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.
"Quality of life" demands attention of China’s new leaders (Originally published 12/03/13)
Quality of growth, not just numbersHowever, the next decade is going to be about the quality of growth, not just numbers. Responding to pressure from the public, China’s new leaders have vowed to fight corruption, narrow the urban-rural income divide, improve the lives of China’s “urban billion” and tackle environmental problems.They will also focus on meeting the aspirations of China’s growing middle class, which wants quality-of-life improvements such as a cleaner environment, higher food-safety standards, water security, and social protection."We should unwaveringly combat corruption, strengthen political integrity, establish institutions to end the excessive concentration of power and lack of checks on power and ensure that officials are honest, government is clean and political affairs are handled with integrity," said outgoing premier Wen Jiabao at his farewell speech to the National People’s Congress.Wen enumerated major domestic challenges that have caused public discontent in recent years - air pollution, toxic factories, tainted food and abuses of power - and pledged more resources to environmental protection and public welfare.His speech was a tacit admission that quality of life had been sidelined by a focus on breakneck economic growth. The question facing President Xi and Premier Li will be to ensure high rates of growth while also addressing environmental concerns.Clean governmentAs Qin Xiaoying of the China Foundation for International and Strategic Studies (CFISS) wrote recently in China Daily, “while people struggled to get sufficient food and clothing during the Deng Xiaoping era…people today probably want rule of law and a democratic living space more ardently than people have at any time before in the country's history.”He adds that the people “want a clean government that is more self-disciplined and responsible, and more efficient in social administration. In addition, they wish for greater safety secured through legislation and law enforcement; greater happiness through completion of the social insurance system; greater dignity gained through the relentless punishment of corrupt officials and the promotion of equality and justice; and greater identity with the international community, established through rational broadening of governmental, nongovernmental, economic, trade, military and diplomatic channels.”In order to deliver on these and other public demands, China’s leaders must try and rebalance the economy by shifting from exports and labour-intensive manufacturing to growth based on domestic demand and innovation.Middle Income TrapThe Asian Development Bank (ADB) has warned that China risks being caught in the middle-income trap, an economic situation where a developing country attains a certain income but remains stuck at that level, usually because of rising wages and falling cost competitiveness.The ADB advises investing in technology, promoting innovation by the private sector and loosening the state’s control over the financial sector. In addition, it says, China should expand its service sector, speed up urbanisation, and try to reduce income inequality so that ordinary people benefit more from economic growth.Clearly while China used to focus on constructing factories, roads and bridges; it must now devote as much time, money and attention on improving its education system and encouraging innovation.Urbanisation is a key driver of China’s modernisation – and is also expected to spur growth. More than 50% of China’s total population now lives in cities, compared to less than 20% in 1980.The urban economy will continue to be a “huge engine” of China’s economic growth, spurring domestic consumption and generating over 90% of China’s GDP by 2025, says Li Keqiang who is known as a “champion” of urbanisation.“Urban billion”“Urbanisation is not about simply increasing the number of urban residents or expanding the area of cities,” Li said in a recent article in People’s Daily. “More importantly, it’s about a complete change from rural to urban style in terms of industry structure, employment, living environment and social security.”However, China’s “urban billion” pose a number of urgent challenges to the new leaders who must take action to integrate migrant workers into urban life, ensure sufficient public funding for social services, work for a pollution-free environment and improve water and waste management. Regulation of the real estate sector is also urgently needed.A key – and divisive - challenge facing the new leaders is to give rural migrants and their families the same opportunities in cities as other urban inhabitants. Changes in the Hukou system under which rural migrants have limited access to local social services enjoyed by urban residents will not come easy. The new leaders have, however, suggested the introduction of a system of national resident permits.Seeking to counter public anger over corruption, Xi Jinping has declared a ban on official extravagance and banished some of the usual pomp from this year's gathering of the National People's Congress.It will be much tougher, however, to pass laws forcing government officials and their family members to declare their assets and financial activities. Action is needed however: The lavish lifestyles of some officials - who often drive luxury cars, own multiple villas and send their children to elite foreign universities – are much hated by the public and have become a source of strong public discontent.Ageing before becoming richAs a result of advances in healthcare and nutrition, combined with the one child policy and very low fertility rates, China is one of a small number of countries in which the population has aged before it has become rich. An estimated 14% of the Chinese population is aged 60 or above and the country is expected to count some 400 million people (or about one-third of the population) over 60 year by 2050.Foreign policy poses another headache: China's new leaders will have to contend with an increasingly fraught relationship with the US and their Asian neighbours. The recent announcement of a 10.7% increase in defence budget to 115.7 billion dollars has increased regional concerns about Beijing’s military spending, especially in view of tensions in the East and South China Seas.Beijing is also under pressure to take on “international responsibilities” by joining the Western consensus on tougher action against North Korea, Iran and Syria.Both the new president and premier are experienced party officials who can be expected to navigate the sometimes-choppy waters ahead with skill and creativity. Given the scale of the tasks ahead, China's new leaders will also have to be especially nimble and fleet-footed to adapt to emergencies relating to public discontent on quality of life issues, including the environment.
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.
