The Euro-Asia dialogue intensified in June and July as Ministers and officials from the two regions met several times both to take stock of their relations and activities and to prepare for the Asia-Europe Summit Meeting (ASEM V) in Hanoi in October 2004.

The scope of the decisions, actions or reactions varied from satisfaction and ambitious projects to essentially wait-and-see examination or barely-concealed impatience with the lack of concrete progress on some projects. But the high-level meetings were the most visible tip of the iceberg of ASEM's activities, which issued official declarations and communiques.

Other ASEM activities also ranged over a wide array of topics from official gatherings to the seminars and exchanges staged by the Asia-Europe Foundation (ASEF) and include its traditional annual Young Leaders' Forum in Saigon in September.

While the meeting of 15 European Union and 10 Asian ASEM countries at Foreign Ministers' level in Bali in July and their discussions of such highly-visible issues as Burma, terrorism and weapons of mass destruction assumed the higher profile, other gatherings of Finance and Economics Ministers, also in Bali and in Dalian respectively, also conducted useful discussions. Both were preceded by the more technical encounters of ASEM partner countries' senior officials and experts on trade and investment in June in Paris.

Contrast to APEC sessions

The talks had a character of rather low-key working sessions which obtained and generated limited international attention and in some cases skirted around other major areas of concern or controversy even amongst ASEM members. The ASEM gathering had the advantage or perhaps disadvantage of discussing some of the major issues such as the exchange rate of the Chinese Yuan, money laundering and other high priority topics first, perhaps clearing the way for more noticeable discussions in subsequent meetings of the counterpart Asia-Pacific Economic Cooperation Council (APEC). The meeting of APEC Finance Ministers in September in Phuket, Thailand, tended to be characterised as a major world event tackling, if not resolving, some of these same issues. While both ASEM and APEC have their distinct identities, the ASEM process to some degree had its genesis as a response or follow-up to APEC, and some comparison is inevitable and of some use. Indeed, it is not unlikely that Asian partners involved in both sets of discussions and cooperation, analyse and evaluate the relative importance and value of each.

The session of the Foreign Ministers, along with representatives of the European Commission and other regional bodies in Bali July 22-24 was the fifth such ASEM meeting and was addressed by Indonesian President Megawati Soekarnoputri. President Megawati and the country's Foreign Minister Hassan Wirajuda made only brief welcoming speeches, in which the President alluded to the country's and the ASEM diversity and the need for sincere efforts to overcome and even take advantage of these differences. "Our experience has taught us that it is essential to build mutual understanding, refrain from the imposition of will, and respect each other when we are determined to engage in cooperation, especially between different groupings," she remarked.

The meeting, however, was again characterised by limited high-level European attendance, a point frequently raised by Asian counterparts who have complained of the lack of interest on the part of Europeans in the dialogue. EU External Relations Commissioner Chris Patten, who attended the meeting, was also said to have warned EU participants that such meagre European participation was not good enough. While the Chair statement of the Bali meeting referred to attendance by Foreign Ministers from all the ASEM countries, the Indonesian Government specifically noted the participation of three EU Foreign Ministers from Belgium, Italy and Ireland, the Dutch Development and Cooperation Minister, 6 State Secretaries, one Under Secretary and two Directors General. Some officials have predicted that the relatively low European participation could even worsen after enlargement and that greater planning and coordination must be organised to assure improvement. It was also suggested that it would be counter-productive to expect results from ASEM meeting attended by some 35-40 representatives after EU enlargement, and ASEM senior officials were scheduled to examine this issue and other reforms at a meeting planned in Rome in the autumn.

Even in the current situation, such attendance results undermine the level of discussion and credibility of positions expressed either by the individual states or the ASEM meeting itself on major issues or detailed subjects. Asian participants also expressed the opinion that the European delegation was sometimes silent on some issues and appeared unprepared.

Asian partners are known to be increasingly irritated by such situations. After the meeting, one Asian participant noted that "I wonder when Europeans are going to believe in commitments. We all have commitments and busy schedules." He even noted that the EU Commission's recent Strategy Document on Southeast Asia underlined the need to establish the European credibility in the region, but he added that such snubs detracted from the Asian perception of Europe.

