View from Abroad: Pakistan’s choice (Originally published 6/12/2014 at dawn.com)

As I prepare to travel to Pakistan — the first such visit in five years — I am filled with admiration, amazement and apprehension. They say the past is a different country. And Pakistan is certainly a very different country from the one I left all those years ago.Pakistan and I have both changed. I am obviously older (but not wiser) than the young, naive and rather demure girl who boarded the plane from Islamabad to Brussels with her parents and sister. At the time, I believed I would be away for a few months, may be a couple of years. Several decades later, Europe has become a core part of my identity and existence and Brussels is “home”, a city that has nourished and nurtured me through good times and bad.Pakistan’s transformation is more starkly radical. Sometimes I can hardly recognise my country of birth. There is much still to admire and love — and to yearn for on cold European winter evenings. Family and friends of course. The food and some of the music. The stories being told by old writers and new ones whose books I devour avidly. The artists whose pieces stir long-buried memories.But what I admire most is the resilience of the people. The indomitable spirit of the so-called common man, the “ordinary” people — or the “masses” that the Pakistani politicians refer to in derision — who keep the country humming and running against all odds.You see that unbeatable spirit everywhere, among the people displaced by floods and the deadly fighting between the army and the Taliban, after the tragic deaths of innocent civilians caused by drones, among the thousand Malalas still determined to go to school and the sick people waiting patiently for a doctor to see them in crowded hospitals.But that resilience is also about being optimistic about the future. Going to work every day in packed buses, facing harassment, electricity breakdowns, rampant inflation and corruption with stubbornness and stoicism. And to keep going on and on. I admire Pakistani business leaders and innovators who still invest and believe in the country. The young and the daring entrepreneurs. People who speak up for tolerance, resist the siren song of conformity and compromise.I have seen the same energy and resilience in many other parts of Asia and in Africa. But recently rarely in Europe. The Eurozone crisis has exhausted Europe and joblessness rates are much too high, especially for young people.But speak to young people in China, India and Indonesia and it is clear that they believe in a better future. Visit the countries and it is clear that people’s lives are getting better. Of course there is still inequality, poverty and hunger. But the governments in these countries are trying hard to tackle the multiple challenges they face. Are Pakistani politicians doing the same?So what about my amazement? Well, I suppose it’s about the patience of the people, the willingness to put up with mediocre and often corrupt politicians, war-mongering soldiers, inequality and unfairness and the rampant lack of the rule of law. Elections have not led to real democracy. All that aid money pouring in, has not led to sustainable growth and development.Reading the online version of the front page of Dawn fills me with wonder at how quickly Pakistan’s political landscape has turned into a dark, cruel, repetitive circus. The scowling, angry features of former cricketer Imran Khan, the crazy pronouncements of the Canadian preacher, the ever-chubbier and dishevelled, helpless look of the prime minister and the semi-lucid mutterings of the scion of the Bhutto family.And then there is the apprehension. Despite the disappointment and the disillusionment with a country which I once called home, I suppose there is still some lingering connection, a hope that Pakistan will survive the challenges of the 21st century, stand proud and tall and become an integral part of a rising Asia.It would be nice if Pakistan was in the headlines not because of the antics of the likes of Junaid Jamshed, anti-India rants by the foreign ministry, suicide bombings and hate-Malala crazies as well as the treatment being meted out to Asia Bibi but because the country was breaking new ground, turning a fresh page, opting for sanity rather than madness.After so many years and so many wonderful experiences in Europe and Asia — not to mention the lessons in honesty, sincerity and fearlessness that I learned from my father — I wonder if I will be able to stay silent when I encounter intolerance and religiosity and the blatant disregard for the rights of women, children and minorities that seems to have become part of the national discourse.Across Asia, there is hope and progress. Viewed from Brussels, it certainly looks like this is the Asian Century, a time when Asia is coming of age, growing and developing.Pakistan has a choice: it could join the Asian mainstream and give its people the life and future they deserve or it can opt to be part of a self-destructive Middle East mindset and stay on the periphery of a dynamic and vibrant Asia. I know what I would choose — but do they?

View from Abroad: A new plan to revive 'Granny Europe' (Originally published 29/11/2014 at dawn.com)

Not much gets Europeans excited these days. When challenges emerge — at least on the foreign policy front — the reaction seems to be almost always the same. Problems with Russia? Let’s expand sanctions. Iran? Let’s keep sanctions. Islamic State? Let’s impose sanctions although just how and on whom is not clear.But suddenly, out of the blue, there is a bit of a buzz in the winter air. Europeans woke up on Nov 26 with a new “hero”: European Commission President Jean Claude Juncker who strode on to centre stage to promise peace — or at least jobs — in our time.It was a seminal moment. For Juncker and Europe.The former Luxembourg prime minister is facing allegations that hundreds of multi-national firms were reportedly attracted to Luxembourg in legal tax avoidance schemes. Juncker was prime minister at the time but denies wrongdoing. The new plan has the advantage of taking the almost-scandal off the media radar.For Europe, the plan could be the answer to its dreams of revival. The 28-nation bloc is still struggling to climb out of a long and painful Eurozone crisis. Growth rates are low, unemployment is tragically high, especially among young people. People are downbeat and dejected. Even the German economy is beginning to flag.To top it all, making pessimists even more downbeat, in a speech to the European Parliament last week, Pope Francis likened Europe to a grandmother, “no longer fertile and vibrant”. (I’m not sure he’s talking about the lively grannies I know though…)Anti-granny remarks aside, the pontiff’s remarks do resonate for many. Europe is getting a tad worn out, depressed and haggard. A shot of vitamins is badly needed.Enter Juncker with a magic bullet: a 315 billion euro plan to spend EU money on new infrastructure projects as part of an initiative to revive granny and help Europe grow and thrive again.Only, there is no magic involved. There will be hardly any new money — only €21bn in EU funds as a guarantee to raise private cash in the capital markets — with the rest of the money expected to come from private sources.EU policymakers say they will be looking for funds wherever they can. Chinese investments will be sought out avidly. Middle East investors will be welcome.“I often hear we need so-called fresh money. But we need a fresh start and fresh investment,” Juncker told the European Parliament this week. “We will not betray our children and grandchildren by writing cheques they ultimately will have to pay.”With one eye on developments across the Atlantic, the Commission chief moaned that “While investment is taking off in the US, Europe is lagging behind. Why? Because investors lack confidence, credibility and trust.”The Commission is making up for the lack of solid details on the plan by upping the hype. Juncker says the initiative represents a cornerstone of efforts to revive an ailing economy.Others have called it a historic moment, a make-or-break initiative, a European “New Deal” to get Europeans working again.Certainly, the timing is right. Many European economists have been saying for some time Europe needs to move from the current focus on austerity to programmes which bring back growth.And the best way to do so is to start investing again — especially in infrastructure.The Commission believes it could create up to 1.3 million jobs with investment in broadband, energy networks and transport infrastructure, as well as education and research.National governments could contribute to the fund if they wished and would be asked to come up with a list of projects with “high socio-economic returns” that could kick-off between 2015 and 2017.With a nod to Martin Luther King, Juncker added that he had a dream. He wanted to see schoolchildren walking into a brand new classroom equipped with computers in the Greek city of Thessaloniki, European hospitals saving lives with state of the art medical equipment and French commuters charging electric cars on motorways.The good news is that pro-austerity Germany — the bane of countries like France and Italy which want the EU to start spending itself out of economic stagnation — is in favour of the plan.But EU officials admit the initiative will not fill the gap in the amount of investments needed, especially in infrastructure across Europe. There is also concern that there will not be enough credible projects around for investors to put their money into.The European Investment Bank will be the “prime mover” in delivering seed money for those investments over the next three years. The plan will now be discussed by the 28 EU leaders at the Dec 18-19 summit.Juncker’s shift from austerity and cutting debt to investment is not going to be the botox shot needed to transform “Granny Europe” into a vibrant young woman. But it is a start.

View from Abroad: Europeans challenge Germany on austerity (Originally published 11/10/2014 at dawn.com)

With apologies to Jane Austen, it’s (also) a truth universally acknowledged that Germany is Europe’s undisputed leader. Its powerful economy, large population, mostly stable politics and mostly responsible politicians assure that Berlin looms large over the European Union landscape.Nothing happens in the EU without Germany’s blessing. For years that was a good thing. It isn’t any longer.Whisper it softly but Germany’s EU partners are getting a little fed up with Berlin’s writ. This is especially the case when it comes to agreement on how best to bring economic growth back into the flagging 28 EU economies.Germany’s focus on austerity is coming under harsh criticism — some of it veiled, some of it open — for jeopardising Europe’s economic recovery.Disaffection with Germany is spreading beyond economics. EU insiders complain in private at Berlin’s growing influence in key EU institutions, its ability to grab some very senior EU jobs for its nationals or close friends and its newly-found assertiveness in areas such as foreign and security policy.Europeans liked a Germany that always said “yes”, kept trying to atone for its role in the two World Wars and opened its wallet whenever others in the EU needed help.Linked up with former adversary France, Germany was the “locomotive” that kept the EU moving up and forward, through economic and monetary, the negotiation and implementation of different constitutional treaties and kept the flame burning on issues like further European integration.It’s different now. Germany is doing all that and more. And its EU partners like it less and less.What went wrong? In fact, the economy. Ever since the Eurozone crisis reared its ugly head, Germany as the bloc’s healthiest economy, has been calling the shots, insisting that governments across the bloc must tighten their belts, cut spending and talk and walk austerity.The tide is changing, however. Across Europe, national leaders, policymakers and economists are starting to challenge Germany’s insistence on budget austerity as a precondition to healthy growth.France is in, what some observers refer to as, an “open revolt” against German Chancellor Angela Merkel’s continued demands for deficit reduction in the face of slowing growth.Italy has warned against too rigidly following Germany’s preferred approach. The president of the European Central Bank, Mario Draghi and IMF head Christine Lagarde are also pushing for Germany to loosen up.Critics of austerity say that more government spending would increase demand for goods and services in Europe and help avert a dangerous fall into deflation, a downward spiral in wages and prices that can cripple an economy for years.Proponents of austerity, which include the Dutch, Austrians and Scandinavians and the three Baltic states, say that governments that fail to get their budget deficits and accumulated debt under control risk losing the ability to borrow at affordable rates in the bond markets and sowing the seeds of financial instability.The debate is unusually “philosophical”, not just economic, say observers. Warning against an escalation of mutual recriminations, the respected former Italian prime minister Mario Monti said the divergences of policy revealed divergences of “national cultures”.Matteo Renzi, the current Italian Premier, has said more bluntly that Berlin has no right to lecture its partners, urging Berlin — and the European Commission which now vets national budgets — to show more understanding for countries with no growth and high unemployment.French Prime Minister Manuel Vall, meanwhile, has unveiled a “no-austerity budget” designed to cut the deficit more slowly than austerity advocates would like.Monti has especially urged the EU (and Berlin) to consider more favourable treatment for public investments within existing rules.Critics of Germany point out that while Berlin is keeping the eurozone in fiscal chains, the United States has loosened the reins — and that thanks to fiscal stimulus, the American economy is starting to grow.At least for the moment, Berlin appears unwilling to deviate from its plan. But change may be around the corner. After all, while she is still very popular in her ninth year in power, Merkel is also under fire at home.In a new book, The Germany Illusion, one of the country’s leading economists, Marcel Fratzscher, takes the government to task for declining to invest in infrastructure and failing to encourage private investment or foster a modern service sector that would yield better pay and thus fuel higher consumer spending.Perhaps, Germany may finally listen. Latest forecasts spotlight a slowdown in the German economy, with economists underlining that the last thing the faltering European economy needs is a sudden downturn in Germany.But others argue that a bout of German weakness may be precisely what is required to convince Merkel to loosen the fiscal reins at home and provide Europe with a dose of stimulus that struggling states like France and Italy have long been seeking.If she does that, Europeans may once again rediscover their earlier respect for Merkel. Unlike the late British prime minister Margaret Thatcher, Merkel, as the ‘Iron Lady’ in charge of the future of both Germany and Europe, should not be afraid of “turning”.

