Asian and EU leaders back free trade
Wed, 07 November 2012
Vientiane — European and Asian leaders yesterday agreed to back free trade and resist protectionism as the best means of helping Europe out of its crisis and assuring Asia a rosy future.
“In Asia as well as in Europe, we are in the same boat, as the global economy keeps us interlinked,” European Council President Herman Van Rompuy said at the end of the two-day Asia-Europe Meeting (ASEM) informal summit held in Vientiane.
The 16-year-old grouping, which brings together 49 Asian and European counties along with the European Commission and Secretariat of the Association of South-East Asian Nations (ASEAN), accounts for 60 per cent of the world’s trade.
European and Asian leaders on Tuesday agreed to back free trade and resist protectionism as the best means of helping Europe out of its crisis and assuring Asia a rosy future.
''In Asia as well as in Europe, we are in the same boat, as the global economy keeps us interlinked,'' European Council President Herman Van Rompuy said at the end of the two-day Asia-Europe Meeting (Asem) informal summit held in Vientiane.
The European Union expressed a keen interest in pushing through new free trade agreements, similar to the ones recently reached with South Korea, with India, Japan, Malaysia, Singapore and Vietnam, to boost trade between the two regions.
``We don't see trade as a panecea, but clearly we see trade as a very important instrument for growth,'' said European Commission (EC) President Jose Manuel Barroso.
The 16-year-old Asem grouping, which brings together 49 Asian and European counties along with the EC and secretariat of the Association of South-East Asian Nations, accounts for 60% of the world's trade.
The 9th Asem fell as Europe is still suffering from the eurozone crisis while Asian economies are still growing, albeit slower than previously due to declining demand in Europe - which accounts for about 42% of Asian exports.
``Part of the growth in Asia is also the result of the open market in Europe, because we are the most important destination for Asian products,'' Mr Barroso said.
Asia, which currently accounts for about a quarter of European exports, is clearly a growing market.
``Asia is a big market for Finland, especially in clean technology, renewable energy and information technology,'' Finish Prime Minister Jyrki Katainen said.
``These are the areas where we are growing, in which Finland is quite good, and Asia forms the biggest and fastest growing market for us,'' he said.
At the summit there was a broad acknowledgement that Europe needs to get its economic house in order, while Asia needs to keep its markets open to European goods, and hopefully expand trade through inking more free trade agreements in the near future.
``From this debate it emerged that in the modern world we all should row in the same direction,'' Rompuy said. ``We need each other.''
The 9th ASEM fell at a time when Europe is still suffering from the euro zone crisis while Asian economies are still growing, albeit slower than previously due to declining demand in Europe — which accounts for about 40 per cent of Asian exports.
At the summit there was a broad acknowledgement that Europe needs to get its economic house in order, while Asia needs to keep its markets open to European goods, hopsfully through more free trade agreements.
“From this debate it emerged that in the modern world we all should row in the same direction,” Rompuy said. “We need each other.” The 10th ASEM is to be held in Brussels in 2014.
Meanwhile, surveys showed yesterday that the fourth quarter has so far brought no improvement in the fortunes of most of Europe’s economies, which now risk shrinking more than previously expected.
Purchasing managers indexes (PMIs), which gauge the activity of thousands of companies worldwide, showed euro zone businesses endured their worst month in October since June 2009, with little hope of a turnaround coming soon.
The euro zone relies heavily on Germany, its largest economy, to generate growth. Business activity there shrank at faster pace last month.
Survey compiler Markit said the latest PMI was consistent with the euro zone economy shrinking at a quarterly rate of around 0.5 per cent.
If the PMIs fail to improve for November and December, the euro zone economy could easily face a hefty contraction in the fourth quarter rather than the stagnation projected by economists polled by Reuters two weeks ago.
The Asia–Europe Meeting (ASEM)
The Asia–Europe Meeting (ASEM)
ASEM currently has 51 partners: 49 countries and 2 international organizations. The partners are Australia, Austria, Bangladesh, Belgium, Brunei, Bulgaria, Cambodia, China, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, India, Indonesia, Ireland, Italy, Japan, Republic of Korea, Laos, Latvia, Lithuania, Luxembourg, Malaysia, Malta, Mongolia, Myanmar, the Netherlands, New Zealand, Norway, Pakistan, the Philippines, Poland, Portugal, Romania, Russia, Singapore, Slovakia, Slovenia, Spain, Sweden, Switzerland, Thailand, the United Kingdom, Vietnam, European Commission and ASEAN Secretariat.
The 10th Asem is to be held in Brussels in 2014.