East Asia

Asia is the world’s largest and most populous continent, and of great geostrategic importance to the EU. The EU has three strategic partners in East Asia: China, Japan and the Republic of Korea. It faces security concerns in the region, such as the nuclear challenge in North Korea and the disputed South China Sea. The EU is a strong economic player and major aid and development donor, working to foster institution-building, democracy, good governance and human rights.

This Fact Sheet describes the East Asia region. See also the Fact Sheets on South Asia (6.6.7) and Southeast Asia (6.6.9).

Legal basis

  • Title V (EU external action) of the Treaty on European Union (TEU);
  • Articles 206-207 (trade) and Articles 216-219 (international agreements) of the Treaty on the Functioning of the European Union (TFEU);
  • Partnership and Cooperation Agreements (PCAs) (bilateral relations).

East Asia

a.China

The EU resumed relations with China — which had been suspended in 1989 after the Tiananmen Square massacre — in 1994. However, the arms embargo imposed by the EU after the events of 1989 remains in place. The growing economic interdependence between the two partners is reflected in the EU-China 2020 Strategic Agenda for Cooperation adopted on 22 June 2016. Within this framework, the EU is seeking strategic cooperation with China in three main areas: prosperity and reform agendas; foreign policy and security; global governance and the multilateral context. The 19th EU-China Summit took place on 1 and 2 June 2017 in Brussels. The two parties reaffirmed their cooperation with regard to tackling climate change and their support for the Paris Agreement. The next round of the dedicated (annual) EU-China Human Rights Dialogue takes place later in June 2017. China has firmly opposed any outside ‘interference’ in its internal affairs, including human rights issues. The European Parliament has called attention to China’s human rights violations, including arbitrary detention, labour camps, the death penalty, curbs on freedom of expression and association, forced abortions and repressive policies in Tibet and Xinjiang. Parliament has also supported Chinese citizens’ calls for effective political reforms[1].

The business climate in China is considered challenging. In 2016, Chinese foreign direct investment (FDI) flows into the EU rose to a record high of almost EUR 40 billion, while EU investment in China fell to a 10-year low of under EUR 8 billion.

The EU remains China’s top trading partner, while China is the EU’s second largest trading partner after the United States. Trade in goods between the EU and China is worth well over EUR 1.5 billion a day, with EU exports amounting to EUR 170 billion and imports to EUR 345 billion in 2016. The EU is concerned about China’s protectionist measures, export restrictions and the problem of overcapacity in certain industrial sectors, as well as the lack of reciprocity and market access for trade and investment relations.

On 12 May 2016, Parliament adopted a resolution on the EU’s stance on granting China market economy status. China and the EU launched negotiations for a comprehensive Bilateral Investment Agreement (BIA) in November 2013. It is crucial that an exchange of market access offers should take place as early as possible. The EU views the rapid conclusion of an agreement with China on Geographical Indications as a major priority. The annual working sessions between Parliament’s Delegation for Relations with China and counterparts from the National People’s Congress have been suspended since the 40th inter-parliamentary meeting (IPM), scheduled for September 2016, was cancelled at the last minute by the Chinese because of an invitation extended by Parliament to the Dalai Lama.

In July 2016, the Permanent Court of Arbitration in The Hague established in a non-binding judgment that China has no historic rights in many of the disputed areas of the South China Sea.

b.Taiwan

The EU adheres to the ‘one China’ policy and does not recognise Taiwan as a sovereign state. The inclusion of Taiwan in the Commission’s Communication of 14 October 2015 entitled ‘Trade for All’ is a major development as it states that: ‘The EU will explore launching negotiations on investment with [Hong Kong and] Taiwan.’ A Bilateral Investment Agreement (BIA) with Taiwan would go beyond investment protection, adopting a comprehensive approach with respect to market access as well as to rules that improve the overall regulatory framework. The EU has developed a well-structured dialogue on economic and trade matters with Taiwan in a number of sectors, such as automotives, pharmaceuticals, cosmetics and medical devices. The EU is Taiwan’s fourth largest market and trade in goods between the EU and Taiwan reached a new record of EUR 46 billion in 2016. With foreign direct investment stocks of EUR 10 billion (2015), the EU is the largest investor in Taiwan. Parliament has supported possible negotiations on an EU-Taiwan economic cooperation agreement and has encouraged closer bilateral cooperation in the areas of trade, research, culture, education and environmental protection[2].

