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Economic Relations between Europe and Asia in the context of ... Presentation Transcript

  • 1. Economic Relations between Europe and Asia in the context of the ASEM Paul Isbell Senior Analyst International Economy and Trade “ II Forum Asia” Casa Asia Barcelona Nov. 22-23, 2004
  • 2. Background to ASEM
    • End of Cold War (late 80s-early 90s)
      • Shift from bipolar to multipolar intl. system
      • Three principal pillars of world system (nearly 90% of world GDP)
        • United States (and increasingly the Americas)
        • Asia
        • Europe
      • Emergence of Regionalisms (EU, NAFTA, ASEAN and broader Asian and American integration processes)
  • 3. Background to ASEM
    • Emergence of “inter-regionalisms”
      • Traditional: Transatlantic relationship, renewed in 1990 with the beginning of the Transatlantic Dialogue (TAD) Goals: to eliminate non-tariff barriers to trade and barriers to services trade
      • New forms: Asia Pacific Economic Forum (APEC) beginning in 1989 and now with more than 20 member states. Bogor Goals: to achieve free and open trade by 2010 and 2025 in the context of “open regionalism”
  • 4. Background to ASEM
    • The Euro-Asian relationship: The “weak link” in the new triangular core of the world system
      • Transatlantic and Transpacific links denser
      • No formal inter-regional dialogue or grouping between Europe and Asia
      • Enormously growing potential
        • Economic emergence of Asia
        • Trend toward regionalisms in Asia
        • Potential for more efficient inter-regional dialogue
    • Potential Advantages: deeper economic links, political dialogue to help other international fora, mutually beneficially re-balancing of intl. system
  • 5. The Birth of Asia Europe Meeting
    • Bangkok Summit of Heads of States/Gov (1996)
      • 15 member states of the EU + 7 members of ASEAN + 3 countries of Northeast Asia (China, Korea, Japan)
      • Goal: Strengthen the inter-regional relationship
      • Bases: Mutual respect and equal partnership
    • ASEM V at Hanoi: Official enlargement of ASEM to include 10 new EU members states + 3 recent entries into ASEAN (Cambodia, Laos, Myanmar)
      • Membership now at 38 states + EC (over 50% GDP and international trade)
  • 6. The ASEM Process
    • ASEM remains an “informal dialogue”
      • Multi-dimensional: political, economic, cultural dialogue
      • Common ground for non-binding, mutually beneficial projects and goals (consistent with national sovereignty and other international commitments)
      • Incremental in nature and complementary to work and objectives of existing, more binding international fora (WTO, Bretton Woods institutions, etc)
      • To improve efficient functioning of global governance
      • To facilitate further deepening and broadening of regional integration in both regions
  • 7. The ASEM Process
    • No permanent institutions
      • By choice, lacks a Secretariat (unlike APEC, ASEAN)
      • Rotating national coordinators (existing state officials)
      • Bi-annual Summits of Heads of State and Govt.
      • Annual Foreign Affairs, Finance and Economics and Trade Ministerial Meetings
      • More frequent Senior Officials Meetings (SOMs)
    • ASEM has “come of age”
      • 5 Summits (Bangkok, London, Seoul, Copenhagen, Hanoi
      • Over 15 Ministerial meetings, numerous WGs, etc.
  • 8. ASEM’s Economic Pillar
    • ASEM’s Economic Pillar
      • The terrain of the Finance and Economy & Trade Ministers, and Senior Officials of Trade and Investment (SOMTI)
      • Two traditional areas of activity:
        • Trade Facilitation Action Plan (TFAP) seeks common ground on reducing non-tariff barriers to trade by facilitating and streamlining:
        • -customs procedures, standards and conformity assessment, public procurement, quarantine and SPS procedures, intellectual property issues, the mobility of business people, distribution issues, and other trade facilitation issues
  • 9. ASEM’s Economic Pillar
      • Investment Promotion Action Plan (IPAP)
        • Investment Promotion Activities
        • Investment Policies and Regulation
          • Activities related to the regulatory and legal framework governing the investment environment
          • ASEM High Level Dialogue on Key Investment Issues
          • Investment Experts Group (IEG) have held numerous meetings since the inception of the IPAP to monitor progress and set future goals
  • 10. Weaknesses of ASEM
    • Process Remains Informal (progress incremental)
    • Lacks Concrete Goals (undermines perceived relevance, identity)
    • Lack of Institutional Infrastructure (lacks continuity)
    • “ Summit Fatigue” (resource overstretch)
    • Still excludes large parts of Asia (South Asia, Central Asia, lacks a “Eurasian continuity”)
    • Asymmetry in Objectives (deeper institutionalization vs advocates of shallow informal dialogue
    • Lack of Symmetry in Interest
      • Between regions (EU vs Asia)
      • Within regions (France vs UK, EC vs members, SE Asia vs NE Asia)
  • 11. The Euro-Asian Economic Relationship
    • Europe and Asia: each others’ second most important inter-regional trade and investment partner
      • In each case, some distance behind the United States and its partners in the North American Free Trade Association (NAFTA)