A new agenda for EU-Asia relations (Originally published 14/01/13)
Perhaps it was the US “pivot” to Asia, perhaps the Eurozone crisis or possibly a much-belated recognition of the need for stronger Asia-Europe engagement? Whatever the reason – or mix of reasons - European leaders have been spending some much-needed time and energy on improving their Asian connections.Leading European officials EU Council President Herman Van Rompuy, European Commission President Jose Manuel Barroso and Catherine Ashton, the EU high representative for foreign and security policy attended key Asian gatherings in 2012. The EU also signed up to the Treaty of Amity and Cooperation, Southeast Asia’s peace blueprint.The efforts are paying off. There is heightened awareness of European-Asian economic interdependence; trade and investments are booming despite the Eurozone crisis and the global economic slowdown; after years of watching from the sidelines, the EU is becoming involved in Asia’s security discussions; there is recognition that tackling 21st Century challenges requires more forceful Asia-Europe cooperation.Following progress in EU-Asia relations made in 2012, the time is ripe to take relations to a higher level. This requires that both sides switch from a focus on visits, meetings and issuing statements and communiques to a more substantive and meaningful strategy for stronger mutual engagement.The time for photo-opportunities is over. Official visits - however welcome and needed – must be backed up by a fresh vision for a stronger, more sustainable EU-Asia strategic partnership which underlines areas where the two regions can work together to meet the challenge of living together in a rapidly changing and very complex world.The new blueprint need not be long or all-comprehensive. Asia is much too diverse and the challenges it faces are much too complex to lend itself to such an approach. Europe too is changing fast.In the end, it’s simple: In an inter-dependent, globalised world where no one nation, bloc or region can claim to lead the rest, where security is about more than military spending and where nations’ are connected to each other by a dense web of trade and investments, Europe-Asia cooperation is the only option.It’s not about whether Europeans have the time, energy or interest in Asia or whether Asians think Europe is still relevant. It’s about the economy, moving beyond the Eurozone crisis and the challenge of ensuring sustained global growth. It’s about dealing with climate change, pandemics, humanitarian disasters and poverty. It’s also about preventing tensions and conflicts which can endanger global peace and security.Here are a few suggestions for engineering a truly qualitative step forward in EU-Asia relations:
- Move from an event-focused relationship to a partnership based on common concerns and tackling shared challenges. This shift can be made within the Asia Europe Meetings (ASEM), in relations with ASEAN and on a bilateral level. The agenda set for such meetings is often an endless laundry list of areas of cooperation. These should be narrowed down to a smaller list of core issues which require joint reflection and action. This should include (a) new global challenges such as climate change and urbanisation, (b) trade and economic questions, (c) politics and security, (d) regional integration initiatives and (e) people-to-people contacts.
- Use the ASEM network of 51 nations and organisations to advance discussions on the list of issues above and foster stronger personal contacts between European and Asian leaders and policymakers. The fact that the next ASEM summit will be held in Brussels in autumn 2014 under Lisbon rules (ie the EU Council and the European External Action Service will set the agenda rather than an individual European government) provides a welcome opportunity for discussions to focus on EU-wide interests rather than narrower national priorities.
- Continue to enhance ties with ASEAN (Association of Southeast Asian Nations). The ambitious plan of action agreed at the EU-ASEAN ministerial meeting in 2013 is a good step forward in relations but needs to be accompanied by three important steps: the organisation of an EU-ASEAN summit, reflection on recognising ASEAN as a key strategic partner and the appointment of a special EU envoy to ASEAN. Such moves will not only give EU-ASEAN relations a stronger foundation but also signal the EU’s recognition of ASEAN’s “centrality” gin ensuring peace and stability in the Asia Pacific and leading regional integration initiatives.
- Leverage economic and trade ties to forge an integrated strategy for EU-Asia relations. Economics has long been the backbone of EU-Asia links and the EU has been pro-active in negotiating free trade agreements and investment treaties with leading Asian nations, including South Korea, Singapore, Vietnam, India and Japan. Business summits are also often held with many Asian countries, including with ASEAN. These trade initiatives need to be made part of the EU’s overall Asia strategy. This is especially important given that Asian nations are involved in an array of regional trade networks, including their own Regional Comprehensive Economic Partnership (RCEP) initiative and the US-led Trans Pacific Partnership (TPP).
- Engage in security discussions. As it seeks to gain entry to the East Asia Summit, the EU should make sure that leading European policymakers participate in Asian security fora such as the ASEAN Regional Forum (ARF) but also the informal Shangrila Dialogue held every year in Singapore and ASEAN-linked security discussions. Although there is no European military presence in Asia, the EU can make constructive contributions to the region’s security discussions in areas such as preventive diplomacy, conflict resolution and disaster management.
- Move away from confrontational narratives. EU-Asia relations have been complicated for far too long by a narrative of competition which paints a picture of the EU as reluctant to adapt to a rapidly changing world and uncertain and uneasy Europe in the face of a self-confident and assertive Asia. The discussion has been useful in focusing Asian and European minds’ on the changing world order and spotlighting the need for stronger Asia-Europe understanding and engagement. But it is time to move on. Asia-Europe relations in this new era must be based on partnership to deal with complex 21st Century challenges. Europe in particular needs to change the tone and style of its inter-action with Asia.
In addition to seeking a stronger regional influence, the EU should of course continue apace with its diplomatic, trade and economic ties with individual Asian countries. Stagnant South Asian regional integration in particular needs to be given a new lease of life.EU policymakers like to say that 2012 was a “pivotal” year for relations with Asia. One year is not enough, however. The effort has to be sustained over the long-term.
