Europe, Asia Leaders Prep for High-Level Summit, With Trade and Cooperation to Headline Agenda
Leaders from the European Union and from a host of Asian countries are meeting in Brussels, Belgium, this week for a high-level gathering that is due to tackle subjects like economic cooperation, trade and investment, and climate change. The meeting, along with related summits scheduled this week in the Belgian capital, will also see Singapore and the EU sign their long-awaited trade and investment accords.
In total, officials from 51 countries will begin meeting as of Thursday evening, with the Asia-Europe Meeting (ASEM) to be chaired by European Council President Donald Tusk for talks on “Europe and Asia: global partners for global challenges." The biennial event will cover topics such as multilateralism; international and regional approaches to trade and investment; cooperation on climate action, including the UN’s Paris Agreement, and opportunities for collaboration on boosting connectivity in the Asian continent.
Shifting trade landscape
The ASEM comes at a key time in international trade, as countries weigh how to approach international and regional cooperation in the current era, particularly given the rising use of unilateral measures by the US, as well as questions over whether and how to update the current multilateral trading system to fit existing and future needs and lower trade tensions.
The EU has put forward its own paper on possible ways to update the WTO, including on dispute settlement and the negotiation of new rules, as well as on improving the system’s functioning through notifications and other areas.
The EU is part of a working group with the US where WTO reform is one of the agenda items, as well as in a trilateral formation with the US and Japan where they have also been discussing their interest in negotiating new rules on areas such as industrial subsidies.
Additionally, WTO reform is due to come up in a working group between the EU and China. Leaders from both Japan and China are due to be in the Belgian capital for this week’s event, which also comes less than one week before Canada’s planned ministerial meeting of “like-minded” countries to discuss the North American nation’s own proposed ideas for WTO reform. That meeting will not include the US or China but will include the EU and Japan, among others.
Aside from the WTO reform discussions, the international trade calendar has seen a host of activity on the negotiating front, with countries and country groups looking to advance existing processes for clinching new regional trade agreements, or launching new ones. Much of this activity has been seen both in Europe and in Asia, amid efforts by the EU to wrap up talks with the Mercosur countries, advance new negotiations with Australia and New Zealand, and update an existing accord with Chile.
The Asian region, meanwhile, has its own processes underway, including the 16-country negotiations for Regional Comprehensive Economic Partnership (RCEP), where the participants are hoping to endorse a set of outcomes by the end of the year. (For more on RCEP, see related story, this edition)
The signing ceremony for the EU-Singapore trade and investment accords is set for Friday 19 October. The EU is also due to hold summits directly with South Korea, as well as with the Association of Southeast Asian Nations (ASEAN). The latter two events are also planned for Friday and are also slated to see discussions on trade, including an examination of the EU-South Korea trade pact already in place.
The ASEM summit comes on the heels of a Bruegel-hosted Asia-Europe economic forum meeting, due to wrap up on Thursday and which will also cover the subject of trade, along with other shared items of interest in the field of global governance.
The EU and Singapore wrapped up negotiations for a trade accord in late 2012 and negotiations on investment-related terms in 2014. The signature process had been put on hold, however, until the EU’s highest court could rule on the bloc’s competence in different areas, in light of questions regarding whether member state ratification would be needed for terms involving investment-related dispute settlement and investor protections.
The European Court of Justice (ECJ) issued its final opinion last year clarifying that, in the case of the EU-Singapore accord, “non-direct foreign investment (‘portfolio’ investments made without any intention to influence the management and control of an undertaking) and the regime governing dispute settlement between investors and states” would require ratification by member states in their respective legislatures, and not just the European Parliament. (See Bridges Weekly, 18 May 2017)
The ruling led to the bloc working to separate out the investment terms from the Singapore trade accord and submitting these as two different agreements for the ratification process. While the trade deal will require only the European Parliament’s ratification, which Commission officials said is expected by next year, the investment protection accord will be subject to member state ratification.
“Opening new opportunities for European producers, farmers, service providers, and investors is a key priority for this Commission. These deals do precisely that, and more – Singapore is an important gateway to the whole Asia-Pacific area, and it is vital that our companies can have a foothold there,” said EU Trade Commissioner Cecilia Malmström earlier this week, previewing the signing.
The ECJ ruling also affects the bloc’s approach to other trade and investment accords on the horizon, with the Council agreeing earlier this year that the EU will pursue trade and investment deals separately, rather than trying to lump them together. (See Bridges Weekly, 24 May 2018)
The European Commission, meanwhile, did not include investment in the mandates it requested from the European Council for negotiating trade accords with Australia and New Zealand, though such mandates may be requested at a later date. (See Bridges Weekly, 24 May 2018)
The EU has been negotiating trade accords with individual members of ASEAN, after the two blocs previously attempted a region-to-region negotiating process. EU officials have said that they hope to use the bilateral agreements approach to lay the groundwork for eventually reaching a region-to-region deal.
The bloc is also slated to move ahead soon with signing a separate accord with Vietnam, for example, another ASEAN member. Negotiations are also underway for trade deals with the Philippines and Indonesia. Proponents of the EU-Singapore deal say that along with the commercial benefits, as well as accord marking a concrete link between the two regions, the trade agreement could pave the way for other cooperative opportunities and send a strong signal of the value of trade and economic integration, both within and across continents.
“These agreements also promote sustainable development, as they include ambitious commitments on the protection of the environment and labour rights and uphold the right to regulate. They are yet another example of the EU's determination to work with like-minded countries to uphold rules-based international trade," said Malmström earlier this week.