Asia is the world’s largest and most populous continent. It is of great geostrategic importance to the EU, which is forging closer ties with countries in South Asia as a strong economic player and a major development and aid donor, working to foster institution-building, democracy, good governance and human rights. The EU also has security concerns in the region, such as the Kashmir conflict and Afghanistan.

Legal basis  

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

South Asian Association for Regional Cooperation (SAARC)  

The EU encourages regional integration and supports the South Asian Association for Regional Cooperation (SAARC). The member countries of the SAARC are Afghanistan, Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan and Sri Lanka. The EU, China, Iran, Japan, South Korea, Mauritius, Myanmar and the US have observer status with the SAARC.

The EU is the SAARC’s top trading partner to the tune of EUR 112 billion (2016 figures); it accounts for around 16% of the SAARC’s overall trade with the world and 23% of its export market. Development cooperation between the EU and the countries of South Asia covers financial and technical aid as well as economic cooperation. Priorities include regional stability, poverty alleviation, human rights, sustainable development, good governance and labour rights. EU-SAARC cooperation seeks to promote the harmonisation of standards and the facilitation of trade and to raise awareness of the benefits of regional cooperation.

A. India

The EU-India strategic partnership promotes trade and economic cooperation. Each partner has regions that differ vastly in terms of economic strength, language and culture, a very large market, and a geostrategic position that poses security policy concerns. The European Parliament resolution of 13 September 2017 on the EU’s political relations with India recommended the preparation of a new, consistent EU strategy for relations with India, with clear priorities. The new EU strategy that is being prepared should further strengthen the EU’s evolving relationship with India by increasing EU participation in the process of India’s modernisation, and should renew the engagement of both sides towards developing a common response to global environmental, economic and security challenges.

The 14th EU-India Summit took place on 6 October 2017 in Delhi. The Summit’s joint statement reaffirmed the parties’ shared commitment to strengthening the EU-India strategic partnership, and discussed foreign and security policy, migration, trade, climate, research and innovation. India has huge potential for economic growth and as a major international strategic player. India is carrying out political and economic reforms focused on modernising the administration, good governance, fighting corruption with demonetisation and transparency programmes, tackling social problems, developing the economy with the ‘Make in India’ and ‘Invest India’ initiatives, and imposing a nationwide goods and services tax.

The EU-India Agenda for Action 2020, adopted at the 2016 summit, sets up forums for foreign policy and security consultations. India is a nuclear power, like its neighbours Pakistan and China, and faces security problems, terrorism and armed border clashes, particularly with Pakistan in the autonomous state of Jammu and Kashmir.

India’s caste system is one of the world’s oldest forms of social class organisation, which raises concerns about continued discrimination on grounds of caste. The country is also an ethnic and linguistic mosaic, with tensions in a number of states and reports of severe human rights abuses and violations of women’s and children’s rights.

The EU and India are re-engaging in discussions on how to proceed with negotiations on an FTA, also known as a Broad-based Trade and Investment Agreement (BTIA). The EU is India’s top trading partner, with a 13% share of its overall trade in goods in 2017. The two-way trade in goods between the EU and India is estimated at EUR 86 billion in 2017, with a hefty surplus of EUR 2.5 billion in India’s favour. The EU is also one of India’s most important sources of investment, with EUR 73 billion in outward stocks and EUR 5 billion in inward stocks in 2016. India currently benefits from unilateral preferential tariffs under the EU Generalised Scheme of Preferences (GSP) which links unilateral trade preferences to respect for human and labour rights.

B. Pakistan

EU-Pakistan relations date back to 1962 and are currently based on the 2004 Cooperation Agreement. The EU, as a major development and aid donor, supports the promotion of democracy and institution-building in Pakistan. The EU has serious concerns about the human rights situation, the blasphemy law and the special military courts in Pakistan.

The elections to the National Assembly and the provincial assemblies in July 2018 took place amid political tensions between the then-ruling Pakistan Muslim League-Nawaz Sharif Group (PML-N) and opposition forces, led by the Pakistan Tehreek-e-Insaf (PTI), which finally won the elections. The EU deployed an Election Observation Mission (EOM), led by Chief Observer Michael Gahler (EPP, Germany), with 10 observers from the European Parliament.

Pakistani politics have been in turmoil since the revelations of corruption by the former prime minister, Nawaz Sharif, in the Panama Papers case in 2016. Sharif was forced to step down in July 2017 and was sentenced to 10 years’ imprisonment on 6 July 2018.