EU-China relations after the leadership change (Originally published 16/11/12)
EU leaders bade a fond farewell to Chinese Premier Wen Jiabao at the EU-China summit in Brussels on September 20. The outgoing Chinese leader, who invested much time and effort in building strong ties with Europe, certainly deserved the effusive send-off. Will China’s new leaders be equally keen on the EU?The good news is that Wen’s successor Li Keqiang is no stranger to Europe. In meetings and speeches during a tour of European capitals in May this year, Li repeatedly underlined his interest in Europe as “a strategic partner that deserves our confidence”.“China firmly supports Europe both in words and in deeds in its efforts to overcome the current crisis,” Li wrote in an article in the Financial Times newspaper. “When “designed in Europe” is combined with “made in China” and when European technologies are applied to the Chinese market, there will be amazing results,” Li insisted.The words may be encouraging but for China’s new leaders, building stronger relations with Europe may have to wait. Domestic priorities will dominate the immediate agenda of both Li and Xi Jinping who replaces President Hu Jintao.China today is the second largest economy in the world. Over the last three decades, China’s rise, its success in delivering growth and development to millions of poor people and its increased confidence in global affairs has mesmerised a watching world.The future is more uncertain, however. Given the immense challenges facing them, China’s new leaders arelikely to spend their time, energy and money on addressing internalchallenges and meeting public expectations.Questions likely to dominate their agenda include meeting the aspirations of China’s growing middle class, responding to public pressure as regards quality-of-life improvements such as a cleaner environment, higher food-safety standards, water security, and social protection. China will need outside help is in meeting the diverse demands of the country’s “urban billion”.China also faces the problems of rising inequality between the rich and poor, corruption at all levels of society and anger over a lack of services like health care.To meet the aspirations of its people – and especially its growing middle class – China needs continued growth. The World Bank says without change, annual growth could sink to 5 percent by 2015 — dangerously low by Chinese standards. China's economy grew at a 7.4 percent annual rate in the third quarter—the slowest since the first quarter of 2009.The world will be watching carefully to see how committed the new leaders are to rebalancing China’s economy so that there is a much-needed shift from exports and labour-intensive manufacturing to growth based on domestic demand and innovation.However, China's new leadership will also have to contend with an increasingly fraught relationship with the US and its Asian neighbours.The Obama Administration has been bringing more cases against China through the WTO, charging China with unfair trade practices.In Asia, there's a growing level of concern about China's rise and its increased assertiveness in defending territorial claims in the South and East China Seas.In comparison, relations with Europe are much less problematic. Trade and investment ties are growing. As both the Eurozone and the Chinese economies slow down, both sides are more aware than ever of their economic interdependence.China looks to the EU for markets, investments and technology. Chinese companies are also increasingly eying the Europe as an investment destination.Chinese annual FDI flows to Europe tripled from €2.3 billion in 2009 and 2010 to almost €7.4 billion in 2011. However, the absolute FDI values remain very small compared to Europe’s total inward FDI and to China’s total outward FDI stock.During his visit to Europe, Li pointed out that China has aided the Eurozone economies over the past two years by importing more goods, investing and buying bonds.Launching an EU-China urbanisation partnership, Li underlined that urbanisation had the most potential to expand China's domestic consumption, a major goal of China's 12th Five-Year Plan (2011-2015).Discussions on energy were also started, illustrating both sides’ readiness to start working together on practical questions.The challenge for both sides is to make this new, positive trend in relations sustainable. EU-China ties are not always easy. Long-standing irritants include the EU’s resistance to ending an arms embargo against Beijing and failure to give the country market-economy status.Europe meanwhile wants better access to China’s markets, improved protection of intellectual property rights and an end to investment barriers.The launch by the EU of an investigation into alleged state subsidies for Chinese solar panel manufacturers risks intensifying the conflict over the multi-billion dollar solar power equipment market that is straining trade ties.The EU Commission is already investigating allegations of Chinese manufacturers "dumping" solar panels in overseas markets. This follows a US decision to impose duties on Chinese solar power products.The Chinese government meanwhile has lodged a complaint with the World Trade Organisation accusingItaly and Greece of illegally favouring domestic solar panel producers in promoting new solar power installations and warning it could put tariffs on EU exports of the raw material polysilicon.Such trade friction does not necessarily have to sour the overall EU-China relationship provided both sides can reinforce their ties in other areas of common interest and concern.In addition to the urbanisation partnership, China and Europe face common challenges in sectors such as environment, food, water and energy security and promoting economic growth.Like the rest of the world, however, Europe will also be watching to see if a country that has helped millions to climb out of poverty is now ready to open the doors to political reform and transformation.
Cool heads needed as EU launches China solar panel probe (Originally published 07/09/12)
The European Commission’s decision on September 6 to start investigating suspected dumping of Chinese-made solar panels has sparked fears of a damaging Brussels-Beijing trade war. It should not: the EU-China relationship is much too important to be jeopardized by anti-dumping inquiries which – however sensational – represent a minor percentage of EU-China trade.The solar panel case has been on the EU drawing board for several months, prompting repeated warnings from China that any EU action would hurt the global clean energy sector and lead to damaging tit-for-tat measures.The group of European solar companies, led by Germany's SolarWorld, and including Italian and other European firms, says Chinese solar firms have been selling panels below market value in Europe. Chinese producers in the firing line include Yingli Green Energy, Suntech Power Holdings Co Ltd, Trina Solar Ltd and Canadian Solar Inc.The inquiry is not unexpected. Under EU law, the Commission is bound to open an anti-dumping inquiry if the complaint satisfies certain basic requirements. Officials say this is the case.The timing of the investigation is unfortunate, however: it comes just days before the EU and China hold summit talks in Brussels. The meeting on September 20 will be the last formal encounter between Premier Wen Jiabao – who has invested much time and effort in developing China’s EU connection - and senior EU policymakers before he hands over the baton to his successor (widely expected to be Vice Premier Li Keqiang).The EU action follows close on the heels of German Chancellor Angela Merkel’s much-publicised visit to Beijing last week. Ms Merkel has said she wants the dispute over solar panels to be resolved through dialogue, not an anti-dumping investigation. She has also sought to reassure her worried Chinese hosts on the “absolute political will” of Eurozone countries to stabilize their currency.Merkel’s visit coincided with a Chinese announcement that it was purchasing 50 Airbus planes worth over $4 billion, the first significant order since a dispute between Beijing and Europe over emissions trading.Wen’s farewell meeting with the EU should certainly not be soured by the anti-dumping case. There should be no repeat of the acrimony generated at the EU-China summit in 2010 over EU criticism of China’s currency policy.Both sides have mended fences over the last two years. Discussions continue over human rights, market access and investments. But the Eurozone crisis and China’s increased economic clout has led to a change in the EU’s view of China. As such, European Commission President Jose Manuel Barroso and EU Council President Herman Van Rompuy are likely to focus on the many areas where the EU and China have succeeded in building a stronger partnership rather than on trade and other irritants.There are initial encouraging signs that Beijing is toning down its earlier rhetoric. In contrast to earlier statements, China's immediate response to the anti-dumping inquiry been measured, with no mention of any retaliatory steps.