View from abroad: Why Cold War is back — sort of (Originally published 06/09/2014)

IN case you haven’t noticed there’s a new swagger to Nato, the 28-nation Western military alliance that many thought had outlived its usefulness with the end of the Cold War.Well, guess what, the Cold War is back — sort of — and the North Atlantic Treaty Organisation is once again in the international spotlight. No longer viewed as another has-been institution, a relic of the past, Nato is now universally recognised as a crucially important alliance to ward off threats from Russia, which threatens Europe’s security from the east, and the nasty “Islamic State” on Europe’s southern flank.It’s quite a turn-around for an organisation which many had given up as irrelevant and out-of-step with a deeply connected, inter-dependent and post-modern world. Leaders were supposed to be nice to each other, sign treaties of amity and cooperation, invest in each other’s economies and give up on wars and conflict.The talk was of “peace dividends”, turning guns into ploughs, the victory of democracy and the rule of law and a commitment to maintaining a liberal international order.Nato talked of “partnerships for peace”, extended a hand of friendship to Russia and to other former foes, countries which were once part of the Soviet Union.No longer. First, for all its economic networks and interdependence, flourishing of global trade and just generally, of globalisation, the world is proving to be a volatile, disorderly and unpredictable place.Suddenly, the future is not that bright or that secure. Far from witnessing the “end of history” as predicted by Francis Fukuyama in the euphoric period following the crumbling of the Berlin Wall, we are entering an “age of anxiety”.Mostly — but not only — this is due to President Vladimir Putin’s recent upending of the post-World War security order in Europe through his actions in Ukraine, starting with the seizure of Crimea five months ago and the subsequent destabilisation of other parts of the country.Russia’s actions and the outrage they have prompted across Europe and the US have undoubtedly given Nato new lease of life. The alliance’s summit held in Wales last week is proof that far from being relegated to the dustbin of history, Nato is back — possibly even with a bang.Or is it? While Nato’s rhetoric on Russia is strong and impressive, it’s far from certain that actions will match words. Take the decision to deploy a new and potentially significant Rapid Reaction Force to deter any further aggression by Russia against its neighbours.The Force would be ready to be deployed within days should there be any military aggression against one of the 28 N ato member nations. The military unit, numbering 4,000 troops, would be on high alert at all times, with additional logistical support stations set up in Eastern European statesThe decision is being hailed as an example of a new and more determined Nato but it falls short of the call by Polish Prime Minister Donald Tusk for the alliance put 10,000 troops in Poland.And there are fears that Nato member states won’t be able to find the funds to finance the Force.The problem is that not only is the alliance divided on how best to react to an increasingly aggressive Russia but defence spending in almost all member nations remains under two per cent of GDP, the goal set by Nato. Overall, Nato military budgets have shrunk by 20 per cent over the past five years, while Russia’s budget has risen by half.Also, Nato has tried to organise rapid-reaction forces in the past, with disappointing results. It first announced it would create a Nato Response Force in 2002, with as many as 13,000 troops. But it took two years to get the unit up and running. Even today, the force needs about 30 days to mobilise. Until this year, it had deployed only once, in 2005, to provide earthquake relief to Pakistan.Meanwhile, many Nato members in Europe have been deeply reluctant to challenge Russia — both for fear of spurring a wider conflict and because of domestic economic problems which could be exacerbated by a confrontation.But the 65-year-old alliance’s worries aren’t limited to Eastern Europe. IS, the terror group that has declared an independent state in Iraq and Syria in recent months, is threatening to send violent European “foreign fighters” to Nato members’ streets.Insiders say Britain is likely to join the US in airstrikes against Islamic State as public anger grows over the execution of Western hostages.Also as Nato troops prepare to depart at the end of the year, Afghanistan represents another headache. Nato officials say Afghans are now responsible for almost 100 per cent of their country’s security. But Nato has said it will remain committed to Kabul through the Nato-Afghanistan Enduring Partnership signed in 2010 and the Resolute Support mission to “train, advise and assist” Afghan forces.In addition, Nato is being challenged by Moscow to react to a new breed of “hybrid war”, a term used to describe Russia’s use of a broad range of hostile actions — including military force — to spur unrest.The Nato summit in Wales may not have been the “most momentous” in the alliance’s history as some predicted. But it does mean that Norway’s former prime minister Jens Stoltenberg who will be taking over as Nato Secretary General on October 1 will be inheriting a very different alliance than the one led by Anders Fogh Rasmussen over the last five years.

ASEM: Why Asia-Europe relations matter in the 21st Century (Originally published 30/06/2014, co-authored with Patricia Diaz)

The Asia-Europe partnership, launched in Bangkok in 1996 to foster stronger relations between the two regions, is ready for a reset.Hopes are high that the 10^th Asia Europe Meeting – or ASEM summit – to be held in Milan on October 16-17 will confirm the credibility and relevance of Asia-Europe relations in the 21^st Century. ASEM has certainly survived many storms and upheavals over the last eighteen years. With ASEM’s 20^th anniversary in 2016 approaching rapidly, the challenge is not only to ensure the survival of the partnership but to create conditions for it to flourish and thrive.ASEM has been through different periods.  Initial euphoria over the initiative was followed by a period of inertia and a degree of apathy and disinterest. Asians criticised European leaders and ministers for not turning up at important meetings. Europeans complained that the gatherings were turning into little more than photo opportunities.The talk now is about renewal and revival as Asians and Europeans seek to inject fresh oomph into ASEM. The focus is on energizing discussions through changed formats and a stronger focus on content.This is positive. However, ASEM’s future hinges on whether governments are ready to pay as much attention to ASEM and devote as much time and energy to their partnership as they did in the early years. It is also conditional on closer engagement between Asian and European business leaders, civil society representatives and enhanced people-to-people contacts. An ASEM business summit and peoples’ forum will be held in parallel with the leaders’ meeting.Fresh ideasEncouragingly, efforts to reinvigorate ASEM have already begun. Asian and European foreign ministers and senior officials have been meeting over the last two years to try and thrash out a new and potentially winning formula for ASEM’s revival. Fresh ideas and formats to recapture ASEM’s original informality and flexibility are being put to the test. Efforts are being made to focus on content, not process. Long-winded communiques are being slimmed down. And leaders are being encouraged to engage in real conversations, not read from prepared papers, while also using ASEM’s immense networking opportunities for increased bilateral contacts.These and other initiatives are important and should go a long way in making ASEM more interesting and useful – and perhaps even more visible to the public.  To stay in sync with a changing global political and economic landscape, ASEM is trying harder to adapt to and reflect new realities. Significantly, the theme of the Milan summit – “Responsible Partnership for Sustainable Growth and Security” – allows for a discussion not only of ongoing political strains and tensions in Asia and in Europe’s eastern neighbourhood, but also of crucial questions linked to food, water and energy security.High-level supportAs Viorel Isticioaia Budura, Managing Director at the European External Action Service (EEAS) points out, Asia matters for Europe - and, just as importantly, Europe matters for Asia. Messages of support for the partnership have also been made in recent months by the Chinese, Japanese and Russian leaders. A statement released after President Xi Jinping of the People's Republic of China meetings in Brussels underlined the “growing role of trans-regional and regional dialogue mechanisms to promote regional peace and prosperity”, with leaders saying they looked forward to the ASEM summit in Milan. Subsequently, an EU-Japan statement highlighted ASEM’s “value” as a forum for dialogue and cooperation.  And interestingly, after their talks in Shanghai recently, Chinese President Xi Jinping and Russia’s Vladimir Putin defined ASEM as an “important platform for the exchange of economic and trade cooperation in other fields, social, cultural, etc.,” adding that they were “willing to strengthen cooperation and promote the ASEM to enhance work efficiency”.Connectivity, connectivity, connectivityEngagement between the two regions has been increasing over the years, both within and outside ASEM. Five of the 51 (set to rise to 52 with Croatia joining in October) ASEM partners – China, Japan, India, South Korea and Russia – are the EU’s strategic partners. Turkey and Kazakhstan have formally voiced interest in joining ASEM although approval of their applications will take time. There is now a stronger EU-Asian conversation on trade, business, security and culture.Exports to Asia and investments in the region are pivotal in ensuring a sustainable European economic recovery while the EU single market attracts goods, investments and people from across the globe, helping Asian governments to maintain growth and development.  European technology is in much demand across the region. Not surprisingly, Asia-Europe economic interdependence has grown. With total Asia-Europe trade in 2012 estimated at € 1.37 trillion, Asia has become the EU’s main trading partner, accounting for a third of total trade. More than a quarter of European outward investments head for Asia while Asia’s emerging global champions are seeking out business deals in Europe. The increased connectivity is reflected in the mutual Asia-Europe quest to negotiate Free Trade Agreements (FTAs)and investment accords.The FTAs concluded with South Korea and Singapore and similar deals under negotiation with Japan, India and individual ASEAN –the Association of Southeast Asian Nations– countries as well as the bilateral investment treaty under discussion with China are important in consolidating EU-Asia relations. These and other initiatives illustrate enhanced recognition that the two regions must work closely together to ensure not only national and regional prosperity but also sustainable and inclusive global growth.Beyond tradeASEM’s connectivity credentials go beyond trade and economics.  In addition to the strategic partnerships mentioned above, Asia and Europe are linked through an array of cooperation accords. Discussions on climate change, pandemics, illegal immigration, maritime security, urbanization and green growth are frequent among multiple government ministries and agencies in both regions, reflecting a growing recognition that 21^st Century challenges can only be tackled through improved global governance and failing that through “patchwork governance” involving cross-border and cross-regional alliances.

While Asia’s rise dominates the headlines, the region’s leaders are cognizant of the many challenges they face – and often look to Europe for cooperation in tackling them. Many Asian countries did not succumb to the woes plaguing the American and European economies but governments in economic powerhouses like China, India and Indonesia are acutely aware of the dangers of falling into the “middle income trap” of economic stagnation. Even as an emerging Asian middle class aspires for a better life and working conditions, the region is grappling with environmental degradation, rampant urbanisation, poor implementation of labour standards and lax quality controls on consumer products. Wealth inequalities persist despite the region’s successful attempts to reduce poverty.

Security: The Asian paradoxDiscussions on security are an important part of the political pillar in ASEM, with leaders exchanging views on regional and global flashpoints. Given current tensions over conflicting territorial claims in the East and South China Seas, this year’s debate should be particularly important.

Some call it the “Asian paradox”. Even as economic cooperation and - in the case of ASEAN - economic integration gathers pace in Asia, historical animosities and unresolved territorial conflicts weigh heavily on the region, damaging relations between governments and people.  The point has been made most sharply by Asian leaders like former Indonesian foreign minister Hasan Wirajuda who warn that the gains of the "Asian Century" are at risk because of unresolved historical conflicts and abiding mistrust in the region.

