ASEAN–EU: Time for a strategic partnership

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV.COM Ltd.

Four decades since the EU and ASEAN signed their first inter-regional cooperation agreement, it is about time to consider upgrading relations from an Enhanced Partnership to a Strategic Partnership, writes Gauri Khandekar.

Gauri Khandekar is a researcher and head of the Agora Asia-Europe programme at FRIDE, a European think tank for global action based in Madrid, Spain.

European Union and ASEAN senior officials will be meeting in Vietnam on 14-15 May to take stock of bilateral relations. The Bandar Seri Bagwan Plan of Action signed last year between the two partners to strengthen the EU-ASEAN Enhanced Partnership (2013-2017) will be amongst the key issues.

But four decades since the EU (then the European Economic Community) and ASEAN signed their first inter-regional cooperation agreement, it is about time to consider upgrading relations from an Enhanced Partnership to a Strategic Partnership.

Over the years, bilateral ties have been comprehensive, covering development cooperation, trade and investment, aid, and political and cultural relations.

The third ASEAN-EU business summit, which took place earlier this year on 8–9 March, reaffirmed the relevance both regions hold for each other, especially in tough economic times and changing geopolitical settings. Both sides committed to devoting more efforts to reduce existing trade and investment barriers, facilitate greater inter-regional commerce, construct better and more efficient cooperation mechanisms and economic policies, and create more employment and growth. An ASEAN-EU Trade and Investment Work Programme for 2013-14 was adopted in the ASEAN Economic Ministers-EU Consultations meeting and is to pave the way to an improved business environment.

The ASEAN-EU partnership is palpably significant in a number of regards, especially in commercial terms. In 2011, the Asian bloc was the EU’s third largest trading partner outside Europe; while the EU was ASEAN’s third largest globally.

Various ASEAN member states are negotiating bilateral Free Trade Agreements (FTAs) with the EU, which have the potential to significantly deepen two-way commerce. While the EU and Singapore have just completed such negotiations, Thailand has become the latest ASEAN member to launch FTA talks with the EU. It is hoped that these FTAs can someday serve as foundation blocs on which to recreate the original region-to-region FTA plan that was dropped in 2009, mainly for political reasons concerning Myanmar. The EU is also the largest investor in ASEAN countries. Businesses note that further investment in ASEAN could be promoted by more transparent, clear and fair investment regulations by an increasingly integrated bloc.

ASEAN already has important economic weight in the region and will be an even bigger driver of regional growth in the coming years: ASEAN GDP is set to reach $10 trillion by 2030, up from $2 trillion in 2012. By 2030, ASEAN must anticipate a population growth of around 18 per cent and a larger number of cities amidst a significant shift to urban areas.

The need for rapid urbanisation and connectivity in the region underlines the need for greater investment today to build better infrastructure, develop human capital, manage natural resources and ensure environmental sustainability as well as strengthen governance and institutional effectiveness.

The continuing financial crisis in Europe has corroborated existing and growing inter-dependencies between both regions: while the EU needs to tap into Asian growth, Asia realises the significant impact of falling European demand on its economies.

ASEAN and the EU now need to prepare for a post-crisis scenario. It is necessary to build a new EU-ASEAN partnership that can strongly link the two regions economically and politically and steer the relationship towards more effective bilateral and global cooperation in a rapidly changing world order.

The EU has so far been instrumental in the ASEAN integration process by sharing its own experience of region building. The EU must now increase its support to ASEAN as it plans to achieve comprehensive regional economic integration through the ASEAN Economic Community 2015 (AEC) blueprint, which aims to build an ASEAN single market and production base by 2015. As the global weight increasingly shifts toward Asia, ASEAN’s role in the region and in global affairs is set to enlarge.

ASEAN covers most of South-East Asia and is cradled strategically between China and India. ASEAN is playing an increasingly important role in regional geopolitics and is proving to be a force for stability and cooperation in Asia. It is leading efforts in the creation of a regional architecture. ASEAN-based formats such as the ASEAN Regional Forum already bring together important global powers to discuss critical regional and international issues. ASEAN finds itself at the centre of important security hotspots and international disputes like the South China Sea dispute which have a growing read on to global affairs. The ASEAN Chair (as observer) and Indonesia also participate in important global platforms like the G20.

The EU has recently lifted all sanctions against Myanmar, with the exception of the arms embargo. This has normalised EU-ASEAN relations across the bloc. With the growing influence of China and the US in Asia, it has become increasingly important for the EU to step up its own engagement in the region, particularly through ASEAN. An upgrade in EU-ASEAN bilateral relations is needed now to underpin changing dynamics in an ever challenging geopolitical and economic environment.

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