are complementary because ‘17+1’ are not only the EU but also the aspiring countries.

The trading routes from the south run across such countries as Albania, Northern Macedonia, Serbia, or Bosnia and Herzegovina which can develop their infrastructure, this way diminishing the disproportions between them and the countries which accelerated in economic terms already as members of the EU. The Chinese are building a railroad between Belgrade and Budapest. This investment is a major step towards improving transport in this part of Europe.

 

Americans often point to the Chinese investments, e.g. the harbor in Piraeus, as to an element of the sellout of strategic infrastructure in Europe. According to this line of thinking, it undermines the autonomy and independence of our continent. What is your assessment – is the sale of such infrastructure advantageous and does the Secretariat have a role to play in the case of this specific investment?

I understand the United State’s argumentation very well. China raises similar arguments in relation to the United States. This is a classic conflict of great powers, where sharp wording is quite common.

Yet, I do not see our role here. We mainly handle the coordination and exchange of information. We show projects, the realization of which is necessary to stimulate exchange and development in the frames of the region. We do not want to get involved in American-Chinese conflicts, it is not our Secretariat’s role.

Neither would we want to interfere in the matter of to whom and why the Greeks decided to sell their port. It is a fact that it belongs to a Chinese company, but the Chinese invest also into Belarus or the harbor in Genoa, therefore outside of the Format countries. In many countries of Europe, the Chinese are building outposts of sorts because the continent as a whole is an important market for them.

Poland needs and buys goods from China. This is why we have to possess the infrastructure to receive them. Everyone wants to order something online and have it delivered to their doorstep the very next day. Such are laws of the market.

 

 Let us then stick to the role the Format plays for the region. From the conversations with representatives of the ‘17’, one may get the impression that this Format sometimes plays the role of a catalyst for regional cooperation. Is it ‘17+1’ who we owe more contacts with the region to?

I would not call it a catalyst. We are the largest country in the region and contacts with other members of ‘17+1’ are entirely natural for us. Perhaps Northern Macedonia or Albania may have another perspective. Poland has been a member of the European Union for sixteen years, and also belongs to the Visegrad group and the Three Seas Initiative and meetings within these organizations take place on multiple levels of administration. Last year, in the frames of the Berlin process, Poznan hosted the EU-Western Balkans summit. There are many forums of cooperation like that and certainly from this perspective ‘17+1’ is one of the most important ones. But it does not mean that we needed the Chinese to initiate this cooperation.

Not all countries in the ‘17’ belong to the EU, while this region should be perceived as a whole. If the entire region could be integrated within the EU, then the ‘17+1’ would lose its raison d’être. But for the time being it is a distant perspective.

Chinese investments are probably easier and more expected in the Balkans. Within the EU we have to operate according to the European law on the principle of open tenders and transparent procurement. Chinese companies may participate in these tenders, but it does not mean that because of that they are guaranteed preferential treatment. Tenders are carried out based on transparent principles and are equal for everyone. Whereas it is a fact that a certain degree of coordination of activities within the region is necessary.

 

In recent years, a growing activity of the Chinese side has been noticeable in the region’s infrastructural projects. The already mentioned project of redevelopment of the Budapest-Belgrade railroad, and then reaching further to the Piraeus is being implemented, the Chinese are investing in road infrastructure. Are the Chinese also seen to plan attempts at investments into waterways infrastructure and are talks in this respect underway?

As the Ministry, we are planning investments in waterways infrastructure, inland navigation, and seaports. These plans are independent of any format of cooperation since we know that such investments are necessary.

Water transport is our priority since it is more ecological and less expensive. Expressways and highways may, at some point, reach their maximum transport capacity, therefore it is worth creating alternatives in the form of river water transport. The most important in this respect is E-30, an international waterway[2]. This is why large investments are related to it, e.g. the construction of water barrages connected to water retention and storage. Moreover, retention reservoirs are crucial, since we face a threat of recurring drought. Similarly, investments in seaports are required.

We are looking for financing possibilities all over the world, and China is one of the partners, similarly as Japan or Singapore. Additionally, we are also using the funds from the Three Seas Fund, European Investment Bank, and other EU funds. It is too early to say which partner will be chosen. Some investments will be purely business projects, such as the water barrage in Siarzewo or port projects. We are open to every partner willing to invest their funds, but each venture should be conducted in a manner beneficial for the Polish economy.

 

One of the Secretariat’s main roles is to announce various investment prospects, as well as provide assistance in the search for business partners.