Asian views of Europe’s security role are also changing. Unease about the dangerous political and security fault lines that run across the region and the lack of a strong security architecture has prompted many in Asia to take a closer look at Europe’s experience in ensuring peace, easing tensions and handling conflicts.  As such, eearlier scepticism of Europe’s security credentials is being replaced by recognition of Europe’s “soft power” in peace-making and reconciliation, crisis management, conflict resolution and preventive diplomacy human rights.In addition, for many in Asia, the EU is the prime partner to deal with non-traditional security dilemmas, including food, water and energy security as well as climate change. Clearly also, the EU remains an inspiration for Asia’s own regional integration initiatives, including ASEAN, and in areas such as rules-based collective security.The seas…Europeans too are starting to become more aware of their security credentials and the global implications of instability in Asia, not least as regards maritime security. “The EU’s essential interests are closely tied up with the security of East Asia,” due largely to implications for navigation and commerce, underlines an EU Council document issued in 2012. The recently approved EU maritime security strategy identifies several threats to EU interests including cross-border and organised crime, threats to freedom of navigation, the proliferation of weapons of mass destruction and environmental risks.  Respect for international law and especially the United Nations Convention on Law of the Sea are emphasised.  Importantly, several Asian and European countries are working together in the EU-led ATALANTA counter-piracy operation in the Western Indian Ocean.Stronger engagement on Asian security issues has meant a deeper EU dialogue with ASEAN which is in the forefront of pan-Asian peace-building efforts. The European Union has signed the Treaty of Amity and Cooperation (TAC), ASEAN’s security blueprint for the region. High-level European and Asian representatives are now regular participants at the ASEAN Regional Forum (ARF), Asia’s prime security forum, as well as the Shangri La Dialogue, an annual informal gathering of security experts held in Singapore.A changing worldMuch has changed in Asia and Europe since ASEM’s launch.  The last 18 years have seen the sustained rise of a self-confident Asia and much soul-searching in Europe over the region’s global relevance. ASEAN efforts to create a frontier-free economic community are speeding up and Myanmar, once the global pariah and the cause of much Asia-Europe acrimony, is now firmly committed to political reform. Europe’s economic troubles have made it less strident in promoting a values-based agenda and while the United States’ “pivot” to Asia certainly prodded Europe to become more active in the region, Asia and Europe have discovered the value of interacting with each other without America.Still ASEM faces strong competition. There is no dearth of rival groupings and countries have become adept at “forum shopping” as they seek to build interest-based coalitions. In a multipolar world, the G20 which brings together industrialised and emerging countries now has to fight for its place against other alliances such as BRICS (which brings together Brazil, Russia, India, China and South Africa) and MIKTA (Mexico, Indonesia, Korea, Turkey and Australia).  A host of other regional and cross-regional groupings litter an increasingly crowded global landscape.

Even as economic connectivity rises, Asia and Europe are witnessing the rise of nationalist and populist movements and politics in many countries are becoming more national and inward-looking. At the same time, as underlined by Yeo Lay Hwee of the European Union Centre at the National University of Singapore, relations between states have become more complex and multi-dimensional as countries vacillate between cooperation and competition and even conflict. Asians worry that the entry into the European Parliament of extremist and populist parties will generate a “Little Europe” mindset which fears globalisation and free trade.  Europeans fret over rising China-Japan and Japan-South Korean tensions as well as Beijing’s deteriorating relations with Hanoi and Manila.

Renewing ASEM ahead of 2014 summit (Originally published 25/09/13)

Most multilateral organisations face the daunting task of adapting to new 21st century economic, political and social realities.Set up in the aftermath of World War II, global institutions at the core of the international system, such as the United Nations, the International Monetary Fund and the World Bank are under pressure to respond to the rise of the world’s emerging powers.The G20, which brings together industrialised countries and the world’s leading rising powers - including China, India and Brazil - was created in 1999 to complement the more restricted G8 composed of traditional industrialised powers. Demands for more effective governance now also beset the G20.Not surprisingly, renewal and reform are also the name of the game for ASEM, the Asia-Europe partnership launched in Bangkok in March 1996 to build stronger region-to-region ties.ASEM (Asia-Europe Meeting), with its 51 partners, is an important multilateral platform for Asia-Europe contacts which allows the two regions to interact in myriad ways.Trade and investment flows are booming, the two regions share concerns about regional and global peace and security and meet regularly within the ASEM framework to discuss issues as varied as urbanisation, river basin management, food security and education.But there is no doubt: ASEM must adapt to the changing landscape in both Asia and Europe if it is to remain credible and relevant.Interestingly, that means going back to the original informality and flexibility of ASEM and the immense Asia-Europe networking opportunities it offers.On the plus side, ASEM includes five of the European Union’s strategic partners – China, Japan, India, South Korea and Russia - and four of the UN Security Council’s permanent members – China, Russia, Britain and France.The fact that new countries continue to demand entry into the club – which began with 26 founding members in 1996 – is a mark of ASEM’s attractiveness and vigour. Once inside the partnership, European and Asian countries of all sizes interact with each other on an equal footing.The forum also provides a platform for ample bilateral contacts between leaders and officials of both sides.Yet, the need for renewal is pressing.  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.Meetings of ASEM senior officials have become long and drawn-out as participants talk more about procedures and dates than substantial questions.The progress they make can appear slow, plodding and incremental. ASEM participants often complain that their work is not visible to the public, that ASEM does not punch its weight in the over-crowded field of global cooperation platforms.The consensus is that 17 years after its launch amid much fanfare, ASEM is in need of a new lease of life.Ironically this could be achieved by taking ASEM “back to the future” and rediscovering the initial rationale behind the partnership. The aim is to recover ASEM’s initial focus on substance over protocol and ritual.Efforts to make ASEM more pragmatic, effective and result-oriented – and more relevant to partners’ economic and social priorities – have dominated deliberations for the last few years.Progress on revitalising ASEM is gaining momentum in the run-up to the ASEM summit hosted by the EU and set to be held in Milan, Italy, in autumn 2014.ASEM foreign ministers meeting in Delhi on November 11-12 are expected to endorse a number of changes which many hope will inject new life into the Asia-Europe partnership.Asian and European policymakers have agreed to streamline and simplify ASEM working methods to ensure that ASEM foreign ministers and leaders 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, ASEM 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 issues such as 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.Based on existing mechanisms, there is now agreement to work on cooperation projects which are even more visible and tangible for benefit of Asia and Europe.Following the recent membership of Norway, Switzerland and Bangladesh, ASEM expansion is expected to continue as Croatia, which became the 28th member state of the EU on July 1 2013, formally joins ASEM next year.ASEM partners also face the uphill task of securing stronger public understanding, awareness and support for the Asia-Europe partnership, especially in the run up to the summit in 2014 and two years later when ASEM celebrates its 20th anniversary.If ASEM reform is implemented as planned, 2016 could become an important milestone in a reinvigorated Asia-Europe partnership, a must in the 21st century.

Exploring ideas on ASEM’s future (Originally published 03/06/13)

Ever since the first high-profile Asia-Europe Meeting (ASEM) in Bangkok in March 1996, Asian and European leaders, ministers and officials have been working on myriad fronts to forge a stronger region-to-region partnership on issues as diverse as green growth, global peace and prosperity, human rights, education and urbanisation.Their work may not always make the headlines. And the progress they make can appear slow, plodding and incremental. ASEM participants often complain that their work is not visible to the public, that ASEM does not punch its weight in the over-crowded field of global cooperation platforms and that 17 years after its launch amid much fanfare, ASEM is in need of a new lease of life.With the next ASEM summit set to be held in Brussels in autumn 2014, the race is on to try and inject fresh impetus into a process which all 51 ASEM partners agree is a compelling necessity – but one which must be deepened and made more dynamic to stay relevant in a rapidly-changing world.ASEM foreign ministers, who gather in New Delhi on November 11-12, are expected to come up with fresh ideas for reviving the Asia-Europe partnership.As illustrated at a recent symposium held in Yangzhou, China, the problem facing ASEM is not a lack of initiatives on revitalizing the relationship; rather, the challenge is to find common ground among the many suggestions being put forward by ASEM partners – and then to refine and streamline recommendations before presentation to ministers and leaders.Significantly, all 51 partners continue to underline the strategic significance of ASEM in the 21st Century. The fact that new countries continue to demand entry into the club – which began with 26 founding partners in 1996 – is seen as a mark of ASEM’s attractiveness and vigour.Over the years, ASEM has also served as a “new Silk Road” connecting the two continents and providing a unique platform for dialogue and cooperation, says an Asian official, adding: “Asia and Europe need each other…we are closely interconnected and interdependent and draw on each other’s’ strengths.”European policymakers say they are similarly confident that ASEM has great merits. “Its relevance has increased. ASEM is informal, comprehensive and still very attractive,” said one European official in Yangzhou.The challenge is to maintain ASEM’s unique informality, networking and flexibility but also make it more pragmatic, effective and result-oriented – and more relevant to partners’ economic and social priorities.ASEM should identify “more cooperation projects which are visible, tangible and serve the interests of people,” said an Asian official, adding: “ASEM should be a forum for action.”More frequent meetings of ASEM economic officials and ministers were mooted, with participants also suggesting that ASEM should be used to explore new ideas, to stimulate and facilitate progress in other fora and encourage capacity-building across sectors.The need for more ASEM contacts with civil society, including members of parliament, business representatives, scholars and journalists as well as local authorities, was underlined.The most difficult task facing policymakers is a much-awaited overhaul of ASEM’s working methods in order to make meetings – especially leaders’ summits held once every two years – more interesting, relevant and productive.Recapturing the excitement and energy evident at ASEM’s launch in 1996 will not be easy, however. Over the years, ASEM meetings have become more formal and ritualistic, with ministers and leaders reading out well-prepared statements instead of engaging in direct dialogue.Meetings of ASEM senior officials have also become long and drawn-out as participants talk more about procedures and dates than substantial questions. “These meeting are a bottleneck in ASEM” said one senior official in Yangzhou. “We have become a housekeeping body.”Instead of reviewing a series of global and regional developments, ASEM summits should have a more streamlined agenda, allowing leaders to engage in a real, in-depth and focused conversation on key concerns.Leaders and foreign ministers should also meet in a so-called “retreat” format to ensure more intensive and interactive dialogue. “We want them to really get to know each other, forge friendships and understanding,” said one participant.Chair’s statements and other documents issued at the end of ASEM meetings should be short, simple and to-the-point rather than long and procedural. They should be media-friendly and understandable to the general public, helping to enhance ASEM visibility.The long-running debate on whether or not ASEM needs a secretariat to provide institutional back-up was discussed. The drive to set up an ASEM Secretariat is essentially driven by Asian partners of ASEM who feel the need for such an institution on their side.Europeans, on the other hand, are generally satisfied with the current situation since the European External Action Service plays an important coordination role for European partners.As preparations intensify for the meeting of foreign ministers in Delhi, the conversation on strengthening ASEM is likely to gain pace. The aim is to prepare not only for the summit in Brussels in 2014 but for ASEM’s 20th anniversary celebrations in 2016.As participants in Yangzhou said, the upcoming anniversary should not only take stock of ASEM cooperation so far but also set it on a new and revitalised course for the future.

A roadmap for strengthened EU-ASEAN ties (Originally published 21/05/13)

