The European Union in South-East Asia: Continuity and Change in Turbulent Times

Author(s): Anthony Forster

Source: International Affairs (Royal Institute of International Affairs 1944-), Vol. 75, No.
4 (Oct., 1999), pp. 743-758
Published by: Wiley on behalf of the Royal Institute of International Affairs
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 The European Union in South-East Asia:

continuity and change in turbulent times*

ANTHONY FORSTER

Ties between Europe and South-East Asia have a long pedigree. The history of
initial trading contacts, the colonial relationship, and then a protracted period of
withdrawal form the basis of current links. The creation of the European
Community (EC) in I958 and the establishment of the Association of South
East Asian Nations (ASEAN) ten years later have added a further dimension to
this region-to-region contact.' Vimolvan Phatharodom has identified three
distinct phases in the relationship that has subsequently developed. The first
phase, between I967 and I980, saw the beginning of work to set up the
machinery for regular institutional contact. The second phase, between I980
and I994, saw a focus on broadening economic and political contact. The third
and current phase has witnessed a 'new era' of EU-Asia relations marked by a
new European strategy aimed at developing a multilateral framework for
expanded cooperation on an equal basis.2
This article examines the creation of the Asia-Europe Meeting (ASEM) and
its impact on relations between the European Union (EU) and South-East Asia.
It suggests that the EC/EU has always been in search of a means to regulate
contact with other international actors. It does so to reduce uncertainty, to
provide channels of communication and to create norms of acceptable
behaviour. The EU's recent renewed interest in the region, signposted by the
Commission's 'Towards New Asia Strategy' and the creation of the ASEM, can
therefore be seen as a consequence of three principal concerns: a need to meet
the challenges of the post-Cold War period by extending structured contact to
new interlocutors beyond ASEAN; a need to restate the EU's credentials as a

* An earlier version of this article was presented at the conference 'Europe and South-East Asia in the
contemporary world: mutual influences and comparisons', Wuppertal, 8-io October I998 and 'Europe-
Asia linkages' conference, University of Birmingham, 2-3 July I999. The author would like to acknow-
ledge the constructive advice from participants of both these conferences. He is also grateful for the
comments from two anonymous referees.
The founding states of ASEAN are Indonesia, Malaysia, Philippines, Singapore and Thailand. Brunei
joined in I984; Vietnam in I995; Laos and Myanmar (Burma) in I997; and Cambodia in i999.
2 Vimolvan Phatharodom, 'EU-ASEAN relations (I967-present): a Thai perspective', paper presented to
the international conference, 'Europe and South-East Asia in the contemporary world: mutual influences
and comparisons', Wuppertal, 8-iO October I998, p. i.

International Affairs 75, 4 (I999) 743-758 743

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Anthony Forster

stakeholder in the region, thus legitimizing European political and economic

interests alongside those of other global actors such as the United States; and an
interest in a new post-Cold War agenda based on a commitment to defining
acceptable economic and human rights standards as a precondition of privileged
contact with the EU.
This article highlights the weak response of the EU to the economic crisis in
Asia, which demonstrates the limited convergence of interests between the two
regions. It goes on to suggest that for a variety of reasons-notably lack of
geographical proximity, economic asymmetry, and preoccupation with central
and eastern Europe-South-East Asia will remain a marginal area of engage-
ment for the EU. In terms of future developments, as a minimum, structured
contact between the EU and South-East Asia will survive because of the
potential economic importance of the region and continuing competition from
the United States, Japan and China. While the ASEM framework for regional
cooperation may facilitate greater connectivity between different activities of
the European Union and may even herald a more coordinated approach to the
Asia relationship, it is unlikely to lead to a qualitative shift in engagement.

Un peu d'histoire: I967-I994

As one seasoned observer of EU-ASEAN relations has noted, 'Europe and Asia
are not strangers.' Throughout both the first phase of contact between the EU
and South-East Asia, from I967 to I980, and the second phase based on the
EC-ASEAN Cooperation Agreement, from I980 to I994, relations were signi-
ficantly shaped by the geopolitics of this period. The EC was the first dialogue
partner to establish informal relations with ASEAN in I972. The group-to-
group relationship gathered momentum in the mid-I970s, in part because
political interest was shown by ministers, especially the German Foreign
Minister, Hans-Dietrich Genscher. The European Commission also considered
the organizing concept of regional groupings 'an important factor for political
stability and peace', but the Commission's interest was driven by more than
simply a principled commitment to this ideal. Group-to-group cooperation also
offered the Commission opportunities through which the EC/EU's own
process of institution-building could be further developed.3 For example, it
provided an opportunity for the Commission to break the monopoly of
exclusive country-to-country contact and to begin the process of putting
relations between the two regions, until the early I970s dominated by bilateral
contact, on a multilateral footing.
Throughout these early periods, there were two rather uneven layers to the
relationship. Contact was at its most dense on the economic level. The need to

3 See e.g. Commission President Roy Jenkins' comment that 'we have always sought to treat ASEAN as a
region, since we from our own experience have learnt that an external stimulus can often support
internal cooperation': Simon Nuttall, European political cooperation (Oxford: Clarendon Press, I992), p. 289.
See also Article 5 of the Bangkok Declaration (Kuala Lumpur: Facts on ASEAN, I977).

