East Asia and Europe Steady Their Footing
International Herald Tribune
October 15, 1994
Michael Richardson 

In a major effort to defuse tensions between East Asia and Europe, a group of leading political and business leaders from the two regions agreed Friday on a wide-ranging program to build closer relations.

The proposals are intended to "reset the balance" between East Asia's strong ties with North America and its more distant links with Europe, said Klaus Schwab, head of the World Economic Forum, which set up the Singapore meeting.

The proposals included a call for regular gatherings of East Asian and European heads of government similar to the informal summit meetings of leaders from countries in the Asia-Pacific Economic Cooperation Forum.

The first summit meeting of that forum, held in Seattle in November, caused concern in the European Union, where it was seen as an attempt by some American and Asian states to "gang up" against Europe on trade issues.

A deputy prime minister of Thailand, Supachai Panichpakdi, said it would be useful for East Asia to have a similar consultative arrangement with Europe to deal with trade, investment and other issues.

Mr. Schwab said the proposals agreed to on Friday were the result of extensive consultations and consensus among meeting participants.

But analysts said it would not be easy to gain unanimous government acceptance in Europe and East Asia for some of the far-reaching proposals on trade and investment liberalization.

The persistent tensions between the two regions surfaced again Friday when Raymond Barre, a former prime minister of France, criticized Mahathir bin Mohamad, the prime minister of Malaysia.

Mr. Mahathir had said in a speech at the meeting that most of Europe still had to get rid of an attitude that "some will call incredible arrogance" before a genuine partnership of equals could be built with East Asia.

Mr. Barre said such a statement was "unacceptable." Asian descriptions of the European Union as a highly protected fortress, he said, were belied by East Asia's large and growing trade surplus with Europe.

Japan's trade surplus with the EU amounted to $40 billion in 1993, while the rest of East Asia had a trade suplus with Europe of about $12 billion.

East Asian states must adopt a long-term strategic view, said Yeo Cheow Tong, Singapore's minister for trade and industry.

"If they wish to continue growing, to enjoy higher standards of living, and to power this growth through exports, they must allow others, in turn to export to them," he said. "It is no longer tenable for East Asian countries to argue on the one hand against protectionist threats by developed countries, while on the other hand continuing actions that restrict trade and investment."

Mr. Yeo said that East Asian governments would "need to behave as responsible global citizens and take concrete steps to deregulate and liberalize their economies."

Mr. Supachai said that East Asia feared that the recent rise in anti-dumping actions by the EU against imports from Asia was a sign that Europe was resorting to nontariff barriers to block foreign competition.

The meeting's proposals said it was essential that European countries make a commitment to control the spreading use of anti-dumping measures.

A number of European leaders said that the Union was emerging from recession with a strong competitive position in key industries and would be able to take full advantage of the export and investment opportunities offered by East Asia's rapid economic growth.

Martin Kohlhaussen, chairman of Commerzbank AG of Germany, said that, until recently, Europe feared East Asia's economic challenge.

"But the tide has turned," he said. "The benefits of closer economic ties are now perceived to outweigh the costs of adjustment related to fiercer competition."

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