Relations between the European Union and the Association of Southeast Asian Nations (ASEAN) are finally picking up much-needed momentum.Recent talks held in Ho Chi Minh City between EU and ASEAN senior officials appear to have made important headway in implementing a new agenda for cooperation, with both sides seeking ways to take the relationship to a higher and more strategic level.The switch from recrimination over issues like Myanmar and human rights to serious consultation on non-traditional security challenges and other questions is indeed welcome.  It is time the EU took relations with ASEAN as seriously as other global players, including the United States.The progress made in Vietnam now needs to be followed up urgently by efforts to improve the structure of EU-ASEAN cooperation, inject more ambitious content and change the tone and style of the relationship.A changing relationshipMuch has changed in Europe and in Southeast Asia since the signature of the EU-ASEAN cooperation agreement in March 1980.The last 33 years have seen a massive change in the contour, ambitions and role of the European Union. ASEAN has also undergone deep transformation through the adoption of the ASEAN charter, expansion of the club to include new members and a renewed drive for strengthened economic integration.Both the EU and ASEAN have succeeded in bringing peace to their regions.  Both have worked for economic prosperity and both have to deal with the challenge of big and difficult neighbours.Increasingly, both face a similar uphill task in ensuring their relevance, influence and importance in the 21^st Century.ASEAN has to affirm its centrality in a rapidly changing region which includes an increasingly assertive China.  It is also struggling to maintain its unity in the face of Beijing.Europe is still battling with the currency crisis, massive unemployment and has to adapt to living in a world where the power has shifted from the West to Asia. When it comes to China – or Russia - the EU is still struggling to speak with one voice.The EU-ASEAN relationship today is also very different from what it was all those years ago – reflecting the changes in both organisations.The challenge facing both sides is to take their relationship into the future – into the 21^st Century.  This can be done through changes in three key areas: E-ASEAN structures, content and tone:Structures: 2012 saw several significant improvements in EU-ASEAN relations: the EU acceded to the Treaty of Amity and Cooperation in Southeast Asia, ASEAN’s core document for ensuring peace and stability in the region.A recent meeting of EU-ASEAN foreign ministers in Brunei pledged to further improve bilateral ties between the two regions by adopting a Plan of Action.Significantly also, Baroness Catherine Ashton, High Representative for Foreign Affairs and Security Policy and Vice-President of the European Commission, attended the ASEAN Regional Forum in Phnom Penh in July after a much-remarked two-year absence.In addition, the EU decision to lift sanctions against Myanmar, giving a boost to relations with ASEAN.However, more needs to be done to further broaden, deepen and strengthen the current level of EU-ASEAN engagement.  It is important that the momentum achieved in the last year is not lost.The EU and ASEAN need to recognise each other as strategic partners. It is quite surprising that this has not been done given the importance of the economic relationship and shared regional integration goals.This will necessarily mean the organization of regular summits between EU and ASEAN leaders – although these gatherings need not be annual.  They could be held back-to-back with the Asia Europe Meeting (ASEM)  which is organised every two years.The EU should appoint a special ambassador in Jakarta with sole responsibility for relations with ASEAN to ensure implementation of the ambitious Plan of Action on EU-ASEAN relations adopted last year in Brunei.The head of such an EU delegation would have the task of overseeing EU-ASEAN relations, establishing contacts with the ASEAN Committee of Permanent Representatives and other important ASEAN officials.  This is already being done by the US, China and Japan which have appointed special ambassadors to deal with ASEAN.  Australia is in the process of sending its own ASEAN envoy to Jakarta.If EU-ASEAN relations are to be brought to a “higher level” within the context of a global power shift to Asia-Pacific and regional security dynamics, the management of ASEAN-EU relations needs to be a full-time job.The conclusion of an EU-ASEAN free trade agreement would also boost the relationship.  Although this is unlikely to be possible in the short-term, it should remain a medium-term goal for both sides.The EU has already concluded a free trade deal with Singapore and is negotiating with Thailand.  These and others in the pipeline should become building blocks for a region-to-region accord once the ASEAN economic community takes more concrete form as of 2016.Increase ASEAN visibility ASEAN also needs to enhance its visibility in Europe.  Very little is known about the organization, its ambitions and achievements in Europe.   Public support for stronger EU-ASEAN ties can only be built up if there is wider media coverage and discussions in universities and in think tanks about the subject.Content:Trade and economic issues will remain the backbone of the relationship, with both sides also working on expanding their investment flows.  Sharing best practice on regional integration also continues to be important in view of ASEAN’s enhanced regional ambitions and the need to build ASEAN capacity in an increased number of areas.The EU can provide lessons in building connectivity – especially as regards institutions and people, students, academics, scientists. Discussions on human rights – once a taboo question for ASEAN countries – are gaining momentum as attitudes change in ASEAN.EU special envoy for human rights Stavros Lambrinidis was recently in Jakarta for talks with the ASEAN Inter Governmental Human Rights Commission (AICHR), the first such encounter between the two sides.Lambrinidis also met with the ASEAN Committee of Permanent Representatives to ASEAN, as well as other ASEAN stakeholders, including regional civil society organisations.In a break with past practice of lecturing ASEAN on human rights deficiencies, the EU envoy underlined that the basis of EU-ASEAN cooperation would be based on "mutual inspiration”.Meanwhile, EU development cooperation and humanitarian aid programmes remain crucially important for the poorer ASEAN countries, including Myanmar, Laos and Cambodia.The EU will never be a military power in the Asia-Pacific. But as ASEAN forges full speed ahead with constructing a region-wide security architecture, the EU needs to define how best it can contribute to regional peace in the Asia-Pacific.The focus should be on non-traditional security, confidence building measures and possibly joint exploitation of the resources in the South China Seas.Maritime security, disaster Resilience, conflict prevention and crisis management as well as peace-building are other subjects where the EU has know-how and experience as are challenges related to health, terrorism, cyber security, climate change and the environment.These moves – many of which are already being explored - would have the added advantage of helping beef up the case for EU membership of the East Asia Summit.Finally, the EU must move to ease travel restrictions in place for ASEAN citizens and encourage youth exchanges and the establishment of study centers in European and Asian universities that focus on the relationship between Asia-Pacific and Europe.Tone and Style:Relations between ASEAN and the European Union have too long been complicated by a narrative of competition – and a history of mistrust.ASEAN has never liked European “arrogance” in lecturing and hectoring them on their perceived deficits and weaknesses. But people in the region admire much that is European, including European technology, products and culture. To keep growing, both sides need each other’s markets and investments.Europeans should steer clear of any prescriptive approach to the way the Association of Southeast Asian Nations (ASEAN) should evolve.ASEAN decision-making is slow, messy and the organisation is currently divided over how best to deal with China. But this is no different from intra-EU debates on the future of the Union and Europe’s own failure to speak with one voice on China.The EU cannot expect imitation, but – despite the current economic crisis -  it can inspire and help ASEAN on its future trajectory.The EU and ASEAN have made a good start in reviewing their relationship and seeking fresh avenues for cooperation. The meeting in Vietnam appears to have been constructive and positive. The effort must be maintained in the months ahead so that both sides can work more closely together to tackle complex 21st Century challenges.

EU can help Pakistan’s new PM tackle tough agenda (Originally published 13/05/13)

As Pakistan’s next prime minister, Nawaz Sharif faces daunting domestic and foreign policy challenges.While attention is inevitably focused on Sharif’s relations with the United States, India and Afghanistan, the election of a new democratically elected government also opens up new avenues for stronger EU-Pakistan relations.The EU should move fast to forge stronger and more comprehensive ties with Islamabad, including the convening of a third EU-Pakistan summit to hammer out a new agenda for deeper long-term relations.Landmark elections – but what happens next?The landmark elections, marking the first transfer of power between two elected civilian governments in Pakistan, give hope that 67 years after independence, democracy is finally taking root in the South Asian nation of 180 million people.The EU’s chief election observer, Michael Gahler, has noted “considerable improvements” in the conduct of the polls compared to five years ago as regards voters’ rolls, independence of the Election Commission and   media freedom.  Unlike in 2008, there were also no reports of widespread rigging or bogus polling stations.Although it’s long hide and seek with democracy may have ended for the moment, Pakistan remains a troubled and fragile state.Violence and bloodshed marred the election campaign and polling day in in many cities as the Taliban relentlessly pursued their anti-democracy agenda by targeting secular parties, sparing only former cricketer Imran Khan’s Tehreek-I-Insaf party.Pakistan’s economy is in shambles, with talks expected soon on an International Monetary Fund bail-out package.  Corruption is rampant. The army and security services continue to exert an unhealthy influence over politics and policy.  And relations with the US as well as most neighbouring countries, including India and Afghanistan, remain tense.Pakistani people deserve credit

There is more to Pakistan than violence, discrimination and economic decline, however.  For almost 7 decades marked by flawed democracy, feudal greed, military misrule and terrorism, the country has worked because of the courage and tenacity of its people, including the millions of Pakistanis who live and work abroad – and send millions of dollars in remittances – to a country they still call home.

Last week’s elections provided additional evidence of the resilience, determination and dynamism of millions of men and women who defied threats of violence, intimidation and centuries-old discrimination to cast their ballots in unprecedented numbers.No room for generalsMany millions of young Pakistanis voted for the first time.  The turnout of women voters was impressive.  An election commission spokesman said turnout had been around 60%, compared to 44 % in 2008.Sharif, an industrialist who has been prime minister twice before - his last period in office ending 14 years ago in a military coup followed by his trial and exile – has said generals have no place in politics.  He has also said he will talk to the Taliban in order to end an insurgency which has raged across the country for the last few years.His dismissal as premier in the 1990s was greeted by relief by many Pakistanis but many are hoping that Sharif has learned lessons from his last time in power.Certainly, his party has a good record on economic management.He advocates free-market economics and is likely to pursue privatization and deregulation to revive flagging growth.Formidable tasks aheadThe tasks he faces are formidable.  Public discontent over endemic corruption is rife; the economy is crippled by chronic power cuts and crumbling infrastructure.  One of Sharif’s first likely tasks will be to negotiate with the IMF for a multi-billion-dollar bailout. To raise domestic revenues, he will have to bite the bullet and increase tax collection.Sharif’s government faces the challenge of putting tense relations with the US back on an even keel. He has vowed to review Pakistan's support for America's "war on terror" but is unlikely to jeopardise 2 billion dollars in annual US aid.  Washington’s support will also be essential if Pakistan is to secure desperately needed aid from the IMF, the World Bank and other global institutions. He will also have to improve ties with Afghanistan and India.While in office the last time around, Sharif tried to make peace with India but his initiatives were opposed by the army.  There is concern that plans for stronger India-Pakistan trade relations – something that Sharif favours – could once again be jeopardised by an uncompromising army.Pakistan will have a crucial role to play in ensuring peace and stability in Afghanistan following the withdrawal of foreign troops from the country in 2014.Relations with Pakistan's traditional ally, China will remain strong but Beijing is worried that militant Uighur Muslims are still receiving training in Pakistan.Hold another EU-Pakistan summitThe EU should lose no time in seeking an upgrade of ties with Pakistan’s new government.  A third EU-Pakistan summit should be organised without too much delay and both sides should move quickly to hammer out a new agenda for deeper long-term relations.EU foreign ministers admitted earlier this year that the so-called “5-Year Engagement Plan” with Pakistan needed to be reinvigorated through early meetings with the new Pakistani ministers and senior officials, saying progress in such fora could lead to a third EU-Pakistan summit.

There is room for a strategic shift in EU-Pakistan relations from an almost-exclusively trade-focused agenda to a more holistic programme of cooperation.

It’s not just about tradeCertainly, Pakistan needs help to boost its exports to Europe and elsewhere.   The EU has already given Pakistan improved market access by introducing autonomous trade preferences following a WTO waiver.  The hope now is that Pakistan will secure access next year to the GSP Plus scheme for zero-duty, zero-quota exports to the EU.A strategic dialogue launched earlier this year between Catherine Ashton, EU foreign policy chief, and her former Pakistani colleague Hina Rabbani Khar seeks to cover cooperation in areas of trade, investment, human rights, governance, energy, education and socio economic development.The rhetoric needs to be translated into action.  To change the dynamics of the so-far relatively lukewarm EU-Pakistan relationship, the EU will have to pay more sustained attention to Pakistan.Once on the periphery of the EU’s Asia policy, Pakistan is climbing slowly up the EU’s foreign policy agenda, mainly because of the strong link with security in Afghanistan, connections between tribal areas in Pakistan and Europe’s “home grown” terrorists and persistent US and British insistence that the EU should help stabilise the country.A long engagementThe adoption by EU foreign ministers last year of a so-called “5-Year Engagement Plan” aimed at boosting civilian institutions and civil society in Pakistan as well as a commitment to start a strategic dialogue with the country are recent illustrations of stronger EU interest in Pakistan.It has not always been an easy relationship, however.  Pakistan has used most of its time and energy to lobby for better market access for its textile exports and bristled at EU comments on its treatment of women and minorities.Volatile politics in Pakistan have also meant the EU has had to constantly adjust and re-adjust its approaches depending on whether the army or civilians are in power.The EU does not have America’s clout in Pakistan.  The absence of an EU role in providing military support has built up Europe’s credibility with Pakistani civil society but has also meant lack of leverage with the military.Meanwhile, strong EU-Pakistan economic ties – the EU is Pakistan's largest trading partner - have also not translated into significant political influence.The EU needs to be more innovative and creative in forging a new strategy which looks at Pakistan not merely as a developing country, requiring traditional development aid actions, but as a fragile country in transition which needs help and assistance to modernise and reform its flagging economy, reinforce weakened political institutions and to strengthen the rule of law.Work on supporting the strengthening of democratic institutions and the electoral framework with particular focus on institution building, legislative reform and voter participation will have to continue. Pakistan’s army and security services still need counter-terrorism training to tackle the insurgency and fight radicalisation.The EU and its member states are beginning to invest time and effort in crafting a multi-faceted strategy capable of responding to the multiple and complex challenges facing Pakistan.Such actions must continue and expand, with the EU also encouraging closer regional integration in South Asia.  Pakistan will continue to need support from its friends to stay on the democratic path.  Successful elections alone will not anchor democracy in Pakistan.

