Opinion on relations between the European Union and ASEAN

(96/C 97/11)

On 30 March 1995, the Economic and Social Committee, acting under Rule 23(3) of its Rules of Procedure, decided to draw up an Opinion on relations between the European Union and ASEAN.

The Section for External Relations, Trade and Development Policy, which was responsible for preparing the Committee's work on the subject, adopted its Opinion on 12 January 1996. The Rapporteur was Mr Pezzini.

At its 332nd Plenary Session (meeting of 1 February 1996), the Economic and Social Committee adopted the following Opinion by a majority vote with five abstentions.

SUMMARY

The Committee notes that ASEAN has succeeded in its initial objective of avoiding conflict between its members, and that the resultant stability has enabled these countries to enjoy strong economic growth.

ASEAN's objectives have changed somewhat over the years, notably with the recent decision to establish a free trade area among its members. In this context, and in that of the accession of former or existing Communist countries (another issue which ASEAN must address), the EU could usefully pass on its experience, for instance by stepping up its cooperation with the ASEAN secretariat.

EU-ASEAN trade is growing considerably, and the trade balance tilts in favour of ASEAN. Trade relations are marred by such problems as market access, respect for intellectual property rights, and the use of anti-dumping duties. The Committee considers that the EU needs first of all to improve its own commercial image in Asia. It hopes that the opening of European Business Information Centres (EBICs), and their linkage with the existing national Chambers of Commerce, will contribute to more fruitful forms of cooperation. It also advocates the setting-up of joint ventures between EU and ASEAN countries, via the EC Investment Partners and other projects devised by the Commission.

The Committee feels that the quality of the European presence in the region is more important than its size. It recommends that EU cooperation should focus on specific sectors such as the environment, telecommunications, energy and vocational training.

Dialogue on human rights is a delicate matter. The Committee reiterates its earlier calls for inclusion of a social clause in the work programme of the World Trade Organization, based on ILO Conventions. On the specific question of East Timor, the Committee considers that a Council 'troika' should hammer out a diplomatic solution based on the UN General Assembly resolutions.

An EU-Asia summit is to be held in Bangkok in March 1996, and the ASEAN countries will be taking part alongside Japan, China and South Korea. The Committee considers that the summit will provide an opportunity to relaunch a European presence in the region. The meeting should serve principally to consolidate dialogue and extend its scope to such fields as the environment, social problems and vocational training.

The Committee notes the wide gap between Europe and Asia, and calls for a major commitment to information and cultural cooperation; substantial resources should be earmarked for this. The Committee thinks that a variety of exchanges and contacts could usefully be promoted so as to deepen mutual understanding, including visits by civil servants, trainees and new graduates from ASEAN countries. The Committee also calls for contacts between EU and ASEAN socio-economic partners, and is ready to take any steps that might be useful. It also asks to be informed of the conclusions of the Bangkok summit so that it can decide what action it should take in the future.

1. Introduction

1.1. The European Union's reasons for granting Asia a higher priority than hitherto are comprehensible and soundly based. This strategy ties in with the globalization of the world economy, from which Europe cannot stand aside. Since the end of the Cold War, it is no longer possible to isolate the economy from the great political questions and to subordinate international economic relations to a higher 'political order'. The economy is now returning to the centre of the political stage, and economic and commercial considerations, with their important place in the foreign policy of the main countries, can be a source of conflict, e.g. the trade dispute between the USA and Japan.

1.1.1. Alongside geopolitics, then, one must speak of geoeconomics, to denote an approach which acknowledges the basic role of the economy in determining worldwide equilibria and defending national interests. In this sense, the European Union, as the world's main trading power, has a role to play. In recent times the Union, in its efforts to rethink and revamp its external relations, has launched a strategy of action on all fronts intended to lead to 'third generation' cooperation agreements: first and foremost towards the 'adjoining' areas (Eastern Europe, the Mediterranean), but also towards regions which are more distant from European interests: Mercosur, other Latin American states, ASEAN and other Asian countries, southern Africa and South Africa.

It has done so not only to make economic cooperation more effective and maintain existing market shares, but also to conquer new markets in the new arena of global competition which has opened up among the main geoeconomic blocs. This strategy could not ignore Asia (particularly ASEAN, the object of an 'attention-paying strategy' since 1980).

However, it is worth considering whether the EU ought to fix its priorities and apportion its interventions accordingly. The criteria for prioritization are dictated first and foremost by political and security interests, pressing social concerns (immigration), and economic and trade interests.

On this basis, the top priority areas for the EU clearly appear to be the southern Mediterranean rim and central and eastern Europe, as they combine all three of the above-mentioned elements. Next comes sub-Saharan Africa, where the main motivation is the fight against poverty, hunger and disease in order to prevent social and environmental disasters. Lastly there are the more dynamic areas of Asia and Latin America, such as Mercosur and ASEAN, where economic and trade interests and the conclusion of partnership agreements are the chief concern.

1.1.2. Asia has acquired such economic and political weight in the global balance that it will certainly be a key player on the international stage in the next century. Current developments in many areas of Asia already make it a worthy partner. South-East Asia, with the recent and less recent NICs - Newly Industrialized Countries (South Korea, Taiwan, Singapore, Hong Kong, Thailand, Malaysia, Vietnam and Indonesia), China with its 'market socialism' and rapid economic and commercial growth (a 9 % average annual increase in GDP over the last ten years); the reawakening and incipient transformation of India: all these are phenomena of great interest and potential, albeit not without dangers and threats which cannot yet be properly assessed or identified. According to an IMF study, as early as 2010 China will be the second largest economy in the world in terms of volume of production. The IMF estimates the Chinese per capita income in 1992 as between $ 1 300 and $ 2 500 per annum, as against the official estimate of $ 370.

1.1.3. Europe's intention to 'strengthen its economic presence in Asia in order to maintain its leading role in the world economy' is therefore praiseworthy. However, it is necessary to take account of certain preconditions without which the EU's declared readiness to open a dialogue could turn out to be not only sterile but counter-productive.

