Not yet a “pivot” - but EU-Asia relations get more active and intense

30/10/2013
By Shada Islam

It’s going to be a hectic and intense few weeks of EU-Asia interaction, as top EU officials hold a record-breaking number of meetings in November with leading policymakers in China, Japan, Indonesia and Myanmar. Catherine Ashton, the EU’s high representative for foreign and security policy, will make her first-ever official visit to the Jakarta-based headquarters of the Association of Southeast Asian Nations (ASEAN) and, along with many of the EU’s 28 foreign ministers,to participate in an ASEM (Asia Europe) ministerial meeting in Delhi.

EU-Asia Agenda November 2013
Indonesia &
ASEAN:
3rd - 4th

Ministerial Meeting

ASEM:
Myanmar:
11th - 12th 
14th - 15th 
Foreign Minister's Meeting
EU-Myanmar Task Force
Japan:
China: 
19th
 21st 
EU-Japan Summit
EU-China Summit

The stepped-up activity comes at the end of a two-year period of enhanced EU-Asia engagement which some – a tad too ambitiously and prematurely – have described as the EU’s own “pivot” to Asia. Certainly, there is now a stronger EU-Asian conversation on trade, business, security and culture.  These more frequent contacts and strengthened sharing of views and opinions are welcome - and should continue.

Developing a truly European strategy for sustained engagement with Asia, however, will require more than a few discussions, visits and communiques.  EU policymakers need to undertake a more in-depth reflection of Europe’s many interests, significant strengths and weaknesses in dealing with a more self-confident Asia.  Yes, there is a marked improvement in EU-Asia engagement-and this should be celebrated. But much still remains to be done.


End of EU-Asian jousting

Years of futile and tedious EU-Asian jousting over participation in meetings and mutual allegations of arrogance and indifference have not served either side well.  The Eurozone crisis and the compelling jobs and growth agenda shared by both Europe and Asia have spotlighted their economic interdependence.  The two regions also have common peace and security interests.  In addition, the demands of global governance require a strong EU-Asia dialogue.

It is time the EU and Asia established a stronger and more sustainable multi-dimensional dialogue to deal with bilateral, regional and global challenges. The EU’s upcoming visits and meetings with Asian leaders should not, therefore, be seen as an end in themselves. But they are important steps in the construction of a fresh EU blueprint for a 21st Century partnership with Asia.

Others are already trying – very hard.  US President Barack Obama may have been forced to stay in Washington because of the government “shutdown” in early October, but as Secretary of State John Kerry insisted at the APEC meeting in Bali, “nothing will diminish” America’s commitment to “rebalancing” towards Asia.   China’s new leaders, meanwhile, are wooing countries in the region with promises of “win-win” opportunities for more cooperation on trade and investments and a softly-softly approach on maritime disputes.

Europe may not be able to match America’s military credentials and presence in Asia or China’s economic dominance.  But the EU can make a mark by implementing what Ashton sometimes describes as a “comprehensive approach” to engagement, including a variety of aid and trade tools, short and long-term actions, humanitarian and development instruments and experience-sharing on security, political questions and confidence-building. 

Below are some (distilled) recommendations on the way forward in EU-Asia relations.


Indonesia: from PCA to strategic partnership

Ashton’s first-ever official visit to Indonesia marks a long-awaited breakthrough in the EU’s hitherto largely underwhelming relationship with one of Asia’s most exciting rising powers.  The EU foreign policy chief should use her talks with President Susilo Bambang Yudhoyono  and Indonesia’s very active foreign minister Marty Natalegawa to make up for lost time by starting the ball rolling on a strategic partnership with Jakarta.  As a first step, now that the EU-Indonesia Partnership and Cooperation Agreement (PCA) of 2009 is almost-ratified (the European Parliament is expected to give the green light in December), the two sides should establish a more structured high-level relationship. European and Indonesian business leaders, meanwhile, are pressing for a rapid negotiation of a Comprehensive Economic Partnership Agreement (CEPA) which, according to participants at the fourth EU-Indonesia Business Dialogue Conference held recently in Jakarta, will improve market access, capacity building and the facilitation of trade and investment between the two sides.