Time to gear up EU-Japan relations (Originally published 20/03/13)

The launch on March 25 of negotiations on a first-ever EU-Japan political accord and a parallel trade-expanding comprehensive Economic Partnership Agreement aims to open a new era of closer and stronger relations between Japan and the European Union.

The two agreements can certainly inject fresh life into the EU-Japan partnership. “They are about making the EU-Japan relationship closer and more substantial,” says Kojiro Shiojiri, Japan’s Ambassador to the EU.

To get good results, however, both sides will have to commit time, energy and effort to the exercise. Most importantly, European and Japanese policymakers will have to find the right balance between their high political ambitions and hard-nosed bargaining on key trade questions, including agriculture and automobiles.

Both sets of negotiations were launched at a “telephone summit” between EU Council and Commission heads Herman Van Rompuy and Jose Manuel Barroso, and Japan's Prime Minister Shinzo Abe. The telephone talks replaced a face-to-face summit scheduled to be held in Tokyo after EU leaders said they were grappling with debt problems in Cyprus.

The move to strengthen EU-Japan ties comes as Japan also prepares to join discussions on a Trans-Pacific Partnership, a free trade deal including the United States and several leading Asia Pacific economies. A triangular trade deal is also being explored with China and South Korea…(the rest remains unchanged)

The EU is a crucial partner for Japan

“For Japan, the EU is a crucial partner, not just a strategic partner,” says Ambassador Shiojiri. “Both the economic and political agreements between the EU and Japan are very relevant. The political agreement is about peace, security and responsibilities. The economic one is about revitalising our economies and societies.”

“The world is changing. The political agreement will allow the EU and Japan to work together to respond more effectively and take on bigger responsibilities to tackle global challenges,” Shiojiri told Friends of Europe ahead of the Tokyo summit.

“We have political declarations but Japan and the EU do not have a joint enterprise or project. This time we should be ambitious and produce added value for our relationship,” he said. “We should be closer. The width and depth of our relations are not commensurate with the importance of our partnership. We should shift gears and transform our relations.”

Japan saw the EU as a “super soft power” and believed there was 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 was a “value promoter” and an important global player and partner for Japan.

Economic Partnership Agreement

Japan is interested in negotiating an ambitious Economic Partnership Agreement, not just a free trade deal, because the focus must be on growth and jobs in both Europe and Japan, the Ambassador underlined, adding: “this is not only about markets but about reinvigorating our economies and societies.”

While it was important to reduce tariffs to boost EU-Japan trade, Shiojiri said he believed that regulatory reform and harmonisation were even more essential to reduce costs and step up competitiveness.  “Regulatory change is the bigger prize with a bigger impact on economies and societies.  We are more interested in reform to build a more resilient economy and society.”

Both the EU and Japan were becoming less competitive in their performance on East Asia’s dynamic markets, he added. “This means we are losing competitiveness…this is a big concern.” The Economic Partnership Agreement would help both Japan and the EU to upgrade their performance in a very competitive globalised world.

To tap the full potential of their relations, the EU-Japan partnership must also encourage closer contacts between civil society actors, business leaders, academics and politicians. “The agreements will be a tool to make our relations stronger,” the Ambassador said.

We should not miss this chance,” he underlined.  “Time is of the essence. We should conclude the agreements in the shortest possible time.  If it takes too long, we will be in a very different world.  It is our responsibility not to take too long.”

The EU view: Japan is serious about market opening

The EU mandate for the Economic Partnership Agreement with Japan was agreed at the end of November last year. According to EU Trade Commissioner Karel De Gucht, the mandate sets out a strict and clear parallelism between the elimination of EU duties and non-tariff barriers in Japan. There's a safeguard clause to protect sensitive European sectors and the EU will “explicitly reserve the right 'to pull the plug' on the negotiations after one year if Japan does not live up to its commitments on removing non-tariff barriers.”

Japan is serious about opening up its market and had already started to remove a number of key non-tariff barriers up front – such as granting liquor licenses to European operators, the Commissioner said, adding: “Such moves have given us all the reassurance we could reasonably expect before a formal negotiation is opened. And no other partner has ever gone as far as Japan before we sat down at the negotiation table together.”

Potential benefits of an EU-Japan EPA:

The European Commission foresees:

• A boost to Europe's economy by 0.8% of GDP
• EU exports to Japan could increase by 32.7%, while Japanese exports to the EU would increase by 23.5%
• 420,000 additional jobs in the EU are expected as a result of this agreement

The negotiating directives:

• Japanese non-tariff barriers will have to be eliminated in parallel to any tariff reductions on the EU side.
• The European Commission should suspend negotiations if progress as specified in the non-tariff barriers and railways and urban transport roadmaps does not materialise within one year from the start of the negotiations.
• There is a safeguard clause to protect sensitive European sectors.

Japan is the EU’s second biggest trading partner in Asia, after China.  In 2011 EU exports had reached a value of €49 billion, mainly in the sectors of machinery and transport equipment, chemical products and agricultural products. In 2011 EU imports from Japan accounted for €67.5 billion. In 2010, EU imports and exports of commercial services from and to Japan were €12.7 and €17.2 billion.

A remedy for declining EU-Japan trade

In its July 2012 assessment[1] of an EU-Japan FTA, the Commission noted that trade between the two had been declining for several years, worsened by a combination of tariffs and non-tariff measures that negatively affected both sides.

Both the EU and Japan have low tariffs on goods, the report said. However, Japan's tariffs remain high in the agricultural and processed food sectors and for beverages, in all of which sectors the EU is a major global exporter. Average Japanese tariffs applied to other important EU exports are generally low.

EU tariffs on the main Japanese exports are higher. Japanese exports to the EU largely fall in a small number of manufacturing sectors, e.g. motor vehicles, electronics and machinery.

Public consultation and studies stress that non-tariff measures are major barriers to EU exports to Japan. Parts of the Japanese market, e.g. some agricultural products and some transport equipment and aeronautical products, are almost totally closed to EU exports. Seven business sectors that cover the bulk of EU exports to Japan are those most affected by existing NTMs: chemicals (including pharmaceuticals), automotive, medical devices, processed foods, transport equipment, telecommunication and financial services.

The lack of transparency in public procurement, and problems relating to IPR, have also been identified as important non-tariff barriers that make the Japanese market effectively inaccessible for EU companies.

The challenge of choosing a new WTO director general (Originally published 05/02/13)

The Doha round of trade talks has long dominated the agenda of the World Trade Organization (WTO). An urgent priority for the organisation’s 157 members, however, is to appoint a new director general to replace Pascal Lamy, the much-respected former EU trade commissioner who has led the Geneva-based trade body since 2005, and who is stepping down in August this year.Over the coming months, WTO members must also make sure that a ministerial conference in Bali at the end of the year can reach agreement on a small package of “early harvest” deliverables from the long-running Doha round. The focus is on clinching a deal on trade facilitation – a move that Lamy says could stimulate the US$ 22 trillion world economy by more than US$1 trillion – as well as on special measures for least developed countries.First, however, the WTO must select a new director general to lead the organisation for the coming four years, a task made more difficult by the continuing deadlock on Doha. The new man/woman who takes the helm of the WTO faces the challenge of revitalising the long-term trade liberalisation agenda while also ensuring short-term results in time for the Bali meeting.A changed global landscapeMuch has changed on the global economic stage since the Doha talks were launched in the capital of Qatar in November 2001. The world economic recovery remains fragile, protectionism continues to be a threat even as global economic inter-dependence grows, the Group of 20 nations is a more powerful force in global affairs (China joined the WTO in 2001) and so-called “new” topics such as investments and competition policy are now firmly on the trade agenda.The proliferation of regional and bilateral trade deals, meanwhile, continues to distract from the multilateral trade agenda – despite hopes that these agreements will be transparent and inclusive and become “building blocks” to boost global free trade.Nine hats in the ringGiven the challenges facing the WTO, it is heartening to see that candidates from nine countries have thrown their hats in the ring to succeed Lamy. Under WTO rules, members have until the end of May to decide on the right person for the job.It’s a great line-up. A majority of the candidates are from developing countries and, for the first time, three women are in the race. So far only men have held the WTO’s top post, and only one previous director general, Thailand’s Supachai Panitchpakdi has been from a developing country.The final set of nominees includes three candidates from Latin America: Roberto Carvalho de Azevêdo, Brazil’s current ambassador to the WTO; Anabel González of Costa Rica, who is her country’s current trade minister, and Herminio Blanco, Mexico’s former minister of trade and industry.From Asia, Mari Elka Pangestu, who is Indonesia’s Minister of Tourism and Creative Industry and was trade minister from 2004-2011, and current South Korean Trade Minister Taeho Bark have been put forward by their countries.Kenya has nominated Amina Mohamed, the country’s former WTO ambassador, while Ghana has presented Alan John Kwadwo Kyerematen, former minister of trade and industry.New Zealand’s Minister of Trade, Tim Groser and Ahmad Thougan Hindawi, former trade and industry minister of Jordan, are also vying for the position.The nine candidates have already addressed a closed-door meeting of the General Council - the organisation’s highest decision-making body outside of its ministerial conferences.The selection and appointment of the new trade chief will follow consultations to be held in April and May and the final selection will be made by consensus, no later than May 31. The nominee will take over at the WTO on September 1. Qualities neededChoosing the right man or woman for the job will not be easy. Of course, qualifications, experience and competence should be the deciding factors in choosing the new head of the WTO. But in the real world of horse-trading and strategic alliances, other factors – such as geography, gender and whether the candidate has held a ministerial post - will play an equally pivotal role.WTO selection procedures state that “where members are faced in the final selection with equally meritorious candidates, they shall take into consideration as one of the factors the desirability of reflecting the diversity of the WTO’s membership in successive appointments to the post of Director-General.”The top slots at the International Monetary Fund (IMF) and World Bank have traditionally been held by a European and an American, respectively, as the result of a “gentlemen’s agreement” between decision-making members of the two Bretton Woods organisations. This is the case at the moment, with France’s Christine Lagarde at the IMF and Jim Yong Kim from the US at the World Bank.Further complicating the WTO selection process is the fact that the search is also on for a new head for the United Nations Conference on Trade and Development (UNCTAD). Speculation is that an African will be selected for the post.The next WTO head must be able to drive forward an organisation which has lost much of its lustre in the last few years. He or she must be a champion of free trade, able to keep protectionism at bay and also play bridge-builder between the concerns of emerging economies and the priorities and interests of developed countries.On a personal level, the new WTO chief must be an honest broker but also a pragmatist who can adapt the organisation to new challenges.

The focus must be on personal skills and qualifications, passion and commitment. The new man or woman at the WTO must make the case for free trade, not for its own sake but because global trade is the motor of world growth and development and of jobs.