1.2. The first consideration is that Asia is not a region like others - neither in political nor in cultural terms - and that precisely for this reason a shared inspiration of civilization and cultural osmosis is lacking between Europe and Asia. Even without citing Samuel Huntington's essay [Samuel Huntington, the well-known political analyst, lecturer at Harvard University and adviser to several Democrat administrations, is the author of the controversial study 'The Clash of Civilizations' published in Foreign Affairs (Vol. 72, No 4, September-October 1993). This argued that most current and future international disputes will break out along the borders between different 'civilizations' and will have cultural rather than ideological or economic causes. Huntington postulates a confrontation between the West and the rest of the world, and more especially against a militant Islamic-Confucian coalition, developing on several levels, from military to human rights and to competition for control of the major international institutions.] it is plausible to state that Asia provides one of the most probable scenarios for a clash of cultures. While in the West many are convinced that the salient feature of the present situation is the strengthening of a diffuse global economic/financial culture based on modern technological, trading and financial practices 'transmitted' through the market, the advocates of the Asian model, in particular the so-called Singapore School [This thesis was put forward in interviews in the American press with Kishore Mahubani, a Singapore diplomat ('The West and the Rest' in National Interest, Spring 1992, and 'The Dangers of Decadence: What the Rest can teach the West' in Foreign Affairs, vol. 72, No 4, September-October 1993), and the former Prime Minister of Singapore, Lee Kuan Yew ('A conversation with Lee Kuan Yew' in Foreign Affairs No 2, March-April 1994).], reject the line that the development of South-East Asia inevitably involves standardization on the Euro-American model and its system of values (including political democracy). This attitude, widespread amongst the Asian intellectual and managerial elite, stresses the cultural specificity of Asia and rejects the hypothesis that economic growth springs from the particular historical process which has led in Europe to the emergence of the market and of the democratic nation-state. Thus modernity is not identified with the institutions and values typical of western liberalism. There can be 'other roads' to modernity and growth, as shown by the experience of those Asian countries which have overcome the barrier of underdevelopment and become part of the world economy, with a role and dynamism of their own. The countries have undergone a cultural revival generated by the economic clout acquired by the region, but this revival is rooted in a great cultural tradition specific to the region, different from and independent of western culture.

1.2.1. Europe is culturally distant and perhaps the first effort should be to make European civilization better known, not only in terms of image, but as regards great artistic and intellectual works (music, graphic art, literature, scientific discoveries). Without full recognition of this special character, there can be neither political dialogue nor beneficial economic cooperation. Economic relations alone are not enough to justify a new strategy of devoting attention to Asia; it is necessary to go further and to try some kind of cultural approach, even if the presently ruling elite in Asia appears to be culturally immune to the model of representative democracy, and brooks no instruction or interference on human rights. Hence the need for qualitatively significant cooperation which is not based solely on trade and investment but which seeks to establish a relationship rooted in common rules.

1.3. When we talk of Asia it is necessary to understand exactly what we are referring to. The 26 countries covered by the Commission's communication () are not only heterogeneous but cannot be classified on purely geographical criteria. The document states that 'European Union strategies will have to be flexible and modular in order to anticipate changes in all three regions of Asia, and they will have to be geared to the particular circumstances of the different countries and regions there'. In the context of relations with the European Union, Asia can be divided into the following geopolitical and geoeconomic areas: eastern Asia, within which we must distinguish the six countries belonging to ASEAN; southern Asia, i.e. the Indian subcontinent; central Asia and subregions of the Caucusus and the Gulf (which the Commission document does not cover).

This area does not provide homogenous multilateral partners for the European Union, as the countries of the area have not started processes of regional economic integration. The exception to this general rule is ASEAN, the Association of South-East Asian Nations, an associative body which, since its foundation as an anti-Communist politico-strategic bloc, has slowly evolved into an economic body focusing on regional cooperation and the achievement of internal synergies.

1.3.1. The Committee has decided to concentrate for the moment on ASEAN, because it is the subregion of Asia which can be seen as a clearly defined multilateral negotiating partner, and because it and the European Community have a formal institutional relationship dating back to 1980, with regular meetings between the relevant foreign ministers. Additional reports with more specific observations on other geopolitical divisions of Asia could follow this one.

The early 1990s saw an acceleration of the trend towards regional groupings, particularly in the West. A little over eighteen months saw the signings of the Treaty of Asunción (26 March 1991) which created Mercosur, the Maastricht Treaty (7 February 1992) which drew up the guidelines for an updated and more federally inclined European Community, which took the name European Union, and the Treaty instituting NAFTA, the North American Free Trade Area (12 August 1992). Furthermore, the favourable climate for regional integration was confirmed by the creation of an economic community by the Member States of APEC and by changes in the objectives and strategy of ASEAN.

1.3.2. ASEAN (the Association of South-East Asian Nations) was set up in Bangkok in 1967 by five countries: Indonesia, Malaysia, the Philippines, Singapore and Thailand, at the very height of the Vietnam war. Its other member countries are Brunei (1984) and Vietnam (July 1995) (). The treaty instituting the association, although it also mentions economic cooperation, sets its primary aim as being to maintain political stability in the face of the Communist threat posed by the Hanoi regime and its external patrons (the USSR and China). External threat was the catalyst for the foundation of ASEAN, and until the beginning of the 1980s, after the signing of the Geneva peace agreements and the reunification of Vietnam, its raison d'être was primarily defensive and anti-Vietnamese: there was a belief, the famous 'domino theory', that the fall of Vietnam would bring the collapse of Cambodia, Laos and Thailand close on its heels. It should be noted that during this period ASEAN helped to bring about and maintain a climate of peace between its members, despite their long-standing and deep-rooted disputes, and that this was a major contributory factor in the resolution of the conflicts in bordering areas (e.g. Cambodia). This was perhaps ASEAN's most tangible achievement, without which South-East Asia would not have been able to achieve such rapid growth. Symptomatic of this sea-change in the political climate and aims of the Association was the accession, ratified last July, of Vietnam, a country which has never abandoned communism and has had no change of regime, although it has implemented various economic reforms.

1.3.3. In cultural, social and economic terms, ASEAN's member countries are extremely diverse. Malaysia and Indonesia form part of the Malay civilization, and Islam has been the predominant religion there since the fifteenth century. Thailand is Buddhist, and largely populated by peoples originating in Southern China, while the population of the Philippines, ethnically Malay, were colonized by the Spanish and partially converted to Catholicism. Singapore, where a trading post of the British East India Company was established in 1819, was governed for many years under the administrative arrangements which applied to the whole of peninsular Malaya. The present state of Singapore was established when the island seceded from the independent Federation of Malaysia in 1965. Singapore is an enclave dominated by expatriate Chinese who are also present as a minority in the other countries, and have played a dynamic and expansionist role in business affairs across the entire area.