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The European Union in South-East Asia

regulate the emerging trade relationship between the EC and ASEAN members
was a dominant priority, with ASEAN a supplier of primary products, a
growing market of 250 million consumers and useful as a stepping-stone for
European companies to break into the Asia-Pacific marketplace.4 Based on the
EC-ASEAN Cooperation Agreement signed in March I980, a broad framework
was established to cover technical assistance and commercial and economic
cooperation, with some flexibility to allow a practical and adaptable basis for the
changing concerns and priorities of ASEAN. It therefore marked a growing
confidence in the ability of the two regional organizations, and government
representatives, to develop strategies for pursuing their interests at various levels
to follow up on issues of mutual interest. By the early I99Os, 8o per cent of
imports from Asian countries were covered by the Generalized System of
Preferences (GSP), and between i99i and I995 two-thirds of EC/EU aid went
to Asia. However, the Cooperation Agreement was a product of its time, and
contained three important weaknesses: it provided for no major EC funds to
support EC-ASEAN activities; the focus was principally on trade, with no
concrete measures to address second-generation economic issues such as invest-
ment; and the instruments for carrying out policy agreements were based on
developmental aid.5
At the political level, in the prevailing Cold War environment, ASEAN also
represented a grouping of anti-communist (albeit neutral) friendly states.6 The
EC was supportive of the need to meet the communist threat in Indochina, and
the importance of the ASEAN states increased with the withdrawal of the
United States from Vietnam in I975. This was perceived as an opportunity for
the EC to take on a more active role in the region, and in this respect three
developments further galvanized the EC-ASEAN relationship: Soviet naval
expansion in the Pacific; the Vietnamese invasion of Cambodia and the I979
Soviet invasion of Afghanistan. European foreign ministers were keen to gain
support from other countries, including ASEAN, and in return EC ministers
supported ASEAN's position on Cambodia, based on the principle of opposing
intervention in the internal matters of a non-aligned country. Political concerns
were therefore never entirely absent from the relationship; but the scope for foreign
policy convergence was rather limited, and in many respects this period marked
the high point of cooperation.7
While the I980 Cooperation Agreement offered a flexible and uncontrover-
sial basis for the relationship, it was clear that by the late I980s that relationship

4 John Redmond, 'The European Community and ASEAN', in John Redmond, ed., The external relations
of the European Community (Basingstoke: Macmillan/St Martin's Press, I992), pp. I38-60.
S Institutionalized dialogue therefore reflected the economic nature of mutual concerns, though strong
bilateral interests ensured the relationship 'was managed as political cooperation while the substance has
been about trade'. See Michael Leifer and Soedjati Dijiwandono, 'Europe and South-East Asia', in Hans
Maull, Gerald Segal andJusufWanandi, eds, Europe and the Asia Pacific (London: Routledge, I998), p. 20
6 For example, ZOPFAN was seen as a declaration of independence through neutrality rather than a direct
alliance with the West.
7 Elfriede Regelsberger, 'The relations with ASEAN as a "model" for a European foreign policy', in
Giuseppe Schiavone, ed., Western Europe and South-East Asia (London: Macmillan, I989), p. 84.

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Anthony Forster

had reached a plateau, with some, like Juliet Lodge, considering group-to-group
links as sub-optimal.8 However, the Commission and the member states were
increasingly preoccupied with the intensive process of constructing the single
European market, and even though different officials were involved few had
either the time or the inclination to re-evaluate the relationship with ASEAN.
Perhaps most worrying, by the late I98os the change under way in relations
between these two regions led to a well-publicized feeling that Asia was a
source of economic threat rather than partnership, with a number of prominent
European industrialists and some governments contrasting the European mixed
economies with less regulated capitalist markets of the Asian Tigers.9

Entering a new era?

While calls for deepening the relationship between ASEAN and the EU go
back to the mid-ig8os, little actually happened until I99I, when the European
Commission felt able to recommend to EC member states the value of
negotiating a new agreement for cooperation to ensure that the interests of
Europe were 'fully taken into account' in South-East Asia.'0 A central factor in
explaining the step change in relations which has taken place since I989 is the
end of the Cold War, which raised important geostrategic issues for Europe and
South-East Asia concerning the very nature of the EU's engagement with
ASEAN and the region of Asia more generally.
First, the end of Soviet (and reduced Chinese) influence raised the possibility
of ASEAN achieving its original aim of building a regional organization which
represented all South-East Asian states." Enlargement thus became a real
possibility, and indeed the membership expanded to include Vietnam in I995,
Laos and Myanmar (Burma) in I997 and Cambodia in I999. This led to
ASEAN becoming more representative of the region and, in the case of
Vietnam and Laos, made closer collaboration attractive. In this respect, enlarge-
ment forced the EU to sit up and take notice of a more assertive ASEAN.'2

8 Redmond, 'The European Community and ASEAN', p. I38; cf Juliet Lodge, 'The transition to a
CFSP', in Juliet Lodge, ed., The Europeani Comnmiunity and the challenge of thefuture, 2nd edn (London:
Pinter, 1993), pp. 227-5I at p. 243.
9 Wolfgang Hager, 'Protectionism and autonomy: how to preserve free trade in Europe', International
Affairs, Summer i982. See also Lester Thurow, Head to head: the conming economic battle amongJapatn, Europe
anid America (Sydney: Allen & Unwin, I992); Loukas Tsoukalis, The new European economy (Oxford:
Oxford University Press, I993), p. 30.I
IO For a discussion of this see Joseph A. McMahon, 'ASEAN and the Asia-Europe Meeting: strengthening
the European Union's relationship with South-East Asia', European Foreign Affairs Review 3, i998, pp.
23 3-5 I at p. 23 5.

I For the constructed nature of South-East Asia see Julie Gilson, 'Creating Asia through the Asia-Europe
Meeting', paper presented to the Third Pan-European Conference on International Relations, Vienna,
I6-I9 September i998, p. io; and Alice Ba, 'The ASEAN Regional Forum', InternationalJournal,
Autumn I997, pp. 63 5-56 at p. 635.
I2 Noordin Sopiee, 'The developnment of an East Asian consciousness', in Greg Sheridan, ed., Living with
dragons: Australia confronlts its Asian destiny (Sydney: Allen & Unwin, I995), p. i9i; Phatharodom, 'EU-
ASEAN relations', p. i6.