EU views on China's urbanisation drive (Originally published 30/01/13)

Europeans are watching with a mix of admiration and anxiety as China’s cities become big, bigger, biggest.Reasons for the admiration are clear: the dizzying pace and scale of China’s urbanization and transformation from a largely rural to an urban nation is unprecedented in human history.  There is also recognition that cities have been the major drivers of China’s impressive economic growth and as such there is EU support for Chinese Vice Premier Li Keqiang as he champions the cause for further Chinese urbanisation.As the world urges China to rebalance its economy, there are hopes that increased domestic consumption due to urbanisation will overtake exports to become the main driver of the economy.As European Commission Vice President Joaquin Almunia said in May last year at the launch of the EU-China partnership on sustainable urbanisation, “city dwellers and migrants are the lifeblood of China’s economic development and need to supported in their search for social and economic opportunities.”Cities in both China and Europe are focal points of economic growth, innovation and paid employment.  On average, urban residents have better access to education and health care as well as other basic services such as clean water, sanitation and transportation than rural populations. If well managed, urbanisation can continue to offer important opportunities for economic and social development.But urbanisation is not as simple as relocating rural people to cities or turning them overnight into city-dwellers.  It is also about the quality of urban living, being able to provide urbanites with social security, housing, health, education and recreational facilities.As such, there is concern in Europe – as in many parts of the world – that China may not be able to cope with the demands of its increasingly assertive “urban billion”. China’s urban expansion poses a huge challenge for local and national leaders who must find sufficient public funding to provide social services and deal with pressure on energy resources, land, water and the environment.  It is also clear that integrating rural migrants into city life will not be easy, given the current system of local residence permits (hukou).Clearly, the hukou system has helped to control the influx of rural migrants to the cities, maintained social stability and, at least partly, avoided slums-like outskirts next to China's bigger cities. But can the hukou system meet the challenges of urban living in the 21st Century?  The fear is that in the long run, it may impede growth by lowering labour mobility and preventing some urbanites from becoming real consumers.Europeans do not just want to watch China’s urbanization from the side lines. The European Union believes firmly that potential for EU-China cooperation in creating energy-efficient and “eco-cities” is immense. The EU-China sustainable urbanization partnership launched amid much fanfare last year is a very visible symbol of the two sides’ hopes of working together on what many in Brussels view as a global challenge, not just a Chinese one.European businesses, meanwhile are hoping to help China meet its urbanization challenge – and make money in the process. And there is no dearth of experts, academics and scholars who are already giving their advice on how best to improve China’s cities of today and build China’s cities of tomorrow.The task facing China is immense.  At recent meetings on the subject organised in Brussels, Chinese and European experts have underlined their concerns regarding the impact of the mega-cities on China’s already massive problem of environmental pollution, water and waste management, property prices and transport bottle necks. Providing health and education facilities to the rising number of urban dwellers will be difficult.However, there is also confidence that Chinese architects, urban planners and other urbanization experts will be able to create and build cities which are adapted to the needs of 21st Century citizens. Ideally, European technology and China’s organizational and implementation skills can be combined to produce the best results.Faced also with energy constraints, increased citizen mobility and dwindling natural resources, Europe is making great strides in greening its cities. But as illustrated by a series of EU projects, including the EU “smart cities and communities” initiative, the quest to develop integrated sustained solutions that offer clean, secure and affordable energy to citizens is far from over.Since cities account for 70 per cent of Europe’s overall energy consumption, EU plans to ensure 20 per cent energy saving by 2020 and to develop a low-carbon economy by 2050 hinge on how quickly and successfully European cities can become more resource-efficient.Europe can share its experience with China in areas such as providing pensions, health care and education for migrant workers as well as in managing rural communities.  EU policymakers also insist on the need to involve civil society representatives in the dialogue on sustainable urbanisation.As such, over the coming years, European and Chinese mayors, architects, urban planners and industry leaders will have many opportunities to meet, identify and find solutions for common problems and priorities. The EU’s own Covenant of Mayors, set up in 2008, has more than 3,800 towns and cities as members who discuss issues like climate change, water, waste and mobility but also over-consumption and ageing.Given the right balance, in China, Europe and elsewhere, cities can be wonderlands of creativity, abundance and talent. But achieving that equilibrium will require out-of-the-box solutions and visionary global partnerships.

EU-China: The challenge of “soft diplomacy” (Originally published 17/04/12)

The European Union’s expanding relationship with China now includes a much-needed “soft power” pillar: on April 18, both sides formally launch a “high level people-to-people dialogue” aimed at ensuring the EU-China conversation in more than just trade, business and global politics, questions already covered by existing EU-China high-level contacts.Bringing people – students, academics, artists, journalists and especially young people – into the EU-China discussion is a good move. Officials, diplomats and business leaders have a prime role to play in promoting ties between nations. However, building real trust and confidence – an essential element in forging strong and stable ties – requires regular contacts and exchanges between non-state actors.Given the “trust deficit” in EU-China ties, the need for more communication among people is essential. Differences in their political systems, values and interests mean that people in China and Europe are unlikely to see eye to eye on many questions.  But this diversity need not stop people from seeking to better understand each other.Europeans are clearly impressed by China’s rise but opinion polls across Europe also show continuing public unease about the country’s political system, human rights, increased military spending and trade practices.Europe’s economic troubles are also impacting on perceptions of China, with public opinion torn between a view of cash-rich China as a potential “saviour” for ailing European economies and fear that Beijing is planning to “buy up” European assets and use its expanding economic power to influence European policy.Ingrid d’Hooge of the Netherlands Institute of International Relations (Clingendael) points out in her study “The Limits of China’s Soft Power in Europe,”that European views of China were favourable in the early years of the 21st Century, when people were optimistic about political reform in China and confident about economic opportunities.  Since late 2006, however, Europeans have been disappointed at lack of political reform in the country and worried about China’s international intentions.Interestingly, however, Europeans differentiate between China as a country – in fact China’s government – and the Chinese people. “When asked how they view the Chinese people, the figures are far more favourable than those for China as a country,” d’Hooge says.Chinese perceptions of Europe appear to be slightly more positive.  The EU has a “huge reservoir of goodwill” in China to tap into according to research conducted by the China Policy Institute of the University of Nottingham. But over 70 per cent of Chinese officials said their knowledge of the EU was insufficient.A 2007 study by Chatham House points out that for many Chinese, “Europe simply does not exist as a political centre of power, especially compared with the US.”  Recently, Chinese media have been critical of expectations that emerging economies would come to the help of embattled Eurozone nations.China’s former ambassador to the EU Song Zhe has criticised European media for failing to give a complete picture of Chinese realities, saying this creates “misunderstandings or even biased views on China”.  The key problem, he added, is that “Europeans just don’t know China well”.Changing perceptions is not going to be easy.  Both the EU and China, however, possess the soft power tools – culture, education and diplomacy - needed to make friends and influence people.China is trying very hard. Widely recognized by Chinese leaders as an important indicator of a country’s international status and influence, the cultivation of Chinese soft power is at the top of the state agenda.   China also has a huge cultural industry and since 2005, President Hu Jintao has promoted a “soft power initiative” aimed at increasing China’s global influence through cultural and language programmes.Not surprising given its global popularity, China’s traditional culture is viewed by many Chinese policymakers as the most important resource for building soft power. The recent expansion of Confucius Institutes in Europe and elsewhere builds on this worldwide interest in China’s cultural traditions and language.Beijing has also extended its media outreach through China Central Television (CCTV), the English-language versions of China Daily Weekly published in London and the Global Times.European culture – traditional and modern – has a similar attraction worldwide. Unlike Chinese policymakers, however, the EU has yet to hammer out a complete strategic vision on the role of culture in EU-China relations or indeed, more generally, on the role of cultural cooperation and cultural diplomacy in EU foreign policy.EU states will – and should - continue to focus on promoting their national cultural traditions. Yet, a joint EU strategy to promote European cultural interests would go a long way in boosting Europe’s soft power in China.The questions the EU has to deal with are sensitive and complex. As EU Commissioner for Culture Androulla Vassiliou pointed out earlier this year, Europeans have to work out how to promote their creative and cultural industries at international level while safeguarding and fostering cultural diversity.“How can we create synergies between diverse and strong cultural identities at EU level when engaging in cultural relations with third countries?” asked Vassiliou.Cultural discussions with China should help the EU to find answers to some of these questions. A number of activities – film festivals, exhibitions and cultural performances, book fairs – set out as part of the current EU-China Year of Intercultural Dialogue should help create a stronger perception of European culture.In addition to creating better understanding between the EU and China, the high-level people-to-people dialogue is also likely to contribute to a greater EU awareness of the potential for joint European cultural outreach.

Enhancing EU-ASEAN ties (Originally published 26/03/12)

Finally, there’s hope for some much-needed progress in Europe’s 35-year old relationship with Southeast Asia.In the coming weeks, top officials from the EU and the ten-member Association of Southeast Asian Nations (ASEAN) will be meeting for the second ASEAN-EU Business Summit in Phnom Penh, Cambodia, to explore mutually interesting business and investment opportunities.An ambitious new action plan for ASEAN-EU relations is being negotiated and is expected to be unveiled when foreign ministers from both regions meet in Brunei in late-April.Also after years of playing hard to get, the EU’s top officials are beginning to take relations with ASEAN much more seriously.European Trade Commissioner Karel De Gucht will be attending the Business Summit in Cambodia. At last count, 17 EU foreign ministers (or their deputies) had signed up to meet their ASEAN counterparts in Brunei on April 27. EU foreign and security policy chief Catherine Ashton is also expected to participate.Showing up for ASEAN meetings is a good first step in building closer ties with the region. ASEAN policymakers have long complained about European ministers’ failure to turn up at EU-ASEAN gatherings.However, injecting real oomph into EU-ASEAN ties will require more than clocking up frequent flyer miles, vigorous handshakes and turning up for photo opportunities.Here are four urgent steps that both sides could take to enhance ties in the short-term.

• Restart talks on a region-to-region EU-ASEAN free trade agreement.
• Include a strong commitment to building a strategic relationship as part of the new EU-ASEAN action plan.
• Celebrate the 35th anniversary of EU-ASEAN ties at a summit.
• Appoint a special EU envoy responsible solely for relations with ASEAN.

Rapid changes in ASEAN, which turns 45 this year, are prompting the EU to take a fresh look at ties with the region.Significantly, the political reform under way in Myanmar has given a new luster to ASEAN. Military-ruled Myanmar’s entry into the organization in 1997 alienated the US and the EU as well as many other Western countries. However, now that Myanmar is opening up, the global race is on to forge stronger relations with both the country - and with ASEAN.Second, America’s much-publicised warm embrace of the Asia Pacific region – which includes plans for a Trans-Pacific Partnership on trade liberalization - has been a wake-up call to the EU.In the last few months, US officials have increased pressure on European governments to engage more strongly with ASEAN instead of focusing all their energy and efforts on China – and to a lesser degree on India.Specifically, Americans have been insisting that the EU must become an active participant of the ASEAN Regional Forum which is the prime platform for discussions on pan-Asian security issues.Third, as it struggles to overcome the economic crisis, the EU has come to rely heavily on exports to the ASEAN market of over 500 million people. ASEAN’s trade with the EU, in return, is helping to keep the region’s economy on track.The point is likely to be highlighted at the ASEAN-EU Business Summit in early April. The meeting, the second of its kind between economic policymakers and business leaders from the two regions, will focus on promoting trade and investment flows by reducing barriers and minimising constraints in trade and investment.

ASEAN TRADE WITH EU AND THE WORLD
EU27 with ASEAN
ASEAN with the world
% OF THE WORLD (excluding Intra-EU Trade)	2008	2009	2010
Imports	7.5%	7.5%	7.9%
Exports	8.3%	8.9%	9.2%
% OF TOTAL EXTRA-EU27	2009	2010	2011
Imports	5.6%	5.8%	5.5%
Exports	4.6%	4.5%	4.5%

In addition, a revival of negotiations on an EU-ASEAN free trade agreement, suspended in 2009 largely because of discord over Myanmar, would send a positive signal of EU interest and commitment to ASEAN.The EU is currently negotiating bilateral trade deals with Singapore, Malaysia and Vietnam but has always maintained that these are “building blocks” in the search for an ASEAN-wide agreement.The new EU-ASEAN action plan for future cooperation, set to be released in Brunei at the end of April, represents an important step forward in expanding the content and scope of the two sides’ conversation so far.Key questions in the new plan include EU support for ASEAN’s efforts to upgrade connectivity across the region, help in implementing the ASEAN economic blueprint as well as cooperation on questions such as maritime security, cyber crime and counter-terrorism.However, the document could do with the injection of a stronger strategic element to make it more relevant to the changing nature of both Europe and ASEAN. The focus should be on improving the quality of the two sides’ inter-action rather than the quantity and volume of subjects discussed.Transforming EU-ASEAN relations into a strategic rather than purely trade and economic relationship would have the added advantage of giving a boost to Europe’s long struggle to become a member of the East Asia Summit. In addition to leading Asian nations, the EAS now also includes all of the EU’s current “strategic partners” including the US and Russia.An EU-ASEAN summit will probably not be easy to organise given leaders’ hectic schedules and conflicting agendas. The Asia Europe Meeting (ASEM) set to be held in Laos in early November, however, offers an opportunity for convening a separate EU-ASEAN summit on the sidelines.The appointment of a special EU envoy for ASEAN would give a fillip to relations. By doing so, the EU would be following in the footsteps of Washington which sent David Lee Carden to Jakarta last year as the first resident US ambassador to ASEAN and Tokyo whose ambassador to ASEAN, Takio Yamada was appointed in 2010. The Australian, Chinese and South Korean “special” envoys for ASEAN operate out of their national capitals.The upcoming agenda of EU-ASEAN contacts and meetings is an encouraging sign of increased mutual interest. The momentum must be maintained, however, through rapid, visible-and-often-symbolic moves which signal the start of a new era of stronger EU-ASEAN engagement.