The distribution of powers between the civilian administration, the military and the judiciary are still the main concern after the elections. The army is still involved in internal and foreign politics, with a broad mandate for security and counter-terrorism issues, while sectarian tensions, terrorism and insecurity are increasing day by day. On 13 July 2018, Pakistan suffered its deadliest terrorist attack since 2014.

The government’s priorities are economic growth and combating terrorism and religious extremism. As a nuclear power, Pakistan’s international relations are conditioned by fear of war with India over Kashmir, by US military interference and by instability in Afghanistan.

Pakistan is a major beneficiary of the EU’s unilateral trade preferences under the GSP+ component of the GSP scheme which were reinstated in 2014. As part of the process, the EP Committee on International Trade monitors compliance with the GSP+ requirements on the basis of the Commission’s biennial assessment report for Pakistan (2016-2017). The EU is Pakistan’s second largest trading partner (after China), with total two-way trade worth EUR 12.8 billion in 2017 and the EU taking in 35% of Pakistan’s total exports. Pakistan enjoys a EUR 0.5 billion trade surplus with the EU.

The EU is a significant donor of development assistance and humanitarian aid to Pakistan. Funding under the Development Cooperation Instrument for 2014-2020 amounts to EUR 653 million and is focused on rural development, education, good governance, human rights and the rule of law.

C. Afghanistan

After the fall of the Taliban regime in 2001, the EU opened a delegation in Kabul. On 26 June 2017, the Vice President / High Representative appointed a Special Envoy who took office on 1 September 2017. An EU-Afghanistan Cooperation Agreement on Partnership and Development (CAPD) was signed on 18 February 2017 and entered into force provisionally on 1 December 2017 pending ratification by all EU Member States. A joint communication by the High Representative and the Commission of 24 July 2017 on ‘Elements for an EU Strategy on Afghanistan’ was supported by the Council Conclusions of 16 October 2017. An Afghanistan-EU Human Rights Dialogue is also in place. On 26 August 2018, the EU and its Member States approved the EU Country Roadmap for Engagement with Civil Society in Afghanistan 2018-2020.

Afghanistan completed its first democratic transition in September 2014, when Ashraf Ghani was sworn in as president. The outcome of the presidential elections caused a serious institutional crisis and the president’s political rival, Abdullah Abdullah, was appointed ‘government CEO’. The International Security Assistance Force (ISAF) withdrew in December 2014 but some 13 000 US and NATO troops remain (Resolute Support Mission) with a training and advisory role. The Taliban — and, more recently, the so-called Islamic State (IS) group — pose serious security challenges. Afghanistan is in danger of becoming a failed state. Greater regional cooperation would be an important driver of national and regional stability. In September 2017, the US deployed 3 000 additional troops and asked NATO to match this deployment. The EU, with strong support from the European Parliament, seeks an Afghan-led, Afghan-owned and Afghan-controlled peace process. From the institutional point of view, the main challenges faced by Afghanistan are the parliamentary and district council elections (due since 2015) which have been announced for October 2018 and the constitutional reform pending since the 2014 elections.

Afghanistan is the largest recipient of EU development funding in Asia. The EU allocated EUR 1.4 billion to Afghanistan for the 2014-2020 period, focusing on agriculture, rural development, health, the rule of law, policing, democratisation and accountability. Some 20% of the funds are reserved for ‘incentive payments’ tied to reforms. The international community pledged EUR 13.6 billion in support of peace, security and economic development in Afghanistan for the 2017-2020 period. At the Brussels Conference for Afghanistan of October 2016, the EU and its Member States, Afghanistan’s largest international donor, together committed EUR 5 billion. On 27 March 2017, Tashkent hosted the International Conference on Afghanistan entitled ‘Peace process, security cooperation and regional connectivity’. The EU is Afghanistan’s 10th largest trading partner with trade amounting to a total value of EUR 352 million in 2017. Afghanistan benefits from the EU’s most favourable trading regime, the ‘Everything But Arms’ (EBA) scheme.

Parliament has expressed serious concern at the growing insurgency and at the Taliban’s actions against minorities such as the Shia Hazaras. Afghan nationals made up the second-largest contingent of refugees arriving in the EU during the ‘big wave’ of 2015 and 2016. In October 2016, the EU and Afghanistan signed a document entitled ‘Joint Way Forward on migration issues’. The EU is also providing support for the large numbers of returnees going back to Afghanistan from Pakistan and Iran since 2016.