Burma a top priority

The Bali meeting itself appeared to be dominated by the situation evolving in Burma, international issues including Iraq, the Middle East, the Korean nuclear controversy and terrorism, all referred to in the Chair Statement and press reports. The official declaration also pointed to a number of issues, including the SARS and other transmissible diseases, enlargement of the EU and ASEM and sustainable development.

The discussion on Burma nevertheless was an early evidence of the change in attitudes by Rangoon's Asian neighbours regarding the political and human rights situation in the country and coincided with the stance taken by Asian leaders and other members of the international community in ASEAN and other gatherings. A strong message ensued from Bali, reminding the Burmese Government of its previous assurances that the detention of Daw Aung San Suu Ky and other opposition members was temporary and therefore called for her "immediate" release and it called for resumption of efforts at peace and reconciliation.

While the Burmese Government was shortly afterwards reorganised and announced a "road-map" for the return of the country to democracy, some Asians felt that the ASEM meeting missed an opportunity to reach an understanding on its own "road-map" for the reform of the country's political system. But other participants indicated that there were some five road maps floating at the meeting and that the most advanced were not fully drafted at that time.

The deliberations also came against a background of additional pressure applied by the US in the form of tightened economic sanctions which were reported to have had virtually immediate impact on numerous factories in the textile sector which the Burmese economy was said to be highly dependent on. And just before the Bali meeting, a number of ASEAN leaders had expressed their impatience and irritation with the Burmese Government, with Malaysian Prime Minister Mahatir even suggesting ASEAN might consider expelling Burma from the group.

Global issues also addressed

In addition to a number of other discussions on internal ASEM institutional or operational matters, much of the meeting was devoted to other global political and security issues. Prominent among these discussions were views on the nuclear controversy on the Korean Peninsula, Iraq and the Middle East, proliferation, terrorism and transmissible disease emergencies.

But overriding these global discussions were declarations of joint policy emphasising the ASEM partners' support for multilateral approaches through the United Nations and in "strict" compliance with international law in facing the major global problems and challenges. This delcaration could be regarded as a desire, without specifically referring to the US-led coalition military intervention in Iraq, to underline the group concern. The Bali statement emerged despite the evident division in views over Iraq and other issues in both European and Asian ranks. It also underlined the "vital role" of the UN in the reconstruction and development of Iraq.

The participants also pointed to a number of past and planned ASEM initiatives in fields such as anti-terrorism, public health, sustainable development, cultural diversity and their joint declaration at the Bali meeting on non-proliferation of weapons of mass destruction and their delivery systems.

Revitalising ASEM a priority

But according to both Asian and European participants attending the Bali meeting, perhaps the most significant development there was the joint commitment to seriously and constructively review the institutional and procedural workings of ASEM itself to move it toward a new stage of operation and productivity.

They continued the discussion of the prospective enlargement of ASEM to include the 10 incoming members of the EU in 2004 and the question of the three new ASEAN members, Cambodia, Laos and Burma.

They instructed the next senior officials' meeting in Rome to examine "ways and means…. on more efficient, effective and streamlined working methods of ASEM process." In part to develop this collective world-view, the Bali participants also vowed to intensify their political dialogue and consultation, including in the context of the UN in New York. They also requested the Asia-Europe Foundation (ASEF), which is responsible for the cultural and public dimension of ASEM to provide a cost-benefit analysis of its operations to date and a management strategy for its long-term financial sustainability. On a related issue of involving other sectors of society in the ASEM process, the meeting also repeated the general position that ASEM host countries could, "at their discretion, organise activities with business, think tanks, academia and other sectors of society."

The Ministers and others in Bali also held a brainstorming session on the possible theme of the forthcoming ASEM V meeting in Hanoi planned for 8-9 October 2004, namely "further revitalising and substantiating the Asia-Europe partnership." They added that they hoped that the Hanoi meeting would elevate "the ASEM process to a higher plane."

Another unifying theme in all the meetings of Foreign, Finance and Economics Ministers during the summer 2003 was in taking stock and contributing to the work to date of a special Task Force on Closer Economic Partnership in the ASEM countries. Another was the subject of the forthcoming enlargement of the EU to 10 new members in Eastern Europe and the Mediterranean region in 2004 and its possible impact on Asia and ASEM.

