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Monday, March 30, 1998 Published at 15:24 GMT 16:24 UK

Special Report

Building new relationships in the global village

Asem 1 was was held in Bangkok in early March 1996. Ahead of this second meeting, regional specialist Shada Islam looks at why Europe and Asia came together in the first place.

[ image: East Timor and other human rights issues have blighted relations]
East Timor and other human rights issues have blighted relations
It was in autumn 1994 that the European Union released its first strategy paper on ways of improving EU-Asia relations. Until then, relations between the two regions had focused essentially on trade and aid, with frequent quarrels on human rights issues like East Timor.

The Commission in 1994 took a more forward-looking look at EU-Asian relations, warning that unless Europe stepped up its political and diplomatic presence in the region, it could continue to lag behind Japan and the United States both as regards political clout in Asia and access to investments and business in the region.

European prosperity at stake

The creation of the Asia Pacific Economic Cooperation (APEC) forum - of which the EU is not a particpant - made EU policymakers even more eager to set up their own formal relationship with Asia.

Using Europe's increasing interest in the region as a springboard, Singapore's Prime Minister Goh Chok Tong came out with his own suggestion that leaders from Europe and East Asia should come together at a high-profile summit to discuss ways of reinforcing their relationship.

Filling a gap in international relations

While Europe and the United States had strong ties and so did Asia and Washington, Europe and Asia had failed to forge equally powerful bonds. It was essential that the world's three most important regions could inter-act with each other as equals, said Mr Goh.

The first Asem summit - attended by all 15 EU leaders and 10 East Asian heads of government (the seven Asean countries, joined by Japan, China and South Korea)- was generally viewed as a big success.

First meeting a big success

The Europeans went into the meeting talking about building a new partnership with Asia. It was decided that difficult human rights issues like Tibet and East Timor would be discussed, but in a non-confrontational manner.

No one would make trouble, the focus would be on building a better understanding between the two regions and fostering a closer political dialogue.

Flattered by the attention, Asian leaders readily discussed ways of increasing cultural, and political contacts with Europe - but they also made it clear that for both regions, the real bond was created by trade and business.

It was agreed that senior officials, foreign minsiters and business leaders from both sides would hold regular meetings.

Unlike Apec, both sides agreed that Asem would not focus on creating a free trade area or setting other ambitious trade-related goals. The next Asem summit was set for London in the spring of 1998.

Asian crisis makes Asem 2 crucial

For Europeans the London meeting offers an opportunity to highlight their continuing commitment to Asia, despite the region's economic problems.

Asians, who were irritated by Europe's slow response to the crisis - and the EU's focus on its own currency plans - will be listening carefully: they want the summit to issue a message of confidence in Asia's economic future, to reassure European banks and businesses that they should stay on in the region and to chart out practical ways of helping the region.

Business a top priority

Asians need European investments and funds to pull themselves out of their current economic mess. They need European markets to sell more of their goods.

For their part European governments want to position themselves for Asia's expected economic upturn, with Asian companies especially interested in picking up cheap assets in the region. As Britain's Foreign Minister Derek Fatchett put it recently, roaring tigers do not turn into docile pussycats overnight.

Also European banks are worried about recovering the 370 billion US dollars that they have given to Asia in loans in the last few years.

The next Asem meeting will be held in Seoul in 2000. The EU-Asia relationship may change in the meantime: Europe will have a single currency by then while the future of Asian economies remains uncertain. But, the trade and business ties that bind them are unlikely to have become any weaker.

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Asem 1: Bangkok 1996

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