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SCMP Reporter

In 1995, when Thailand first suggested that countries from Asia should start meeting their counterparts in Europe on a regular basis, most thought it was a good idea.

 For Asia, the Asia Europe Meeting (Asem) was a chance to strike an alternative relationship with a massive economic power that could provide an effective counterbalance to the United States.

 For the 15-nation European Union it was a chance to supplant the institutional dominance rapidly gaining strength at the Asia-Pacific Economic Co-operation forum, and give the EU a greater presence in the region.

 'The situation has changed dramatically since then,' said Professor Michael Leifer of the department of international relations at the London School of Economics and Political Science.

 Rather than seeking to build what was then deemed to be advantageous relations with a fast developing region of the world, Europe is now keener to show that it can be a stable and reliable ally in times of crisis.

 The second Asem leaders meeting - to be held in London this week - will provide the best opportunity to do that. As one commentator said last week: 'If Europe ever had the opportunity to establish a presence in Asia, this is the time to do it.

 'Never before has Asia needed their help and advice.' Mr Leifer agrees: 'Europe has to register that it is not a fair-weather friend, and that it can make a contribution to restoring stability to Asian economies which is in their mutual interest.'  From Asia's point of view, the best aid would be an agreement to roll over potentially crippling short-term debt, to which European banks have more exposure than both Japanese and US banks combined.

 The British Government has announced the establishment of an Asian Trust Fund, which it is running in conjunction with the World Bank, and to which the European Commission and several European countries have said they also want to contribute.

 Providing technical expertise and cash to help build credible financial frameworks for Asian nations and limit the impact of the crisis on poverty, the fund is also likely to be augmented by the establishment of an international technical network of assistance, which crisis-torn Asian nations will be able to access as they seek to rebuild.

 While admittedly such initiatives are not the groundbreaking and alliance-building bridges that some might expect for Europe to try and construct with Asia, they mark the early stages of any relationship, Mr Leifer said. 'The danger of anything like this is that there is too much undue expectation. This is soft institution building.'  Yet Europe faces stern criticism for having not done enough to build stronger relations with Asia, allowing both the US and Japan to wield more influence in the region.

 Thailand is calling on European leaders to rectify this at Asem by issuing a separate statement - in addition to that being produced by the chairman which focuses purely on the Asian crisis - which would send a signal of Europe's willingness to help Asia recover.

 European firms have a much smaller presence in the region than either the US or Japan, and has suffered considerably from a perception that it is less keen to trade with Asia - an image that is reinforced by the anti-dumping investigations that have been launched by the European Commission against countries in the region.

 Mr Leifer said governments could not be blamed for the lack of enthusiasm showed by the private sector, and denied that Europe played a lesser role in Asia than the US or Japan.

 Yet last week the EC launched a new public policy primarily aimed at building closer relations with the mainland, but framed within a much closer Asian relationship to which Asem would be instrumental.

 In addition, the British Government has poured GBP2.2 million (about HK$28.66 million) into the Pacific Asia Programme, a research project conducted by the Economic and Social Research Council, and which is the largest investment in Europe in public policy research in Asia.

 It has released a paper calling for 'vision in setting a new agenda for the Asia-Europe relationship now that the hubris in Pacific Asia has faded'  Gerald Segal, director of the programme and director of studies at the International Institute for Strategic Studies said Britain in particular, as host of Asem had a distinct role to play.

 Before the regional crisis, it might have seemed adequate to have an agenda led by relatively non-controversial issues such as enhancing environmental co-operation.

 ''But given the depth of the economic crisis in Pacific Asia and the looming uncertainties surrounding a single European currency, the UK has the opportunity to take the lead in setting an ambitious agenda for Asia-Europe relations.'  The emphasis he believes is on closer co-operation in enhancing global norms and institutions in managing regional and global economies.

 'It will only be through co-operation in the hard times that Europeans and Asians can demonstrate there is real depth and significance to their relationship.'  Work by a team at Nottingham University, led by Peter Wright, has shown that Britain owes much to Asia in that it had provided 'a major force, helping stimulate the UK's modernisation.'  'A failing Pacific Asia will also mean less direct investment in the UK,' Mr Segal said. Similarly, Britain is expected to gain a great deal in placing within Asia modern financial services that will help it withstand any crisis in the future.

 Will it and the rest of Europe grasp the nettle? The answer is not clear cut. In the early 90s Western European governments and companies blame the emergence of Eastern Europe as far too great an attraction for them to think of Asia.

 In the late 1990s, it is European Economic and Monetary Union which is beginning to fire the imagination. Will this now prove a similar distraction for Europe? Asem aims to ensure that it does not.



Asem seeks to engage European countries in Asian affairs