Rising Asia and old Europe need to work together (Originally published 21/03/12, co-authored with Giles Merritt)

Tempting as it may be, it would be wrong to write off Europe as yesterday’s power. Europe still matters even though this is not the message some EU policymakers have been sending out to a watching world.The impression that Europe is too busy dealing with internal challenges to play a strong global role is especially strong in Asia. True, China gets a great deal of EU attention. And the EU’s outreach on trade remains strong. But there is more to Asia than China - and trade and investment agreements must not be made a substitute for a more pro-active EU foreign policy.The EU must engage more strongly with South Asian and Southeast Asian countries on foreign policy and security questions, not just trade. This means top-level EU participation in Asian security fora such as the ASEAN Regional Forum (ARF). It means showing up and seriously participating in ministerial meetings with Asian countries such as the EU-ASEAN gathering of foreign ministers in Brunei in April. It also requires regular and consistent high-level conversations on global and regional challenges with India and other South Asian nations.Apart from trips to China, EU foreign policy chief Catherine Ashton has been a rare visitor to the rest of Asia. Her decision to stay away from the ARF last year, for a second year running, was a serious faux pas. Not surprisingly, Asians have put Europe’s request to join the East Asia Summit – the region’s prime security club – on hold and insist that Europeans must first prove they are ready for a serious conversation with Asia on security.European policymakers are selling Europe short. Asia cannot take Europe seriously unless it does a better job of communicating with the region – and gains better understanding of what makes increasingly self-confident Asians tick.Dealing with a changing and rising Asia will require that the EU engages in new courtships and new alliances with governments, businesses and civil society leaders in the region.The name of the game has to be partnership between Rising Asia and Old Europe. But by failing to engage seriously and consistently with Asia, Europeans are propagating a myth of European weakness and irrelevance.The reality of Europe – the eurozone crisis notwithstanding - is different. Given its experience in turning enemies into friends, voluntarily pooling sovereignty and achieving economic and political integration, the EU has a wealth of experience to share with Asia on future frameworks for global governance. More so, it scarcely needs saying, than the United States.Asians pressing ahead with their own efforts at regional integration and cross-border cooperation still look at the EU for inspiration. Interestingly, this is still the case although Europe’s practice of lecturing ASEAN on the subject has irked many Asians.The EU’s predominance in world trade is undiminished. EU-Asia trade is booming and is crucial both for Europe’s economic recovery and ensuring that Asian growth remains on track. The EU-Korea free trade agreement is the first in a series of trade-expanding deals that Europe is negotiating with Asian partners, including India, Malaysia, Singapore and Vietnam.Europe is the biggest source of foreign investments in Asia. Today, the eurozone crisis has made Europe’s frontier-free single market even more of a magnet for Asian investors. A recent survey underlined that 45 % of businesses in Asia are either currently doing or looking to make strategic acquisitions in Europe in the next 12 months, compared with just 14 % cent in the Middle East and 7 % in North America.Although Asian exporters and businesses may complain about Brussels’ heavy-handed ways, the EU has fostered the development of high-quality rules and standards which help shape global norms in areas such as food and consumer products, cars, chemicals, aircraft emissions. European companies are leading innovators in clean and green technologies that Asia needs to meet the challenge of low-carbon growth and urbanisation and realise their plans for increased connectivity among nations.It is the coming overhaul of the many aspects of the EU rulebook – from financial services to climate issues – that will maintain the EU’s clout and influence.Neither Europe nor Asia can work alone to tackle threats to global stability that range from resource competition, nuclear proliferation, overpopulation to climate change.Europe isn’t indifferent and certainly not irrelevant to Asia’s rise. As the US speaks of the Asia Pacific Century and seems to reinforce its presence in Asia, Europe must develop its own blueprint for improved engagement with the region.

Progress expected in EU-Japan free trade talks (Originally published 09/03/12)

As Japan struggles to recover from the devastating effects of last year’s earthquake as well as the ensuing tsunami and nuclear crisis, the EU has given encouraging signals of progress in negotiating a free trade agreement with Tokyo.In talks in Tokyo recently, Denmark’s Minister for Trade and Investment, Pia Olsen Dyhr, Japan’s Foreign Minister Koichiro Genba and Yukio Edano, Minister for Economy, Trade and Industry, agreed to try and speed up the so-called “scoping” exercise aimed at exploring the pros and cons of an EU-Japan FTA.They said negotiations on the free trade pact should start during the Danish EU Presidency which ends on June 31.Denmark’s determination to get the ball rolling on the trade deal is good news. Apart from the obvious trade benefits of such an agreement, the FTA will also help strengthen the EU’s still under-developed strategic relationship with Japan.If both sides play their cards right, the EU and Japan could agree to launch the FTA talks at their annual summit in May in Japan. Both sides will have to work hard, however, to try and reach that goal.Interestingly, Japan is also considering participation in negotiations for the Trans-Pacific Partnership free-trade initiative launched by US President Barack Obama last year.It is not proving easy, however. Other TPP participants, including Australia, have called on Japan to eliminate tariffs on beef, dairy products and sugar in order to join the initiative.Japanese officials say they will place all items, including politically sensitive farm items, on the table for discussion once Tokyo fully joins the TPP talks. Japan needs to secure approval for its participation from all nine countries currently involved in the TPP talks.Among the nine TPP participating countries, Brunei, Chile, Malaysia, Peru, Singapore and Vietnam have already informed Japan of their support. However, US officials have not given Japan the go-ahead.Meanwhile, Japan’s economy continues to feel the effects of the March 11 catastrophe. Rebuilding the country's infrastructure is proving difficult. Many people in the affected areas, whose resilience and perseverance impressed everyone last year, are still striving to rebuild normal lives.The country posted a record 19 billion dollar trade deficit in January as the yen’s strength and weaker global demand eroded manufacturers’ profits.Exports of cars and electronics have been hit by damaged plants and infrastructure. In the latter half of the year, floods in Thailand knocked out more Japanese production capacity, while overall shipments were hurt by a strengthening yen, up 17 per cent against the euro over that period.Adding to the economic burden, following the shutdown of nuclear plants in Japan, the country has increased its reliance on expensive foreign oil and gas.Japanese consumers and companies, however, are now proactively reviewing their energy usage, with energy consumption reduced by 10 to 20%.The Fukushima crisis has also prompted a national debate on nuclear energy and nuclear safety. Prime Minister Yoshihiko Noda has admitted that the government, bureaucracy, utilities and experts share the blame for being blinded by the myth of nuclear safety.He admits that Japan will have to cut its dependence on nuclear power, though the government is likely to settle for a long gradual process when it formulates a new energy policy this summer.

EU-China Partnership on Sustainable Urbanisation (Originally published 05/03/12)

Having launched the EU-China partnership on urbanisation at their summit in Beijing last month, European and Chinese policymakers, business leaders and experts are now seeking to translate their noble intentions into practical action.The potential for EU-China cooperation in creating energy-efficient “eco-cities” is immense. But so are the challenges.Beijing can probably mobilise some of the domestic resources and know-how needed to tackle the massive and difficult task of coping with its “urban billion”. To ensure the success of the enterprise, however, China will need to work with Europe and other partners.The reason is simple: although the rise of mega-cities is a phenomenon across Asia, the speed and scale of China’s urban development is unprecedented in human history. China used to be a land of villages and rural communities. It is now a largely urban country.According to China’s National Bureau of Statistics, the level of urbanisation in the country crossed the highly symbolic 50 per cent threshold last year. And the trend is far from over: according to some estimates, 350 million people will be added to China’s urban population by 2030.As a 2008 report on “Preparing for China’s Urban Billion” by McKinsey Global Institute points out, by 2025, China will have 221 cities with more than one million inhabitants of which 23 cities will have more than five million people. The urban economy will generate over 90 percent of China’s GDP by 2025.

CHINA’S URBAN GROWTH SO FAR (1970-2010) In 1980 only less than a fifth of China’s population lived in cities. Urban population reached 690 million in 2011, accounting for 51.27 percent of the total population. Between 1990 and 2005, 103 million  people migrated from rural to urban areas. The total number of migrant workers in 2011 was 252.78 million, up by 4.4 percent compared to 2010.
Source: Data are from National Bureau of Statistics of the People’s Republic of China

Overall, this augurs well for China’s sustained rise. Cities have been the major drivers of China’s impressive economic growth and - not surprisingly - urbanisation is the centrepiece of China’s 12th Five Year Plan.However, this urban expansion also poses a huge challenge for local and national leaders who must find sufficient public funding to provide social services and deal with pressure on energy resources, land, water and the environment.More is at stake. Integrating rural migrants into city life will not be easy, especially since without local residence permits (hukou), they will have limited access to basic services, including health and education.As such, as Tom Miller, Managing Editor of the China Economic Quarterly at Dragonomics points out, the expansion of China’s urban population will not automatically create a new middle class of consumers.To create energy efficient cities, China will have to reform the current fiscal system under which a large slice of locally collected taxes is sent back to the central government, leaving city authorities short of cash.Europe has made great strides in greening its cities but as illustrated by a series of EU projects, including the new EU “smart cities and communities” initiative, the quest to develop integrated sustained solutions that offer clean, secure and affordable energy to citizens is far from over.Since cities account for 70 per cent of Europe’s overall energy consumption, EU plans to ensure 20 per cent energy saving by 2020 and to develop a low-carbon economy by 2050 hinge on how quickly and successfully European cities can become more resource-efficient.

CHINA’S URBANISATION FORECAST (UP TO 2025)  1 billion people, or 64 percent of China’s population, will live in cities. China will have 8 megacities with a population over 10 million and 221 cities with a population over one million. Migration will be a driving force of future urbanisation. The share of China's GDP generated by cities will rise from 75 percent today to 95 percent. Urban water demand will increase by about 70 percent compared with 2005 levels. China's cities are to build almost five million buildings from 2005 to 2025 – of which almost 30,000 would be skyscrapers – the equivalent of six New York Cities.

Source: Woetzel, Jonathan, et al., Preparing for China’s Urban Billion, McKinsey Global Institute, February 2009.

The new EU-China urbanisation partnership opens up fresh opportunities for cooperation. China and Europe can work together on building energy efficient eco-cities by sharing technology and expertise on questions like urban planning, energy supplies, energy demand management and developing “green digital cities”.Cooperation in improving the low-carbon and resource-efficient character of buildings as well as in sectors such transport and mobility, waste management as well as water and air quality is expected.Beyond such an EU-China “eco-relationship”, Europe can share its experience with China in areas such as providing pensions, health care and education for migrant workers as well as in managing rural communities.China’s urbanisation offers exporters and investors – in China, Europe and elsewhere – lucrative new markets. Europe’s green tech companies are especially well-placed to provide the technological solutions needed to tackle many of China’s urbanisation challenges.Over the years, European and Chinese mayors, architects, urban planners and industry leaders will have many opportunities to meet, identify and find solutions for common problems and priorities.The EU-China partnership on urbanisation already provides for the organisation of a first EU-China mayors’ forum this year. Other initiatives are expected.As the Shanghai Declaration published in October 2010 after the World Expo in Shanghai underlines, building “cities of harmony” requires a re-examination of the relationship between people, cities and the planet.Given the right balance, cities can be wonderlands of creativity, abundance and talent. But achieving that equilibrium will require out-of-the-box solutions and visionary global partnerships.

