ASEAN: A key partner of EU in emergimg Asian region

Sun, 28 Jan 1996

Yeo Lay Hwee sketches out the future direction of the relationship between ASEAN and the European Community

Asia-Europe relations have been receiving a lot of attention lately. ASEAN, with its long-standing links to the European Community, has been at the forefront of pushing for greater European engagement in Asia. The EU itself, after a thorough review of the need to strengthen the competitiveness of the Community's industries, has also come to perceive the economic dynamism of Asia as presenting opportunities, and not threats, to its own economic well-being.

This change in the EU's attitude towards Asia was captured in the EU's recent communications on Towards a New Asia Strategy. In its New Asia Strategy, ASEAN is seen as the cornerstone of the EU's dialogue with the region.

Relations between ASEAN and the EU are at a turning point because of changing perceptions and attitudes on both sides. The sustained, rapid growth in the ASEAN economies and its deepening through AFTA; the deepening and widening of the EU; the increasingly integrated and highly competitive global economy; have all contributed to these changes. ASEAN and EU ministers and officials have recognized that the time has come to review the current relationship, and strengthen it further in a spirit of greater equality and partnership. An ad hoc Eminent Persons Group, comprising nine members from the EU and seven from ASEAN, was created to assist in this task.

A comprehensive look at the existing ASEAN-EU relationship reveals its asymmetry in the realm of economic co-operation. While the EU is ASEAN's third largest trading and investment partner after Japan and the U.S., ASEAN ranks low in the EU's pyramid of priorities. ASEAN's annual trade with the EU constitutes only about 4.75 percent of the EU's external trade, and the EU's investments in ASEAN represent less than one percent of the EU's cumulative FDI for the period 1982-1992. The EU has also reduced its development assistance to ASEAN over the years. Now, the EU's development aid is limited to Indonesia and the Philippines.

As more and more ASEAN countries have moved into the higher income bracket, the EU has wanted to move away from the donor- recipient relationship. For the Europeans, economic cooperation in the future would have to take place with respect to the EU's own priorities -- stimulating economic growth on the basis of mutual interest. Rapid economic growth has transformed ASEAN into a serious trading partner. Expanding market and rising income will make ASEAN an increasingly important market for European goods and services. Pro-business government and political stability, continuous liberalization and deregulation, AFTA and the emergence of growth triangles, make ASEAN an attractive investment haven.

Unfortunately, beyond the preserves of a small segment of policy-makers and bureaucracies, ignorance about each other and the changes taking place remains. ASEAN businesses see Europe as a "fortress" too preoccupied with its own internal affairs, slow in adapting and highly protectionist. Similarly, Europeans have the tendency to lump ASEAN together with many other developing countries, seeing them as economically backward and politically unstable. ASEAN-EU relations are still perceived as primarily a North-South relationship.

Such ignorance and lack of knowledge about each other are impediments to a better and more meaningful relationship. This is because no amount of policy dialogs and official meetings can replace solid economic and sociocultural ties based on mutual benefits and understanding. As it now stands, there is no shortage of formal, institutional links from the ASEAN-EU Ministerial Meeting to the Joint Cooperation Committee and the Senior Officials Meeting, and also the various sub-committees. Therefore, the challenge is to expand relations beyond the preserves of the bureaucracies to the wider segment of the societies. Both ASEAN and the EU have to work towards raising each other's profile to win public support for their political co-operation and encourage greater private sector involvement in their economic cooperation. The role of the business sector is especially crucial since economic cooperation is the main thrust of this new partnership for growth.

While economic cooperation is the main thrust of ASEAN-EU relations and is best driven by the private sector, the political and security dimension of the relationship remains an important domain for politicians and officials. Political will is important for successful commercial and economic cooperation. Also, security is so intricately linked to economics that it is unrealistic to try to separate the two.

The political and strategic dimension of ASEAN-EU relations have always been on a more equal footing. Both sides have tried to advise each other on the various political and security issues in their respective regions. Indeed, the institutionalization of relations in 1978 with the first Ministerial Meeting marked the EU's recognition of ASEAN as a factor of stability and balance in South-east Asia. The strategic glue that held the two groups together seemed to have loosened following the demise of the Soviet Union and the end of the Cold War. Differences of opinion concerning Myanmar, East Timor, the application of human rights, environmental issues became more pronounced. However, in these areas, the differences were discussed among equals. As the EU thinks through its strategy towards Asia and decides to concentrate on economic cooperation, the differences are slowly being narrowed again.

ASEAN sees the EU's engagement in the security realm in this region as a stabilizing factor. With clear understanding that regional stability is the fundamental for continued growth and prosperity, ASEAN has taken the lead in trying to fashion a new security architecture for the region.

In conceiving the ASEAN Regional Forum (ARF), ASEAN sees multilateralism as the means to strengthen peace processes in the Asia-Pacific. The EU also sees its participation in the ARF as in line with one of the reasons behind greater European integration. European leaders have felt that Europe should play a more powerful and influential role in the field of international relations, notably within the triangle of the U.S., East Asia and Europe. Hence, the EU has requested its representation in the ARF to be increased from the current one to three. This is a clear indication of the importance the EU places on security in the Asia-Pacific.

There is no doubt that both ASEAN and the EU see intrinsic values in closer links between themselves. However, with ASEAN increasingly involved in regional affairs, particularly within APEC, and the EU preoccupied with its own deepening and widening, there is a potential danger of ASEAN-EU ties being downgraded. Hence, the need to put the ASEAN-EU relationship in a greater Asia-Europe context.

In addition, ASEAN-EU relations on their own cannot be an entirely equal partnership by virtue of the disparities between their economies. There will, therefore, be a real limit to how far this relationship can grow. However, when viewed as an integral part of a greater Asia-Europe relationship, the scope for cooperation between ASEAN and the EU economically and politically, and also in the areas of development assistance to third countries, is tremendous.

ASEAN is very much a part of the dynamic East Asia; and ASEAN has both historical and cultural ties, and formal, institutional linkages with the European Community. Hence, it is in a good position to bring Europe and Asia together. ASEAN's role in building political and economic bridges between Europe and Asia is valuable. The ARF and the Asia-Europe meeting are clear examples of ASEAN's initiatives and commitment to this role.

ASEAN-EU relations will provide the EU with a strong footing for the implementation of its nascent Asian strategy. Seen in this light, the future direction of the relationship has great potential and can be a true partnership for growth.

Yeo Lay Hwee is a Research Associate at the Institute of Policy Studies.

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