c.Japan

EU relations with Japan, a strategic partner of the EU since 2003, are based on shared values: human rights, democracy and the rule of law. The EU and Japan are currently working towards a framework agreement — a Strategic Partnership Agreement (SPA) covering not only political dialogue and policy cooperation but also cooperation on regional and global challenges. In parallel, a free trade agreement (FTA) between the EU and Japan is being negotiated with a view to stimulating trade and economic growth on both sides. The negotiations were officially launched on 25 March 2013 and the 18th round took place in Tokyo in April 2017. At the EU-Japan Leaders’ meeting on 21 March 2017, the parties confirmed their intention to conclude them swiftly. In endorsing the launch of the FTA negotiations, Parliament insisted on reciprocal and equal benefits from the deal and called on Japan to deliver, notably, on its commitments to reduce non-tariff measures and technical barriers to trade. Japan is the EU’s second largest trading partner in Asia (after China), with total trade between the two amounting to EUR 125 billion in 2016. The two parties are committed to enhancing trade and investment relationships further.

d.The Republic of Korea (South Korea)

South Korea has been a strategic partner of the EU since 2010 and has since strengthened its democratic values and now has a well-developed civil society. The rapid development of its market economy has fostered close political and economic links with the EU. The 2014 EU-South Korea Framework Agreement provides a basis for strengthened cooperation on major political and global issues, with a legal link to the EU-South Korea Free Trade Agreement (FTA). July 2016 marked the fifth anniversary of the EU-South Korea FTA under which exports of goods are fully liberalised, with the exception of a limited number of agricultural products. Bilateral trade between the EU and South Korea has grown significantly on both sides and reached a record level of more than EUR 96 billion in 2016. Relations with South Korea also involve an increasing level of economic and commercial integration. The EU and South Korea share the goal of denuclearising the Korean peninsula and securing stability throughout north-east Asia.

e.North Korea

The EU has no representation in the Democratic People’s Republic of Korea (DPRK) and bilateral relations are limited, with no bilateral political or commercial treaties in force. Moreover, excluding humanitarian assistance, the EU’s development cooperation is subject to political considerations, UN sanctions and other constraints. Parliament has passed several resolutions condemning Pyongyang for its nuclear and missile programmes and has expressed great concern about the deteriorating human rights situation in the country.

In compliance with UN Security Council resolutions (2270 and 2321), on 6 April 2017 the EU expanded sanctions against the DPRK by extending the prohibition on investments beyond financial services and transport to new sectors, such as conventional arms-related industry, metallurgy, aerospace and computer services and services linked to mining and manufacturing in the chemical, mining and refining industry. The EU also added four persons to the list of those targeted by its restrictive measures against the DPRK, bringing to a total of 41 the number of persons who are subject to travel restrictions and asset freezes; seven entities are also subject to an asset freeze. In terms of trade in goods, the EU is North Korea’s 11th biggest trading partner, with total trade worth EUR 30 million.

[1]OJ C 36, 29.1.2016, p. 126.

[2]Resolution of 12 September 2012 on the Annual Report from the Council to the European Parliament on the Common Foreign and Security Policy, OJ C 353 E, 3.12.2013, p. 77. http://www.europarl.europa.eu/sides/getDoc.do?type=TA&language=EN&reference=P7-TA-2012-334

Jorge Soutullo / Anna Saarela

07/2017