“China expresses deep regret” about the decision, Ministry of Commerce spokesman Shen Danyang said in a statement on the ministry's website (www.mofcom.gov.cn).“Restricting China's solar panel products will not only hurt the interests of both Chinese and European industry, it will also wreck the healthy development of the global solar and clean energy sector,”said Shen.He urged the EU to “seriously consider China's position and proposals, and to resolve friction over solar panel trade through consultations and cooperation”.China sold about 21 billion euros in solar panels and components to the EU in 2011 - about 60 percent of all Chinese exports of the product.Total EU imports from China were valued at 292 billion euros last year. Imports of Chinese products subject to trade defense duties total less than one percent of that amount. The US also imposed duties on solar panel imports from China in May after a similar initiative led by SolarWorld there.Europe’s solar companies are divided over the dumping case. Some such as those that install panels say Europe should welcome Chinese imports because they make solar power more affordable and are essential for the 27-member bloc to achieve its goal of having 20 percent of energy from renewables by 2020. EU companies that have sold machinery to China to produce photovoltaic cells have also expressed misgivings.EU governments are unlikely to see eye to eye on the investigation. Berlin is wary of annoying a country with which it has forged a trade-based “special relationship” and which remains an important ally in efforts to stabilize the Eurozone.Others may also hesitate. The EU-China relationship has been gaining momentum in recent months. At their last summit in Beijing in February, the EU and China launched a high level people-to-people dialogue on a par with their discussions on strategic issues and on economic questions.An urbanization partnership is now in full swing with mayors’ from Europe and China set to meet in Brussels on September 19 for two days of discussions.In addition, EU and Chinese business leaders will meet for their own summit on September 20 to discuss investments and innovation.The upcoming EU-China summit is not expected to result in any headline-grabbing new initiatives but practical new cooperation tracks will emerge. Leaders are expected to launch discussions on water security, a rural development partnership and talk about cyber security.The focus on practical engagement and cooperation in areas of mutual interest should define the EU-China relationship in the coming years. China and Europe are increasingly interdependent, a fact that Merkel understands and underlines.As such, instead of fearing Germany’s determination to build ever-stronger relations with China, Berlin’s partners should encourage such moves. The German-China “special relationship” adds to the EU’s clout and influence when talking to Beijing.Talk of competition between the EU and Germany in dealing with China should be jettisoned. Instead, the EU should take a leaf from Berlin’s book of practical diplomacy and engagement with Beijing. What’s good for German-Chinese relations will boost, not undermine, EU-China relations.
As Asians talk security, Europe cannot be on the sidelines (Originally published 09/07/12)
As senior EU policymakers get ready to attend Asia’s top security conference in Cambodia on 11-12 July, there should be no doubt: Europe and Asia need to work more actively and forcefully together.Debates on whether or not the EU should seek stronger engagement with Asian nations or be content with a marginal role in the region may be intellectually stimulating – but they are pointless.Certainly, the EU will never be a “Pacific power” and should have no ambition of becoming one. But neither can it remain passively on the side lines of developments in Asia.In an inter-dependent, globalised world where no one nation, bloc or region can claim to lead the rest, where security is about more than military spending and where nations’ are connected to each other by a dense web of trade and investments, Europe-Asia cooperation is the only option.It’s not about whether Europeans have the time, energy or interest in Asia or whether Asians think Europe is still relevant. It’s about the economy and the challenge of ensuring sustained global growth. It’s about dealing with climate change, pandemics, humanitarian disasters and poverty. It’s also about preventing tensions and conflicts which can endanger global peace and security.None of these challenges can be tackled by one nation or region on its own. Certainly US Secretary of State Hillary Clinton will be in Phnom Penh for the ASEAN Regional Forum (ARF) to reassure Southeast Asian nations of America’s renewed commitment to the region. But, exhausted by two long-drawn wars and beset by shrill election-year domestic concerns, the US has made clear that it is no longer ready to play global policeman or global peacemaker.Despite its growing economic clout, China has never laid claim to being an international leader and is unlikely to do so in the near future. Russia’s global ambitions are not credible. India is not interested.In contrast, whether they like it or not, Europeans are expected to think and act globally, stand up for certain key universal principles, to be generous and kind to victims and get tough with bullies.For all their criticism of Europe – and despite the Eurozone crisis – even the fiercest Asian commentators recognise that Asians can learn much from Europe. Asians have never liked European “arrogance” in lecturing and hectoring them on their perceived deficits and weaknesses. But they admire much that is European including European technology, products and culture. In order to keep growing, Asians need European markets and investments.When she sits down with Hillary Clinton at the ARF meeting later this week, Catherine Ashton, the EU's chief diplomat, should remember that Asia-Europe cooperation is a necessity – although reaching out to countries in the region is not always easy.Political reform in China remains a distant dream, economic liberalisation is patchy and dissidence is met with repression. Indian democracy is messy and even as it claims Great Power status, millions of Indians live in dire poverty. ASEAN integration is slow, painful and incomplete and decision-making in the 10-nation bloc is often very complicated.But the economic reality is simple: The EU is China's biggest and ASEAN's third-biggest trading partner. It is also the largest investor in ASEAN countries with an average of 20.6% of foreign direct investment over the past three years.The EU has signed free trade agreements with South Korea and is negotiating others with India, Singapore, Malaysia and Vietnam. An EU-ASEAN free trade agreement could be negotiated as of 2015.The recent EU-ASEAN ministerial meeting in Brunei saw the adoption of an action plan aimed at further building ties between the two regions. In Cambodia, the EU is expected to finally sign the ASEAN Treaty of Amity and Cooperation which could pave the way for EU participation – one day - in the increasingly influential East Asia Summit.Without a hard military presence in Asia, the EU will never carry as much clout as the US. As they fret about China’s territorial claims in the South China Seas, Vietnam and the Philippines need America’s reassuring embrace. Certainly a crisis in the South China Sea would also be disastrous for EU trade with the region. As such, Ashton’s presence at the ASEAN Regional Forum is a good signal of EU interest and concern.Europe can make other constructive contributions, especially since the basic premise of ASEAN security discussions is about building trust and confidence, preventive diplomacy and conflict resolution, issues that Europeans know a thing or two about.The ARF meeting in Cambodia will also discuss disaster management – another area of strong European expertise.In November EU Council President Herman Van Rompuy and European Commission President José Manuel Barroso will be in Vientiane, Laos, for a summit with 19 leading Asian leaders. Barroso is also expected to attend the Bali Democracy Forum and make an official visit to Indonesia.Last year’s US “pivot” or renewed engagement with Asia has certain prompted Europe to put some new life into its lacklustre relations with the region. The challenge now is to ensure Europe’s sustained presence in Asia, in the interest of both regions.