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The European Union in South-East Asia

On the European side, the institutional and policy changes brought about by
the I993 Maastricht Treaty transformed the European Community into a
European Union and equipped it with a common foreign and security policy
and a single currency. These developments gave out an external signal that the
EU aspired to aln enhanced global role.'3 The foreign and security policy articles
of the Treaty on European Union also offered an opportunity to move the
relationship forward by upgrading EU activities in this and other regions.I4 In
particular the Treaty reduced the difference between economic and political
instruments of the EU, which opened up the potential for a more integrated
approach to the EU's external policy.I5 Finally, the European Commission had
long considered that the EC-ASEAN relationship was dominated by member
states, with most assistance taking place through bilateral channels and only a
small proportion of EC aid going to relatively obscure projects, such as the
ASEAN Timber Technology Centre and ASEAN Management Centre.
Third, changes in the strategic environment brought about by the collapse of
the Soviet Union and declining importance of communism, led both the EU
and ASEAN to re-evaluate the strategic dimension to their relationship. From
the outset of region-to-region contact, an explicit objective shared by Europeans
and South-East Asia was that such cooperation should be an important factor
for political stability and peace. However, in the Cold War period the security
dimension to ASEAN was limited to a declaration in I97I by the mnembers that
they constituted a Zone of Peace, Freedom, and Neutrality from which the
Europeans were excluded. The founding of the ASEAN Regional Forum
(ARF) in I994, with the aim of maintaining peace and stability in the Asia-
Pacific region, offered a more inclusive solution to regional security and placed
the EU alongside other strategically important countries, notably China, India,
Japan, Russia and the United States.I6 Alice Ba suggests that the creation of the
ARF had two further aims: it was an attempt by ASEAN states to maintain
ASEAN's organizational relevance and it was aimed at highlighting the
importance of the region of South-East Asia. '7
A fourth factor leading to a re-evaluation of the relationship was the emer-
gence of a multipolar world of 'trading regions'. I8 Over the preceding twenty
years of contact, collaboration had been based upon a shared 'basic philosophy
of regionalism as a structural principle of international relations'. The changes

3 Christopher Hill, 'The capability-expectationis gap, or conceptualising Europe's ilnternational r-ole',

Journal oj Comsomon Market Stttdies 3 I: 3, September I993, pp. 305-28.
I4 See e.g. the Europe-Mediterranean Partnership agreed in October I994 alnd the EU-MERCOSUR
agreement signed in February I995.
I5 Up to this point, EC competences were limited to the common comnmercial policy, relations with third
states and competence for establishing association agreenments.
I6 Allen Whiting, 'ASEAN eyes China: the security dimension', Asian Survey 37, April I997, pp. 299-322.
For the debate on whether member states of the EU should be represented, see 'Not the ASEAN way',
Ecollnolist, 26 October I996; 'Asia-Pacific: EU angry with UK, Fraiice on ASEAN move', Econiomnist,
24 July I 996.
r7 Ba, 'The ASEAN Regional Forumn', p. 63 5. ASEAN member states also signed the South-East Asian
Nuclear Weapons-Free Zone Treaty in December I995.
I8 'Let's make a deal', Asiaweek, I5 March I996, p. 26.

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Anthony Forster

brought about by the end of the Cold War served to strengthen the view that
the EU and ASEAN should be prominent actors in the region of South-East
Asia. There was also a feeling prevalent in the European Commission in the early
I99OS that Japan and the United States were stealing a march on the Europeans,
through the growing importance of the Asia-Pacific Economic Council
(APEC), in which the EU had been unable to gain observer status in I993.19 A
weak Asia-Europe relationship implied that the United States had 'an exces-
sively strong position vis-a-vis these two other regions'. Part of the motivation
for re-evaluating the EU-ASEAN relationship was therefore the need to
embrace the growth of Asian power and to match US diplomatic investment in
the region, creating a third leg of a triangular relationship between North
America, Asia and Europe.20 However, in a number of important ways, there
was growing concern in Europe at 'treating ASEAN as a region'-a Cold War
strategy which had dominated the first two decades of contact.2' This over-
looked the major powers in Asia-Japan, India, and China-the latter two
countries embracing trade liberalization and India indicating in I993 that it
would abide by GATT regulations and agreements.
However, the pressures towards redefining the EU-ASEAN relationship
were not limited to geopolitics. The bureaucratic momentum provided by the
need to renew the Agreement was an important factor. A change in economic
priorities was also important in forcing a reappraisal of the existing arrange-
ments. First, the I980 Cooperation Agreement no longer accurately reflected
the economic balance between the EU and ASEAN, and the noticeable shift
from a donor-recipient relationship to a more balanced one generated pressure
for change. In the I980s ASEAN countries were supplicants, demanding better
access for products and trade. By the early I99OS ASEAN had become the
world's tenth largest exporter and developed a trade surplus with the EU, with
EU trade in Asia totalling $3I2.5 billion, compared with $235 billion for trade
with the United States. Moreover, the East and South-East Asian region's economy
grew 44 per cent between I990 and I995, with almost half the world's growth
coming from the region. The changing economic importance of these countries
fed into a feeling that economic power would soon translate into political power.22
It was therefore in the interest of both sides to 'develop a political dialogue with
Asia, both to gradually associate it with the management of international
problems and to make its contribution to the establishment of regional security