1.3.3.1. The member countries had a total population of 335 million in 1993, greater than that of the 15 nation EU, while their economic power in terms of GDP is a little more than that of the Netherlands. The accession of Vietnam has taken the population over 400 million. Per capita income ranges from $ 19 000 in Singapore, a city-state with three million inhabitants whose income figures outstripped those of France in 1995, to $ 700 in Indonesia, with over 180 million; or from over $ 21 000 in Brunei, a small - population 300 000 - oil-rich sultanate, to $ 830 in the Philippines, with a population of 67 million, and $ 170 in Vietnam (1993 figures). Malaysia has a population of 19 million and a per capita GDP of $ 3 160. Thailand has a population of 58 million and a per capita GDP of $ 2 040. Over the last six years Malaysia and Thailand have been among the world's most dynamic economies, with high GDP growth rates. Between 1988 and 1993 Malaysia's annual growth averaged 8,5 %, while Thailand averaged 9,2 % between 1986 and 1991 with a slight drop to 7,5 % in 1992 and 1993. Following the liberalization and restructuring of the protected and semi-autarkic economy, Indonesian growth also picked up to between 6 % and 7 % p.a. from 1988 to 1992. These three states have already joined the ranks of newly industrialized countries (NICs), while the Philippines and Vietnam, although they lag some way behind the leaders, are also nudging their way into the group. The whole area is hallmarked by very low labour costs and unregulated working conditions. On the social level, this produces wide divisions, and, from a manufacturing point of view in general, it is not conducive to the development of a skilled workforce. Apart from the differences in income mentioned above, a further cause for concern is the inability of the area's development model to distribute the benefits it produces fairly amongst the population.

1.3.3.2. The ASEAN countries are particularly rich in natural resources. Indonesia and Malaysia are oil-producers and major exporters of natural gas. Even after the collapse in oil prices the Indonesian economy remains heavily reliant on the oil industry, despite efforts to diversify. Indonesia has large (although as yet unquantifiable) reserves of a variety of coal and other minerals, including tin, bauxite, copper, nickel, iron and gold. However, the predominant economic sector is still agriculture, which contributes 20 % of GDP and employs 48 % of the workforce. Besides the domestic sector catering for the home market, cash crops for export (rubber, palm oil, coffee, tea, cocoa, sugar and tobacco) grown on large plantations have become very important. The forests - two-thirds of the land area - are an important resource. Between 1985 and 1992 the Indonesian government prohibited exports of timber to ensure that it was worked locally, thus increasing the added value of exports. Since 1993 the export of unworked timber has been heavily taxed, and the government is showing concern about the intensive exploitation of forestry resources and the consequent environmental damage. In 1992 they adopted a special action plan to ensure sustainable use of forestry resources, but many environmental organizations have condemned the indiscriminate destruction of one of the world ecosystem's most important tropical rain forests.

Malaysia is the world's foremost producer of rubber and palm oil. Although price fluctuations have led to falling production, they are still among the most important elements of Malaysian exports; the EC is by far the largest market for Malaysian rubber (28 % of production) and one of the largest for palm oil (10 %). For Malaysia too the forests are a major source of exports. Since 1992 the Malaysian government has adopted a new policy of gradually introducing a 'sustainable development' system in the forestry sector. Production of cocoa, tropical fruit and fishery products and high-quality stockfarming are gaining in importance. In the mining sector, besides natural gas (21 million mª of reserves with production increasing by 18 % annually in 1992-1993) tin is still fairly important; with 8,4 % of world production Malaysia is the fifth ranked nation.

In Thailand agriculture's contribution to GDP fell from 40 % in 1960 to 11,4 % in 1993, but it still employs two thirds of the labour force. Despite headlong growth in manufacturing industry, agriculture is still important and Thailand, along with Vietnam, is one of Asia's two net exporters of agricultural produce. Apart from rice (the world's leading exporter) tapioca, maize, sugar and rubber, Thailand is specializing in the production of soya, palm oil, coffee, cotton, and a wide variety of fruit (which has stimulated investment in the fruit juice industry). Stockfarming and fishing are expanding and highly remunerative sectors. Mining is less significant, but tin, antimony, lignite, iron, tungsten, manganese and zinc are to be found.

In the Philippines too the primary sector (agriculture, forestry and fishing) contributed 22,5 % of GDP in 1992 and employed 45,7 % of the workforce in 1993. It is split between an archaic, fragmented and labour-intensive sector producing for subsistence and the home market, and a more modern and capital-intensive sector (agro-business plantations) producing for export. The main products are rice, maize, coconuts, sugar, bananas, pineapples and other tropical fruit. Forests are one of the country's main resources, but they have suffered from uncontrolled exploitation resulting from population pressure, timber exports, illegal felling and insufficient replanting. In 1945, 15 million hectares were covered by forest; by 1988 this had been reduced to 1,2 million hectares. Since 1988 Corazon Aquino's democratic government has set up programmes of replanting and for protecting the remaining virgin forest, particularly on Mindanao.

Following the end of the Vietnam war and the reunification of North and South Vietnam in 1975, the country's net material product (NMP) [Net material product is an economic variable which excludes public administration costs. It was used in the Comecon countries until Comecon was disbanded in 1990, when it was replaced by the variables (GDP, GNP, etc.) used elsewhere.] grew by a sluggish 1 % during the second half of the 1970s. In the period 1980-1985 NMP grew by some 7 % per year. In 1987 it slowed significantly, to 2,1 % - a sign of the continuing structural problems which the liberalization measures had not solved. Although the post-1976 Vietnamese Government did not jettison socialist economic principles entirely, it did introduce liberalizing market-based reforms. The public and private sector began to work in concert and generate synergies. The reforms, known as 'doi moi' (renewal), ensured full acceptance of private enterprise and spelt the end of state quotas and subsidies. However, the role of state planning in what is now a mixed economy has yet to be clarified. Following the reforms, GDP at constant prices rose by 4,7 % in 1991 and 8 % in 1993. Vietnam's economic structure remains weak and signally lags behind that of the other ASEAN countries. Agriculture continues to be a mainstay and still employs 73 % of the workforce, although its contribution to GDP fell from 50 % in 1989 to 29,3 % in 1993. Apart from the mining and traditional industries which were active during both the colonial period and the conflict between North and South Vietnam, there was no real industrial sector. This only began to develop after 1970 in North Vietnam with the emergence of a substantial heavy steel industry and the building of power stations and infrastructure. Light industry did not appear until the mid-1980s, mainly producing textiles, electronic components and manufactured goods with little added value.

1.3.3.3. A characteristic shared by the ASEAN countries is the headlong growth of the industrial sector in the last decade. In Malaysia it contributed 22,3 % of GDP in 1987, against 8,7 % in 1960. In 1993 that figure passed 30 %, representing 65 % of export earnings. Thailand is currently East Asia's leading recipient of foreign investment; the loss of comparative advantages, first by Japan and then to some extent by South Korea, Hong Kong, and Taiwan, has led to these countries relocating some production abroad, transforming Thailand into the country with East Asia's highest level of investment in labour intensive, export-oriented industry. Thailand's main manufacturing industry is semiconductors and electronic components, whose exports grew by 13,9 % in 1992, matching the 14 % share of the textile industry, the traditional mainstay of the Thai economy.

