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 maritime disputes in the 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.

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 in 1994 but the arms embargo imposed by the EU after the Tiananmen Square events of 1989 remains in place. The growing economic and geopolitical interdependence between the two partners is reflected in the joint ‘EU-China 2020 Strategic Agenda for Cooperation’, which has deepened and broadened cooperation in a wide range of areas, such as foreign and security policy, economic development, global governance and multilateral cooperation in trade and investment and in social, environmental and other areas, including people-to-people contacts. In 2016, the EU adopted the ‘Elements for a new EU strategy on China’.

The EU-China Strategic Dialogue took place on 1 June 2018 in preparation for the 21st EU-China Summit held on 16 July 2018. The Joint Summit Statement of 2018 (there was no Joint Statement in 2016 or 2017) reflects the deepening of bilateral relations between the EU and China and the renewed positive impact that such a partnership can have. As global actors, the EU and China have a shared responsibility in addressing regional and global challenges, such as climate change and the implementation of the Paris COP21 agreement, common security threats, including counter-terrorism and cybersecurity, and strengthening multilateralism and the rules-based multilateral trading system, including the reform of the World Trade Organisation (WTO), in the context of which the EU and China have set up a joint working group.

Beyond trade and investment, the Summit strengthened further the already comprehensive relationship in a number of areas, such as energy cooperation, connectivity and transport and investment cooperation. A comprehensive bilateral investment agreement with China, the EU’s top priority, would create a level playing field for businesses, provide new market opportunities and protection for investors and their investments, and allow both sides to envisage broader and deeper ambitions. The exchange of market access offers on 16 July 2018 should open a new phase for the investment negotiations, create new momentum and accelerate the process. The EU and China have made progress on the negotiations for an Agreement on Cooperation on, and Protection of, Geographical Indications (GI), expected to be concluded in autumn 2018.

The business climate in China is considered challenging and the EU is concerned about China’s protectionist measures, export restrictions and the problem of overcapacity in certain industrial sectors, as well as intellectual property rights. The EU remains China’s top trading partner, while China is the EU’s second largest trading partner. Trade in goods between the EU and China is worth well over EUR 1.5 billion a day, with the EU’s annual exports amounting in 2017 to EUR 198 billion and its imports to EUR 375 billion. The EU’s exports of services to China in 2017 reached EUR 44 billion, while services imports were worth EUR 28 billion. In 2017, Chinese foreign direct investment (FDI) flows into the EU amounted to around EUR 30 billion, while EU FDI investment in China was estimated at around EUR 6-7 billion in 2017.

The 13th EU-China Business Summit held on 16-17 July 2018 provided an opportunity for businesses to exchange views on topics such as innovation, sustainability and the new economy between the two partners. Parliament adopted a resolutionon the state of EU-China relations on 12 September 2018. On 12 May 2016, it had adopted a resolution on the EU’s stance on granting China market economy status. The 41st interparliamentary session between Parliament’s Delegation for Relations with China and its counterparts from the National People’s Congress took place in May 2018. The last EU-China interparliamentary session during the present legislative term is scheduled for 14 and 15 November 2018 in Strasbourg.

Parliament has drawn 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] and has condemned the treatment of various individual human rights defenders and activists. China firmly opposes any outside ‘interference’ in its internal affairs, including on human rights issues. The 36th round of the EU-China Human Rights Dialogue was held in July 2018.

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 the text states: ‘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 the car industry, pharmaceuticals, cosmetics and medical devices. The EU is Taiwan’s fifth largest trading partner after China, ASEAN, the US and Japan, and trade in goods between the EU and Taiwan reached a new record of EUR 50 billion in 2017. With current FDI stocks of EUR 17 billion, the EU is the largest investor in Taiwan. Parliament has supported potential negotiations for an EU-Taiwan investment agreement and has encouraged closer bilateral cooperation in the areas of trade, research, culture, education, climate change and environmental protection. On 22 March 2018, Taiwan and the EU held their first annual Human Rights Consultations.

C. Hong Kong

The areas covered in EU-Hong Kong relations include trade and economic development, customs cooperation, innovation and technology, competition, food safety, the environment and education. The EU was Hong Kong’s second largest trading partner in goods in 2017 after mainland China, while Hong Kong was the EU’s 17th largest trading partner in goods and the 10th largest in services. The 11th EU-Hong Kong Structured Dialogue took place in November 2017. The European Parliament recommendation of 13 December 2017 on the 20th anniversary of the establishment of the Hong Kong Special Administrative Region (SAR) recommended respecting the Basic Law of the Hong Kong SAR, as being of key importance for further strengthening relations with the EU. While the EU adheres to the ‘One China’ policy and acknowledges China’s objection to ‘interference in internal affairs’, the resolution condemns China’s interference in Hong Kong’s internal affairs, which may put the long-term viability of the ‘one country, two systems’ model at risk. The EU report entitled ‘Hong Kong Special Administrative Region: Annual Report 2017‘ was issued on 24 April 2018.

