Tony Blair and the British Government assume the presidency of the European Union for six months at a historic turning point for the organisation and possibly its relations and image in Asia and the international community.

Not only will the Blair Government undertake its leadership of EU meetings and affairs with the burden of a full-blown existential constitutional and budget crisis, but it will have to lead the way into a new and demanding era in European relations with Asia.

The first set of circumstances would be a difficult test for any EU member after the resounding popular rebuffs by voters recently in France and the Netherlands of the proposed EU constitution. British Prime Minister Tony Blair and his Government will also take over the six-month term as EU President on July 1 following a distressing EU Summit in Brussels noteworthy for its inability to progress on important policy or budgetary decisions.

The following six months should see a major effort for the Blair team to make its mark on the future direction of the EU in the debates over policy and budgets. He will also be undertaking this role against rival visions championed by French and German leaders who have both been severely undermined in internal and even European politics to the point where they appear as replaceable lame-ducks.

In some fundamental areas of EU policies, such as the composition of the budget and the amount spent on agriculture, the outcome could have an impact on Asian interests. Such discussions could affect, for example, the attitude of the EU group in general toward trade and the degree of protection on products ranging from agriculture to textiles, where the concern for job losses has played a large role. It could colour the EU approach to relations with the emerging economic presence of the likes of China and India. In recent years there has been debate and concern, although not as pronounced as in the US, about the relocation of industrial production and jobs from Europe to Central Europe and Asia.

These debates, along with the possibility of interest-rate reductions by the European Central Bank, could also affect the international exchange rate of the common European currency and the competitiveness of EU industries and products.

Addressing the European Parliament in Brussels June 23, Blair called on the group to “renew and reform,” adding there was no shame in such a process. He added that the choices were not between a free-market Europe and a social or political Europe, but a matter of facing up to the reality of globalisation.

There was no specific mention of specific EU policy toaxard Asia in the Blair presentation to the European Parliament June 23, but references to the need to pursue and develop the EU common foreign and security policy to the point where Europe could more fully meet global and regional challenges to security. And there were references, especially to India and China as emerging economic and technological powers.He noted, for example that "China and India in a few decades will be the world's largest economies, each of them with populations three times that of the whole of the EU. The idea of Europe, united and working together, is essential for our nations to be strong enough to keep our place in this world." Later discussing the EU's global competitiveness, he remarked that the current situation "is allowing more science graduates to be produced by India than by Europe; and that, on any relative index of a modern economy - skills, R&D, patents, IT, (Europe) is going down not up. India will expand its biotechnology sector fivefold in the next five years. China has trebled its spending on R&D in the last five."

The recent EU summit on June 16-17 also contained a declaration touching on major elements of EU policy towards Asia that was indicative of some policy orientations and priorities. For example, it began with an almost ritualistic reference to the Asia-Europe Summit Meeting (ASEM) process and to relations with the Association of Southeast Asian Nations (ASEAN) without providing any details. Then it underlined the importance to the relations and partnership with Japan. The relationship with China and its existence for 30 years and have also evolved into a strategic partnership were also saluted. The summit participants also looked forward to the preparation for a new formal accord between the EU and China. There were also important references to the US as a leading strategic partner and on the need to consult on Asian strategic issues with Washington and Tokyo, but not specifically with other Asian partners. India was also singled out for specific mention as was a proposed action plan between the two to be approved, according to the statement, at the next EU-India Summit possibly in September.

As on so numerous other subjects, the British EU presidency’s approach and role regarding Asia is looked upon with some doubt and concern. There exists a residue of suspicion that London’s views concerning Asian policy and relations will be largely influenced in Westminster rather than Brussels or elsewhere.

One damning sign of the Blair attitude toward EU-Asian relations has been its performance, attendance and solidarity regarding the ASEM Process, which in recent years the Prime Minister has seen fit to attend in person at the London Summit which seems almost inevitable, but he has been noticeably unmotivated to participate in the most recent Copenhagen and Hanoi versions in 2002 and 2004.