Both Thailand and Malaysia are switching from low-added-value industrial production to more sophisticated products, but both countries suffer from a shortage of skilled labour, poor infrastructure and environmental problems caused by pollution and deforestation.

In Indonesia too the manufacturing sector accounted for less than 10 % of GDP in the mid-1960s. As in other South-East Asian countries, the Indonesian government initially followed an industrial strategy of import substitution. This enabled national industry to be set up, protected from international competition by strong tariff barriers. However, by contrast with other countries that changed to an export oriented strategy, Indonesia maintained this policy until the end of the 1980s, leaving its industries largely isolated from innovation and international investment, and hence rather uncompetitive. This partially explains Indonesia's backwardness in industrial development, which is still largely under state control. A few liberalizing reforms introduced at the end of the 1980s have stimulated the development of a private manufacturing sector, often in association with foreign companies. The manufacturing sector accounted for an estimated 20 % of GDP in 1993.

Singapore, which has had a solid base of export-oriented manufacturing industry for over 20 years, is specializing increasingly in higher technology sectors, and has stimulated productivity increases by linking them to pay rises. Having lost some of its comparative advantages, the annual GDP growth rate has stabilized at around 4 % to 5 %, while manufacturing has concentrated on mature and high technology products; the city-state is increasingly developing into an extremely important financial centre.

The Philippines find themselves in the converse situation; having taken the first steps towards light industrialization, they are attracting investments in labour-intensive, low added-value production. Overall, between 1985 and 1991, exports of manufactured products from ASEAN countries grew from 49 % to 85 % of total exports.

1.3.3.4. Japan's economic presence looms large. 37 % of local imports are Japanese products; more than 40 % of Japanese investment is channelled to the area, as are 60 % of Japanese cooperation funds.

The region has seen what economists term a 'flying geese' development model, which consists of a given country producing certain goods domestically while they enjoy certain comparative advantages. Thereafter, when these advantages are lost, production is relocated to neighbouring countries (at first Taiwan, South Korea and Hong Kong; in a second wave, Thailand, Malaysia, Indonesia, the Pacific islands, etc.) which take advantage of Japanese investment, while the leader-country, which has invested heavily in R& D, specializes in ever more sophisticated high-tech products using very flexible production methods. This cycle has replicated itself down the chain, and following in Japan's wake Korea, Taiwan, Singapore and Hong Kong are now transferring low added value, labour intensive production to neighbouring countries.

This phenomenon is most clearly demonstrated in the electronics industry. Between 1985 and 1991 ASEAN's exports of electronic products quintupled (from $ 6,6 billion to $ 32,8 billion) and their composition changed: components dropped from 60 % to 30 % of the total, while computers rose from 15 % to 22 % and telecommunications equipment from 18 % to 35 %. All the world's major electronics corporations, mainly Japanese, have a presence within ASEAN, where they have established an integrated circuit of production. This means that individual components (say, of a television set) are produced in different countries (e.g. Thailand, Indonesia) and then assembled in a third country (e.g. Malaysia), bringing a considerable reduction in costs. A third of trade between ASEAN members is in electronic products; this is mainly trading between multinationals.

Although it is not a formally integrated area - as Japan has never aspired to being the regional centre - in fact East Asia is integrated in terms of the globalization of production carried out by big businesses. Indeed, more than 60 % of its trade and investment is carried out within the area or with Japan.

2. Relations between the EU and ASEAN

2.1. As mentioned earlier, the European Union concluded a formal agreement with ASEAN in 1980 and maintains institutionalized relations involving regular meetings of foreign ministers. A joint committee has operated since then to examine scientific and technological cooperation programmes, to approve measures for promoting business contacts between the two regions and to approve development projects put forward by ASEAN countries for European Community funding. In 1983 an ASEAN-EC Business Council was set up to bring together business people from the two sides to identify common projects. The first meeting between ASEAN and EC economic affairs ministers took place in October 1985, and it was decided that European investment in ASEAN (estimated 13 % of total foreign investment, compared with 28 % from Japan and 17 % from the USA) should be stimulated. In 1986 a joint working party on trade issues examined the problems of access to ASEAN markets and in 1987 joint committees on investment were set up in all ASEAN capitals. In 1988 an agreement was reached on the setting-up of a Joint Management Centre based in Brunei. In 1991 the Community adopted new guidelines on development cooperation, with an increase on aid to Asia and a change in the aid systems for ASEAN countries, giving priority to training, science, technology and venture capital, rather than aid for rural development.

At the June 1991 meeting of ASEAN and EU foreign ministers in Luxembourg, disagreements emerged between the two sides for the first time over the EU's proposals to tie economic agreements and aid programmes to human rights and environmental policies. In September 1993, the EU and ASEAN began negotiations for an agreement on the control of drug trafficking. Lastly, at the two-yearly meeting of EU and ASEAN foreign ministers held in Karlsruhe in September 1994, ministers confirmed the central importance of EU-ASEAN relations and agreed to pursue mutually beneficial economic cooperation and to foster wider involvement of the private sector.

Although ASEAN has not reached a level of integration on a par with that of the European Union, it has had and continues to have great importance for regional stability.

2.1.1. ASEAN is not yet either a free trade area or a customs union and has no intergovernmental - let alone supranational - institutions. The highest political body is the Meeting of ASEAN Heads of Government, which usually meets every three years. At the meeting in Singapore in January 1992, many changes were made to the organization to move it further in the direction of real economic cooperation, and the ASEAN Free Trade Area (AFTA) was established, with completion scheduled by 2003. AFTA is starting to make its presence felt. The final coverage of products and the list of tariff reductions within the Common Effective Preferential Tariff Scheme (CEPT) has led to the harmonization of tariff nomenclature and the elimination of quantitative restrictions from non-tariff barriers to products included within CEPT. CEPT tariff concessions are granted on a reciprocal basis and all ASEAN members can conclude bilateral agreements. The CEPT programme also provides for a special reduction that enables member countries which reduce their customs tariffs to 20 % or beyond, even on the basis of the 'most favoured nation' principle, to enjoy the preferential CEPT tariffs granted by their partners.

However, the moves to create a single market are opposed by a number of entrenched interests.