Indonesia and the EU should set up working groups to discuss mobility, the role of small and medium-sized enterprises as well as science and technology.  This would be in addition to existing discussions on trade and investments, air transport, fishing, development cooperation and education including links between European and Indonesia universities and the setting up EU studies curricula in Indonesian universities. Visa facilitation for Indonesian nationals will help to step up contacts between business leaders, academics and students.  To move the relationship forward, the EU must also keep in view the bigger picture of its trade and business interests in Indonesia.  European allegations of Indonesian protectionism and economic nationalism need to be clarified, especially in view of Jakarta’s arguments that many of the measures are designed to speed up economic development and add value to raw materials as well as Indonesia’s overall appetite for European exports including billions of euros worth of Airbus aircraft.

EU-Indonesia Trade
 Imports:  €15,396 million  0.9% of EU Imports
 Exports:  €9,648 million
 0.6% of EU Exports
Trade: bsp;€25,044 million  
Source: Europa

ASEAN: What a difference two years make

There is no doubt: the last 24 months have seen an important and marked improvement in EU-ASEAN ties. Driven by changed circumstances internally, in their regions and beyond, the EU and ASEAN are taking a fresh, more realistic and less emotional view of each other.  These new approaches, aided by the political reform underway in Myanmar and the lifting of EU sanctions against the country, are evident in multiple interactions between EU and ASEAN ministers and senior officials including at meetings of the ASEAN Regional Forum (ARF), the EU’s accession to the Treaty of Amity and Cooperation, Southeast Asia’s prime security blueprint, and the multi-dimensional EU-ASEAN Plan of Action adopted in Brunei in April last year. Certainly, ASEAN’s new and dominant narrative of speeded-up integration and the grouping’s central role in the array of free trade initiatives in the region are prompting the EU to review its perceptions of ASEAN as an ineffective organisation.  In addition, given their economic interests in the region, France, Germany and Britain have emerged as pivotal drivers of rising EU engagement with ASEAN.  Increased wariness of China’s more assertive posture in the region, especially as regards conflicting territorial claims in the South China Seas have increased Europe’s awareness of its strategic interest in maintaining (maritime) security in the region. 

ASEAN is also taking a fresh look at the EU.  As ASEAN steps up its economic integration agenda, the EU is once again viewed positively by many in the region as a source of experience, technical expertise and transfer of technology. EU investments are being sought for ASEAN’s ambitious connectivity plans. Significantly, the adoption of the ASEAN Charter in 2008 with its references to human rights and building a “people-centered” ASEAN and the setting up of the ASEAN Intergovernmental Commission on Human Rights (AICHR) have removed some of the earlier EU-ASEAN friction over these questions and prompted a palpable toning down of the EU’s prescriptive rhetoric on integration and human rights.  More needs to be done, however.  The EU and ASEAN must recognise each other as strategic partners, hold regular summit meetings and like the US, Japan, China, Australia and India, the EU must lose no additional time in appointing a special ambassador accredited to ASEAN.  In addition to bilateral free trade agreements between the EU and ASEAN states, the now-abandoned plan to negotiate an ambitious region-to-region EU-ASEAN free trade deal should be revived.  This could balance Asian free trade initiatives such as the Trans Pacific Partnership (TPP) and the Regional Comprehensive Economic Partnership (RCEP) linking all leading economies in the region.

EU-ASEAN Trade
 Imports:  €100,035 million  5.6% of EU Imports
 Exports:  €813,244 million  8.1% of EU Exports
 Trade:  €181,360 million

Source: Europa



ASEM: Renewal and reform

Launched in Bangkok in 1996 to foster stronger EU-Asia relations – and closer personal relations between EU and Asian leaders – the process of Asia Europe Meetings (ASEM), with its 51 partners, remains an important channel of region-to-region communication – albeit one in dire need of renewal and reform. Interestingly, recent reflection on restoring ASEM’s credibility and relevance has focused on going back to the original informality and flexibility of the forum and a better utilisation of the immense Asia-Europe networking opportunities it offers, including as regards bilateral contacts between leaders and officials of both sides.

Yet ASEM meetings over the years have become more formal and ritualistic, with ministers and leaders reading out well-prepared statements instead of engaging in direct dialogue.  As ASEM participants prepare to celebrate 20 years of their partnership in 2016, the aim must be to recover ASEM’s initial focus on substance over protocol and ritual.