Economic, Financial initiatives

The Bali meetings of Foreign, and a few days later Finance Ministers, as well as the Economics Ministers in Dalian, received interim reports from the Task Force on Economic Cooperation, which had been created following a decision of the ASEM IV Summit in 2002 in Copenhagen. The objective of this small group of of five independent experts from both regions was to examine the work already carried out within the ASEM economic pillar and explore and recommend possible way of enhancing this cooperation. The group was also charged with making interim reports to these ASEM Ministerial meetings and a final report for ASEM V in Hanoi.

The Task Force was especially directed to consider work in trade, investment and finance, including the creation of a Eurobond market in Asia and the use of the Euro as an international currency. The meeting of the Task Force to date had assigned participating think tanks in Europe and Asia to draft issues papers on some of these topics, including the general current state of the internationalisation of the Euro and further development of an Asian bond market, which might include the possible use of the Euro.

Task Force discussions in this sector have reportedly been directed at ways of improving the use of Asian savings, first at the national level, perhaps using ASEM as means of addressing training requirements of such a project. Task Force participants were also reported to have mentioned the use of ASEM as a forum to discuss European experiences in this field, in particular the political preconditions essential for successful regional economic and financial integration.

Regarding closer cooperation in the trade sector, the Task Force report apparently also told the ASEM meetings of its preliminary discussions on the urgency of ASEM collaboration to facilitate a successful conclusion of the Doha Round of multilateral trade negotiations.

And it said that some mention was made of the possibility of creating specific Asia-Europe institutions for the promotion of trade, investment and tourism, as well as the possible introduction of inter-regional free trade by 2025 as an official target of ASEM. There was also said to be widespread sentiment in the Task Force on the need to rejuvenate and intensify the involvement of the business community and industry in the ASEM process through various activities.

Among other subjects the Task Force was said to have considered were the need to examine the perceived link between trade integration and income distribution, the integration of the Chinese economy in a world context and the possibility of moving the ASEM process beyond its current "dialogue" format toward possibly a more structured and action oriented system.

EU enlargement discussed

Another issue addressed in all three ASEM Ministerial meetings during the summer was the question of the anticipated enlargement of the EU from its existing 15 members to include 10 additional members by mid-2004.

This European process is also related to the issue of a possible enlargement of ASEM which has been partially addressed in the past and has remained an open question. While the European partners have indicated their desire to have the new EU members become part of ASEM, they have apparently balked at the natural counterpart of the need to incorporate all ASEAN members into the same ASEM system, largely because of the controversy surrounding Burma/Myanmar. The question of opening to other partners in South Asia has also been raised in the past but left aside for the foreseable future.

But many Asian and other EU partners have in recent years also expressed concern about the possible impacts of EU enlargement on their own trade, aid and political relations with the EU, with the concern expressed that the consequences of enlargement could be adverse for them.

In the various ASEM meetings, EU delegates were reported to have sought to reassure their Asian partners that enlargement of the EU would not adversely affect them, except positively through the creation of a larger open market for their goods and services. However, the presentations were said to have been general and that no specific studies of the impact on Asia or individual Asian countries have been conducted. Some specific country studies, however, have been conducted by some Asian institutions or are planned in Europe.

The financial and economic meetings, also attended by leaders of such institutions as the Asian Development Bank, European Investment Bank, World Bank and International Monetary Fund, also examined the general international economic situation and issues more specific to the ASEM process.

As part of a Bali Initiative proposed by Indonesia, the participants at the Finance Ministers' meeting discussed means of strengthening the partnership for development and growth between Asia and Europe. The discussions combined a number of different themes ranging from capacity-building in the institutions to appropriately sequenced structural reforms, improvement of public and private governance, and assurance that conditions are created for the improvement in growth would benefit the weakest in society.

These high-level sessions, along with other meetings of top experts and officials, are part of the ongoing process that will continue until the next ASEM Summit meeting in Hanoi in October 2004 to prepare the discussions and challenges for that crucial meeting