The ASEAN countries apply varying - but on the whole high - levels of tariff protection; for some products they are extremely high. Non-tariff barriers (prohibitions, quotas, import monopolies, customs checks, etc.) are widespread but difficult to quantify. Liberalization is proceeding slowly and the governments are influenced by both the arguments of industrial pressure groups and by customs revenue, which provides a not insignificant proportion of state resources. Under AFTA, customs duties for goods produced within ASEAN are to be brought down to a 0 % to 5 % band by 2003. The formalities for its application are complex. The calendar distinguishes between products subject to a 'fast track' procedure and those which are to follow a normal process of tariff reduction. The weak point of the agreement, however, is that countries can temporarily or permanently exclude lists of products from it, with the lists being revised after the first eight years of the agreement. Indonesia has listed 1,800 such products (19 % of its tariff line) and the Philippines 1 350 (24 %). Trade between ASEAN countries rose by 41 % in 1994, from $ 79 billion to $111 billion. Total ASEAN trade with the rest of the world, including intra-regional trade, rose by some 30 %, from $ 419 billion in 1993 to $ 506 billion in 1994.

A conference of Heads of State was held in Bangkok in December 1995, and on 15 December participants signed a treaty making the region a nuclear weapon-free area. Consideration was also given to enlargement of ASEAN by the year 2000 to include Burma, Cambodia and Laos, which sent observers to the conference. Participants stressed that the prospect of a ten-member ASEAN should not prejudice the structure of the organization or impede the trade liberalization process. It was decided that intra-ASEAN tariffs should be cut to 5 % by the year 2000, with a three-year derogation for Vietnam. The idea of 'informal' summits of Heads of State between the official conferences was also mooted. However, the real centre of power is the annual meeting of foreign ministers, which is charged with coordinating policy among the various ministerial working groups, of which the ASEAN Economic Ministers (AEM) is the most important. The AEM supervises the work of the five committees on trade and tourism, industry and energy, banking and finance, agriculture and forestry, and transport and telecommunications. The ASEAN Standing Committee meets every two months and is composed of the foreign minister of the country that holds the presidency (which rotates), and the ambassadors of the other countries, and maintains continuity in the organization's activities. Finally, there is a permanent secretariat, based in Jakarta, with a Secretary-General elected for a five-year term at the meeting of foreign ministers. The secretariat has around a hundred officials working on various projects of common interest. Inter alia, they have drawn up plans of action on social development, the environment, science and technology, culture and information and the control of drug abuse, in the form of directives to be implemented by the individual states. Decisions are consensus-driven, being taken by informal meetings at which any disagreements are ironed out and a unanimous decision is reached. The organization operates primarily on the basis of consultation and conciliation. Not by chance, the only common institution so far envisaged has been a court of law.

ASEAN countries maintain strict limitations on the rights of EU companies to establish a presence and to provide services, particularly financial and maritime services. In those countries for example, banks have severe restrictions on their ability to set up branches and to provide banking services. In this context, the maritime transport sector and the shipbuilding sector, which are developing rapidly in ASEAN countries, need to be addressed by the EU with a view to achieving liberalization in the former sector and the application of the principles of the recent OECD agreement (on abolition of shipbuilding subsidies) in ASEAN countries.

2.1.2. ASEAN is heavily dependent on the global market. The amount of inter-member trade is very low compared with trade with other regions, varying between 16 and 18 % of the total volume. Exports of manufactured goods increased considerably from 49 % of total exports in 1985 to 85 % in 1991, while exports of primary products fell from 68 to 33 %. The area's development depends largely on external - particularly Japanese - investment, which as previously mentioned, represents 28 % of the total direct investment in the area, followed by the USA (17 %) and the EU (13 %). Member countries' economies are rarely complementary; the ASEAN countries produce similar products and thus compete in third markets. Hence there is no vertical division of production, or specialization in the sense that one country produces, say, cars while another makes household electrical goods. All the countries produce essentially the same products. However, there is some intra-sectoral and horizontal complementarity. In practice, this means that in certain sectors (such as electronics, but also textiles) trade is taking place within single companies having subsidiaries in different countries. This enables synergies to be created between branches of individual industries, thus opening up greater opportunities for complementarity. The degree of complementarity in trade between ASEAN countries shows that the trading structure is slowly evolving from a vertical to a horizontal division of labour. ASEAN will undoubtedly have to improve its internal complementarity, striving at the same time to expand its internal market and reduce intra-ASEAN competition on the international market.

2.1.3. ASEAN has no natural centre or integrated axis, such as the North Sea-Rhine Valley-Tyrrhenean Sea corridor in the European Community, functioning as a powerhouse for development throughout the region. The existence of a central powerhouse spread across several countries has been a very important factor in post-war European development and in the early stages of European integration. The absence of an equivalent region of ASEAN might mean that development, rather than proceeding in an integrated and harmonious manner, could be patchy and localized.

To offset this problem, ASEAN has developed subregional cooperation 'growth triangles' between some of its member countries in order to improve their border areas.

Devised in December 1989, the first 'growth triangle' (straddling Singapore, Indonesia and Malaysia) is intended to maximize the growth potential of the three adjoining areas, comprising Singapore, Jahore, the most southern state of Malaysia and the Riau islands of Indonesia, especially the islands of Batam and Bintan. Medan represents another 'growth triangle', set up in 1993 by Indonesia, Malaysia and Thailand and covering the north of Sumatra, four of Malaysia's northern states and southern Thailand. A third initiative centres on the 'Mindanao triangle', involving Indonesia, Malaysia and the Philippines.

2.2. Furthering regionalization

In its current state, ASEAN is not capable of providing a counterweight to the neighbouring giants China and Japan or the economic pressure of the earlier NICs. Hence the search for support outside Asia, with hopes being pinned on outside partners such as the EU and APEC (Asia-Pacific Economic Cooperation) and on the United States, to whom the ASEAN countries are looking with increasing interest on both economic and political terms. All the ASEAN countries, despite some initial reluctance, have become members of APEC, and their willingness to become part of an organization - albeit unstructured - that also involves the USA is clearly evident.

2.2.1. Although APEC is an intergovernmental forum with extremely vague and general objectives, timetables and instruments, it is nevertheless a powerful source of attraction for the ASEAN countries, precisely because it includes the US which, under the Clinton administration, has placed great emphasis on the Asia-Pacific area. Together, these countries account for almost 60 % of world trade, and it is a particular feature of APEC that industrialized, newly-industrialized and developing countries all belong to it (). It is seriously doubtful whether the aim of liberalization of trade can be achieved within the time limits and constraints proposed at Seattle and at the Bagor Conference in 1994, but in time APEC may become the privileged forum for action by the most dynamic Asian economies.

2.2.2. The European Union is at a disadvantage when competing with Japan and the US in the Asia-Pacific area for obvious geographic and political reasons. Nonetheless, in view of the influence exerted by the large Asian states and the US, the ASEAN states wish the EU to play a stronger role in various fields. The EU could, therefore, help to further the process of 'regionalization' of ASEAN by offering its experience with a view to helping improve the operation of AFTA, establish a free trade zone and, later, a customs union, set a common external tariff and step up economic cooperation between member countries.

