Leaders and foreign ministers from more than 50 Asian and European countries concluded talks at the 9th Asia-Europe Meeting (ASEM) in Laos on Tuesday. The two-day ASEM discussed a host of global challenges topped by economic and security issues.
Speaking before the body, Mr Herman Van Rompuy, the European Council president, said trade and the economy were the dominant issues leaders had to discuss. Other topics included terrorism, energy and food security as well as climate change and water resource management.
On the economy, Asian and European leaders voiced strong determination to improve trade and investment relations to help speed up development in Asia and pull Europe out of its downturn. They endorsed engagement with the WTO, the signing of bilateral trade and investment pacts, as well as technical cooperation between the two continents.
Singapore’s Prime Minister Lee Hsien Loong shared his ideas on how Europe could solve its financial crisis: “Asia can help Europe tackle its financial woes, but the continent needs to carry out fundamental reforms for the long term,” he said.
He identified two ways Asia can help. The first is by boosting consumption through broader safety nets and freer financial systems. The second is by promoting trade, through measures like free trade agreements with Europe.
Recalling Asia's experience with its 1997-1998 financial crisis, he outlined what he believed were two main challenges for Europe.
Firstly, Europe has to manage its national debt by embarking on fiscal reforms and focusing on tackling underlying structural deficits, rather than on "fiscal numbers" that reflect economic cycles. Secondly, Europe has to recapitalise troubled banks, to stop the squeeze on credit and deposits from flowing out.
These were urgent priorities, he said: "The Asian countries learnt that lesson painfully - when we postpone solutions, the problems grow larger."
In the long term, he added, Europe should look at carrying out structural reforms of its labour market and social welfare systems to bring back growth, and build political support for eventual fiscal union.
LaotianPrime Minister Thongsing Thammavong said member countries at ASEM agreed to back an economic integration process, emphasising economic growth, social development and environmental protection. The EU also discussed several free trade agreements (FTAs) with Asian countries. European leaders reassured their Asian counterparts Europe has taken the right steps in implementing economic reforms following the eurozone crisis.
Earlier this month, the EU conducted further FTA negotiations with Singapore, Japan and India, all deals that are close to completion. "We are pushing for a new generation of [free trade agreements] FTAs," said European Commission President Jose Manuel Barroso who believes the EU is keen to push for the elimination of barriers to trade and investment.
"We see trade as important to growth in Europe, Asia and the rest of the world," Mr Barroso said. "An important conclusion from the meeting is strong rejection of protectionism. [Eliminating] non-tariff barriers is what we discussed when designing our new-generation FTAs."
Thai Foreign Minister Surapong Tovichakchaikul also reported that Thailand has nearly completed its FTA negotiations with the EU, though the trade pact will still need parliamentary endorsement.
Report: ASEM presses for economic integration [Bangkok Post, 7 Nov 2012]
Report: Asia can help but Europe needs reforms: PM Lee [The Straits Times, 6 Nov 2012]