'9 APEC was formed in I989; initial membership comprised the United States, Canada, Japan, South
Korea, Australia and New Zealand. Hong Kong, China and Taiwan joined in I99I.
20 R. James Ferguson, 'Shaping new relationships: Asia, Europe and the new trilateralism', Internation
Politics 34, December I997, pp. 395-4I5 at p. 400. See also Fran,ois Godement, 'Europe and Asia: the
missing link', Asia's international role in the post Cold War era, Part II, Adelphi Paper 276 (London: Inter-
national Institute for Strategic Studies, I993). However, Gerald Segal notes that it was continuously
stated that ASEM was complementary to strong Asia-American relations, rather than a challenge or an
alternative to it.
2I Roy Jenkins, quoted in Nuttall, European political cooperation, p. 289.
22 See e.g. President Chirac's speech, quoted in Peter Montagnon and Ted Bardacke, 'Chirac sees EU as
Asian partner', Financial Times, I March I996, where Chirac explicitly drew attention to the fact that
'Asia deserved a larger political role in the world, commensurate with its economic power'.

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The European Union in South-East Asia

There was also a particular concern that the EU was not seizing trade and
investment opportunities. While trade had risen dramatically as a result of the
GSP and the Agreement, there was a feeling in the Commission that the EU had
not done enough and that the growing levels of trade and investment were the
fruits of ASEAN members' own efforts to liberalize trade and foreign direct
investment. Investment in the region amounted to i per cent of EU investment,
and by I993 accounted for only I3 per cent of foreign direct investment-a 4 per
cent reduction on levels in the mid-ig8os-despite a range of measures
including the creation ofJoint Investment Conmmittees in each ASEAN capital
in I987, the promotion of small-scale joint ventures and a programme of EC
International Investment Partners.23 So, in addition to the perceived need to
meet American and Japanese economic interest in the region, responding to a
specific challenge was an important motivation for upgrading economic links.24
It was therefore no surprise that the first aim of the European Commission's
'Towards New Asia Strategy' was to strengthen the EU's economic presence in
Asia in order to maintain a leading role in the world economy.25
At the same time, the EU came under pressure to reconsider its hierarchy of
economic priorities and, for obvious reasons, it chose to privilege countries
from central and eastern Europe with a realistic prospect of EU membership.26
Paradoxically, the search for a new and more political framework with the
ASEAN countries therefore needs to be seen in the context of a downgrading
of the region in relation to central and eastern Europe, which is geographically
more proximate and to which the EU feels it has greater political and economic
obligations. To compensate for the absence of significant financial support and
privileged economic relations, the EU was keen to supplement modest
economic collaboration with enhanced political engagement.
For ASEAN states, economic interests remain the driving force of the
relationship. Vimolvan Phatharodom suggests that one result of the changing
economic balance occurred in the region itself, as ASEAN governments warmed
to the idea of using market-driven economic reform to achieve domestic policy
goals. ASEAN countries were prompted to embrace deregulation and privatization,
as a means of promoting domestic economic change.27 In truth, the rapid develop-
ment of ASEAN economies and the introduction of a graduation mechanism,

23 This was a 4 per cent reduction from the level in the late I980s, which was directly attributed to the
creation of the single market and Eurocentric focus to investment. See Caroline Southey, 'Europe's
business record in Asia under fire', Financial Times, 20 March i996.
24 The Economist notes that the EU expects trade to rise twice as fast as with the United States next century:
'Groundhog day', Economist, 26 January i996.
25 Commission of the European Communities, Communication from the Commission to the Council,
'Towards a New Asia Strategy', COM (94) 3I4 final, Brussels, I3 July I994. However, it proposed no
new instruments for achieving these objectives, but highlighted the existing institutional and procedural
contacts built up in the early years of the EU-ASEAN relationship. For example, it did not extend the
four offices in the region, the major office remaining in Bangkok, rather than alongside the ASEAN
secretariat in Jakarta, and the strategy did not include any new financial arrangements. Neither did it
single out ASEAN as a particularly important means of strengthening the broader relationship. See also
COM (96) 3I4, I7-I8.
26 Lodge, 'The transition to a CFSP', p. 243. See also Tsoukalis, The new European economy.
27 Phatharodom, 'EU-ASEAN relations', p. i6.

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Anthony Forster

which removed GSP benefits from a number of products, began to erode the
value of the GSP. Neither did ASEAN want to be left behind by APEC. All
these factors led to ASEAN's commitment to a free trade area, to be fully
realized by 2009, providing for a common effective preferential tariff scheme,
and in I995 to the setting up of a free investment zone, accompanied by agreements
on cooperation on intellectual property and liberalization of the service sector.28
The end of the Cold War also dramatically changed the interests of the EU in
the region. During the Cold War period, there were few political disagreements
of substance, in part because controversial issues were kept off the agenda since
the Cold War context diminished the salience of differences. However, the
transformation of the EC into the EU brought with it a new mission.29 The
defence of 'European values', including human and fundamental rights, demo-
cracy and environmental issues, was the cornerstone of this new agenda.30 In
terms of the EU-ASEAN relationship, this introduced a new set of political and
economic agenda items on which fundamental disagreements were inevitably
going to exist. Economically it introduced the concept of 'fair trade', including
the need to protect international copyright, and to raise social legislation and
workers' employment conditions from low existing levels to European standards
before trade could take place on equal terms.3' Politically, the EU committed
itself to contributing to the development of the consolidation of democracy, the
rule of law and respect for human rights.32
The growing influence of the European Parliament-especially the Committee
on External Economic Relations, the Committee on Environment, Public Health,
and Consumer Protection, and the Committee on Development and Cooper-
ation-has been particularly active in pressing this agenda. In this respect, through
the budget and other powers the Parliament insisted on making its own support
for external agreements (required under the EU's Article 235) conditional on a
commitment to democratic values, human rights, the protection of workers
(fair trade) and environmental issues.33 The Council, too, passed resolutions on
human rights and development, democracy and a wide range of other non-
economic issues, and under this pressure the European Commission has felt
obliged to embrace conditionality as a key feature of a new phase in EU-

