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EU-Asia Policy

13 October 2017

On 11 October the EU-Asia Centre held a special briefing on the prospects of EU Policy towards Asia with Gunnar Wiegand, the Managing Director in the EEAS for Asia. He was joined by two discussants: Shada Islam, Director of Policy, Friends of Europe and Jana Dreyer, Editor of the Borderlex trade newsletter.

Gunnar Wiegand summarized the outcome of the 14th India-EU summit which took place in New Delhi on 6 October 2017. He said both sides were mutually satisfied with the progress of bilateral cooperation in general. On global governance there was very good eye to eye agreement e.g. on the implementation of the 2015 Paris Agreement and the importance of the rules-based multilateral trading system. Concrete deliverables included the new €500 million EIB loan agreement for the Bangalore metro project, which was part of EIB’s €1.4 billion in loans to India in 2017 and a good example of the political will by both partners to transform cities into liveable places. India-EU cooperation also increased significantly in the fields of research - both sides aimed at opening Horizon 2020 and Indian programmes – and energy (fusion energy, ISA). Areas of political sensitivity included trade policies (rice) and foreign policies. Wiegand said that India’s refraining from criticizing, even indirectly, neighbours in the region (Myanmar), was perhaps a heritage of its non-interference and that India also avoided to create difficulties for Russia (Ukraine). Wiegand concluded by saying that the summit clearly demonstrated an overall new level of quality in EU-India relations: “A lot we can do, a lot we will do”.

Subsequently Wiegand moved on to other strategic partners. He said that China had become a good partner in regional cooperation and environment (Middle East, Afghanistan, Africa). EU-Chinese cooperation in Africa was going to be upgraded. Regarding connectivity (BRI) the challenge was to ensure a level playing field for all to participate. The success of the EU-Japan summit was illustrated by the strategic partnership agreement and the FTA which both partners were determined to deliver by the end of this year. These were modern and comprehensive trade agreements which demonstrated the belief in more transparent and fair trade by both partners. Regarding trade the Republic of Korea was the most advanced of all Asian partners, its FTA being the EU’s first trade deal with an Asian country. Korea cooperated in other areas as well, e.g. Atalanta (since March 2017). DPRK overshadowed but also energized the EU’s work with ROK as president Moon’s notion to work on a peaceful solution was in line with the EU. As for ASEAN the EU was its oldest friend, looking at 40 years of relations and a new action plan (concluded at the EU-ASEAN ministerial meeting on 7 August 2017) that included many new areas of cooperation. Yet ASEAN was not the same integrated market as the EU, it was important to find the right balance (trade vs. human rights and non-proliferation).

Jana Dreyer commented on the FTA negotiations between India and the EU, which were launched in 2007. She said that India was sending mixed signals with a clear prioritization of economic reforms but no progress in modernizing trade. A very nationalistic mindset and traditional approach (agricultural subsidies) were making dialogue difficult. India showed an offensive interest in services yet it was quite defensive in the area of goods. Dreyer said that RCEP negotiations were going to be a big test for India. Negotiations on the proposed FTA between ASEAN and the six states with which FTAs already existed had been accelerated after TPP failed and were scheduled to be finalized by the end of this year. So far India wanted to liberalize only 77% of its tariff lines with 90% being the goal. Dreyer emphasized that ASEAN was going to be the next challenge for the EU, it being the world’s largest growth market. Yet the biggest challenge was for the EU to export its values and liberalize trade at the same time.

Shada Islam said that after 10 years that were lost due to domestic interests the EU’s current progress with India was very much needed and impressive even though no quick clinch to FTA negotiations could be expected. EU-India relations illustrated the EU’s significant effort in the last 3-4 years to engage with Asia and not just China. Asia was not just about China and this message had slowly but surely sunk in. The new challenge was to now move beyond trade issues. Myanmar demonstrated a failure of strategic foresight by the entire international community, but the EU was possibly in a position to use its good relationship to talk more frankly. It was proof of a mature power to be able to work with countries that were not OECD members. An area highlighted by Islam was people-to-people exchange and the accessibility of visa for not just business and political leaders but members of the civil society as well. Islam concluded by underlining the overall enormous potential of EU-Asia relations to develop and grow sufficiently robust to withstand the changing geopolitical circumstances. In this regard she welcomed the positive signal of the EU’s invitation to the East Asia Summit taking place in Manila in November this year.

In the discussion there were questions raised about the EU following the US’ policy regarding DPRK (denuclearization as a prerequisite), the EU’s stance over non-tariff barriers as part of FTA negotiations, Iran, and EU’s security cooperation with ASEAN.