2.2.3. The EU could make available its know-how in these fields, providing governments with the assistance they need to resolve the inevitable problems and resistance to implementing a free trade agreement and an open market. All the countries' economies would feel the benefits over the medium to long term. Forecasts predict a 25 % increase in intra-ASEAN trade once the free trade agreement is up and running.

2.2.4. Moreover, Europe could provide support in setting up the more structured institutional framework which will be needed once ASEAN is required to manage increasingly complex economic and industrial cooperation. Initially, this support could take the form of reinforcement of the Secretariat responsible for coordination, preparing documentation and the decisions taken by the political bodies and a - perhaps - supranational court of arbitration to settle disputes.

2.2.5. The main problem concerns the intractable question of East Timor - a former Portuguese colony now occupied by Indonesia. Portugal has political objections to an agreement with ASEAN because of human rights abuses by Indonesia in East Timor. A major diplomatic effort using all the resources available is required to solve these problems clouding EU-ASEAN relations. It would therefore be helpful if at the earliest opportunity a representative of the Presidency (the foreign ministers of the troika) could draw up a proposal and hammer out a diplomatic solution based on the UN General Assembly Resolutions.

3. Factors favouring closer EU-ASEAN relations

3.1. The approach adopted in the Commission document () of placing future trade, economic and development policy towards ASEAN within the broader context of cooperation with Asia seems right. Against this backdrop, the Committee believes that the following elements justify closer relations.

3.2. The EU's relations with ASEAN are based on Europe's assessment of the role which ASEAN has played in the regional context since 1967 (when the Vietnam War was in progress), and is still playing in promoting the establishment of consultation structures on security and economic cooperation. With the collapse of the USSR and the volatile situation which has also developed in Asia, the strategic role of ASEAN is all the more important since this group of countries could help to contain the potential 'hegemonic' pressure from either China or Japan. Hence the European interest in maintaining a channel of communication with these countries and supporting the aim of establishing a Zone of Peace, Freedom and Neutrality (ZOPFAN) and a South-East Asian Nuclear Weapon Free Zone (SEANWFZ).

3.2.1. Like the EU, ASEAN is today faced with the question of enlargement to embrace formerly communist countries, or countries which are still communist but are converting to market economies such as Vietnam, Laos and Cambodia, or politically unstable countries like Burma. Vietnam's membership will be a stabilizing factor throughout the region, and could also underpin the moderate line now espoused by the Vietnamese leadership. The same could apply to Laos, Cambodia and Burma, which currently have observer status but are due to join ASEAN by the year 2000, taking membership up to ten countries. These new partners, Vietnam included, are significantly less developed than the other members. ASEAN's leaders are convinced that within ten years Vietnam will reach the development levels of other member countries. The EU might offer ASEAN the benefit of its experience in cooperation with countries that are trying to move from a planned to a market economy, such as the Phare programme and support for the private and cooperative sectors.

European experience in this area could help the ASEAN countries to work together on the reconversion process. Enlargement would also increase ASEAN's economic and strategic autonomy in a region representing a market of over 455 million people. Current ASEAN members agree that the organization should not exceed ten members, and that one of the chief problems for the next few years will be how to integrate the new members without slowing the integration of the six original members.

The Committee considers that it is important to encourage EU-ASEAN partnership favouring Vietnam, in order to give effective support to the development process in a country still suffering the consequences of a long war.

ASEAN countries benefit from EU GSP tariff preferences although some ASEAN countries have grown rapidly, have GDP per head comparable to the poorest EU Member States and have demonstrated successful, aggressive export performance. In some cases, manufacturing employment within the EU therefore suffers.

3.2.2. The second point of interest for the European Union is based on the realistic scope for trade and investment between the two regions. The present volume of trade between the EU and ASEAN amounts to some ECU 50 billion (ECU 48,5 billion (about $ 60 billion) in 1993), which is four times the volume in 1980. The trade balance tilts markedly in favour of ASEAN with a 1993 trade surplus of ECU 2,7 billion. A comparison of EU-CEEC and EU-ASEAN trade reveals an almost perfect symmetry in the volume of imports and exports between the EU and these countries - see Table 5B. The EU is ASEAN's third largest trading partner after Japan and the United States; it accounts for 15,5 % of ASEAN exports and provides 13,7 % of goods imported into the region. In relations with the ASEAN countries, forms of economic cooperation, with reciprocal advantages, should be favoured over development cooperation. The recommendations in the Commission document regarding support for the European private sector to enable it to take advantage of a favourable commercial and financial climate should be supported and encouraged. The EU must select priority sectors for economic cooperation in which it has a clear relative advantage, such as banking, energy, environmental technology, means of transport and telecommunications.

ASEAN is a partner with a powerful economic motor which has not yet moved into top gear. Europe can help its development and become a privileged partner. However, as the European Parliament () has noted, the EU needs to emphasize commercial cooperation with Asia rather than competition. To this end, the European Union needs first of all to improve its own commercial image in Asia. The opening of European Business Information Centres (EBICs), and linking them up with the existing national Chambers of Commerce will contribute to more fruitful forms of economic cooperation.

Of similar importance is cooperation in science and R& D. For this to happen, funding needs to be found for cooperation in technology and innovation, as well as for travel grants and study visits by trainees, civil servants and new graduates from ASEAN countries. The Committee feels that there would be particular advantage in setting aside additional funding for programmes for Asian trainees in European institutes, universities and businesses, since this will not merely improve Europe's image, but will also foster mutual understanding and help bring together the cultures whose differences are one of the major obstacles to open dialogue between the two regions.

Another field in which there is scope for agreement with ASEAN countries is cooperation on joint economic initiatives in both the ex-Communist CEECs and the non-member Mediterranean countries. The major ASEAN countries have the financial and technological capacity for a tripartite EU-ASEAN-CEEC mechanism for investment in reconstruction and modernization programmes in certain industrial sectors, now privatized in the ex-communist countries. The same sort of arrangement would be possible for development projects in Mediterranean countries. European-oriented development in a predominantly Muslim, but not fundamentalist, region could convince the Arab-Mediterranean world that modernization is compatible with the preservation of traditional values.

ASEAN is certainly a major trading partner, but although representing a model for reciprocal, profitable partnership between two regional groupings, numerous problems have clouded EU-ASEAN relations. The ASEAN countries are critical of the EU's anti-dumping policies, the new Generalized System of Preferences (GSP) and the farm-export subsidies. For its part, the EU can legitimately be critical of the problems of tariffs, market access, discriminatory legislation and the absence of environmental clauses in ASEAN countries.

