Category Archives: ASEAN+3

21st
Jul 2016

Asia and Europe inching closer to each other

Cooperation between Asia and Europe in the last 20 years has enhanced the relations of the two continents in all fields, from international trade to global economic recovery, infrastructure and migration. Asia and Europe have signed many bilateral trade agreements and discussions are ongoing on regional deals.

These achievements were in full display at the 11th Asia-Europe Meeting (ASEM) Summit held on 15-16 July 2016 in Ulaanbaatar, Mongolia where 53 Heads of State and Government – 30 European and 21 Asian countries, as well as the ASEAN Secretariat and the European Union – got together under the overarching theme of ‘20 Years of ASEM: Partnership for the Future through Connectivity’.

Leaders at the ASEM 11 Summit, 15-16 July 2016, Ulaanbaatar (Mongolia). Source: http://www.aseminfoboard.org/events/11th-asem-summit-asem11

Leaders at the ASEM 11 Summit, 15-16 July 2016, Ulaanbaatar (Mongolia). Source: http://www.aseminfoboard.org/events/11th-asem-summit-asem11

The ASEM dialogue process was first launched on 1 March 1996 in Bangkok, Thailand, to enhance relations and various forms of cooperation between the then 15 members of the European Union and its Commission, the then 7 members of the Association of Southeast Asian Nations (ASEAN), and the individual countries of China, Japan, and South Korea which would form the so-called ASEAN+3 grouping. A series of enlargements saw additional EU members join as well as India, Mongolia, Pakistan, and the ASEAN Secretariat in 2008, Australia, New Zealand and the Russian Federation in 2010, Bangladesh, Norway, and Switzerland in 2012, Croatia and Kazakhstan in 2014.

When the ASEM was inaugurated in 1996, it was conceived as an instrument for bridging the missing link between the EU and East Asia. At the time of the first ASEM in 1996, North America and East Asia had already established an institutional mechanism (the Asia-Pacific Economic Cooperation) for deepening inter-regional cooperation and North America and the EU had further bolstered their transatlantic ties. In this context, it was perceived that there was a glaring missing link as far as relationship between the EU and East Asia was concerned and that the ASEM process would serve to fill this missing link in the triangular relationship: North America-EU-East Asia.

ASEM paramount objective has always been the enhancement of economic relations between the two regions. The ASEM process allows the EU to avoid the risk of being isolated by too close a collaboration among the Asia-Pacific countries while also giving East Asia the opportunity to counterbalance US presence by opening up to Europe.

Europe’s economic presence in Asia is felt particularly in the areas of trade and monetary policy. For instance, Brussels is Beijing’s most important commercial partner—the two trade more than one billion euros a day. The EU is ASEAN’s third-largest trading partner, after China and Japan, but ahead of the United States. Overall, Asian markets are the destination for almost one third of EU exports and offer rapidly expanding market opportunities for European firms, which are also among the biggest contributors of FDIs in the region

Following the surge of trade relations, Asia has become the largest buyer of euro-denominated assets. The share of euros in the foreign exchange portfolio of Asia’s major central banks’ accounts is, on average, for around 25-27 percent of the holdings of Asia’s major economies, reaching 30% and above in China (the world’s largest holder). This makes the euro the second-most-important reserve currency in Asia – after the dollar, but ahead of the yen.

Europe’s economic rebalance toward Asia is rooted, as in the case of the United States, in the realisation that Asia has become central to global prosperity and to the Western powers’ own growth prospects. Since 2011, the EU has signed free-trade agreements with South Korea and Singapore; it is negotiating one with Japan, Vietnam, Malaysia and Thailand; and has opened discussion on a trade and investment agreement with the whole of ASEAN.

At the last ASEM summit, leaders from the two regions explored plans for an inter-regional investment and trade agreement that would counterbalance the US-led Trans-Pacific Partnership (TPP). Such dynamics deserve to be followed closely by European and Asian companies for the potential that they could have for trade, investment and jobs creation on the Eurasian continent.

More on this in the interview to Dr. Casarini by Xinhua News.

21st
Oct 2014

Prepare for a EU-East Asia trade and investment agreement

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.

world map

Image source: Wikipedia

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.