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 | |||
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| ASEAN with the world | |||
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| % 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)
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| 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)
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| 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.
EU-China ties: Beyond the headlines (Originally published 10/02/12)
Expect no headline-grabbing breakthroughs at the China-EU summit in Beijing on February 14. China is unlikely to drop its strong opposition to the European Union’s Emission Trading Scheme (ETS), there will be no spectacular China-funded rescue package to ease the Eurozone sovereign debt crisis and Beijing will remain outside the international consensus on sanctions against Syria and Iran.The EU, meanwhile, will stay firm on keeping its arms embargo on China and not grant Beijing much-coveted status as a market economy.Discord on these and other issues is only part of the story, however. There is more to the EU-China relationship than meets the eye. New economic and geo-political realities are prompting both sides to sidestep old grievances, think afresh and try to seek out common ground.It is not proving easy. Traditional and new areas of disagreement - including strong divergences over China’s human rights record – have not disappeared. However, behind the headlines, Europe and China are slowly but surely building a new network of ties that bind.Mostly this is economic necessity. Europe needs all the rich friends it can get to help ease the current Eurozone debt crisis. China’s economic future depends on continued access for its exports to Europe’s large market.But both sides are also exploring new avenues for cooperation. The launch of a high-level EU-China people-to-people dialogue at the Beijing meeting is a case in point as is the start of an EU-China partnership on sustainable urbanisation.EU and Chinese officials are discussing energy questions, cyber security, water management and counter-piracy activities. Efforts to step up cooperation with China on these and other global common goods are a step in the right direction to meet key 21st Century security challenges.For the moment, however, the focus remains on economics and trade. Crucially, as the Eurozone crisis grinds on, there is heightened awareness of the expanding connections and deep interdependence between the European and Chinese economies.If both sides play their cards right, this could signal the start of a real “win-win” era.China has an interest in safeguarding the health of its biggest export market. It also needs to diversify its currency reserves. Prime Minister Wen Jiabao’s repeated assurances – given most recently during German Chancellor Angela Merkel’s visit to China – that Beijing will help Europe to fight the current crisis reflect a strong recognition that in an inter-connected world, as he put it, “helping stability in the European market is actually helping ourselves”.Meanwhile, with an eye on China’s 3.2 trillion dollar currency reserves, EU officials say enhanced cooperation with China is more than ever before a “strategic necessity”.As such, while EU Commissioners Karel De Gucht and Michel Barnier may threaten China over its restricted rules on government procurement and constraints on exports of rare earth, the EU has little interest in engaging in a damaging tit-for-tat trade confrontation with Beijing.Similarly, European fears over the political fall-out from rising Chinese investments in Europe – especially in infrastructure and utilities - are likely to ease once the phenomenon loses its novelty value. As cooler heads point out, far from “buying up” Europe, like corporates the world over, Chinese companies are looking for commercially sound and viable investments.Clearly, Europe needs to press for an equally open Chinese market both as regards European investments and European exports. But with China poised to become the EU’s largest trading partner this year, overtaking the United States, and Europe still the biggest market for Chinese exports, both sides know it is time to look beyond their daily skirmishes to the rewards inherent in building closer and stronger relationship.
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.
