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Europe presses Asia to open economies

Publication Date : 07-11-2012

 

Europe pressed Asian countries yesterday to open their economies further and urged China to ramp up domestic demand as it seeks to tap into the faster-growing region and ease the effects of its long-running economic crisis.

European Commission president Jose Manuel Barroso said the 49 countries of the Asia-Europe Meeting (ASEM) agreed to a "strong rejection of protectionism" at a two-day summit in Vientiane, Laos, Reuters reported.

But European members made no concrete progress on trade deals with Asian counterparts and several leaders voiced concern about the increasing use of non-tariff barriers, as a number of countries seek to raise protective trade walls.

The European Union's planned free-trade agreement with Japan, for example, has stumbled over the issue of dismantling non-tariff barriers in the Asian country. Free-trade talks with India are also making slow progress.

"It's very important for all of us to avoid — namely when there are problems in terms of a financial and economic crisis — what could be a temptation for different countries to become more inward-looking," Barroso said. "The European Union is definitely on the side of those who want more open trade."

Global policymakers are scrambling to avoid a fresh economic downturn as the 17-member eurozone economy slides toward recession this year and the US heads for a "fiscal cliff" of spending cuts and tax hikes in January.

Falling European demand has been a drag on Asian economic activity this year, obliging governments to step up investment and other spending to stimulate domestic demand.

Some Asian leaders have hinted at frustration with the European financial crisis, urging more decisive action to shore up growth.

"As Europe finds itself in economic difficulties, the Asian economies must step up to the plate and ensure that [they] contribute to the global economy," said Indonesian Foreign Minister Marty Natelegawa.

ASEM accounts for more than half the world's population and trade. Its ninth summit concluded yesterday with the adoption of the 16-point Vientiane Declaration on strengthening partnership for peace and development.

"ASEM's leaders shared the view that all ASEM partners would co-exist in peace, eradicate war, refrain from use of force against each other and from direct and indirect interference in internal affairs of each other and resort to peaceful settlement of disputes," the summit's chairman, Lao Prime Minister Thongsing Thammavong, stated.

ASEM leaders, according to Thongsing, also agreed to foster cooperation on sustainable development, ensuring a balance between stable economic growth, social development and environmental protection.

"Leaders committed to narrowing the development gaps between ASEM partners, promoting connectivity and creating an environment conducive to steering integration processes," he said.

Heads of states and governments, including Indonesian President Susilo Bambang Yudhoyono, delegates of 20 Asian countries and 29 European countries and the presidents of the European Council and European Commission, as well as the secretary-general of Asean attended the summit.

The summit, according to European Council president Herman van Rompuy, discussed in depth the three pillars of ASEM, namely economic, political and sociocultural fields. Economy and trade became the key focus of debate.

"There was no blame game," said Rompuy, adding that there was a clear sense among members that they were all in the same boat as the global economy had tightly interlinked them.

 

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