    • Since Asian crisis and emergence of the Euro, the Euro-Asian economic relationship has become more significant
      • In last 25 years, the share of EU imports coming from the economies of Asian ASEM has risen from less than 10% to nearly 25%
  • 12. Euro-Asian Economic Relationship
    • Share of EU exports to Asian ASEM has also increased from less than 7% to nearly 15%
    • In last 10 years, Euro-Asian merchandise trade flows have nearly doubled in both directions, from a combined total of US$377bn in 1994 to US$567bn in 2003
  • 13. Euro-Asian Economic Relationship
    • From perspective of Asian ASEM, the relative importance of Europe has declined somewhat relative to the US since creation of APEC
    • Still, on average some 15% of A.ASEM exports go to EU while on average some 10% to 15% of imports come from EU
    • Excluding intra-Asian ASEM trade, these EU shares would increase to approximately 30% and 25%, respectively
  • 14. Euro-Asian Economic Relationship
    • Despite recent gains in Euro-Asian trade, the Euro-Asian economic link remains the weakest of the three major legs of the Transatlantic-transpacific-Euro-Asian geo-economic triangle
    • Transpacific Asian-North American merchandise trade is the most significant (US$647bn combined trade 2003 vs Euro-Asian link with US$567bn )
  • 15. Euro-Asian Economic Relationship
    • Transatlantic economic link appears weakest – in merchandise trade terms – with only US$478bn combined trade flows 2003
    • Predominance of transatlantic economy in services trade and FDI - most important world link
      • Asian ASEM FDI stock in EU nearly €70bn
      • EU FDI stock in Asian ASEM members totals some €110bn
      • EU stock levels in the US are now approaching US$1trillion
      • US FDI stocks in Europe are about US$700bn
      • EU-US services trade comes to some €225bn, while EU-Asian ASEM services trade sums to only €75bn
  • 16. ASEM Attempts to Deepen Economic Relationship
    • Asian Crisis and Creation of Euro: catalysts
    • London Summit (1998)-Seoul Summit (2000) – ASEM Vision Group
      • Headed by South Korean economist Il Sakong, along with 25 experts
      • A Strategic Vision Report with Recommendations for the Future of ASEM (over 10 major recommendations)
        • Free Trade in Goods and Services by 2025
        • Macroeconomic policy coordination and reform of intl financial system
        • Institutional recommendations, including an ASEM secretariat and a number of theme-specific ASEM centers
    • Results disappointing, little concrete action taken, diversions of 9-11 and initiation of Doha Round
  • 17. ASEM Attempts to Deepen Economic Relationship
    • Copenhagen Summit (Sept. 2002)
      • Preparations overshadowed by sense of drift
      • Yet optimistic over successful launch of euro
      • Creation of the ASEM Task Force for Closer Economic Partnership between Asia and Europe
        • 10 Asian and 7 European independent experts
        • Tasked to present concrete action-oriented recommendations for closer economic partnership to Hanoi Summit
        • Role of Spain: Rodrigo Rato, European Secretariat (Elcano Royal Institute, Alfredo Pastor Task Force Member
  • 18. ASEM Task Force for Closer Economic Partnership
      • Nearly two years of discussions and debate
      • Revisited many of the themes of the Vision Group (free trade goal, institutional issues)
      • Concentrated on Themes referred to in the Copenhagen Chair’s Statement (wider use of euro in Asia, further development of Asian bond markets)
        • Ambitious concrete recommendations in finance
        • Broader recommendations aimed at capitalizing on the Euro-Asian strategic potential
        • Insistence on institutional dimension
  • 19. ASEM Task Force for Closer Economic Partnership
    • General Recommendations
      • Goal of Free Trade by 2025
      • Inclusion of discussions of energy issues as a priority within the Economic Pillar
      • Adoption of a common strategic agenda to promote stability and prosperity in the Euro-Asian landbridge
    • Concrete, Action-Oriented Recommendations
      • ASEM Secretariat (even if “virtual”)
      • ASEM Trade, Investment and Tourism Promotion Center (even if virtual, to be hosted by Vietnam)
      • ASEM Business Advisory Council (to increase ASEM’s relevance to business communities)
      • ASEM “Yes” Bond Market and Fund
  • 20. ASEM Task Force for Closer Economic Partnership
    • At the Hanoi Summit, ASEM “Yes” Bond Fund and ASEM Promotion Center captured most attention of leaders, along with the new proposed energy and Euro-Asian landbridge priorities.
    • Task Force Recommendations now in hands of the Finance and Economy Ministers
    • The Task Force conceived of European Asian economic relations in broader terms, beyond flows of trade and investment, to commonly-held strategic interests
  • 21. Future of ASEM
    • Common Interests, Complementary Needs
      • Asia: development, stability, more efficient use of Asian savings, facilitation of SME activity
      • Europe: broader use of the euro in Asia, development of SMEs, continued opening of world trade and investment markets
      • Energy Issues, Prosperity of Central Asia
    • Reform in Europe, integration in Asia
    • ASEM link relevant for international stability and balance, for strengthening global governance and multilateralism