Democracy is hard work, says Indonesian leader (13/12/11)
For a quick insight into Indonesia’s ambitions of exerting regional power and global influence, visit Bali in December when the laid-back luxury beach resort morphs into an animated hub of discussion and debate on democracy, human rights and the rule of law.Delegates to the Bali Democracy Forum are a motley crew: the meeting held last week brought together representatives from over 80 countries and hundreds of observers. The conference’s title – “Enhancing Democratic Participation in a Changing World: Responding to Democratic Voices” – may not be catchy and some of the speeches were tedious. But the message from Indonesian President Susilo Bambang Yudhoyono remains strong and unequivocal: Asian countries must match their economic success with democracy and political reform.The focus this year was inevitably on the Arab Spring. The Indonesian President warned that based on his country’s experience, there were no quick fixes. “It is safe to assume that in the early years, things will be more difficult before it gets better…Democratic success has to be built, earned and improvised every step of the way. Indeed elections are only one of the tools of democracy and building a mature democracy takes a lot more than holding elections.”Launched in 2008 to encourage discussion and exchange of views on democracy among Asian countries, annual meetings of the Bali Democracy Forum have become a potent exercise in Indonesian public diplomacy.The Forum has grown in credibility and prestige over the years, spotlighting Indonesia’s democratic record since the fall of President Suharto in 1998, and the country’s increasingly vocal and visible aspirations to become Asia’s prime normative power and champion of political reform and democracy.The message from Jakarta is strong and clear: Indonesia matters – in both Southeast Asian and on the global stage. The country’s new breed of gutsy and self-confident politicians and diplomats are breaking with the cautious approach of past administrations by working hard to give Indonesia a stronger regional and international voice.Indonesia’s transformation from dictatorship to a modern and robust democracy in the past decade is no modest achievement – and through the annual meetings in Bali, Indonesia wants to spread the gospel on democracy.Indonesia’s foreign policy ambitions are not new. The country has long been active on the regional and international foreign and security policy stage. However, President Yudhoyono, now serving his second and final term in office, has given a new boost to the reputation of Southeast Asia's largest economy and most populous nation, successfully portraying it as one of Asia’s most exciting countries with constructive contributions to make within the region and on the global stage.Helped by men like former foreign minister Hassan Wirajuda, Indonesian diplomacy is now in full gear, its officials no longer content to watch from the sidelines as regional and world leaders step up engagement with China and India.Mr Wirajuda, a gentle and affable man, with a sweeping vision and experience of the world tells me in Bali that Indonesia wants to share its experience with Arab countries in transition. “WE can learn from each others’ mistakes,” he says.The focus has to be on social justice, on fighting corruption on not allowing a monopoly of power. “Governments have to be sensitive to the aspirations of the people,” he underlines.Significantly, Turkey, seen as a model for mixing Islam and democracy, was also present at the Bali meeting.In the last few years, Indonesia has taken its place in the G20, become a force to be reckoned with in the Association of Southeast Asian Nations (ASEAN) and adopted a moderating role within the Organisation of the Islamic Conference (OIC).Jakarta’s efforts at fighting terrorism and radicalization are watched carefully by its neighbours as well as the United States and the European Union.Long-term prospects are bright. Indonesia’s economic growth rates – expected to remain around the 6 per cent mark in the near future – continue to impress. Demographics are excellent; 44% of its population is under 24, meaning a growing workforce in years to come. Basic literacy rates are at 90% (although education still needs a lot of investment). The country is resource-rich. It's a major exporter of soft commodities such as palm oil, cocoa and coffee, as well as coal.But it's not just a geared play on commodities. The economy is mostly driven by domestic demand, with consumption accounting for around 60% of GDP. Indonesia is also strategically located: half of world trade passes by its northern maritime border, giving the country a strategic role in ensuring safe and secure international navigation.Small wonder then that US President Barack Obama, Chinese President Wen Jiabao, Indian Prime Minister Manmohan Singh and Australian Prime Minister Julia Gillard are among leaders who have recently trod the red carpet in Jakarta. The US and Australia are seeking to sign ambitious cooperation pacts aimed at enhancing ties with Indonesia, clearly seeing the country as a counter-weight to China's growing influence in the region.As the driving force behind many Asian regional integration initiatives. Indonesia is often held up as an example to be followed by neighbouring Burma/Myanmar, a role that Jakarta does not shun.To fulfill its regional and global ambitions, however, Indonesia will have to put its domestic house in order. Indonesians tell me the country remains riddled by corruption and religious extremism is still a problem. Few doubt that Indonesia needs to make faster progress in addressing issues like freedom of expression, military reform, police brutality (especially in Papua), treatment in prisons and of minorities.“We remain vigilant as Indonesia is not totally free from the prospect of new communal conflicts flaring up,” the Indonesian President told delegates at the Bali Forum, adding: “The more we guarantee human rights for our citizens, the more durable our democracy will become.” It is a lesson for many countries, not just those living through the so-called “Arab Spring”.
America’s focus on Asia is a “wake up call” for Europe (Originally published02/12/11)
America’s focus on the Asia-Pacific appears to have acted as a much-needed wake-up call for the European Union. Over the coming months, EU policymakers are expected to take a closer look at Europe’s relations with Asia and hopefully come up with a new blueprint for invigorating flagging Europe-Asia ties.There is much to be done. Having failed to forge real “strategic partnerships” with the region’s rising powers, the 27-nation EU has long-focused on a limited trade-only agenda with most Asian nations. Trade and economic ties do certainly bind and foster inter-dependence. But the economic link has not resulted in stronger Europe-Asia political relations or joint action to tackle key 21st Century challenges.EU-Asia security links are practically non-existent. After a successful peace monitoring mission in Aceh in 2005-2006, the EU has steered clear of any security-related initiatives in Asia. Recently, Asian and European countries have cooperated in anti-piracy operations off the coast of Somalia action in Asia. But this is of course eclipsed by the US military presence in Asia – and President Barack Obama’s recent decision to send more troops to Australia.The US clearly believes this is the “Asia Pacific Century”. During his nine-day sweep through the region, President Obama hosted an Asia Pacific Economic Cooperation (APEC) forum in Hawaii, went to Australia, took up America’s seat at the East Asia Summit in Bali and sent tough signals to China in its backyard. He also dispatched US Secretary of State Hillary Clinton to Burma on a breakthrough mission to assess moves towards democracy in the country.Countries in the region are eager for America’s presence and influence, often as a counter to China. The US President stressed in a speech to the Australian parliament that the troop buildup was not aimed at China. China’s defense ministry has warned, however, that plans to build up a U.S. military presence in Australia are a continuation of “Cold War thinking” that could destabilize the Asia-Pacific region.Certainly, no European