One-day International Conference EU-ASEAN Reviving the Partnership

Brussels, 21 October 2004

Ladies and Gentlemen,

It is a heartfelt delight for me to be here today at the one-day international conference by the theme of EU-ASEAN Reviving the Partnership. This Conference could not have come at a more timely and crucial moment, given the progressive changes in ASEAN and the renew importance attached by the EU to ASEAN.

Recent Developments in ASEAN

After 37 years of its existence, ASEAN continued to maintain an active agenda to realise the ASEAN Vision 2020. An important milestone in this respect was the adoption, at the 9th ASEAN Summit held on 7 October 2003 in Bali, of the Declaration of ASEAN Concord II (Bali Concord II) aiming at achieving the ASEAN Community based on the three pillars of economic integration, political/security cooperation and socio-cultural cooperation.

Through ASEAN Community, ASEAN is determined to stay competitive in the international race. The community is expected to tighten security and economic bonds, to confront threats, such as terrorism and increased trade competition from outside the region, particularly from China and India.

In the 1970s when ASEAN first began, cooperation was very patchy, a little bit here, a little bit there. In the 1980s, ASEAN focused mainly on economic problems. In the 1990s, ASEAN member countries had become more comfortable with each other and were open to improve cooperation in a wide field, including security and political issues.

The ASEAN Community has given ASEAN a new sense of purpose. It serves as a definition of what ASEAN wants. The year 2020 is the target set by ASEAN in Kuala Lumpur. It is the year when many of ASEAN economic agreements should be realized. That should also be the target dates for security and political cooperation to produce results.

What ASEAN can learn from the EU community building?

Mr. Rodolfo Severino, the former Secretary-General of ASEAN, in his remarks to the 2001 one-day conference in Brussels, mentioned that ASEAN will never be like the EU. The historical, cultural and ideological foundations that impelled the EU’s formation and shaped its character, in many ways, is different from ASEAN.

From European Coal and Steel Union, to European Common market, European Economic Community, and European Community and finally European Union, the path progressed for half century. It is a gradual and steady institutional designing and building which made Europe the way it is now.

In this respect, ASEAN is different from the EU. Unlike the EU which took institutional building, ASEAN is taking a different route. It favours functional cooperation first. ASEAN has proceeded even without the required institutions.

For years, ASEAN cooperation is premised on political commitments. It subscribes to the fundamental principles of non-interference and respect for sovereignty and territorial integrity of member countries, with consensus building playing an important part. We call it “the ASEAN way”.

Although ASEAN will not be like the EU, the EU can certainly be the kind of reference to ASEAN community building efforts. ASEAN can certainly learn from an integrated approach of the EU in developing its high level regional institutions.

The significance of European regionalism is that all European countries have been gradually absorbed into a united and highly integrated “Grand Europe”, by a single market, a single currency, as well as a single political system. In this respect, ASEAN still has a long way to go.

In ASEAN, the association is not a supranational organization where the ASEAN Secretariat has the mandate and legal instruments to direct member countries and regional policies. It is an organization that is very much led and paced by the member countries with the Secretariat playing a coordinating and facilitating role.

Although we are currently improving the existing ASEAN Dispute Settlement Mechanism (DSM), ASEAN is yet to empower by sanction mechanism. ASEAN has limited powers to ensure proper implementation of all economic agreements and expeditious resolution of any dispute.

ASEAN-EU Relations: Strategic Partnership

Ladies and gentleman,

Looking at the progressive changes of both regions— the EU is enlarging its membership eastwards, while ASEAN is entering into a new community and institutional building process— there exists a strong desire on the part of the EU to share its experience on forging regionalism and on the part of ASEAN to adopt the best practices of the EU and to modify them to fit the ASEAN context. This would certainly provide ASEAN and EU a common platform to launch policy dialogues in a number of important sectors where ASEAN regional integration efforts have been intensified such as in trade and investment.

Since 1 May 2004, following its enlargement to include 10 new members, the EU represents a market of over 450 million people and a 9,739 billion euro combined economy. At the same time, ASEAN registers a robust economic growth. Despite the unfavourable conditions, such as the war in Iraq and the outbreak of SARS, ASEAN managed to grow steadily in 2003.

The GDP of ASEAN is closed to USD700 billion and a population of 540 million growing at more than 2% a year. If the region is able to achieve an average growth rate of 6% a year, it will have a combined GDP exceeding USD1 trillion by 2010.