D. Bangladesh

EU-Bangladesh relations date back to 1973. The 2001 Cooperation Agreement covers trade, economic development, human rights, good governance and the environment. The third Bangladesh–EU Diplomatic Consultations took place on 19 July 2018, covering a wide range of political issues and developments on both sides: human rights and governance, trade and investment, including the EU’s Everything But Arms (EBA) trade preferences, post-LDC Bangladesh relations with the EU, and other regional and global issues such as the Rohingya crisis, connectivity, migration and Agenda 2030.

The EU is broadly supportive of the Bangladesh Government’s reform agenda and emphasises the need for it to deliver on its promises and ensure compliance with its human rights obligations. The EU-Bangladesh meeting on Human Rights and Governance was held on 24 April 2018.

The EU has committed up to EUR 690 million under the 2014-2020 Multiannual Indicative Programme.

Bangladesh is a parliamentary democracy in which power alternates between two parties, the Awami League (AL) and the Bangladesh Nationalist Party (BNP). The AL won the last legislative elections in 2014, and Sheikh Hasina became prime minister. Following violent clashes in 2015 between the two parties, the political situation remains fragile, with security instability and rising religious extremism. The BNP organises periodic strikes, with strong support among students and workers. There are currently reports of increasing human rights abuses and an escalation of political and sectarian violence.

Thanks to a dynamic private sector and a low-cost workforce, Bangladesh’s economic growth is currently around 7%, and it is among the few countries to have achieved the Millennium Development Goals. Working conditions and labour rights in the textile industry have improved since the Bangladesh Sustainability Compact, launched after the tragic Rana Plaza incident in July 2013. However, labour unrest continues to be a serious issue in Bangladesh, especially in industrial garment factory areas around Dhaka.

As a Least Developed Country (LDC), Bangladesh benefits from the EBA arrangement, the most favourable trading regime available under the EU’s GSP. The EU is Bangladesh’s top trading partner on a total share of 23%, with two-way trade worth EUR 11.2 million in 2017.

Since August 2017, at least 655 000 Rohingya refugees have fled persecution in Myanmar to Bangladesh. Most of them do not have access to nutrition or basic infrastructure. The situation can only be resolved if Bangladesh and Myanmar implement their repatriation plan of 23 November 2017.

E. Sri Lanka

EU-Sri Lanka relations date back to the 1975 Cooperation Agreement, upgraded in 1995 by a third-generation Cooperation Agreement on Partnership and Development. The EU GSP+ benefits were restored for Sri Lanka in May 2017 as an incentive for political reforms and compliance with international conventions on human rights, labour rights, environmental protection and good governance. Following the granting of access to the EU for its exports under the EU’s Generalised Scheme of Preferences Plus (GSP+) in May 2017, the European Parliament is closely monitoring Sri Lanka’s progress concerning effective compliance with the GSP+ criteria. The EU-Sri Lanka Group on Governance, Rule of Law and Human Rights met on 5 June 2018.

The EU is Sri Lanka’s second largest trading partner (after India), with two-way trade in goods worth EUR 4.4 billion in 2017, and a EUR 1 billion trade balance in favour of Sri Lanka.

The EU has provided Sri Lanka with EUR 760 million in development assistance over the past decade.

Sri Lanka suffered a civil war from 1983 to 2009 between the Sinhalese-dominated government and the Liberation Tigers of Tamil Eelam (LTTE). Encouraged by the army’s victory, the then President, Mahinda Rajapaksa, called early presidential elections in January 2015 but was defeated by Maithripala Sirisena of the Sri Lanka Freedom Party (SLFP). President Sirisena appointed Ranil Wickremesinghe of the United National Party (UNP) as his prime minister. After parliamentary elections in August 2015, the UNP formed a unity government with the SLFP, based on an agenda of good governance, national reconciliation and re-engagement with the international community. The change of government has led to strong economic growth and enhanced cooperation with the EU.

The upcoming political challenge is to consolidate political stability and to strengthen democratic institutions with a new constitution, to be adopted in 2018.

As a result of the progress made through the introduction of a legal framework for fighting illegal, unreported and unregulated (IUU) fishing that is consistent with international obligations on the fisheries governance system, on 21 April 2016 the European Commission lifted the ban on Sri Lankan fish exports to the EU.