28 Meeting of ASEAN Heads of Government, Singapore, 27-28 January I992 (akarta: ASEAN Secretar
I 992).

29 The emergence of the new agenda can be traced back to the mid-i98os. After I99
noticeable with the codification of the human rights agenda, the establishment of a clear benchmark and
the growing activism of the European Parliament.
30 Eero Palumjoki, 'EU-ASEAN relations: reconciling two different agendas', Contemporary Southeast Asia
I9: 3, December I997, pp. 269-85, p. 272.
3I Ibid., p. 274.
32 Communication from the Commission to the Council, COM (94) I3, final, Brussels, I997.
3 The extent to which this is simply a means of defending the European welfare state model(s) against an
alternative Asian economic model is an open question. For the tensions inside the EU see COM (96)
3I4 final, Communication from the Commission to the Council, the European Parliament and the
Economic and Social Committee, 'Creating a new dynamic in EU-ASEAN relations', p. 28, quoted in
Palumjoki, 'EU-ASEAN relations', p. 275.

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The European Union in South-East Asia

ASEAN relations.34 These new EU priorities were perceived by ASEAN as

divisive and controversial, and highlighted the different value agendas of the two
regional organizations. Some ASEAN political leaders were explicit in suggesting
that the EU's new-found interest in these issues was a fig-leaf for the defence of
expensive European welfare and employment models against Asian competition.35
To all these factors must be added a growing dissatisfaction inside the EC
concerning the very nature of EC-ASEAN bloc-to-bloc meetings. The
Commission was critical of what it termed 'the uncertain and imperfect nature
of ASEAN integration'. Despite the broad similarity of objectives between the
EC and ASEAN-both projects aimed at enhancing security, prosperity and
regional security-they represent very different approaches to regional integration,
the former characterized as closed and the latter as more open, with less
institutionalization and more emphasis on voluntarist approaches to cooperation.
Moreover, the advancement of 'Asian values' promoted most vigorously by the
Malaysian leader Mahathir Mohamed and his Singapore counterpart Lee Kwan
Yew, especially in the framework of the EC-ASEAN relationship, highlighted
the different approaches to the new agenda. This was evident as early as I990,
when ASEAN rejected the EC's position concerning the possible imposition of
sanctions on China.36 The bloc-to-bloc nature of the meetings was therefore
perceived by the Europeans as encouraging a closing of ASEAN ranks on new
agenda issues-with ASEAN using their collective influence to EC interference.

ASEM and the EU-ASEAN relationship: a new structure and a new approach?

In many crucial respects, the decision to launch an Asia-Europe meeting

reflects the differing objectives which the EU and ASEAN had in respect of the
existing relationship, the failure of attempts to revise the I980 Cooperation
Agreement when it came up for renewal in I99I and the impact of the end of
the Cold War. Though there was willingness on both sides to expand the Agree-
ment into cooperation, and consensus was reached on the technical details, the
EU's increased priority given to the human rights agenda proved to be an insur-
mountable obstacle. The human rights abuses in East Timor and a massacre there
in November I99I further soured the relationship, and Portugal (bolstered by
the European Parliament) led EU opposition to renewing the I980 Agreement.
Between I99I and I996, however, some informal progress was discernible.
At Karlsruhe in September I994 both sides took stock of the relationship and

34 In general, the European Commission has been more hesitant, though its position is constrained by
bureaucratic in-fighting. The Human Rights Directorate is supportive of the European Parliament's
commissioning reports from the EP-sponsored Institute for Europe-Asia Studies. However, the 'area'
directorate generals remain dominant and less keen. See e.g. the more relaxed European Commission
position concerning Myanmar membership of ASEAN: 'Declaration by the European Union on the
accession of Cambodia, Laos and Burma/Myanmar to ASEAN', Luxembourg, 2 June I997 837/97
(Presse I989), E/59/97.
35 For an excellent discussion of this see Phatharodom, 'EU-ASEAN relations', p. 23.
36 See Palumjoki, 'EU-ASEAN relations', p. 273.

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Anthony Forster

tried to chart a way forward. Sub-committees on trade, economic and industrial

cooperation, and on science and forestry, were created to supervise a wide
range of projects, which by I995 numbered over fifty. An EU-ASEAN business
conference took place in I994; two sub-committees on environment and
narcotics, and expert groups on intellectual property rights and industrial
standards and quality, were created.37 However, the relationship fell well short
of new expectations on both sides. The EU's I994 New Asia Strategy over-
looked ASEAN and relegated it to 'one of the key elements of its Asia policy'.
In its 'Creating a New Dynamic in EU-ASEAN Relations' communication pre-
sented in i996, the Commission attempted to address these problems. However, a
number of insurmountable obstacles remained in overhauling the relationship,
and the Commission recognized that a declaration and action plan, rather than a
new agreement, would be the only politically feasible means to develop the
EU-ASEAN relationship further.38 However, even this seemed optimistic with
the accession of Myanmar to ASEAN inJuly I997; this further soured the inter-
regional relationship, leading to the cancellation of meetings between the EU
and ASEAN in the winter of I997.39 This was quickly followed by the EU's
decision to impose industrial and agricultural sanctions in response to the use of
forced labour, marking the low point of relations.40
Against this background, it was left to the Singapore Prime Minister to pro-
pose a major and innovative solution to these problems in the form of an Asia-
Europe Meeting (ASEM). The common explanation is that Lee Kuan Yew
wanted to make Asia less dependent on the US (in APEC) and therefore read
too much into the New Asia Strategy. His suggestion was for an informal forum
of heads of state and government from Europe and Asia. It would include the
fifteen EU member states and the European Commission President, the ASEAN
members, and China, Japan and the Republic of Korea, and would meet every
other year.4'
A key attraction of this proposal for the EU was that the ASEM format
offered a way out of a deadlocked and rather stale relationship with ASEAN,
which had become bogged down with the need to revise the Cooperation
Agreement and Europe's new economic, political and strategic priorities. The
idea was therefore one the EU could not refuse. It was consistent with the new
strategy and it found a way out of the APEC problem. Though the idea of
ASEM came from an ASEAN member government, within nine months the
EU had approved the initiative as a novel means of regulating contact between
Europe and Asia: novel because, unlike the EU-ASEAN cooperation agreement,

