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Commissioner for Trade Cecilia Malmström on Why Asia Matters

18 October 2018

On 16 October the EU-Asia Centre hosted a discussion with Cecilia Malmström, the European Commissioner for Trade, on ‘Why Asia Matters’.

Speaking on the eve of the 12thbiannual Summit of the Asia-Europe Meeting (ASEM), the Commissioner’s key message was thatnaturally, Asia matters to EuropeRecent years have seen the strengthening of bi- and multilateral partnerships between Europe and Asia. The EU had successfully concluded FTA negotiations with Korea, Japan, Singapore and Vietnam. The deal with Japan was especially important as it covered a quarter of the world’s GDP. 

Negotiations with various other Asian partners, including Indonesia, Australia and New Zealand were on-going. In a show of joint commitment, China and the EU had recently exchanged market access offers to progress the bilateral investment treaty negotiations. Talks with India, however, had not made much progress due to the different levels of ambition. These developments demonstrated Europe’s firm support for free trade and a rules and values-based multilateral system.

The EU was the world’s largest trader and needed to be a trader that was fit for the futureThat is why the EU’s trade agreements are not limited to trade alone – they also extend to e-commerce, environmental and social sustainability, transparency in public procurement, equal business opportunities, and respect for the rule of law and human rights. Many also include specific chapters on the role of small and medium-sized enterprises, to ensure that the economic gains of globalization are spread evenly throughout society. 

The EU, as a global actor whose functioning and external action is underpinned by human rights, the rule of law and democracy, and respect for the current multilateral system, will continue to use trade not only to forge further respect for these values, but also to gain access to new markets. In this regard, Asian states are of great significance to the EU, as many of them subscribe to the EU’s values and endorse multilateral institutions including the WTO. Where there are problem issues, as with Cambodia and Myanmar just now, the EU was ready to assess and if necessary initiate a process to temporarily or indefinitely suspend preferential access agreements. 

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Discussion

Taking questions from the audience, the Commissioner mentioned that China’s Belt and Road Initiative was as visionary as it was imperfect. Economic projects developed under the initiative often lacked transparent bidding procedures, and did not sufficiently respect environmental, financial and social standards. It remained to be seen whether this initiative could be a vehicle for Sino-European cooperation. 

On the recently negotiated EU-Vietnam FTA, the Commissioner hoped that the current European Parliament could still approve the deal. 

The EU was capable of negotiating bilateral deals with ASEAN member states while assessing the potential for a bloc to bloc deal, which was still in the future.

Asked about the employment impact of globalisation, the Commissioner said that whilst it was true that there were sometimes winners and losers from trade deals it was up to governments (and sometimes the EU) to mitigate the impact.

On the Iran deal, the Commissioner said that the EU was upholding an international agreement and would seek to ensure EU companies that wished could continue to trade with Iran. She repeated the EU’s criticism of US steel tariffs.

As regards the WTO, it was not perfect but blocking the appointment of judges in its Appellate Body was not the right course of action. The EU had therefore set up working groups with both China and the US to discuss WTO reform, in order to create a WTO that is fit for the future. She hoped other Asian countries would support these reforms.