leader can create the same buzz in Asia as the US President. The problem is that most Europeans do not even try.True, the EU has long talked of building strong strategic relations with Asia’s emerging powers. But the rhetoric remains just that: EU ties with China, India, Indonesia and the region’s other rising nations remain lackluster and uninspiring. EU and Asian leaders meet for high-level summits, ministerial encounters and issue wordy communiques. But handshakes and photo opportunities are no substitute for policy and strategic thinking.In dealing with ascending Asia, the EU would be well advised to take a page or two from the US strategy towards the region. America’s renewed commitment to the Asia-Pacific offers Europe an opportunity to learn from - and possibly participate in - what is certain to become a vibrant transpacific partnership.Competition with the US for influence and visibility in Asia has long driven EU policy in the region. EU leaders launched ASEM (Asia Europe Meeting) as a platform for dialogue with Asian countries in 1996, largely as a response to APEC. EU policymakers often gauge their success or failure in Asia by comparing European trade or business flows with America’s economic presence in the region.And since the US – and Russia – participated in the latest East Asia Summit, the EU is stepping up pressure on Asian governments to be given entry into the influential club.A new transpacific alliance could therefore provide the spur Europe needs to get its own act together in Asia.Dealing with a changing and rising Asia will require that the EU engages in new courtships and new alliances with countries in the region.However, European policymakers have not been as good at doing their homework on Asia as their American counterparts. Even as Hillary Clinton promises substantially increased investment - diplomatic, economic, strategic, and otherwise - in the Asia-Pacific region in the coming years, Catherine Ashton, the EU’s high representative for foreign and security policy, has yet to set out a convincing blueprint for relations with Asia.In fact, apart from trips to China, Ashton is a rare visitor to the rest of the continent. Her decision to stay away from the ASEAN Regional Forum (ARF) in Bali, Indonesia in July this year, for a second year running, was a serious diplomatic faux pas.Asians saw Ashton’s absence from ARF as a snub and yet another signal that, apart from a focus on China, Europe is not really interested in the region. Many Asian analysts warn that Europe is becoming increasing irrelevant in Asia. And they insist that if Europeans are serious about joining the EAS, they should stop talking and – like the Americans - start proving they are serious about stepping up political engagement with Asia.Turning EU rhetoric into action can begin with four easy steps:For starters, senior EU officials can stop playing hard-to-get and start attending key Asian meetings taking place in the region.The European External Action Service should hammer out a revamped, up-to-date agenda for EU-Asia cooperation which goes beyond trade and business. EU negotiations on free trade agreements with Asian countries are a positive step forward in helping to enhance economic ties. But trade policy, however active, cannot replace foreign policy.EU policymakers need to engage in some serious reflection, based on input from independent researchers, think tanks, academics, business leaders and other non-state actors, from both Europe and Asia, on how to get Europe-Asia ties on a more dynamic track. Like the Americans, Europeans must engage more actively with independent think tanks working on Asia.Again, like the Americans, the EU should become an active partner in the increasingly important security discussions in Asia, including within ARF and other fora.Once it has stepped up engagement with Asian countries, the EU will be in a position to make a credible bid to join a transpacific dialogue. After all, Europe’s cooperation is essential in tackling today’s global challenges.
Asia, Europe and One Health (Originally published 10/11/11)
With the world population now estimated at 7 billion, international attention has focused on the impact of the rising population on the battle against poverty, global food security and climate change. A more crowded world is also likely to be more vulnerable to emerging and rapidly-spreading infectious diseases.Recent health crises such as SARS (Severe Acute Respiratory Syndrome) and the avian influenza epidemic have highlighted the intricate relationships and linkages between people, animals and ecosystems as well as the ease and rapidity with which diseases travel across borders.Tackling epidemics and pandemics in today’s globalised world clearly requires international cooperation. With a majority of human infectious diseases commonly attributed to have originated in animals, working across disciplines is also necessary.Asian and European governments are committed to integrating the One Health approach, which seeks to promote, improve, and defend the health and well-being of all species, into their policies.The European Union has set up a new animal health strategy and initiated joint infectious diseases research programmes in key areas such as vector-borne diseases, vaccine development and neglected zoonoses (diseases transmitted from animals to humans).Meanwhile, the Association of Southeast Asian Nations (ASEAN) is playing a leading role in regional arrangements involving animal and human health sectors, in particular, in terms of how to respond to outbreaks of infectious diseases at a regional level.Having made an early pledge to integrate the "One Health" approach in its regional mechanisms, ASEAN is already committed to going beyond animal health, towards the human health and environmental sectors. ASEAN is also taking into consideration the influence of other sectors such as education, infrastructure, trade and tourism.Recent health crises have in fact encouraged ASEAN members to work together at a regional level. In addition, ASEAN Plus Three (China, Japan, and Republic of Korea) have developed the Emerging Infectious Diseases Programme to tackle pandemics such as SARS and avian flu.The 2007-2011 Strategy for Regional EU-Asia Cooperation sets aside a total of 48 million euros worth of EU regional funds fir health-based cross-border cooperation in Asia, combining animal and human health cooperation for the first time, in addition to the environment.A separate Highly Pathogenic Emerging and Re-emerging diseases (HPED) programme, started by the Commission in January 2010, aims to strengthen the institutional capacities of ASEAN, SAARC (South Asia Association for Regional Cooperation) and their Secretariats to control HPED and to improve epidemic and pandemic preparedness in the region in a sustainable manner.For the next three years, the Commission’s major focus will be on driving the "One Health" approach forward in tandem with its major international partners.There is potential for more Asia Europe cooperation on One Health initiatives. A recently published EU-funded study showcases ten “One Health” case studies in Asia and Europe including emergency measures to address serious outbreaks of infectious disease, community engagement projects to improve disease surveillance and control and communication strategies to change risky behaviour.The document, which also includes a catalogue of data bases covering key One Health documents, focal points and One Health programmes and activities, provides a good basis for further Asia-Europe discussion – and cooperation – on One Health initiatives.Such collaboration can be done best through the framework provided by the Asia-Europe Meeting (ASEM). An ASEM meeting on One Health is in fact planned for next year.ASEM can help combine Asia's experience in communicable diseases outbreaks with the EU's experience in institution building. Asia and Europe can learn from each other’s experience by exchanging information and “best practice”, including through collaboration between universities, research institutes and pharmaceutical companies.Better coordination of existing initiatives, projects and programmes can also be assured through the connection of a One Health ASEM network and the connection of existing data bases.