37 Phatharodom, 'EU-ASEAN relations', p. 23.

38 'A new dynamic' (Luxembourg: Commission of the European Communities, I996), COM (96) 3I4.
39 The meeting in question was that of senior officials in the Joint Consultation Committee and was
cancelled because of the EU's concern over human rights violations in Myanmar on the basis of a
technical argument that Myanmar was not a signatory of the I980 Cooperation Agreement.
40 McMahon, 'ASEAN and the Asia-Europe Meeting', p. 237.
4I See Jacques Pelkmans and Hiroko Shinkai, eds, ASEM: how promising a partnership? (Brussels: European
Institute for Asia Studies, I997).

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The European Union in South-East Asia

it offers a non-legally-binding arrangement based upon a high degree of informality.4

It was therefore both a substitute for renegotiating the EU-ASEAN Cooper-
ation Agreement and a vehicle for widening EU involvement in the region.43
As a new institutional structure, ASEM has four advantages. First, ASEM
offers a timely means of redefining regional contact between Europe and Asia.
The Cold War had set strict limits to the countries with which the EC wanted
to engage, but changes in and after I989 necessitated a more inclusive approach
than that offered by the ASEAN io: one that fully accommodated China, Japan
and South Korea and offered the possibility of including India and Pakistan. A
strong attraction to the EU was that the trading bloc of ASEAN no longer
provided a satisfactory interlocutor to address important policy concerns of the
EU, and ASEM offered a means to redress this.
Second, ASEM offered a means out of the intractable membership problems
that had beset the EU-ASEAN relationship: in essence the rules had to be
changed to deal with Myanmar. In the first instance this was resolved by
allowing each side to choose its own members, followed by agreement that new
applications would require approval from all participants. This offered a means
of managing contact with new ASEAN members-Laos, Burma and, since
April I999, Cambodia-which presented the most difficulty for EU member
states in revising the I980 Cooperation Agreement. Third, ASEM offered a
means to extend cooperation in the region to new areas and the opportunity to
address economic, political, socio-cultural and security concerns within one
institutional structure. The ASEM initiative therefore held out the prospect of
an open-ended mechanism through which new policy concerns could be added
to those considered in the ASEAN format, with nothing excluded a prionr.
Fourth, important advantages were also perceived at a procedural level.
ASEM provides distinct layers of contact with different bargaining dynamics. At
the government level, heads of state and government, foreign and finance ministers,
and senior officials meet together. It also incorporates a 'Track 2' process, modelled
on the ARF, creating non-governmental level networks. Three further levels of
contact contained within the overarching framework of ASEM are the EU-
ASEAN contact, which forms the cornerstone upon which ASEM is built; the
EU contact in the ARF; and that of bilateral government-to-government contact.
ASEM therefore holds out the prospect of a variety of channels through which
regional problems can be tackled, and provides an opportunity to move issues
up and down a hierarchy depending on their importance and sensitivity.
The process is very informal, as reflected in the choice of the term Asia-
Europe 'Meeting' rather than 'Summit'; the agenda and discussion are based on
consent and even the chair's statement (rather than a joint communique) is collect-
ively agreed. This avoids rigid group positions through the direct participation

42 Mr Goh Chok Tong, the Prime Minister of Singapore, made the initial proposal. For an insider's view
see Victor Pou Serradell, 'The Asia-Europe Meeting (ASEM): a historical turning point in relations
between the two regions', European Foreign Affairs Review 2, I996, p. I85.
43 For the chronology of the speed with which the EU responded see Toshiro Tanaka, 'Asia-Europe
relations: the birth and development of ASEM', Keio Journal of Politics Io, I999, pp. 3I-5I at p. 36.

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Anthony Forster

of heads of state and government. Cooperation is also based on a non-binding

approach-peer group pressure and a sense of political obligation-rather than a
legal obligation to act, and on consultation rather than negotiation. Finally, the
instruments for carrying out collective agreements made in ASEM are
economic and political protocols, which in contrast to the EU-ASEAN
Cooperation Agreement remove the complicating factor of seeking approval
from the European Parliament. In short, for the EU, ASEM is as much a new
structure as it is a new approach. It is therefore unsurprising that at the time of
its creation in I996 it was greeted as a 'step change' in relations between the two
regions, and 'an historical turning point', introducing a 'new dynamic' in the
relationship between Asia and Europe.44