Our focus is business matchmaking, promotion, and organization of meetings providing opportunities for an exchange of information. Networking and getting to know prospective partners definitely facilitates later cooperation.

Obviously, all imparted information is public, but in the world of today with a large stream of information, the goal is to highlight that most important. The information marked with the ‘17+1’ hashtag has become a brand for other partners.

Business matchmaking is a part of our efforts at creating connections to benefit Poland and all partners in the region, to ensure its development as a whole. We have to increase our transport capacities, both for people and goods. Via Carpathia may come as a good example – whereby its sections located in our territory to directly connect Bialystok, Lublin, and Rzeszow are crucial for Poland. For this route to fulfill its function, parts of it have to be built in many countries simultaneously.

 

Europe has a large trade deficit with China. If we facilitate this exchange of goods, it will be easier and cheaper, and the deficit will continue to grow. Are we not facilitating an exchange which is extremely disadvantageous for 17+1 countries?

Trading routes always work both ways. For the time being the containers traveling our way are full and return empty. On the one hand, the Chinese market is closed to many of our goods, on the other, the manufacturing costs in China are different than in Europe. Chinese do not buy our clothes or electronics, but they import luxury goods from Europe. World production is moving to China and this disproportion will not disappear. Poland, for example, also has a disproportion in the trade exchange with the UK, but in this case, it is us who export to Great Britain more than import.

Endeavors aimed at a wider opening of the Chinese market for our products should be a parallel process to the support of the China-Europe connections. As the ministry, we are currently working on opening the Middle Kingdom to more fish species. We are waiting for Chinese inspections to allow our processing plants’ exports to that market, including the export of carp, cod, and mackerel. In China, imported fish is considered a luxury and certainly healthier goods, perhaps because of the disadvantageous ecological conditions in the Middle Kingdom. Considering that under normal conditions a train journey takes between 14 and 16 days, processed fish products and frozen fish come into play.

We would like Polish fish processors to enter this market and build a brand of high-quality products. From outside the scope of our Ministry’s responsibilities, recently the Chinese market has been successfully opened to Polish chicken, and broader access for Polish furniture has been gained.

These endeavors will not render the trade balance equal. We must, nevertheless, engage in actions aimed at decreasing the trade deficit.

 

Is the opening of the market for individual product groups a subject of bilateral negotiations, or is it taking place also in the ‘17+1’ format?

These are classic bilateral subjects. The ‘Seventeen’ do not form any customs union, so it would be difficult to raise these issues. But on the occasion of the ‘17+1’ meetings, we also address these issues in the bilateral format. China is far away, direct contacts are not too frequent, it is worth putting them to maximum use. Thanks to ‘17+1’ the bilateral issues are easier to reach.

We will exchange the experiences of talks with the Chinese side in the region. There are no obstacles for very practical exchange of observations in terms of elements the sanitary inspections pay attention to. Such a practical exchange of experience in the relationships between the countries of the region and China is a huge advantage of the ‘17+1’ format.

*

Michał Wójcik – Director of the Department of International Cooperation of the Ministry of Marine Economy and Inland Navigation (DWM MGMiŻŚ). In the Ministry, he is leading the  Coordinating Secretariat for Maritime Issues , monitoring the cooperation of Central and Eastern European States with China.

Many thanks to Anna Bratek, a specialist at the DWM MGMiŻŚ for her efforts in organizing this interview.

References:

[1] Greece joined the Format in April 2019, which previously held the informal name “16+1”. In light of this change, the Coordinating Secretariat also changed its name.

[2] The E-30 waterway leads from Stockholm, along Sweden’s eastern coastal waters, across the Baltic Sea to Swinoujscie, the Oder River, the designed Oder-Danube Canal to Devin near Bratislava, connecting the Baltic Sea with the Danube region. The elements of this planned waterway are the Szczecinski Lagoon, the Oder Waterway and the Oder-Danube Canal. The E-30 waterway runs along the so-called Central European Transport Corridor (CETC).

Krzysztof Zalewski

Analyst on India and Energy. He currently serves as the President of the Board of the Boym Institute and is an editor of the “Tydzień w Azji” weekly (published in cooperation with wnp.pl). As a policy expert, he writes about foreign policy and digital transformations in India and Australia. He previously worked at the European Union Agency for Fundamental Rights in Vienna, at the Foreign Relations Office of the Chancellery of the President of Poland, at the Polish Parliament (Sejm) and at the Centre for Eastern Studies in Warsaw.

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