{"id":31728,"title":"Asia Pacific: The Test Case for a Geopolitical EU Trade Strategy","link":"https:\/\/bst-europe.eu\/de\/economy-security-trade\/asia-pacific-the-test-case-for-a-geopolitical-eu-trade-strategy\/","date":"14. Dezember 2022","date_unix":1671000941,"date_modified_unix":1754481067,"date_iso":"2022-12-14T06:55:41+00:00","content":"

The Asia Pacific is a key region for future global growth in terms of market size and purchasing power.<\/em> For this reason and in view of the growing tensions with China, it should be in the foremost political and economic interest of the EU to pursue a strong and assertive trade policy in this vital region and increase its implementation efforts.<\/em><\/p>\n

Even without China, the countries of the Asia Pacific represent 30 percent of the world population, 20 percent of world GDP (purchasing power parity) and 18 percent of world trade. The region has developed into a key region for prospective growth in terms of market size and purchasing power.<\/p>\n

On top of that, major lifelines of global trade run through its waters. Consequently, the three big economic players, China, the United States and the EU, are vying for power and influence in this important region. Given the growing systemic rivalry with China, it is vital for the economic and political interests of the EU to pivot more strongly towards the Asia Pacific, especially as to the much-discussed diversification of trade away from China.<\/p>\n

As the multilateral trade liberalization process under the umbrella of the World Trade Organization is stalling, bilateral free trade agreements (FTAs) are the second-best option to foster deeper trade integration and incentivize trade with the respective partner economies.<\/p>\n

Our analysis covers the trade relations of the EU, the United States and China with 14 Asia Pacific states. These are the five states whose\u00a0economy accounts for at least one\u00a0percent of world GDP (Japan, India, South Korea,\u00a0Australia and Indonesia) plus the ten member states of the Association of Southeast Asian Nations (ASEAN<\/a>): Brunei,\u00a0Cambodia, Indonesia, Laos, Malaysia,\u00a0Myanmar, Philippines, Singapore,\u00a0Thailand, and Vietnam. Indonesia is therefore included in the ASEAN member states.<\/p>\n

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The EU is not involved in any of the two megaregional trade deals<\/strong><\/h2>\n

The EU already has bilateral agreements with four of the 14 Asia Pacific, namely with Japan, Singapore, South Korea and Vietnam. They are all so-called deep agreements – they go beyond mere tariff reduction and cover issues, such as investment, standards or intellectual property rights, which promises a higher level of economic integration between the respective partners. Three more FTAs of the EU in the region are under negotiation (with Australia, India and Indonesia). Another three are on hold (with the Philippines, Malaysia and Thailand).<\/p>\n

The EU is not involved in any of the two megaregional trade deals concluded in recent years: the Regional Comprehensive Economic Partnership (RCEP<\/a>), which brings together ASEAN plus China, Japan, South Korea, Australia and New Zealand, and the Comprehensive and Progressive Trans-pacific Partnership (CPTPP<\/a>), which brings together eleven states from both sides of the Pacific, including Chile, Canada, Australia and Singapore. Moreover, negotiations on a region-to-region agreement between the EU and ASEAN were discontinued in 2007.<\/p>\n

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China takes a proactive approach. The United States refrains from further trade deals<\/strong><\/h2>\n

China not only has four bilateral FTAs of varying depth in the region but also has a trade deal with ASEAN and is a member of the RCEP. In 2021, China moreover formally requested to join the CPTPP.<\/p>\n

In contrast, the United States is not very active in the region in terms of trade deals: it has only three deep FTAs in place and none under negotiation. This is mainly because FTAs were not a political priority for the U.S. after the U.S. under the Trump administration withdrew from the TPP (CPTPP\u2019s predecessor), and negotiations between the U.S. and the EU on the Transatlantic Trade and Investment Partnership (TTIP) were halted.<\/p>\n

The U.S. is focused rather on partnerships with less binding economic commitments, such as the Indo-Pacific Economic Framework for Prosperity (IPEF<\/a>) launched in May 2022 with 13 countries in the region, including Australia, India, Indonesia and Japan, as well as military and security-related initiatives.<\/p>\n

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Four ways for the EU to pivot more strongly towards the Asia Pacific<\/strong><\/h2>\n