Recognising Palestine: EU’s Middle East policy in the spotlight (Originally published 21/09/11)
Europe’s struggle to forge a common stance on Palestinian efforts to win statehood recognition at the United Nations is a blow to the EU’s long-standing quest to make friends and influence policy in the Middle East. The UN move by Palestinian Authority President Mahmoud Abbas is hardly a surprise. Palestinian leaders have been mulling over the decision for several years. Also, as the rest of the Arab world wakes up to people power – and given the continuing stalemate in Israel-Palestine negotiations – a decision by the Palestinians to take their case to the UN sooner rather than later was to be expected.Europeans are deeply split on the issue: While France and Britain have signalled they are likely to support the Palestinians at least in the UN General Assembly, Germany has warned about the repercussions on peace talks with Israel. Others such as the Netherlands and the Czech Republic have indicated they will oppose the effort.The EU should have been better prepared. Since the 1980 Venice Declaration, Europeans have spoken in favour of a two-state solution to end the Israel-Palestinian conflict. The Palestinian Authority has received millions of Euros in EU assistance to build up institutions in preparation for full-fledged statehood. EU ministers are regular visitors to the region and Catherine Ashton, the EU High Representative for Foreign and Security Policy, has spent many weeks in the region, working with the Americans and Tony Blair, the international envoy for the Middle East, to try and get Israelis and Palestinians back to the negotiating table.All of this makes the current disarray in EU ranks even more perplexing. It is also damaging for Europe’s international credibility and long-standing efforts to become a more powerful player in the Middle East. Europe’s disjointed response to the Palestinian bid will be difficult to explain given EU support for the Arab Spring and the values of democracy and freedom in the region.Mr Abbas is expected to deliver a formal request for statehood recognition on September 23 when he speaks to the UN General Assembly. The US and many European governments are urging the Palestinian leader not to push for an actual vote in the UN Security Council, where the US has promised a veto, but to go instead to the General Assembly with a demand for an upgrade of the Palestinians’ current observer status from “entity” to “non-member state.” This would place the Palestinians in a position similar to that of the Holy See, the government of the Roman Catholic Church, enabling them to sign international treaties. That could include having cases heard in the International Criminal Court.Once Mr Abbas hands a letter to the UN secretary-general calling for the Security Council to recognise Palestine as a state, it could take weeks or months for the UN to act on the Palestinians' request. The EU should use this time to rework its Middle East strategy to make it more credible and coherent.
In Australia, Barroso must also reach out to others in Asia-Pacific (Originally published 02/09/11)
European Commission President Jose Manuel Barroso’s visit this week to Australia is good news for Europe’s still largely under-developed relationship with Canberra. If he plays his cards right, the Commission chief could also use his visit to Australia - and New Zealand - to give a much-needed boost to the EU’s lacklustre engagement with other Asia-Pacific nations.
That at least is what Australia and most Asian countries are hoping for. “We’re seeking a broader and deeper engagement with the EU on a bilateral level,” says Brendan Nelson, Australia’s Ambassador to the EU. In addition, Barroso’s visit should lead to greater understanding in Europe of the increasing political and economic importance of the Asia-Pacific and the rapid changes taking place in the region, he underlines.
The message certainly needs to be hammered home – repeatedly – in conversation with senior EU policymakers. While the rise of Asia has not gone unnoticed in European capitals and by Europe’s dynamic business sector – EU-Asia trade and investment flows are booming - the EU’s top officials appear largely indifferent to the growing political and geo-strategic clout of the region.Certainly, high-level visits to China abound. India gets a look-in occasionally. But Asians are still smarting at the decision by EU High Representative for foreign and security policy, Catherine Ashton, to stay away from the meeting in July of the ASEAN Regional Forum (ARF) which is hosted by the Association of Southeast Asian Nations (ASEAN) and brings together leading regional and global powers.As an Asia-Pacific nation seeking ever-closer integration and engagement with the region, Australia sees the ARF as an “extremely important” forum for security discussions in Asia, says Ambassador Nelson. “It is in the interest of Australia and the region that the EU engages strongly with the ARF,” he underlines.In fact, most ASEAN officials make clear that the EU’s hopes of joining the East Asia Summit, which in addition to key Asian players, now includes Russia and the US as members, is largely conditional on its performance in the ARF.Barroso’s visit to Canberra – the first such trip to the country by a Commission president in thirty years – could help ease some of Asia’s concerns about the direction of EU foreign policy. But this will require that the Commission president uses his many public appearances and speeches to reach out to the wider region.
Significantly, Australia joined the ASEM (Asia Europe Meeting) last year, highlighting its Asia-Pacific identity. And for all the focus on the US and Europe, Australia’s growing economic and political links with the Asia-Pacific region guarantee it a buoyant future.
Relations with China are clearly at the core but Australia is also forging stronger ties with India, Indonesia, Vietnam and Japan, countries which provide an expanding market for Australian exports, mainly of commodities. Integration with rising Asia helps explain the increase in Australian incomes in the last two decades and the country’s still-strong economic performance.Relations between the EU and Australia have been improving rapidly in recent years, with earlier tensions over agriculture and trade now part of an almost-forgotten past. That “narrow” agenda has now been widened to include plans to sign an EU-Australia Partnership Framework which will make Australia a “tier one” partner for Europe, says Ambassador Nelson.The agreement, expected to be signed later this year, will allow for regular senior-level contacts between the two sides and closer consultation on foreign policy and international security issues as well as global trade and climate change.With Baroness Ashton also expected to be in Australia in late October to attend a high-level Commonwealth meeting, the EU should not miss the opportunity to use the new focus on Australia to build bridges with an increasingly EU-sceptical Asia-Pacific.