The meeting of ASEM foreign ministers that Ashton and EU foreign ministers will attend in Delhi on November 11-12 is expected to endorse a number of changes which many hope will inject new life into the Asia-Europe partnership by streamlining and simplifying ASEM working methods to ensure that leaders and foreign ministers engage in a real, in-depth and focused conversation on key concerns.
As such, when they meet in Delhi in November, in addition to attending 2 official plenary sessions, foreign ministers will engage in a “retreat” to ensure more intensive and interactive dialogue.  Discussions in the plenaries will focus on sustainable economic growth and development and on non-traditional security issues, including food, energy and water security, cyber security and counter-terrorism.  The “retreat” will look at international and regional flashpoints including the Middle East, North Korea and Iran. Efforts are being made to ensure that chair’s statements and other documents issued at the end of ASEM meetings are short, simple and to-the-point. There are also demands for a stronger focus on the economic “pillar” of ASEM and a resumption of regular meetings between economic experts, policymakers and business leaders from both sides.  Senior ASEM economic officials have not met since a gathering in Rotterdam in 2006. Several Asian and European governments believe these contacts should be revived ahead of the ASEM summit to be held in Milan in autumn 2014.

EU-ASEM Trade
 Imports:  €533,060 million  29.8% of EU Imports
 Exports:  €361,459 million  21.4% of EU Exports
 Trade:  €894,519 million  
Source: Europa

Myanmar: EU Task Force mixes political and economic support  
 

Relations between the EU and Myanmar have been improving rapidly following the process of political reform started in 2011 and the lifting of EU sanctions last year.  Following President Thein Sein’s trip to Brussels earlier this year, the EU has taken the unusual but interesting step of organising a so-called “Task Force” meeting of political and business leaders in Myanmar on 14 and 15 November  to discuss ways of supporting and fostering the country’s transition process.  The plan is to mobilise the full range of EU resources – in both the public and private sectors – to help speed up Myanmar’s economic development and encourage further political change in the once-isolated nation.  The EU initiative reflects just how far Myanmar has travelled in the last few years as it switches from life under a harsh military regime to a country which is universally feted for its embrace of civilian rule and continuing efforts at political reconciliation and economic reform.  In a striking symbol of on-going international rehabilitation and economic integration within the region, Myanmar will take over as chair of the ten-member Association of Southeast Asian Nations (ASEAN) in 2014, thereby playing a crucial role in preparations for creating an ASEAN Economic Community by 2015.

EU support for Myanmar’s remarkable transition must not be unconditional, however. The country faces numerous complex challenges in its progress towards democracy, economic development, human rights, and peace and national reconciliation. Decades of economic mismanagement and isolation have led to deep-rooted structural poverty. Economic growth is narrowly based on extractive industries. Unemployment remains high and GDP per capita is the lowest in  Southeast Asia. Most importantly, ethnic reconciliation remains difficult, with President Thein Sein struggling to maintain order as deep-rooted tensions that were largely contained under the army's strict rule boil over in different parts of the country.  Human Rights Watch accuses the Myanmar authorities and members of Arakanese groups of committing crimes against humanity in a campaign of ethnic cleansing against Rohingya and other Muslims. In a resolution adopted in June, the European Parliament has said the government must take urgent action to end all forms of persecution and violence against the Rohingya Muslims, ease their humanitarian situation and protect them from violence and public incitements to religious hostility. The EU assembly also insisted the government draw up an action plan to address the root cause of the discrimination and undertake an urgent review of a 1982 Citizenship Law with a view to granting citizenship to the Rohingya.


EU-Myanmar Trade
 Imports:  €164 million  0.0% of EU Imports
 Exports:  €232 million  0.0% of EU Exports
 Trade:  €369 million  

Source: Europa



Japan: moving relations up a gear    

It took almost two years of consultations, but in April this year Japan and the EU finally launched the first round of official negotiations on an Economic Partnership Agreement. If negotiations are successful, the deal will boost the bilateral trade and investment relationship, have a wider positive impact on their respective economies and – importantly - also bolster political relations between the two sides.  Initial estimates speak of a boost to Europe’s GDP of approximately 0.7% and the creation of 400.000 jobs, while Japanese exports to the EU could increase by as much as 23.5%.  The negotiations address a number of EU concerns, including non-tariff barriers and the further opening of the Japanese public procurement market to ensure a progressive and reciprocal liberalisation of trade in goods, services and investment, as well as rules on trade-related issues.