3.2.3. The region's governments are not at all sensitive to western concerns over human rights, and regard any attempt to tackle the question as interference in their internal affairs and as an attempt to 'impose' European values. The European Union has for some time given priority to the problem of human rights, and has deplored their violation. The Maastricht Treaty makes the signing of new agreements conditional on respect for human rights. The Commission also intends to put forward other conditions that will reinforce the priority given to human rights. The human rights question in the ASEAN countries is undeniably bound up with democracy and respect for political opponents and minority groups. It is a typical case of incompatibility between good trading relations on the one hand, and sharp cultural and political differences on the other. The European Parliament report questions whether the insistence on strictly linking EU relations with ASEAN countries with respect for human rights may perhaps be hindering the development of such relations. In the report the EP implies that a more flexible attitude by the EU might be appropriate in order not to hinder economic relations. The issue is a tricky one because important interests and values are at stake. However, the Committee considers that questions of principle and values should have priority over mere economic and trade interests.

3.2.4. In view of its substantial trading surplus with the EU, ASEAN cannot adopt a 'take it or leave it' attitude to European offers. In purely trading terms, the Community represents ASEAN's third largest export market. The EU could bring pragmatic and gradual use of conditionality to play on human rights, taking account of each country's level of development, history and culture in its assessments of them in this respect. The same applies to the treatment of the workforce.

3.2.4.1. In the first place, attention must be drawn to the fundamental rights of workers, trade unions and employers organizations enshrined in the ILO's 'human rights Conventions', and the most important Convention on minimum employment age. It is of great importance that the European Union convinces the governments of the ASEAN countries of the importance of ratifying and implementing these Conventions in so far as they have not yet done so. These Conventions are embodied in the 'social clause' which the Committee wishes to be placed on the agenda of the WTO. The social clause provides for:

- a ban on forced labour (Conventions 29 and 105);

- workers' right to organize and bargain collectively (Conventions 87 and 98);

- minimum age for admission to employment, and abolition of child labour (Convention 138);

- a ban on discrimination between workers, and equal remuneration for men and women for equivalent work (Conventions 111 and 110).

3.2.4.2. Secondly, working conditions and treatment of workers, and especially of women workers, often genuinely reach the level of social dumping in these countries, for instance as regards working hours, wages, occupational safety and health, and social protection systems. Here, the European Union should encourage the ASEAN governments to ratify and implement the relevant ILO Conventions, which have been designed as universal mimimum standards and which can be adopted by industrialized as well as by developing countries.

The ILO has organized seminars on trade-union training and the framing of programmes to increase awareness of social rights and promote the application of ILO Conventions. The new ILO policy should, with the help of the European Commission, serve to promote cooperation programmes in the field of employment, vocational training and child labour. Progress could also be ensured through compliance with ILO Conventions, trade liberalization agreements and future WTO directives on this question.

3.2.5. To this end, Europe should direct its development aid programmes towards improving the working conditions of small farmers and women working in the computer chip and electronic components industries and should demand that education facilities, basic health care and family planning are made available. It should make an effort to help combat immediately and with great determination at least the ugliest and most exploitative forms of child labour. The way to attain these goals is to set up programmes with a strong social content, to be carried out by NGOs which are in a position to carry out work in the field and establish an effective dialogue with the beneficiaries of the project.

Unfortunately, child prostitution is rife in parts of south east Asia, partly due to increasing tourism and directly contravening UN Conventions. The Committee believes that the organization of sex tours should be made illegal in all Member States, and nationals prosecuted at home who have sex children abroad.

3.2.6. The employment demands of a large population mean that the governments of the region must pursue a goal of full employment and of eliminating the still vast pockets of poverty. With this in mind, programmes could be launched to encourage the establishment and spread of micro-enterprises and craft activities, a field in which the EU has considerable experience which might usefully be transferred. Similarly fundamental is the contribution the EU could make to upgrading the region's skills basis, improving training and devising vocational training programmes and courses to integrate young people and women into working life. To this end it would be both locally beneficial and exemplary of European interest in the area if a multi-purpose vocational training centre and technological research centres were to be set up in one of the ASEAN countries.

3.2.7. The Commission document () states that for countries with high growth potential, 'economic cooperation is aimed at improving the business and regulatory environment in partner countries in order to stimulate two-way trade and investments with the direct participation of the private sector'. Unfortunately, the private sector is not inclined to invest in high risk countries or those with a serious macro-economic imbalance. It has been observed that even when substantial incentives are provided, there are problems with private sector participation. This constant insistence in European Union documents on private sector participation, while correct in principle, amounts to little in practice if the requisite operational instruments are not created. The Commission document speaks of 'promoting business cooperation between European companies and their Asian counterparts... by increasing information and creating a favourable framework for industrial cooperation and notably for SMEs'.

Numerous initiatives have been launched to stimulate greater European investment in the ASEAN countries. EC investment in the region increased during the 1980s in volume, but shrank in relative terms as investment from other countries grew faster. EC investment focuses on the palm oil, chemicals, pharmaceuticals, foodstuffs, electrical and electronics industries, the car sector, banking and finance. The Committee hopes that when the forthcoming EU-ASEAN global cooperation agreement becomes operative, steps will be taken to improve the conditions contained therein for direct investment by EU companies in these countries. A legal framework is also needed for conciliation and arbitration procedures in case of disputes. The protection of intellectual property is of particular importance here.

3.2.8. The EC Investment Partners (ECIP), the EC's financial instrument for promoting joint ventures, could prove the most appropriate means of fostering European investment and joint ventures between European and ASEAN SMEs (some 20 regional projects concerning ASEAN are in the pipeline). The ECIP is currently the main instrument for the creation of joint ventures and for encouraging the spread of small and medium scale industry. To improve take-up, quicker and more simpler procedures should be found for the projects that receive ECIP funding. For infrastructure work greater involvement by the EIB (European Investment Bank) is desirable; for some years it has been permitted to fund projects in Asia and Latin America. Prior to involvement it would be necessary to ascertain whether the conditions exist in the ASEAN countries for the growth of the SME sector and whether the European model is exportable. Ideally the European Commission would fund research into the situation of SMEs in the ASEAN countries and into identifying the sectors with scope for cooperation with European SMEs.

4. Conclusions

4.1. North-South relations - as they have until recently been conceived - are rapidly changing in Asia. Within Asia, there is now a hierarchy of economically strong countries which are no longer developing nations and which exist alongside countries where poverty is rife, generating the same imbalances within the continent as are found in North-South relations. The EU's main concern in relations with Asia is linked to the economic tensions between the two regions, given the potential impact on Europe's competitive position of accelerated growth in Asia by the end of the century. This must be countered by a strategy to step up cooperation between the two areas and defuse the potential for damaging the competitiveness of the EU, which has a lower growth rate and whose market share is also threatened on third markets.