And as worthy as the British Government’s leadership and commitment to the cause of Africa and debt relief has been, there exists considerable irritation that it has come virtually to the exclusion of significant interest in Asia, except in purely national interest and occasion.

But even there, Blair has to some degree been overshadowed by his German and French colleagues, Gerd Schroder and Jacques Chirac who have been constantly visiting China, but also other Asian countries. But seizing the occasion of his leadership Mr Blair will discover he has sufficient time to make back-to-back visits to India and China to enter into a crucial phase of negotiations and relations with those two countries.

One question the Chinese leadership might ask Mr Blair could be whether he will renew the EU pledge to lift the EU arms embargo to China or whether he will lead the retreat again in the face of often undiplomatic pressure from Washington. This was the case earlier in 2004 when Foreign Secretary Jack Straw vowed to take the EU case of lifting the embargo to Washington, but returned from Washington chastened and decidedly less committed than before.

The momentary British zeal to assume leadership in clearing the way both within the EU and with other EU strategic partners such as the US was short-lived when confronted by the barrage of hostility encountered by Straw in Washington earlier in the year. But some indication of a new timetable might be an expected request for the Chinese to raise.

But now the consultations between Brussels, Washington and Tokyo over the issue have linked the embargo to more substantial Chinese progress on human rights than was the case in late 2004 and early 2005 when the EU announced its intention to lift the embargo as soon as possible and perhaps as early as the end of June 2004.

At the time, the EU seemed to have accepted the Chinese argument that the continuation of the embargo seemed inappropriate among strategic partners, that it would be replaced by a stringent code of conduct on arms sales and that the original link to human rights was being address in other bilateral mechanisms.

Since then, there have been some reports that Britain has raised some difficulties on the way to drafting the desired code of conduct, which should be an objective independent of its connection to the China issue.

The Chinese disappointment over the EU’s backtracking on its proclaimed intentions to rescind the embargo could have repercussions on other EU and British objectives for the Presidency in late 2005.

One of the major ambitions, according to senior British diplomats, is for the EU-China summit attended by Blair at the head of the EU delegation in Beijing in September be used to launch negotiations on a new bilateral EU-China cooperation agreement to replace the outdated accord signed by the two in 1985??. The start of this exercise may indeed occur in Beijing in September and EU official have been working for months on draft proposals to present to their Chinese partners to serve as a list of EU interests and a basis for future discussion. But sources in Beijing recently indicated that the leadership in that country appeared in no great hurry to begin, negotiate or conclude such work, in part because of the irritation felt over the unfulfilled EU promise to lift the embargo.

The senior UK diplomat also indicated that a top British priority for the EU-China summit will be the continuation and expansion of the bilateral cooperation already launched between the two on related energy and global warming issues. These have been themes raised in recent years by British leaders and delegations at meetings such as ASEM or the G8.

Relations with India will also figure prominently with exchanges of visits, beginning with the Indian Prime Minister and Foreign Minister expected soon and the EU-India Summit planned for New Delhi in September. Prime Minister Manmohan Singh was also awaited for a visit to the UK in June, his second in less than a year. The Indian Prime Minister, along with his Chinese counterpart, will attend the G-8 summit of industrialised countries in Gleneagles, Scotland, and Singh will also attend ceremonies at his alma mater in Oxford and in London.

In these high-level EU-India contacts attention will be focused on the completion of an action plan aiming to structure the growing relations between the two, that will include strategic issues as well as the traditional economic concerns.

Relations with the ASEAN region may again be dominated by the problems with Burma/Myanmar as the country's turn at the presidency of ASEAN approaches in 2006 but with little progress in site regarding its plans for a process leading to democracy and the freeing of political prisoners, such as Aung San Suu Khy, whose detention received additional attention on the occasion of her 60th birthday in June. The British Government, which has been strongly implicated in the issue because of its historic links with the Burma and with the Nobel Prize winner in detention, will have to steer a diplomatic path between pressure and engagement with the military regime while not allowing the question to been seen to hold relations with the entire ASEAN community hostage.