Speaking Of Asia

Asean and EU: Love is in the air

A liberal open-skies policy might just be the nudge for closer strategic partnership.

At the East Asia Summit lunch held on the sidelines of the Asean gathering last month in Manila, an additional place was kept at the table for a non-EAS leader - Mr Donald Tusk, president of the European Council.

It was a one-time gesture meant to mark 40 years of Asean-EU dialogue that could also have been the start of a longer journey. There is little question that the European Union would not mind turning that invitation into a permanent seat at the high table.

After all, this, unquestionably, is the Asian century with three large-population nations in the continent - China, India and Indonesia - all set to grow spectacularly at the same time. Since Asean is at the centre of this virtuous triangle, it makes a lot of sense to be in the room as the regional grouping deals with the major powers through the EAS mechanism.

This week, a significant development took place in Brussels that might further the EU cause for what could eventually be an elevated strategic relationship with Asean. The EU Council formally announced plans for 25 EU states to work together on a first set of 17 collaborative defence projects, thus establishing Pesco -which is short for Permanent Structured Cooperation.

"She is awake; the sleeping beauty of the Lisbon Treaty," gushed Mr Jean-Claude Juncker, the EU President, referring to a clause that deals with an eventual military union. "Our security cannot be outsourced."

The countries that have chosen not to take part in Pesco are Malta, Denmark - which has special opt-out status - and Britain, which is set to leave the union in 2019. Pesco's aim, says an EU factsheet, is to "jointly develop defence capabilities and make them available for EU military operations. This will thus enhance the EU's capacity as an international security partner."


ST ILLUSTRATION: MANNY FRANCISCO

Get the meaning?

While we await the emergence of a wide-awake EU it is interesting to recapitulate this region's ties with a still-coalescing Europe.

The economic relationship is undoubtedly robust. The EU is the top investor in Asean, accounting for US$31 billion (S$41.8 billion) in foreign direct investment last year - nearly a third of the total FDI flow into the region. Total trade between Asean and EU amounted to US$230 billion in the same period, making it the second biggest trading partner after China. The trade balance favours Asean.

Given that Asean accepted the European Economic Union, the forerunner to EU, as its first dialogue partner back in 1972 - and the EU itself since 1977 - the strategic relationship notably hasn't kept pace with the economic partnership.

There were reasons; at the time the EAS kicked off in 2005, the EU did not even have a settled security policy. Even recently, the EU didn't have a common platform on some issues critical for Asean, such as the South China Sea.

"It wouldn't have been good for the East Asia Summit to have an EU bloc coming in. What would they add to the discussion?" says a senior Asean diplomatic figure. "Now that the EU is moving towards a common security and foreign policy, there might be a case. But many in Asean also feel the EU will drag in issues of human rights, climate change, migration and all that. For the typical South-east Asian official, there are more pressing things to worry about."

There is a peculiar honesty in that statement. A recent visit to the EU headquarters in Brussels revealed the deep commitment officials in this supranational body (Asean, on the other hand, is a mere inter-governmental organisation) feel towards say, human rights, abolishing the death penalty, democracy and a host of other questions that some in this region may consider "tiresome" or "bleeding heart" issues.

There is no knowing how long Mr Donald Trump will stay in power but it is a fair bet to say that Trumpism isn't easily extinguished from the United States. If this trend were to continue, therefore, there undoubtedly would be some room for a power bloc that thinks of the world in normative terms rather than in purely transactional terms. In other words, Asean could use an adult in the room.

As recently as 2013, the EU suspended free trade agreement talks with Thailand after the military coup there. Regardless of what Asean might think, or say, EU commitment to stand up for some of these issues will never go away.

On the other hand, Asean too must surely know that this is not a stand-still world. Where once its priorities were to find the right balance in ties with China and the US, those were times when the US was fully entrenched in the region and led by people with reasonably set standards of behaviour, not an alarmingly transactional one.

