The 10th summit of the Asia-Europe Meeting (ASEM) took place in Milan, Italy, on 16-17 October 2014. Amid concerns for the Eurozone’s economy and China’s sluggish growth, the summit provided an opportunity for the two sides to explore the prospect for a trade and investment agreement, something that would complement the US-led Trans-Pacific Partnership (TPP) on the one hand, and the Transatlantic Trade and Investment Partnership (TTIP) on the other.
Today, the ASEM process brings together 53 participants: 31 from Europe, and 22 from Asia. On the European side, there are the 28 EU member states, 2 European countries (Switzerland and Norway), and the European Commission. On the Asian side, there are the 10 members of the Association of South-East Asian Nations, the ASEAN Secretariat, three North East Asian countries (China, Japan and South Korea), three South Asian countries (India, Pakistan and Bangladesh), plus Kazakhstan, Russia, Australia and New Zealand. The ASEM countries account today for around 60% of the world’s population, half of global GDP and more than 60% of international trade.
This success in terms of membership is also ASEM’s major limitation. It appears, in fact, more and more difficult to reconcile the priorities, including the national agendas, of so many and diverse countries. Thus, off the record some of the founding members of ASEM – the EU and the ASEAN grouping plus China, Japan and South Korea – have aired plans for a trade and investment agreement that would complement the TPP and TTIP. In so doing, the ASEM process would renew with the spirit of its founding principles.
When the ASEM summit was first inaugurated in 1996 in Bangkok, Thailand, 26 participants took part: on the European side, the 15 member states of the EU and the European Commission; on the Asian side, the 7 members of ASEAN plus China, Japan and South Korea – the so-called ASEAN+3. The first Asia-Europe meeting achieved two objectives: it created a counterbalance to the Asia-Pacific Economic Cooperation (APEC); and gave impetus to integration dynamics in East Asia. It was, in fact, in the context of ASEM that consultations between ASEAN and the region’s three largest economies (China, Japan and South Korea) led to the subsequent creation of the ASEAN+3. This ‘only-for-Asians’ grouping had been vigorously opposed by the US for fear of losing influence over regional dynamics.
Today, East Asian nations have the possibility to gain leverage over TPP negotiations by opening up to European business interests. At the same time, a trade and investment accord with the ASEAN+3 grouping would allow the EU to bring under a single framework those FTAs that it has already signed with South Korea and Singapore; those under negotiation with Japan, Vietnam, Malaysia and Thailand; and the bilateral investment agreements currently under discussion with China and ASEAN – which are meant to lay the ground for a comprehensive FTA. It may take some time before official negotiations for a comprehensive EU-East Asia trade and investment agreement are launched. Yet, companies should start preparing now to reap the benefits of such a grand initiative.