The latest round of talks held in Brussels in October will be followed by an EU-Japan summit in Tokyo on November 19.  Indeed, the EU and Japan need to establish a grand vision for a future strategic partnership which goes beyond trade and economics to include joint endeavours to tackle non-traditional security challenges. In Tokyo earlier this month, Japan’s Foreign Minister Fumio Kishida  and Ashton agreed that Japan and EU must work together in coping with East Asian and Middle East affairs, including Afghanistan and the Iranian nuclear issue.  Japan has said it sees the EU as a “super soft power” and believes there is room for enhanced EU-Japan cooperation in areas like disaster and crisis management, cyber security, counter-terrorism, combating pandemics and other global challenges. The EU with its commitment to democracy, human rights, the rule of law and the market economy is a “value promoter” and an important global player and partner for Japan, according to Tokyo.

EU-Japan Trade
 Imports:  €63,813million  3.6% of EU Imports
 Exports:  €55,490million  3.3% of EU Exports
 Trade:  €119,303million  

Source: Europa



China: The next ten years

As China and the EU embark on a second decade of their strategic partnership, both sides have to reflect on the future course of their often volatile relationship.  Recently, ties have been soured by the trade dispute over solar panels, the role of Chinese state-owned enterprises and EU businesses’ repeated claims that Beijing is discriminating against foreign investors. China is also uneasy about the Transatlantic Trade and Investment Partnership (TTIP), viewing it as an US-EU attempt to “encircle” and contain China while the EU frets over China’s “special relationship” with Germany and Central and Eastern European countries.  In contrast, 2012 was a relatively good year for EU-China relations, with both sides launching a partnership for sustainable urbanization, establishing high-level people-to-people discussions and agreeing to negotiate a bilateral investment treaty to boost two-way investment flows.  The organisation of the EU-China summit on November 20 and the High-level Economic Dialogue held in Brussels recently give hope that EU-China relations are moving into a new, more stable and less-crisis prone phase of practical and pragmatic cooperation. Green growth and urbanisation have been identified as areas of particular interest to both sides.

The EU is pressing China to adapt its growth model from being investment driven, and rather resource and capital intensive, to one that is based more on rising consumer demand, with a higher quality of investment and growth.  EU Trade Commissioner Karel De Gucht is insisting, meanwhile, on clinching an EU-China investment agreement which will improve the protection of EU investments in China as well as Chinese investments in Europe by ensuring legal certainty and predictability for investors.  Europe also wants the agreement to cover improved access to the Chinese market for European investors through a reduction of barriers.  De Gucht has also said he hopes China will work for the success of the 9th WTO Ministerial Conference in Bali by agreeing to a deal on 'trade facilitation'.  The EU-China summit on November 21 in Beijing should reach a wider understanding that on putting their relations on a stronger, more stable and less volatile footing.  This requires a greater and sustained focus on improving mutual understanding and efforts to look beyond immediate problems to the longer-term compelling necessity to work together to tackle domestic and global challenges. Such a rethink demands a shift away from fragmented policy responses to a more coherent and multi-sector method of dealing with each other in order to forge a new 21st Century partnership based on mutual trust and respect. A focus on practical cooperation, including ways in which the EU can help Chinese leaders to achieve the “China Dream” is also required.  

EU-China Trade
 Imports:  €289,915 million  3.6% of EU Imports
 Exports:  €55,490million  3.3% of EU Exports
 Trade:  €119,303million  

Source: Europa



Conclusion

The EU’s active engagement with Asia over the last two years and the upcoming array of meetings with key Asian players mark an important and qualitative leap forward in relations between the two regions.  The new momentum in relations must continue, with the EU using its high-level conversations with Asian governments and with its own member states – and civil society representatives - to hammer out a new strategy for making a unique European contribution to the Asian Century, in all its economic, political, security and cultural facets.

The challenges facing the European  Union in Asia can be found in Friends of Europe's recent publications 'EU-India: A Vital Partnership in a Changing World'  'Three's a Crowd?Indonesia, ASEAN and Europe' and in the upcoming events 'Ten Years on: Rebooting the EU-China Strategic Partnership' on November 25th and 'EU-China: The next ten years' on Tuesday, November 26th.

Image credit: EU-Singapore Centre



Friends of Europe on Facebook