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Asean in 2017 and Beyond

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Asean in 2017 and Beyond JUNE 2017 ASEAN IN 2017 AND BEYOND LIFE (RE)STARTS AT FIFTY REPORT The report reflects the conference rapporteur’s understanding of the views expressed by participants. These views are not necessarily those of the organisations that participants represent, nor of the European Commission, Friends of Europe, its Board of Trustees, members or partners. Reproduction in whole or in part is permitted, provided that full credit is given to Friends of Europe and that any such reproduction, whether in whole or in part, is not sold unless incorporated in other works. Co-funded by the European Union Editor: Shada Islam Programme Manager: Clotilde Sipp Programme Assistant: Nassim Bounya Publisher: Geert Cami Director: Nathalie Furrer Rapporteur: Sebastian Moffett Design: José Gonçalves Image Credits : CC / Flickr—United Nations Photo; leolintang/Bigstock.com; Flickr—EEAS; Flogel/Bigstock.com; nawadoln/Bigstock.com; CC/Flickr – Charles Chan. © Friends of Europe - June 2017 TABLE OF CONTENTS Foreword 5 ASEAN cheat sheet 8 Recent milestones in EU-ASEAN cooperation 9 Conference report 10 EU, ASEAN should strengthen ties, as globalisation weakens 11 Free trade under pressure 13 Two regions, two histories 15 Economic relations are fundamental 17 New dimensions: strategic and political relations 21 Defusing tensions in Southeast Asia 23 Wealth gaps in poorer countries 26 An ASEAN identity? 28 Conclusion 32 Key statistics of EU-ASEAN trade & investment relations 34 Programme 36 4 ASEAN in 2017 and beyond Friends of Europe | June 2017 5 FOREWORD SUMMERTIME SIGNALS WARMER EU-ASIA TIES Perhaps it’s down to global uncertainties sparked by US President Donald Trump’s volatile policies. Perhaps it’s the result of the European Union’s new Brexit-inspired sense of urgency and purpose. Or perhaps George Gershwin is right – and summertime just makes living easy. Whatever the reasons, Asia and Europe are finally starting a serious and strategic conversation on shared global challenges. Europeans were active participants at the Belt and Road Forum held in Beijing earlier this month. EU foreign policy chief Federica Mogherini will attend the Association of Southeast Asian Nations Regional Forum and celebrations of ASEAN’s 50th anniversary in Manila in August. European and Asian senior officials are meeting in June in Brussels ahead of the Asia-Europe Meeting (ASEM) foreign ministers encounter in Myanmar in November. There will be a gathering of ASEM economic ministers in Seoul in September, the first such meeting in many years. It’s not just the frequency of these and other encounters that is significant. Meetings between Asian and European leaders, ministers, policymakers and business representatives take place often enough. But they have habitually been much too formal, and in some cases little more than photo opportunities. Although important challenges still lie ahead – and regretfully EU relations with India and Pakistan have yet to truly take off – Asia and Europe are slowly but surely expanding the scope and deepening the substance of their conversation. 6 ASEAN in 2017 and beyond Significantly, the EU’s Trade Commissioner, Cecilia Malmström, is working hard to get trade deals finalised with Japan and several ASEAN countries. Talks on a region-to-region free trade agreement with ASEAN look set to be revived. Trump’s lack of commitment on issues such as global security, trade and climate change is one key reason for closer dialogue and contact between Asia and Europe which equally depend on and defend the rules-based multilateral global order. The increasingly volatile international outlook also certainly demands stronger Asia-Europe cooperation. Whether it’s North Korea’s erratic nuclear conduct or violence in Syria, Asians and Europeans are equally concerned by the worsening global security situation and its impact on their own stability. Refugees, terrorism and violent extremism, as well as cybersecurity threats, test both Asia and Europe. Tensions in the South China Sea worry Europe, which depends on those sea lanes for a large percentage of its trade. Asians are concerned about the impact of Brexit on their investments in Britain and their economic ties with the EU-27. Both regions face the challenges posed by populists, rising inequalities, and meeting the aspirations of young people for jobs and a better life amid rapid technological transformations. Human rights in many Asian countries continue to be a source of major concern. As illustrated by their interest in China’s Belt and Road Initiative (BRI), the ASEAN Connectivity Master Plan and similar discussions within ASEM, both Asia and Europe give priority to forging stronger links between countries and regions, encompassing infrastructure, digital networks and people-to-people ties. This new EU-Asia relationship is evident in four recent developments. Friends of Europe | June 2017 7 First, compelling new global realities are giving a new lease of life to ASEM. With its informal format and flexible structure, this forum offers a unique platform