Taking EU-India relations beyond trade (Originally published 08/02/12)

Negotiations on a first-ever EU-India free trade agreement are injecting much-needed excitement into Europe’s relationship with India.Despite earlier hopes, the trade deal will not be signed at the 12th EU-India summit in Delhi on February 10th. But the buzz generated by the negotiations as they enter a critical final stage is helping to lift Europe’s profile in a country which has so far kept the EU at a polite arms length.Significantly the trade talks, now into their fifth year, have helped to focus official and public attention in India on the EU – rather than individual European member states - as a global economic player.The challenge facing European policymakers is to use the shift from indifference to interest in EU-India relations to reinforce the still largely underdeveloped conversation with Delhi on non-trade questions.The change of mood is recent - but palpable on both sides. Senior Indian officials now describe the EU as a “key strategic partner”. Catherine Ashton, the EU High Representative for Foreign and Security Policy was recently in Delhi for a groundbreaking foreign policy dialogue with her Indian counterpart.With EU-India trade currently estimated at a mere 86 billion euros a year (compared to almost 400 billion euros annually with China), the free trade pact under negotiation – officially called a “Bilateral Investment and Trade Agreement” - is a good step forward in building stronger ties and increasing mutual understanding.The ongoing trade negotiations, while problematic on some key issues, have meant more regular contacts between Indian and European officials – and a clearer European understanding of the complexities of India.This is cause for some celebration. For all the talk of India’s rise and the country’s growing global clout as a member of the G20, the EU has not devoted adequate time or effort to clarify its strategic objectives and interests in the country. As such the EU-India “strategic partnership”, launched in 2004, has remained under-exploited.In part, this is the result of India’s complex landscape. According to some forecasts, the country is set to overtake China as the world’s fastest growing economic by 2050. The Asian Development Bank reckons that India’s 350 million strong middle class could grow to 1 billion in 2025. But India also has one third of the world’s poor. A major effort is therefore necessary if India is to meet the Millennium Development Goals (MDGs).As Nobel laureate Amartya Sen points out, “India has started falling behind every other South Asian country (with the partial exception of Pakistan) in terms of social indicators, even as it is doing so well in terms of per capita income.” The Indian government is paying greater attention to making development more inclusive and achieving a substantial reduction in poverty. The national focus is also on structural reforms, including better governance – especially following the Anna Hazare anti-corruption campaign in the wake of key graft scandals - and improved infrastructure. But more remains to be done.India and Europe share common values such as democracy and a preference for multilateralism. They also have common goals as regards good governance, achieving MDGs and working for global peace and stability. But the partnership is made more difficult because of divergent interests. Crucially there are different interpretations of what a strategic partnership is supposed to achieve.The EU sees it as a partnership to achieve global public goods by meeting 21st century challenges, including terrorism, proliferation of weapons of mass destruction, state failure and regional conflicts. India views its strategic partnerships with the EU and the US as a vehicle for ensuring greater worldwide prestige and political clout.There is also an inevitable dissonance between the EU as a status quo power which is often reluctant to make room for newcomers and India which is seeking great power status. The accusation is that the EU speaks the language of inclusiveness but unwilling to cede its seats and voting rights.This time, however, Europeans want to do more than talk trade with India. While in Delhi, European Council President Herman Van Rompuy and European Commission President Jose Manuel Barroso will try and convince their host Indian Prime Minister Manmohan Singh to join the international sanctions regime against Iran.The EU says it is disappointed that India has not joined the large international consensus against Iran’s nuclear programme. India, however, is heavily dependent on Iranian oil to meet its growing energy needs.Venturing into relatively new political territory as regards volatile politics in South Asia, Messrs Rompuy and Barroso will also encourage recent signs of a thaw in Indian relations with Pakistan following Islamabad’s decision to grant Most Favoured Nation trade status to India and Delhi’s move to allow a World Trade Organisation (WTO) waiver on zero-tariff EU imports of Pakistani textiles.There will be discussions on climate change and signature of a declaration on enhanced cooperation on energy which will allow joint activities in areas such clean coal, energy efficiency and renewables as well as nuclear safety.Interestingly, cooperation possibilities will be explored as regards cyber security and anti-piracy operations as well as more exchanges on counter-terrorism.These initiatives are positive and should help prepare the ground for further political exchanges. However, as the FTA negotiations enter the final stretch and domestic lobbies in both India and Europe fight hard to defend their interests, the summit’s focus will inevitably be on trade.The EU is seeking a steep reduction in tariffs for export of its automobiles, wines and spirits to India. However, the proposals have met with fierce resistance from Indian manufacturers.Europeans are also pushing India to open the banking and insurance, postal, legal, accounting, maritime, security and retail sectors.European carmakers say the FTA will grant Indian-built cars immediate duty-free access to the EU but would only reduce the tariff barrier to European vehicle exports to a level of 30 per cent, which would stay intact indefinitely. Car manufacturers in India including Tata, Toyota, Maruti Suzuki, Honda, Hyundai Motor and General Motors, otherwise fierce competitors in the Indian market, have joined ranks to resist what they fear will be a flood of imported European cars into the Indian market.These and other disagreements will inevitably be sorted out in the coming months. Once the FTA is completed, the EU and India must pay increased attention to other aspects of their relations. Both sides can set key priorities which meet India’s requirements as a dynamic emerging power but a country which is also struggling to combat poverty and exclusion.As India rises along with the rest of Asia, it deserves stronger EU recognition as a regional and global power, not just an expanding market for EU exports and investments.

Asia 2050: Hopes and Challenges (Originally published 05/10/11)

For insight into the historic changes taking place in Asia, read and compare the Asian Development Bank’s recent ground-breaking report (Asia 2050: Realising the Asian Century) tracking Asia’s seemingly unstoppable rise with the World Bank’s seminal study on The East Asian Miracle published in 1993.East Asia’s eight turbo-charged power houses described by the World Bank two decades ago have now been joined by China – the biggest development story in the world today and the region’s dominant economy. India, while not an East Asian state, is part of the region’s growth trajectory as are Australia and New Zealand.The East Asian Miracle pointed to strong fundamentals, international integration, and good government as the key factors of success in East Asia. But it all came crashing down a few years later as the region was brought to its knees by the 1997-1998 financial crises. Complaints about corruption, nepotism, poor financial regulation and more dominated the headlines. The region was expected to lose years of growth. Asia faltered but it did not fail.The recovery has been difficult but relatively rapid as governments got serious about putting their houses in order. Today Asia is doing better than anticipated and the region has – so far – managed to escape relatively unscathed from the slowdown affecting Europe and the US.As the ADB underlines, if Asia’s march to prosperity, being led by seven economies with more than 3 billion people between them – China, India, Indonesia, Japan, South Korea, Thailand and Malaysia - continues apace, there will be some 3 billion additional affluent Asians by 2050. Asia’s combined GDP – also including poor nations such as Laos and Pakistan – will rise from 17 trillion dollars last year to 174 trillion dollars in 2050. In short, Asia will retain the dominant economic position it held 300 years ago.But Asia’s ascendance is not set in stone. Countries could slip and stumble into a middle income trap of stagnation and slow growth. And even as we celebrate rising Asia, it cannot be forgotten that the region is still home to almost half the world's absolute poor, who earn less than 1.25 dollars a day.

Emerging economies face the risk of being stuck in the "middle-income trap" as bursts of rapid growth, driven by export-based manufacturing, are followed by periods of stagnation or decline.

There are other key challenges -- rising inequality within and between countries, poor governance and corruption in many of them, and intensifying regional competition for finite natural resources.

In the worst case, according to the ADB, Asia could face “a perfect storm” of bad macro-economic policies, unchecked financial sector exuberance, conflict, climate change, natural disasters, changing demography and weak governance.

To make Asian growth sustainable, the study says, countries must address poverty, equality of access and opportunity, and focus on education, entrepreneurship, innovation and technological development. Massive urbanization will need to be tackled.

Climate change is “a wild card for Asian development”, warns the study, which stresses that Asia is already hit by more storms, floods and other natural disasters than any other region.

Asia must retool its institutions to ensure transparency, accountability and predictability in order to respond to demands for greater voice and participation in government being made by an expanding middle class.

Significantly, regional cooperation and integration are seen as vital for Asia’s continuing rise. The ADB also correctly insists that Asia will need to take greater ownership of the “global commons” and transform itself from a passive onlooker in the debate on global rule maker to an active debater and constructive rule maker.

Changes in Asia are impacting not only on the region itself but across the world. The United States is stepping up its engagement with all major Asian actors. In fact, if any thing China’s economic rise has increased other Asian countries search for closer military and security links with the US.

Is there a role for Europe in the Asian Century? Certainly, Europe has strong historical, cultural and economic ties with Asian countries. However, as pointed out in a Friends of Europe policy briefing and conference held in June 2011, enhanced Europe-Asia cooperation in the political and security spheres, requires stronger mutual understanding and a deeper knowledge of each other.

Key findings of the ADB report and Europe’s potential as a partner to help Asia maintain its growth trajectory were the subject of our breakfast debate entitled "Asia 2050: Challenges ahead" on 6 October 2011.

Tigers, jaguars and global growth (Originally published 14/03/11)

The impact of Asia’s rise on the European Union and the United States dominates world headlines. The focus is also often on the pros and cons of China’s growing presence in Africa. Lost in the reports is mention of Latin America’s booming economies – and the role played by ascending Asia in helping to transform the region.Latin America is rapidly emerging as a global economic power. And deepening economic links between Asia’s booming economies and Latin America have been pivotal in driving forward this evolution.This is clearly good news for both regions – and for the global economy. Increasing trade connections between Asia and Latin America have helped shelter both regions from the worst effects of the economic crisis affecting the US and the EU.The EU and the US have long urged developing countries to step up “south-south” trade to boost global trade flows, help create new jobs, raise revenues and diversify export patterns.Until recently, however, globalisation was all about growing links between industrialised and emerging nations. Today, however, it’s the integration of emerging markets that has become a major engine of world growth.China is of course spearheading the drive. “Latin America is looking towards China and Asia – and China and Asia are looking right back,” underlined the Organisation for Economic Cooperation and Development (OECD) in a report published in 2008.But other Asian countries including Japan, South Korea and India, are also expanding their presence in Latin America. The Inter-American Development Bank says Asian trade with the region topped 256 billion US dollars in 2010 –more than Latin America’s annual trade with the EU and more than half of its trade with the US. China has displaced the US as Brazil’s top trading partner.The World Trade Organisation (WTO) estimates intra-emerging market trade rose on average by 18 per cent per year from 2000 to 2008, faster than commerce between emerging and industrialised nations. It totalled 2.8 trillion US dollars in 2008, about half of emerging-market trade with all countries.The rise in south-south trade is impressive. Chinese exports to other emerging markets, accounted for 9.5 per cent of GDP in 2008, compared with 2 per cent in 1985. India’s exports rose to 7.3 per cent from 1.5 per cent and Brazil’s almost doubled to 6.3 per cent.It’s no secret; Asians are interested in Latin America’s natural resources. Commodity exports from Latin America to are thriving and likely to become even more buoyant as new highways being built across Latin America from the Atlantic to the Pacific oceans open up new trade routes to Asia.Latin America is also an attractive market for Asia’s green technology firms. Indian pharmaceutical companies have started factories and joint ventures in Lain America and that produce millions of dollars worth of lost-cost generic drugs. Capital goods represent an estimated 54 per cent of Brazilian imports from China.There is undoubtedly trade rivalry between the two regions as low-cost Asian manufactured goods compete with Latin America’s industrial products both in the region itself and on the global stage.Asia and Latin American have so far dealt with such friction in a non-confrontational manner. Both sides have a vital interest in pushing for more dynamic south-south trade and investment flows. So does the rest of the world.