Evaluating ASEM I and II

In looking back over the two ASEM meetings that have taken place so far, the
level of activity and investment in the process is striking. Two heads of state and
government meetings have taken place, the first in Bangkok in I996, the second
in London in I998, both of which have raised the profile of European-Asian
relations. Alongside these, regular meetings have taken place between foreign,
finance and economic ministers, with follow-up meetings of senior officials. In
terms of the 'Track 2' process, ASEM has been most active in trying to pump-
prime networks linking the private and public spheres in the fields of education,
culture and business. For example, ASEM established the Asia-Europe University
Programme to improve links in higher education; an Asia-Europe Centre at the
University of Malaya, which will be upgraded to an Asia-Europe University;
and ASEM 'education hubs' to improve contacts between students.
In the area of cultural activities, ASEM I and II have created the Europe-Asia
Foundation, a non-profit organization aimed at improving cultural understanding,
established through voluntary funding from Singapore, France, Luxembourg as
well as finance from the EU. A youth exchange programme now exists, with
two ASEM Young Leaders' symposia held in Japan and Austria and an agreed
calendar of future meetings. There is also a Council for Asia-Europe Cooperation
(CAEC), a network comprising six think-tanks in the two regions.
ASEM networks have also been created to address common business con-
cerns in a wide range of areas. An Asia-Europe Business Forum was established
to address issues such as trade and investment alongside an Asia-Europe Business
Conference. Of central importance to the EU has been the need to develop
links between small and medium-sized enterprises (SMEs). Developmnents her
include an ASEM electronic resources network; the creation of SME centres;
and a regular business conference addressing issues of concern to SMEs. Similar
developments are evident in the agriculture, environment and transport sectors.45

44 Serradeu, 'The Asia-Europe meeting', p. I99. See also McMahon, 'ASEAN and the Asia-Europe
Meeting', p. 242.
45 For an overview of activities, see Tanaka, 'Asia-Europe relations', pp. 38, 47.

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The European Uniion in South-East Asia

In evaluating the contribution of ASEM to European-Asian relations, an

important issue is whether the creation of ASEM has delivered the perceived
benefits that led European governments to support the initiative in the first
place. At the non-governmental level, the density of networks is striking and in
many respects has lived up to European expectations in creating important
levels of contact where EU-ASEAN relations were no longer particularly
good.46 Whether, in the long term, these will deliver significant benefits and in
particular provide a means to overcome some of the existing problems
experienced at the EU-ASEAN level is unclear. Some observers are optimistic
that these non-governmental networks share a characteristic of being less
controversial and more protected from public scrutiny, 'without politico-
ideological matters impinging on the process'.47 A more sceptical view is that
the networks simply replicate the same 'problems in a slightly different format.
In terms of managing EU-Asian relations, it is clear that the ASEM
framework has provided the EU (and Asian participants) with the option of
pushing contentious issues down into other levels of engagement, offering a
greater number of options for handling issues. As mentioned above, the issue of
Asian membership of ASEM has been deftly handled by permitting a presence,
but not active participation, to states that present the most difficulties. In the
case of China, those governments that felt most strongly about its human rights
record-Denmark and Sweden-simply did not send heads of state and
government to ASEM I, though their respective foreign ministers attended.
In terms of political dialogue, the outcome of the first two ASEM meetings
has added a new list of issues of mutual concern. In both Asia-Europe Meetings
discussion extended well beyond that of EU-ASEAN meetings, addressing arms
control, non-proliferation of chemical and biological weapons, and disarma-
ment issues. However, intractable issues have been left to one side in the interests
of finding common ground, and a number of unresolved issues have been
pushed down to the EU-ASEAN and ARF levels. To this end, ASEAN's
South-East Asia Nuclear Weapons Zone Treaty, discussed at ASEM I, proved
too divisive to reach the agenda at ASEM II.
Managing the EU's 'new agenda' in ASEM has been more problematic. In
both ASEM I and II, the Europeans have requested that human rights be both
on the agenda and in the statement from the chair. In ASEM I they were more
successful, but in ASEM II human rights were omitted from the formal
meeting, leaving the Europeans to deal with these issues through bilateral
meetings.48 Thus the Portuguese Prime Minister and Indonesian President met
for the first time since I975, and human rights issues were raised in bilateral

46 Michael Smith, 'Negotiating the new millennium: the roles of the European Union', paper presented at
the Third Pan-European International Relations Conference andJoint Meeting with the International
Studies Association, Vienna, I6-I9 September I998, p. I4.
47 Palumjoki, 'EU-ASEAN relations', p. 28I.
48 See Tanaka, 'Asia-Europe relations', p. 38. See also Paul Lim, 'The London ASEM II Summit: issues and
outcomes', paper presented to the Asia-Europe Linkages Conference, University of Birmingham, 2-3
July I999, p. 5.