for an open, no-holds-barred brainstorm on all issues of mutual interest. Second, EU relations with ASEAN are also advancing, as shown by Mogherini’s trip to Manila. Future relations would get a boost if there is a quick ASEAN decision to open the doors of the East Asia Summit to the EU. Third, although trade relations between Beijing and Brussels remain strained, the BRI has the potential to spark a more ambitious and truly strategic EU-China conversation on crucial issues of global peace, security and economic governance. As EU leaders prepare to meet Chinese Premier Li Keqiang for the 19th EU-China Summit in Brussels on 1-2 June, the EU should widen its view of BRI, seeing it as not merely as an economic ‘project’ but as a reflection of Beijing’s ambitious vision of its role in a rapidly-transforming world. And fourth, EU-Japan relations look set for an enormous geo- economic boost following the imminent conclusion of an ambitious comprehensive economic partnership agreement. Maintaining the new momentum in Europe’s ties with Asia’s leading nations will continue to require hard work, clear-headed strategic thinking and a spirit of compromise. Expectations will also have to be managed. So let’s enjoy the summer and warmer EU-Asia ties – but make these relationships resilient enough to face possible storms and cold weather ahead. Shada Islam Director of Europe and Geopolitics at Friends of Europe 8 ASEAN in 2017 and beyond ASEAN CHEAT SHEET • 10 member states: Indonesia, Malaysia, the Philippines, Singapore, Thailand, Brunei Darussalam, Myanmar, Cambodia, Laos, and Vietnam • Population – 625 million, which is 8.5% of the world's population • Combined nominal GDP – US $2.4 trillion (2016) • ASEAN Secretariat is responsible for enhancing coordination and implementation of policies; based in Jakarta, Indonesia. Current Secretary-General – Le Luong Minh. • ASEAN Summit is an annual meeting and the highest authority of ASEAN comprising the heads of governments/states responsible for all initiatives and directions of ASEAN. The chairmanship rotates annually in the alphabetical order of member states’ names. Currently chaired by the Philippines. • ASEAN builds regional cooperation in three "community pillars": ASEAN Political & Security Community, ASEAN Economic Community and ASEAN Socio-Cultural Community • “ASEAN Way” is a concept of multilateralism which advocates regional cooperation based on non-interference, informality, minimal institutionalisation, consultation and consensus, non-use of force and non-confrontation. • The region has concluded 5 free trade agreements, namely with China, South Korea, Japan, Australia & New Zealand, and India. It is currently negotiating an overarching agreement, the Regional Comprehensive Economic Partnership (RCEP), with these 6 countries. Friends of Europe | June 2017 9 RECENT MILESTONES IN EU-ASEAN COOPERATION 2012 EU’s accession to the Treaty of Amity and Cooperation in Southeast Asia (TAC), boosting political engagement in the region 2013 Adoption of the Bandar Seri Begawan Plan of Action to strengthen the ASEAN-EU Enhanced Partnership (2013-2017), which covers a wide range of areas of cooperation 2014 EU and ASEAN explore ways to elevate relations to a strategic level, marking the start of a renewed engagement (20th EU- ASEAN Ministerial in Brussels) 2015 The EU establishes a diplomatic mission to ASEAN and appoints a dedicated Ambassador 2016 ASEAN welcomes the EU’s interest in furthering engagement with the region through all ASEAN-led processes (21st ASEAN- EU Ministerial in Bangkok) 2017 Celebration of the 40th anniversary of the establishment of EU-ASEAN diplomatic ties Conference Report Friends of Europe | June 2017 11 EU, ASEAN SHOULD STRENGTHEN TIES, AS GLOBALISATION WEAKENS The EU and ASEAN should react to the worldwide retreat from globalisation by boosting their efforts towards greater partnership, participants told a Friends of Europe Policy Summit. The Association of South East Asian Nations was set up in 1967 at a time of global turmoil to promote greater political and economic integration. The past few decades have provided its members with a strong framework for economic growth, in particular the trend towards global free trade. As ASEAN reaches age 50, however, there are signs of a backlash against globalisation in Europe and the United States. 12 ASEAN in 2017 and beyond Greater cooperation between the EU and ASEAN could boost world trade. ASEAN is the EU’s third largest trading partner and the EU is ASEAN’s second, with bilateral trade reaching €201bn in 2015. The two partners have launched negotiations for a comprehensive air transport agreement, which would be the first accord to lay out an “open skies” or “open aviation area” arrangement between two major regional trading blocs. In addition, on 10 March, trade leaders from the blocs, including EU Commissioner Cecilia Malmström, announced the resumption of work towards a region-to-region FTA. Efforts to boost economic integration between ASEAN members include work to develop the ASEAN Economic Community (AEC), which will promote free trade and the flow of skilled labour.
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