Asia in European limelight

14 October 2014

Source: Business Standard (India)
Source type: Newspaper
Published on: 04 Oct 2010

Three Asia-related summits are planned in Brussels, at a time the EU is trying to cast itself as a foreign policy player of substance.

Asia will be the focus in Europe next week with three major Asia-related summits planned in Brussels, at a time when the European Union is attempting to cast itself as a foreign policy player of substance.

The first of these is the eighth Asia-Europe Meeting (Asem) that will take place on October 4 and 5. Asem’s sprawling membership at present comprises 43 countries and two international organisations (the European Commission and the Asean secretariat). Next week, three new members — Australia, New Zealand and Russia — will also formally be inducted into the group.

Although the countries that participate in Asem collectively comprise almost 60 per cent of the world’s population and 60 per cent of the global trade, the meeting is in essence an exercise in chin, wagging with little concrete action ensuing from the group’s get-togethers once every two years.

In Europe, the original idea behind Asem was to provide a European equivalent to the US-led Apec (Asia-Pacific Economic Cooperation), but over the years this ambition has remained unrealised.

On the agenda will be matters as diverse as improving global economic governance, environmental issues, in particular climate change, as well as common global challenges such as terrorism and piracy.

It’s likely that the thorny problematic of IMF (International Monetary Fund) reform will dominate the economic governance session, with Europe coming under pressure to give up seats on the board of IMF.

European directors currently account for nine of the 24 seats, with voting weights and seats still reflecting the relative size of economies when IMF was created back in 1945. A procedural manoeuvre undertaken by the US last month, in which it declined to re-elect the 24-member board in its current form, has stepped up the pressure on the Europeans to reduce their number.

The EU has been clinging to its seats and held a series of meetings of its finance chiefs in Brussels this week to discuss the issue.

No definitive solution to the issue is expected from Asem, an informal discussion platform than a decision-making body. However, it will afford an opportunity for different proposals on the matter to be aired.

Some 40 heads of state and government will be attending Asem. Notable absentees include the Indian, Pakistani and UK Prime Ministers. India will be represented by Vice-President Hamid Ansari, Pakistan by its foreign minister and the UK by Liberal Democrat leader Nick Clegg.

Bilateral meetings will take place on the sidelines with all eyes on possible talks between the Chinese Premier Wen Jiabao and Japan’s Prime Minister Naoto Kan. The two sides are currently embroiled in a bitter diplomatic feud ignited by a ship collision in disputed waters.

On October 6, two major bilateral summits will take place. The first of these is the European Union (EU)-South Korea summit which will finally see the signing of a free trade agreement (FTA) between the two sides. Heralded as the EU’s most ambitious to date, the trade accord was recently subject to last-minute delays due to concerns over the potential detrimental effects on Europe’s auto industry.

On the same day, the EU-China summit will bring the world’s largest economy and its fastest growing rival into the spotlight. Bilateral trade between the two stood at a huge ¤296 billion in 2009. The EU is currently China’s most important trading partner, while for the EU, China is second only to the United States.

Europe’s imports from China have grown by around 16.5 per cent per year for 2004-2008. In 2009, despite the economic crisis, the EU still imported ¤215 billion worth of goods from China and China remains Europe’s biggest source of manufactured imports.

All three summits come in the wake of a concerted effort by the EU to develop a more cogent foreign policy. Following the adoption of the Lisbon Treaty at the start of this year, a new post of high representative for foreign affairs was thus created and plans are ongoing to develop a new European diplomatic service.

On September 16, a summit of EU leaders in Brussels was intended to focus on the bloc’s relationship with its strategic partners, a list that includes China and India. New EU President Herman Van Rompuy declared that Europe needed not only strategic partners but also a strategy, pithily summing up the region’s main foreign policy challenge.

But despite the clarion calls to strategic action, nothing very substantial is likely to ensue from the China summit, with the EU as unable to speak with one voice as ever, on key issues of interest to China, such as its demands for market economy status and the lifting of the arms embargo against it.

The EU will instead press Beijing on further opening its market to European companies, particularly when it comes to public procurement. German Chancellor Angela Merkel recently said China must sign the WTO’s agreement on public procurement if Chinese firms are to continue to enjoy access to European government contracts. Some pressure on the undervalued renminbi is also likely.

However, such pressure is unlikely to succeed unless Brussels is willing to offer some kind of quid pro quo to Beijing. But the ability to do so, given the diverse interests of the EU’s 27 member-states, remains circumscribed, despite the new, post-Lisbon Treaty thrust on foreign affairs. For the moment, the EU continues to struggle to claim any role as a geo-strategic player of consequence. As next week’s meetings will underline, for the rest of the world, Europe remains primarily an economic entity, with FTAs and market access the chief weapons in its limited diplomatic arsenal.

-By Pallavi Aiyar, Business Standard