Diplomatic engagement with Asia is stepped up through multilateral and bilateral mechanisms, including the Asia-Europe Meeting (ASEM).
The 1st of March marks the ASEM Day, which celebrates the importance of connecting the two continents, Asia and Europe, based on the principles of equal partnership and mutual respect.
Bringing together 53 partners from across Europe and Asia, ASEM is the main multilateral platform for dialogue and cooperation linking Europe and Asia with significant global weight: ASEM partners represent around 65% of global GDP, 60% of global population, 75% of global tourism and 68% of global trade.
The EU also participates in the Association of Southeast Asian Nations (ASEAN) Regional Forum and East Asia Summit, is an observer at the South Asian Association for Regional Cooperation, and collaborates extensively with the African Union and the Indian Ocean Rim Association. The EU also has strong bilateral partnerships with Japan, South Korea, China, and India.
The EU is analyzing the need to play a bigger role in Asia, to bear greater responsibility and to have an impact on the affairs of this region, whose fate is intertwined with that of Europe. In this context, we should take into consideration that the European Union Global Strategy (EUGS) highlights the importance of strategic autonomy for the EU and stressed the need to enhance its credibility as a global player.
Recently, the economic environment has reoriented itself and we are now in the middle of a new East versus West dynamic, with significant effects on global trade. The crisis caused by the COVID-19 pandemic and the conflict in Ukraine affected sustainable global supply chains and the supply of critical raw materials, leading to higher energy and food prices. These have led us to change our trade relations, to adapt to these changing geopolitical and economic dynamics.
Under the current circumstances of increasing global interdependencies, there is a need for the EU to work towards an in-depth understanding of Asia. At the same time, Asia needs to develop a better understanding of the EU and its complexity, the diversity of Member States and the potential of cooperation.
With its high-speed industrialization and urbanization, rising rates of consumption and the dynamic generation of Millennials, Asia looks challenging. Looking from Bucharest at our relations with Asia, like most of our European cousins, we see a display of a rich tapestry in colorful patches, cultural and historical threads tightly woven together.
An important EU’s legal framework, which Romania can use it in relationship with Asian states, is the Indo-Pacific Strategy of the EU (it was adopted on September 16, 2021). Therefore, Thus, Romania has the chance to engage more in promoting the European Union Strategy for the Indo-Pacific, to strengthen economic resilience and connectivity.
The Indo-Pacific region is increasingly becoming strategically important for the EU. The region’s growing economic, demographic, and political weight makes it a key player in shaping the international order and in addressing global challenges.
The EU and the Indo-Pacific are highly interconnected. The EU is already the top investor, the leading development cooperation partner and one of the biggest trading partners in the Indo-Pacific region. Together, the Indo-Pacific and Europe hold over 70% of the global trade in goods and services, as well as over 60% of foreign direct investment flows.
What could the cooperation between Asia and Europe become? Asia does not need Europe for its own development because they have everything needed for that. However, it is still essential to point out what Asia still needs and that Europeans could contribute. One of these aspects is related to the necessity of a security (including counter-terrorism, migration, maritime security and cyber issues) and political setting because it is easily noticeable that there is no centrality within Asia. The EU, including Romania, can be very helpful with Asia in the architecture of multiculturalism.
Asia becomes a decisive matter for the comprehensive development of the new world order, from politics to technology, and a question of Europe’s role in the world. Romania must be able to take part in this huge Asian development.
Romania’s interests in Asia are undergoing an important rethink because Asia is an important area for the manifestation of trends that shape global strategic relationships and our common future – economic security, diversification of supply chains, free trade, combating climate change, freedom of navigation and defence of international law. On 17 January 2023, during the annual meeting with the heads of the diplomatic missions accredited in Romania, President of Romania, Mr. Klaus Iohannis, emphasized that the year that has just begun will be an important one for reinvigorating Romania’s relations with traditional friends and partners in South and South-East Asia, Africa and the Middle East.
The EU is now China’s largest trading partner, and China is the EU’s second-largest.
Trade and economic relations between Romania and Asian countries have a very high potential, significantly exceeding the current volume of bilateral trade turnover.
In 2022, Romania’s foreign trade was 218.1 billion euros, up 26% compared to 2021, with exports registering 92 billion euros – an increase of 23%, and imports of 126 billion euros, up by 28%. This was a record year in terms of Romanian trade.
Moreover, in 2021, Romanian trade volume was approx. 73% with UE countries, and the rest with other European countries and other world countries. This means, there are a lot of opportunities to enhance trade between Romania and Asia countries in the near future.
Romania’s trade balance recorded the following trends at the level of Asian countries in 2021:
- Trade deficit on relations: China (-5,070 mil. euro), Türkiye (-1,799 mil. euro), India (308 mil. euro), Thailand (160 mil. euro), South Korea (146 mil. euro), Malaysia (129 mil. euro), Indonesia (113 mil. euro), Vietnam (112 mil. euro), Bangladesh (36 mil. euro);
- Trade surplus on relations: Iran (276 mil. euro), Japan (35 mil. euro), Pakistan (21 mil. euro).
Import ranking: China (6,205.21 mil. euro), Türkiye (4,418.41 mil. euro), India (537.76 mil. euro), South Korea (516.50 mil. euro), Japan (358.90 mil. euro), Thailand (230.89 mil. euro), Vietnam (208.86 mil. euro), Malaysia (170.19 mil. euro), Indonesia (124.44 mil. euro), Iran (67.87 mil. euro), Pakistan (42.29 mil. euro), Bangladesh (39.40 mil. euro).
Export ranking: Türkiye (2,619.54 mil. euro), China (1,134.72 mil. euro), Japan (394.14 mil. euro), South Korea (370.01 mil. euro), Iran (343.72 mil. euro), India (229.78 mil. euro), Vietnam (96.98 mil. euro), Thailand (70.79 mil. euro), Pakistan (62.88 mil. euro), Malaysia (41.09 mil. euro), Indonesia (11.87 mil. euro), Bangladesh (3.01 mil. euro).
Romania should follow its interest for developing the traditional relations with Asia countries and pursue the intensification of bilateral dialogue in a practical way, in order to capitalize on the current potential of bilateral relations.
For the development of economic relations with Asia countries, Romania has the opportunity to use the legal framework of the EU’s Free Trade Agreements with Asian states. Currently, the Romanian business environment does not use this tool for working with its Asian partners.
In 2021, Brussels updated its trade policy to emphasize “open strategic autonomy,” which aligns well with the free and open Indo-Pacific construct as it continues to focus on preferential trade agreements with developed and middle-income economies and economic partnership agreements with developing countries. The EU’s Market Access Strategy is meant to create the best possible conditions for European firms, intellectual property rights protection, and dispute settlement.
Once again in human history, it seems inevitable that two major regions of the planet, the West and the East, will enter a new phase of interaction. Potentially looking for a new balance, mutual adjustments, and refreshed ideas for partnership. Not in polarization, sometimes simplifying the dramatic and debilitating logic of the past, but in a spirit that can help explore a possible convergence and mutually beneficial cooperation.
In addition, political agreements were coupled with the economic and trade agreements, commissioned by the EU institutions, frameworks that promote common work. However, the main problem with all these agreements is the implementation and the knowledge of the private investors of the public trade agreements.
About the author:
He is the President of the Middle East Political and Economic Institute.