For the EU, FTAs are currently are the key tools to use to take on a more active role in the Asia Pacific. We see four ways to push this:<\/p>\n

1) The EU should look more carefully at compliance with and utilisation of FTAs and regularly review whether FTAs need to be updated. In FTA negotiations, the EU should move more rapidly to a conclusion and subsequent enforcement while considering the respective partner’s development level and local needs.<\/p>\n

2) The EU should put a stronger focus on its region-to-region relations\u00a0with ASEAN and strive for an EU-ASEAN FTA to get a better footing\u00a0in the region.<\/p>\n

3) The EU should start talks with the RCEP and CPTPP about possible\u00a0cooperation, ranging from observer status to associated or even full\u00a0membership.<\/p>\n

4) The EU should strengthen the\u00a0Asia-Europe Meeting (ASEM)<\/a>\u00a0process\u00a0and advance it to an important cooperation platform with the\u00a0long-term vision of establishing a Free Trade Area between Asia and Europe (FTAAE). The increasing politicization of economic relations\u00a0must be kept in mind but should not permanently hamper enhancing cooperation in the long run.<\/p>\n

About the infographic<\/u><\/strong><\/p>\n

Our infographic scrutinizes the trade relations and free trade agreements of the EU, China and the United States with 14 Asia Pacific states as of 2020. These include five major economies, whose economy accounts for at least one percent of world GDP: Japan, India, South Korea, Australia, and Indonesia. Moreover, we added the Association of Southeast Asian Nations (ASEAN) as an additional \u201ceconomy\u201d due to its economic and political importance in the region. Indonesia is therefore included in the ten ASEAN member states. The analysis is based on the IMF databases World Economic Outlook (WEO<\/a>) and Directions of Trade Statistics (DOTS<\/a>) for data on population, GDP and trade. For measuring the depth of FTAs, it relies on the Design of Trade Agreements Database (DESTA<\/a>).<\/p>\n

Link to the infographic: GED Trade Graphics – Global & European Dynamics (globaleurope.eu)<\/a><\/p>\n

About the authors<\/strong><\/p>\n

Cora<\/span> Jungbluth is a senior expert in the <\/span>Europe\u2019s Future Program<\/span>\u00a0at the Bertelsmann Stiftung. Her research focus is foreign direct investment and international trade (especially the role of emerging economies).<\/span><\/p>\n

Stefani Weiss is Senior Expert for EU Governance, Foreign and Security Policy in the Bertelsmann Stiftung\u2019s \u2018Future of Europe\u2019 programme and currently in charge of the project \u201cSovereign Europe: Strategic Management of Global Interdependence\u201d.<\/p>\n

Read more<\/strong><\/p>\n

A Gloomy Outlook for EU-China Relations: Divergence, Distancing, Decoupling<\/a><\/p>\n

Open, assertive, sustainable: notions of a geopolitical EU trade policy<\/a><\/p>\n

The international order in transition \u2013 How could the world look like tomorrow? Conclusion<\/a><\/p>\n","excerpt":"

The Asia Pacific is a key region for future global growth in terms of market size and purchasing power. For […]<\/p>\n","thumbnail":"https:\/\/bst-europe.eu\/wp-content\/uploads\/sites\/24\/2022\/12\/Asia_Pacific_Map_as_Cover_Pic.jpg","thumbnailsquare":"https:\/\/bst-europe.eu\/wp-content\/uploads\/sites\/24\/2022\/12\/Asia_Pacific_Map_as_Cover_Pic.jpg","authors":[{"id":2725,"name":"Cora Jungbluth","link":"https:\/\/bst-europe.eu\/blogger\/dr-cora-jungbluth\/"},{"id":29231,"name":"Stefani Weiss","link":"https:\/\/bst-europe.eu\/?post_type=blogger&p=29231"}],"categories":[{"id":596,"name":"Economic Security & Trade","link":"https:\/\/bst-europe.eu\/category\/economy-security-trade\/"}],"tags":[{"id":488,"name":"Asia Pacific","link":"https:\/\/bst-europe.eu\/tag\/asia-pacific\/"},{"id":202,"name":"eu","link":"https:\/\/bst-europe.eu\/tag\/eu\/"},{"id":262,"name":"EU trade strategy","link":"https:\/\/bst-europe.eu\/tag\/eu-trade-strategy\/"}]}