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Anthony Forster

meetings with China. Caught in a difficult situation-between its new agenda

and the need for regulating contact-the EU has been forced to acquiesce in
this by means of quiet diplomacy for the sake of preseraving the ASEM process.
Unsurprisingly, some NGOs, such as the Asia-Europe People's Forum and
European-based human rights organizations, have been active in voicing their
concerns. Some commentators, notably Joseph McMahon, have argued that
this has not only sidelined the importance of the EU's human rights agenda, but
also replicated the impotence that affects the EU-ASEAN dialogue.49
In economic terms, a wide range of initiatives have been taken, notably the
Trade Facilitation Action Plan and the Investment Promotion Plan. There has
also been much common ground on issues of global economic management, for
example trade liberalization. However, in the face of the 'Asian economic crisis',
which began in June I997, the European response has been modest. A certain
amount of damage was done by the impression given of a Eurocentric response
to the crisis, with Commission President Jacques Santer commenting that Asian
problems would have only a marginal effect on the EU.5? This was
compounded by comments from the Monetary Affairs Commissioner to the
effect that the crisis would not derail the euro.5' Despite warm words of
solidarity from Tony Blair, the host of the second ASEM, proclaiming 'that
Europe is and will stand by Asia in its hour of need', little of substance has been
forthcoming in part because the Europeans felt they had contributed through
the IMF. In concrete terms, the EU agreed to contribute to an ASEM Trust
Fund at the World Bank, appointed a special envoy to the region and created a
team of European financial expertise to advise ASEM governments.
From a European perspective, ASEM clearly offers a very useful means of
ring-fencing the crisis and provides an international forum in which to pass
responsibility for managing the crisis on to Japan-the dominant regional
economy-to resolve it.52 From an Asian perspective, the impression is that the
EU's involvement in the region is built on inward-looking and self-interested
motivations. A number of the region's leaders have spoken of Europe being
willing only to pay 'lip-service' to the relationship, and the lasting impression is
of a shaken faith in the value of regional contact in whatever form.53
Despite some well-publicized achievements, after two meetings and with the
third on the horizon ASEM promises much, but as yet has delivered few
tangible gains and certainly falls well short of the qualitative change for which
many observers had hoped. On the positive side, ASEM has some limited
achievements to its name in the development of new forms of contact at head of
state and government level, and the creation of new economic, scientific and
cultural networks. It has also allowed Europeans to side-step many of the

49 McMahon, 'ASEAN and the Asia-Europe Meeting', p. 245.

5? For conument on the economic impact of the crisis on the EU and its economy see Neil Harris, European
business, 2nd edn (Basingstoke: Macmillan, I999), pp. 38-40.
5I Gilson, 'Creating Asia through the Asia-Europe Meeting', p. I 5.
52 Ibid.
53 Phatharodom, 'EU-ASEAN relations', p. 22.

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The European Union in South-East Asia

difficult issues which have stalled the EU-ASEAN relationship, and structurally
allows issues to be pushed off the head of state and government agenda to more
sheltered policy networks.
However, fundamental weaknesses remain in the ASEM approach to EU-
Asian and EU-ASEAN relations. First, the relative importance of the EU's
'new and the 'old' agendas remains unclear. Pushing the human rights, environ-
mental and employment rights issues into the margins is only a partial solution,
since they remain to be tackled. Second, by extending contact from ASEAN to
ASEM, China is added to a list of countries which present further complications
for the EU and more particularly those member states who feel most committed
to the new agenda. Third, the absence of agreed objectives for ASEM remains a
concern and adds additional problems to the process of management. For the
EU the political dimension, the need to regulate and institutionalize contact
with Asia, and economic self-interest have propelled the relationship forward.
For the Asian participants, the primary interests are economic considerations,
trade, investment and financial issues, and non-interference-whether through
ASEAN or ASEM-remains a central defence against the EU stance.

EU-South-East Asian relations: a balance sheet

In looking back over the last thirty years, clear patterns of both continuity and
change are evident in the EU's interaction with South-East Asia. First, the
international environment has been, and remains, central in understanding the
EU's engagement both in the region and with ASEAN. Not only does it
provide the context in which contact takes place, but it significantly shapes the
interest and effort the EU and its member states have been willing to invest in
the relationship. In the I970S and I980s the Cold War set clear bounds to the
relationship and dampened down differences between the EC and ASEAN.
The end of the Cold War has done the opposite, forcing Europeans to recon-
sider the nature of their involvement in the region and exacerbating important
differences concerning the purpose of this contact.
For self-evident reasons, the European Commission has consistently taken
the most positive stance about dialogue based on regional organizations. Member
state interest has been more sporadic and less homogeneous-depending on
economic and military interests and historical links to the region. The countries
of Scandinavia have a passing though particular interest; former colonial powers
such as France and the UK are more engaged with a wider number of South-
East Asian countries and view multilateral structures as a supplement to their
existing bilateral ties.54 Germany's growing economic involvement (and exposure
spur on Berlin's commitment to the value of group-to-group relations in the
region, and it has the most invested in multilateralism. This makes policy

54 See e.g. France and Britain's demands for a separate seat in ARF alongside that of the Troika and
Commission. 'Not the ASEAN way: Europe's Asian muddle', Economist, 26 October I996; 'EU angry at
UK, France on ASEAN move', Economist, 24JuIy I996.

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Anthony Forster

coordination and coherent policy extremely difficult to craft, and further

exacerbates the difficulties of dealing with the EU as a single interlocutor.
While the two regions have always pursued different agendas, the differences
between them appear to be widening. In the past common ground was found,
since the economic interests of ASEAN concerned access to European markets,
while the main European interest lay in regulating this contact. The introduction
of a new European concern to the relationship-the desire to impose economic,
environmental and human rights standards-as a core aspect of contact, had
proved very corrosive. This is particularly true at a time when the economic
relationship between the EU and South-East Asia has become more balanced,
and the EU has proved itself unwilling to provide anything more than token
support during the Asian crisis.
While economic issues remain an important aspect of the EU's involvement
in the region, the EU's response to the I997 Asian economic crisis demonstrates
the limitations of that involvement. Geographical distance, the weakness of
economic links and the secondary importance of European member states in
the military balance of the region all suggest that, despite the rhetoric, South-
East Asia is not of central significance to the EU-if only in comparison to Europe's
near abroad, in central and eastern Europe, Russia and the Mediterranean.
While ASEM provides a timely institutional 'fix' to the growing complexity
of EU-Asia relations, offering a broad framework within which layers and
networks operate, greater connectivity and flexibility do not overcome
fundamental differences. Better coordination of policy may be on offer, but it is
unlikely to lead to a qualitative shift in engagement. However, the EU's residual
interests in the region will ensure that it continues to invest in a structured
framework to its relations with the countries of this region, not least because of
the existence of continuing competition from the United States, Japan and China.

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