Europe-Asia ties to be closer than ever

Europe-Asia ties to be closer than ever

Although formal cooperation between the European Union (EU)
and Asia only began to take shape in the 1970s, when the EU
sought to strengthen its links with the Association of Southeast
Asian Nations (ASEAN), the two regions have been closely
connected for many centuries through various flows of migration,
of culture, of philosophy, of religion and particularly, of
commerce.

Indeed, economic relations remain a cornerstone of ties
between Europe and Asia. In 1996, exports from the EU to Asia
totaled US$204 billion. More than U.S. exports to the region. At
the same time, the EU's 15 member states imported $238 billion
worth of Asian goods.

The EU is the largest trading economy in the world, accounting
for one-third of world trade, 30 percent of the world stock of
foreign direct investment and 35 percent of the total GDP of
Organization for Economic Cooperation and Development countries.
Europe is now poised for a period of steady growth, which should
be about 2.5 percent a year over the next five years. The
introduction of the Euro on Jan. 1, 1999, will add further
dynamism to the EU.

The Asia-Pacific region has, until recently, been the most
dynamic economy in the world. It still has enormous potential for
further growth and -- like Europe -- depends on trade and
investment to prosper.

One of the points agreed by the 26 leaders meeting at the
Asia-Europe Meeting (ASEM) II in London on April 2 and April 3
was a commitment to keep markets open in order to encourage
commerce between the regions. This commitment will certainly be
encouraged by two ASEM initiatives: the Investment Promotion
Action Plan and the Trade Facilitation Action Plan.

ASEM leaders also welcomed the proposal to create a European
network of experts which would work in conjunction with Asian
counterparts to provide technical advice for the reform of the
financial sector. Technical support for financial restructuring
will also be offered by an ASEM Trust Fund, to be run under the
auspices of the World Bank.

The Trust Fund will also address social problems arising from
the crisis, and the EU will review existing cooperation programs
to see where additional funds can be allocated to Southeast Asia
for projects to help communities suffering the effects of the
crisis.

Europe also takes a full role in global efforts to facilitate
restructuring of Asian economies. EU member states contribute
nearly 30 percent of the capital of the International Monetary
Fund and the World Bank, compared with the U.S., 18 percent, and
Japan, 6 percent. This clearly shows the key part that Europe has
played within the international community in responding to the
crisis and demonstrates the strong commitment which Europe has
toward its Asian partners.

However, the Asia-Europe relationship is not solely based on
economics. Both sides appreciate the need to strengthen broader
political and cultural contacts. This can be pursued through
dialogs on global issues such as the environment, international
crime, drugs and fundamental rights, and through various actions
such as people-to-people exchanges and educational and scientific
cooperation.

The Asia-Europe Foundation is working to build ties between
EU-ASEAN civil societies in the ASEM process. Within EU-ASEAN
relations several projects have been developed, such as European
Studies Centers and the Junior EU-ASEAN Managers Exchange Program
to encourage mutual understanding in a broadly based and balanced
relationship.

The ASEM Summit sent a signal of confidence that with a
combination of sound fundamentals and policies, the crisis will
be overcome. Europe will certainly continue its efforts at
regional, ASEM, ASEAN and bilateral levels to ensure that the
next time ASEM leaders meet, in Seoul in 2000, present hurdles
will be overcome and the relationship between Europe and Asia
will be closer than ever.