D. Japan

Japan has been a strategic partner of the EU since 2003 and shares its values regarding human rights, democracy and the rule of law. The EU-Japan Strategic Partnership Agreement (SPA), covering political dialogue and cooperation on policy matters and on regional and global challenges, takes the partnership to a new level. It will also strengthen interparliamentary dialogue between the European Parliament and the Japanese Diet. The EU-Japan Economic Partnership Agreement (EPA), one of the EU’s most comprehensive free trade agreements, is expected to stimulate trade and economic growth on both sides. The EPA contains commitments not only regarding trade in goods but also regarding services, and it provides a framework that promotes bilateral investments. The two agreements were signed on 17 July 2018 at the EU-Japan Summit. Both the EPA and the SPA are expected to enter into force in 2019, following approval by the Council of the EU and the consent of the European Parliament, which is exercising its democratic scrutiny of the negotiations. The 38th EU-Japan Interparliamentary Meeting in May 2018 welcomed the conclusion of the EPA, as it demonstrates the shared commitment of two of the world’s biggest economies to free and fair trade as a powerful tool for sustainable economic growth. The EU and Japan share a common vision for an open and rules-based world economy that guarantees the highest standards. Japan is the EU’s second largest trading partner in Asia after China, with total trade between the two amounting to EUR 129 billion in 2017. The two parties remain committed to enhancing investment relations further by concluding a separate investment agreement, which would include investor/investment protection standards and a mechanism for the resolution of disputes in the near future. The negotiations on an adequate level of data protection by the EU and Japan were concluded on 17 July 2018. Negotiations are continuing on an EU-Japan Bilateral Air Safety Agreement (BASA), which is seeking to enable effective aviation safety and reduce burdens on aircraft operators on both sides.

E. The Republic of Korea (South Korea)

EU-South Korea relations date back to the 1997 Agreement on Cooperation and Mutual Administrative Assistance in Customs Matters. Today, the Republic of Korea is one of the EU’s 10 strategic partners in the areas of global security, the economy, the environment and international cooperation. The bilateral free trade agreement (FTA), ratified in December 2015, is one of the EU’s most ambitious trade deals to date. Bilateral trade between the EU and South Korea has grown significantly and reached a record level of EUR 100 billion in 2017. The EU is a significant investor in South Korea: its FDI stocks amounted to EUR 50 billion in 2016. Parliament’s resolution of 18 May 2017 took stock of the five years of implementation of the EU-South Korea free trade agreement.

South Korea’s science and technology sector is one of the most advanced in the world. It seeks to focus on innovation and has an impressive record in robotics and artificial intelligence, opening up new opportunities to increase joint scientific and technological cooperation with the EU.

South Korea has a highly digitised economy and is developing a national cybersecurity strategy, after experiencing hacks and attacks that affected millions of people and official sites. North Korea has been accused of plotting most of the major cyber-attacks. There is increasing cooperation between the EU and South Korea in the field of cyber threats.

Inter-Korean tensions were extremely high in 2017, with the continued testing of North Korean weapons. North Korea’s participation in the Winter Olympic Games in February 2018 in PyeongChang marked a turning point. President Moon Jae-in is attempting to ease tensions through dialogue and confidence-building measures. Three inter-Korean summits to seek denuclearisation took place between April and September 2018. The EU is supporting a diplomatic solution to the Korean nuclear crisis.

In March 2017, South Korea’s Constitutional Court confirmed the impeachment of the former president, Park Geun-hye. The legislative elections of April 2017 produced a delicate balance between the five main parties and Moon Jae-in, leader of the Democratic Party, was elected president in May 2017. The new administration is implementing an ambitious economic growth agenda, increasing government spending and pursuing redistributive social policies.

A mission from Parliament’s Committee on Foreign Affairs visited Japan and South Korea from 2 to 6 April 2018, seeking the deepening of the strategic partnerships and their parliamentary dimension, in particular regarding global and regional security and peace, on matters such as non-proliferation of weapons of mass destruction, crisis management, cybersecurity, the fight against piracy and counter-terrorism. The 9th EU-South Korea summit is scheduled to take place on 19 October 2018 in Brussels.

F. The Democratic People’s Republic of Korea (North Korea)

The EU has a policy of ‘critical engagement’ towards the Democratic People’s Republic of Korea (North Korea/DPRK), which combines pressure with sanctions and other measures while keeping communication channels open. Bilateral relations are limited, and the EU has no bilateral political or commercial treaties in force with North Korea. Moreover, excluding humanitarian assistance, the EU’s development cooperation, mainly related to food security, is subject to political considerations, UN sanctions and other constraints. Parliament has passed several resolutions condemning North Korea’s nuclear and missile programmes and has expressed great concern about the deteriorating human rights situation in the country.

To complement and reinforce the relevant UN Security Council resolutions (2270, 2321, 2371, 2375 and 2397), the EU has several times expanded the range of sanctions against the DPRK, by extending the prohibition on investment beyond financial services and transport to new sectors. These include the conventional arms-related industry, metallurgy, aerospace and computer services, and services linked to mining and manufacturing in the chemical, mining and refining industries. In April 2018[2], the EU added one individual and 21 entities to the list of individuals subject to restrictive measures targeted at the DPRK because of their involvement in illegal trade activities and actions facilitating the evasion of sanctions. In total, 59 individuals and nine entities have so far been placed autonomously by the EU on the sanctions list, while in addition, 80 individuals and 75 entities are currently listed by the UN.

Following North Korea’s joint participation with South Korea in the Winter Olympic Games in February 2018 in PyeongChang, three inter-Korean summits took place in April, May and September 2018. This historic step demonstrated the mutual interest of the two nations in pursuing the goal of de-escalation and peace in the Korean peninsula.

The summit between President Trump and Kim Jong-un took place in Singapore on 12 June 2018. The resulting joint statement committed to establishing new US-DPRK relations and notably ‘reaffirms the 27 April 2018 Panmunjom Declaration, signed during the April 2018 inter-Korean summit, whereby the DPRK commits to work towards the complete denuclearisation of the Korean peninsula’.

 

[1]European Parliament resolution of 14 March 2013 on EU-China relations (OJ C 36, 29.1.2016, p. 126). 

Anna Saarela / Jorge Soutullo