4.2. It is clear, from a number of sources, that the prospect of the world's economic powerhouse shifting to the Pacific is regarded in ASEAN more with apprehension than anticipation, insofar as it would confirm China and Japan's overwhelming predominance. ASEAN countries would feel squeezed between them and obliged to align themselves with one or other.

4.3. In contrast to China and Japan, Southeast Asia has always been open to external influence: its self-declared 'open regionalism' has deep historical roots. During the colonial period, the region was drawn into a division of labour geared to Europe. There can, of course, be no question of resuming a relationship which belongs to the past, not least because of the level of development attained by the ASEAN countries. But, the opportunity - missed at the time of Taiwan and South Korea's take-off - is now there to have a positive influence on the 'drive for maturity' of countries which are beginning to take off with a significant, but unexceptional, average growth rate, and to re-establish a preferential relationship with Europe. Such an objective would bring the following advantages.

4.4. It seems difficult for the European Union to challenge the competitiveness and economic hegemony of Japan in what can be regarded as a 'reserved Japanese market'. It must be remembered that Eastern Asia is the third element of the capitalist 'trio' and is emerging as a competitor to the European Union, which could seek to re-establish a certain balance by securing the support of the Russian Federation which, as an 'Asian power' could have a certain influence on the region.

However, in this area the quality of the European presence is more important than its size, and this presence can be left up to the markets and to firms which may find it convenient either to set up joint ventures with local firms or to relocate their own production and offices in order to reap maximum benefit from existing comparative advantages and the high level of services and infrastructure.

4.5. A broad-ranging European strategy, centred upon ASEAN, would not necessarily be in opposition to US interests. By containing excessive dominance of the Pacific and Indian Ocean by China and Japan, it would facilitate the emergence in the Asia-Pacific area of a balance capable of ensuring sufficient leeway for stable and profitable relations with the European Union.

The forthcoming Europe-Asia summit to be held in Bangkok in March 1996, in which the ASEAN countries will be taking part alongside Japan, China and South Korea, will be a unique opportunity to relaunch a European presence in one of the world's most dynamic areas which has vigorous economic and technological growth. It also offers an opportunity to set up new and advanced cooperation programmes, for which a few broad ideas have been sketched out in these pages.

The EU needs to take a more assertive and transparent approach to the forthcoming 1998 GSP arrangements. In particular, ASEAN countries should only benefit where their overall prosperity and export performance are weak. It is essential that the opportunity is taken to take a more assertive position by the EU and USA jointly. This should be based on a joint strategy aimed at improving access for goods and services and at better protection for intellectual and technical property rights, as foreseen in the joint EU-US action plan, agreed in Madrid in December 1995.

4.6. The meeting should serve principally to consolidate dialogue and extend its scope to such fields as the environment, social problems and vocational training. Given the wide gap between development levels, the Asian side is finding it difficult to establish an agenda and objectives for the meeting. A general consensus could be obtained on a few precise guidelines (i.e. the common vision and general approach to the problems), leaving the discussion of specific topics to a later date. The main aim is to create the missing point of contact between the EU and Asia.

As the political and social problems have been underestimated and UN General Assembly decisions have not been implemented by some ASEAN countries, the Committee hopes that these problems will be ironed out before the Europe-Asia summit, with the active involvement of the EU troika, so that the full potential of EU-ASEAN economic relations can be exploited.

4.7. The gap between Europe and Asia is wide. There must be a major commitment to information and cultural cooperation and major resources should be assigned to this purpose. A variety of exchanges and contacts could usefully be promoted so as to deepen mutual understanding. The EU should keep in mind the diversity of Asia and adopt different strategies in its relations with Japan, China, India and the ASEAN countries (and there are special characteristics within the group).

4.8. The EU should adopt a qualitative approach to ASEAN cooperation and focus on such sectors as the environment, infrastructure, telecommunications, energy and vocational training. As the EU is already heavily committed to cooperation with central and eastern Europe and the Mediterranean countries, it lacks the means to make a large financial outlay on cooperation. It can make up for this by providing qualitatively significant cooperation focusing on exchanges in the fields of training, culture and improvement of mutual understanding.

4.9. The European presence in the ASEAN countries visited by an ESC delegation is far less marked than that of Japan and the United States. Europe needs to raise its profile in the region, inter alia by means of art exhibitions and scientific and cultural initiatives to help disseminate Europe's vast cultural heritage. Secondly, there should be greater investment in exhibitions and trade fairs, encouraging European firms to take part in them and familiarize their Asian partners with European technology and goods from different production sectors. The setting-up of European Business Information Centres could play an important role, notably in the promotion of small and medium-sized businesses. A proper distribution of tasks between these centres and Member States' bilateral chambers of commerce could yield worthwhile results.

4.10. Given the efficiency of the ASEAN secretariat, the EU should offer all technical assistance it can, for instance by passing on what it has learnt when setting up an external tariff and a common market. The ASEAN secretariat and the Commission could hold experience-swapping seminars and meetings. Some socio-economic organizations in the ASEAN countries are government controlled, and others are still embryonic. A two-track approach is needed involving dialogue at both ASEAN (with the Chamber of Commerce and the Trade Union Council) and national level (with individual organizations).

The Economic and Social Committee has an important role to play in dialogue and relations with the ASEAN countries. It represents important sectors of Europe's civil society, and has links with the interactive networks which formed the real bedrock of European integration. It has comments to make and experience to share with its counterparts (trade unions, non-profit organizations, trade associations, employers) in the ASEAN countries. Its involvement in the Venice cultural forum is an important first step here. The Committee hopes that it will be involved in the forthcoming Europe-Asia sumit in Bangkok, or at the very least that it will be kept properly informed so that it can decide what action it should take in the medium to long term.

Done at Brussels, 1 February 1996.

The President

of the Economic and Social Committee

Carlos FERRER

() Commission communication to the Council, 'Towards a New Asia Strategy' (COM(94) 314 final of 13. 7. 1994).

() Vietnam joined ASEAN on 28 July 1995, at the 28th ministerial meeting of ASEAN countries in Brunei.

() APEC has 18 member states: as well as the six ASEAN countries (Indonesia, Malaysia, Thailand, Philippines, Singapore and Brunei) it includes the NAFTA (Canada, US, Mexico) plus Japan, Hong Kong, Australia, New Zealand, Chile, Papua-New Guinea, China, Taiwan and South Korea.

() See foot-note, p. 33.

() Report on the Commission communication to the Council, 'Towards a New Asia Strategy', PE 211.248 final, 12 April 1995.

() See foot-note, p. 33.