There is no knowing how long Mr Donald Trump will stay in power but it is a fair bet to say that Trumpism isn't easily extinguished from the United States. If this trend were to continue, therefore, there undoubtedly would be some room for a power bloc that thinks of the world in normative terms rather than in purely transactional terms. In other words, Asean could use an adult in the room.

To give the EU dog its due, the organisation is changing as well. Britain's putative exit in 2019 is significant in strategic terms because it removes from the union a key voice that looked poorly on enhanced military cooperation within the fold, partly because of Westminster's emphasis on the transatlantic alliance and Nato.

But there is much that the EU could do, meanwhile, to sew up its relationship with South-east Asia. For instance, when it comes to striking trade deals with Asean, its record has been dismal.

FOLLOW THE MONEY

Talks on an EU-Asean free trade agreement were started in 2007, only to be abandoned two years later as the EU decided to go the bilateral route. Thus, it began negotiations with Singapore, Vietnam, Thailand, the Philippines, Indonesia and Malaysia but none of them has resulted in a working agreement to this day.

FTA talks with Singapore and Vietnam have been concluded, but the agreement is not yet in force. In the Singapore case, it is because the EU requires the assent of each member Parliament, a painstaking exercise. As for Vietnam, one of the reasons for the holdup is that the EU requires the document - which typically could run to as many as 2,000 pages - to be translated into 24 European languages!

As one official admitted to me: "We are big fans of launching FTA talks, but not very good at concluding them."

One low-hanging fruit waiting to be plucked is improved air connectivity between these two regions. Since October last year, four rounds of negotiations have been conducted on an Asean-EU Comprehensive Air Transport Agreement (CATA). The next meeting is scheduled for February, in Jakarta.

While there has been progress on safety, security and air traffic management issues, a key sticking point is the so-called "fifth freedom" rights. The EU is willing to countenance Asian carriers picking up passengers in an EU airport and ferrying them to other EU destinations but baulks at extending that privilege to allow passengers to be flown beyond the EU.

It is senseless for the EU to miss the big picture in its quest to protect a few of its carriers that fear tighter competition. Taking the broader view would mean that Asean and EU carriers could both gain from a liberal CATA, perhaps even gaining traffic that now is routed through hubs in the Middle East, such as Dubai and Qatar.

To do so would be not to bestow a favour on Asean but in its own self-interest. In the Asean economy that is taking shape, services - an area where Europe has an edge in so many sectors - are going to be key. Better for Europe to position itself to be in on it. Should the talks go well, a high-quality CATA could be in place by the end of next year.

What of Asean's attitude towards EU? Asean capitals are fully aware that the EU can never replace the US in the region, at least not for the foreseeable future. They also know that unlike the US, which has a sense of security thanks to friendly neighbours north and south and with its flanks protected by two vast oceans, the EU's first priority is its own neighbourhood. That neighbourhood isn't always a pleasant place.

Besides, when it looks to Asia the EU's priorities often seem to be China and India before its gaze turns to South-east Asia.

That said it is indeed being considered whether it makes sense for Asean to invite it to next year's EAS, which will be hosted by Singapore, or even consider giving it a permanent place at the EAS table.

From the middle of next year, Singapore is the coordinating country for Asean-EU ties, a position it will hold for three years, thus giving it some leverage on the collective decision. Asked at a lecture organised by the ISEAS - Yusof Ishak Institute recently whether Asean would endorse EU participation at EAS summits, Foreign Minister Vivian Balakrishnan's response was not reflexively negative, but "wait and see".

"I don't want to get into details about invitations and structures within the EAS," he said. "I just want to tell everyone - look at the question of how Europe has solved war and peace, and follow the money. Look at the trade and investment flows between Europe and Asia."

Not quite enough to call for cakes, at least not yet. These are days when slow dance is back in vogue, gaining on hip hop. So it may just be time to think of moving the champagne from the cellar to the refrigerator.

A version of this article appeared in the print edition of The Straits Times on December 15, 2017, with the headline 'Asean and EU: Love is in the air'. Print Edition | Subscribe