The EU remains as one of ASEAN’s major trading partners, third largest after Japan and the United States. On the economic front, a total trade between ASEAN and the EU increased by 6% to USD99,662 million compared to 2002. In terms of FDI inflows to ASEAN, the figures showed the rebound in foreign direct investment (FDI) inflows into the region. FDI to ASEAN in 2003 increased 48% year-on-year to reach US$20.3 billion (approximately, 16.8 billion euro), with EU contributing 35% (US$7.1 billion or approximately, 5.9 billion euro) of total FDI in 2003. Looking at the above figures, there is a lot of room for improvement between ASEAN and the EU.

Through Trans Regional EU-ASEAN Trade Initiative (TREATI), both regions hope to expand the existing trade and investment flows. A number of joint act

ivities in areas of mutual economic interest are currently being identified and implemented.

At the Fifth Consultation between the ASEAN Economic Ministers and the European Union Trade Commissioner, held recently in Jakarta on 5 September 2004, both ASEAN and the EU agreed that a number of TREATI activities supportive of four ASEAN priority integration sectors (Agriculture, Electronics, Fisheries and Wood-based products) should be prioritised. These include among others: Sanitary and Phyto-sanitary (SPS) measures for agro-food and fisheries, as well as regulatory measures for wood-based products and electronics.

On the political and security front, ASEAN continues to be a main conduit for the EU in engaging Asia since the EU does not have bilateral ties with all the Southeast Asian countries. The ARF continues to feature prominently in EU’s strategy for engaging the region as it provides a window for the EU to extend its political presence in the region. Besides, the ARF continues to be the most important and successful security forum in Asia Pacific participated by all major players of the world. The EU being a political union is interested in engaging the region through the ARF process to promote the objectives of its partnership with ASEAN as outlined in its new Communications.

The EU considers the ARF as an excellent framework for dialogue on regional and political and security issues in the Asia Pacific region. The EU also acknowledges that the innovative “two-track approach” of the forum offers opportunities for both formal and informal exchange of views on a wide range of issues.

Transnational crime was identified as an area for cooperation in a substantive way since ASEAN and EU fully recognise its negative impact on their economies and societies. Given the current global momentum towards the fight against terrorism and crimes related to it, fighting transnational crime and adopting common approaches in international fora could be a potential area to focus on. The unfortunate association of the crimes with the Islamic radicals should make ASEAN, home to millions of Muslims, an important focus for cooperation, rather than the contrary.

On the social and cultural front, education, environment and poverty reduction would be the areas to move forward in the short to medium term since both sides consider these areas important for cooperation within their regions and with their partners. The EU has undertaken a number of innovative changes in the field of education such as introducing the concept of lifelong learning to keep up with the rapid changes of today and integrating protection of the environment as a key ingredient in its economic policies. ASEAN too is taking efforts to improve its human resources through education and to safeguard the environment while pursuing economic development.

Similarly, the EU has successfully developed strategies to minimise poverty through the harmonisation of social protection policies. The EU wants to include the eradication of poverty as a priority in its cooperation with ASEAN. This is another strong point for ASEAN-EU collaboration since ASEAN will have to continue addressing poverty through the narrowing of the development gaps.

On the longer term, ASEAN and EU should capitalise on the strong historical and cultural bond between the two regions that goes back to a few centuries. A greater understanding between the ASEAN and the EU through enhanced interactions in the areas of youth, media and culture will help each other to narrow the perception gaps which will contribute to forging a more effective cooperation in the future.

Conclusion

While the existing cooperation has brought about benefits to both ASEAN and the EU, the future direction of the relations will be dependent on several multi-dimensional factors that would include: the changing strategic landscape, the EU’s desire to play a greater role in the global economy and international affairs, the transition towards the New Economy and managing the challenges that it presents, the EU’s ability in managing its enlargement process and ASEAN’s commitment to forge greater regional integration.

ASEAN-EU relations possess potentials and opportunities for further expansion. However, both sides should be mindful of several issues in developing the relations. The relationship should be based on the spirit of partnership and should focus on each other’s strength while respecting the divergence in views over some issues. Indeed, the future direction of ASEAN-EU relations would rest on adhering to the above spirit of dialogue, and seizing the opportunities presented in pursuing region-to-region cooperation while strengthening bilateral ties between the EU and individual ASEAN Member Countries. ASEAN-EU relations has been nurtured and not forced, and it will remain that way.

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