F. Nepal

EU-Nepal relations date back to 1973 and are based on the 1996 Cooperation Agreement. With nearly a quarter of the population living on less than USD 2 a day, Nepal depends on external aid for 25% of its budget. The 10th EU-Nepal Joint Commission meeting was held on 28 June 2018 and took stock of the implementation of ongoing cooperation, in particular in the education sector, in nutrition, and in rural development, where value addition to certain agricultural products is supported to stimulate job creation and the growth of economy. The Financing Agreement for the EU Contribution to Agriculture and Rural Development (CARD) in Nepal, worth EUR 40 million, was signed at the meeting. The EU is one of Nepal’s biggest development aid donors and has tripled its development assistance to EUR 360 million for 2014-2020. The EU also reiterated the importance for Nepal of taking greater advantage of trade preferences granted by the EU under the Everything But Arms scheme (EBA), as total two-way trade in good amounted to EUR 380 million in 2017.

There are high levels of inequality between the upper and lower castes and marginalised communities such as the Madhesi. China and India are competing for influence in the country, which is slowly reconstructing after the 2015 earthquakes.

An EU Election Observation Mission observed elections to both houses of parliament and the provincial assemblies in Nepal on 26 November and 7 December 2017. The Communist Alliance (made up of the Communist Party of Nepal-Unified Marxist-Leninist (CPN-UML) and the Communist Party of Nepal-Maoist Centre (CPN-MC)) defeated the Congress party by an overwhelming majority in the parliamentary elections. The Communist Alliance also won the elections to six of the seven provincial assemblies. Local elections finally took place in three phases between May and September 2017, after being boycotted by the Madhesi representatives in Terai.

G. Bhutan

Isolated from the outside world for centuries, Bhutan is a tiny, remote kingdom with ancient Buddhist traditions located in the Himalayas between India and China. It is adapting to globalisation and strengthening its economy, while at the same time preserving its ancient traditions. It made a peaceful transition to a parliamentary democracy under the constitution adopted in 2008, guaranteeing the separation of powers under a constitutional monarchy.

The EU Multi-Indicative Plan 2014-2020 allocates EUR 42 million in assistance for Bhutan. The EU has had a strong presence in Bhutan since 1982, working to reduce poverty, promote democratisation and good governance and support sustainable agriculture and renewable natural resources. On 24 May 2018, a new ‘EU-Bhutan Trade Support Project’ was launched with the aim of improving value addition, market linkages and the trade and investment regulatory framework.

The EP Delegation for relations with South Asia visited the country in May 2017. Parliament has repeatedly acknowledged Bhutan’s unique development philosophy, initiated when it opened up to globalisation. It is based on the concept of Gross National Happiness (GNH), which statistically measures people’s quality of life and balances spiritual and material advancement.

H. The Maldives

EU-Maldives relations date back to 1983 when the head of the Commission Delegation in Colombo was accredited as non-resident ambassador. Although there is still no formal cooperation agreement, the EU provides cooperation support for rural communities, tourism and climate change mitigation. On 16 July 2018, the EU Foreign Affairs Council adopted a framework for targeted restrictive measures against persons and entities responsible for undermining the rule of law or obstructing an inclusive political solution in the Maldives, as well as persons and entities responsible for serious human rights violations.

After a period of political turmoil in 2015, the human rights situation progressively deteriorated, with increasing repression of the opposition. In July and August 2017, former President Yameen ordered the army to shut down the parliament, thus avoiding impeachment, and in February 2018 he declared a state of emergency for one month.

The opposition leader of the Maldivian Democratic Party (MDP), Ibrahim Mohamed Solih, won the presidential elections on 23 September 2018. After a week of contestation and attempts to annul the vote, the president of the Maldives Electoral Commission confirmed that Solih had obtained 58% of the votes, beating the former incumbent Abdulla Yameen of the Progressive Party of Maldives (PPM).

The Maldives is known as a luxury holiday destination. Extremely vulnerable to climate change, this fragile archipelago is exposed to rising sea levels and coastal erosion, which pose a serious threat to the viability of the country. The other reality is high youth unemployment, gang violence and drug addiction, with increasing social unrest.

The Maldives graduated in 2011 from the UN’s Least Developed Country (LDC) category and attained upper middle income status in 2013. The economy is based mostly on tourism and fisheries. The EU is the Maldives’ fourth largest trading partner, accounting for a 10% share of the total trade in goods (2017).

 

Jorge Soutullo / Anna Saarela