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, addressing a wide range of issues in preparation for the upcoming 20th EU-China Summit, scheduled for July 2018. The Summit is expected to strengthen further the already comprehensive relationship in a number of areas, such as trade issues, energy cooperation, connectivity and transport and investment cooperation. As global actors, the EU and China have a shared responsibility in addressing regional and global challenges such as climate change, common security threats, including counter-terrorism and cybersecurity, and strengthening multilateralism and the rules-based global order, including in the context of the World Trade Organisation and implementation of the Paris COP21 agreement.

The business climate in China is considered challenging. 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 2016 reached EUR 38 billion, while services imports were worth EUR 30 billion. In 2016, Chinese foreign direct investment (FDI) flows into the EU rose to a record high of EUR 10 billion, while EU investment in China was more than EUR 12 billion. The EU is concerned about China’s protectionist measures, export restrictions and the problem of overcapacity in certain industrial sectors, as well as about the lack of reciprocity and market access for EU businesses to trade and invest. A comprehensive bilateral investment agreement with China, the EU’s immediate priority, would create a level playing field for business, provide new market opportunities and protection for investors and their investments, and allow both sides to envisage broader and deeper ambitions, such as a free trade agreement. The 12th EU-China Business Summit held on 2 June 2017 provided an opportunity for businesses to exchange views on economic relations between the two partners.

On 30 May 2018 Parliament’s Committee on International Trade adopted an opinion on a draft resolution on the state of EU-China relations for the Committee on Foreign Affairs. A vote in plenary on this resolution is scheduled for the September 2018 plenary session. On 12 May 2016, Parliament 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 on 9 May 2018.

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 35th round of the EU-China Human Rights Dialogue was held in Brussels in June 2017.

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 fourth largest market and trade in goods between the EU and Taiwan reached a new record of EUR 50 billion in 2017. With FDI stocks of EUR 17 billion (2016), the EU is the largest investor in Taiwan. Parliament has supported potential negotiations for 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. 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 is Hong Kong’s second largest trading partner in goods in 2017 after mainland China, while Hong Kong is the EU’s 17th largest trading partner in goods and the tenth largest in services. The 11th EU-Hong Kong Structured Dialogue took place in November 2017. The European Parliament resolution 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. Members of the European Parliament visited Hong Kong[3] twice in 2017.

D. Japan

Japan has been a strategic partner of the EU since 2003 and shares its values of 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 signing of the two agreements is tentatively scheduled for 11 July 2018 at the EU-Japan Summit. They are expected to enter into force by 2019, following approval by the Council and the consent of the European Parliament. Exercising its democratic scrutiny of the negotiations, Parliament called for reciprocal benefits, notably regarding market access, non-tariff measures and technical barriers to trade. 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 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 protection agreement in the near future. Negotiations are taking place on an EU-Japan Bilateral Air Safety Agreement (BASA), to be aimed at enabling effective aviation safety and reducing 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 (ROK) 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 the EU’s most ambitious trade deal 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.

Tensions between South Korea and North Korea were extremely high in 2017, with the continued testing of North Korean weapons and the belligerent responses of US President Donald Trump. President Moon Jae-in of South Korea is attempting to ease tensions with North Korea through dialogue and confidence-building measures. The joint participation of South Korea and North Korea in the Olympic Winter Games in February 2018 in PyeongChang, South Korea, marked a turning point in relations. An inter-Korean summit proposed by President Kim Jong-un of North Korea took place at the end of April 2018. While supporting harsh sanctions against North Korea as well as reinforced security, President Moon Jae-in seeks to avoid military confrontation, and has launched a new, cautious de-escalation policy based on greater willingness for dialogue. 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, after around 16 million people took to the streets in protest. The Korean people’s desire for change was overwhelming. The legislative elections of April 2017 produced a delicate balance between the five main parties, none of which has a majority. 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.

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), 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.

By complementing and reinforcing 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[4], the EU added one individual and 21 entities to the list of individuals subject to restrictive measures targeted on the DPRK, because of their involvement in illegal trade activities and actions facilitating the evasion of sanctions.

Following North Korea’s joint participation with South Korea in the Olympic Winter Games in February 2018 in PyeongChang, the third inter-Korean summit, proposed by Kim Jong-un, took place on 27 April 2018. This historic step demonstrated the mutual interest of the two nations in pursuing the goal of permanent peace on the Korean peninsula.

The possibility of meeting Kim Jong-un on 12 June in Singapore was first raised by President Trump in April 2018. The US abruptly cancelled the meeting on 24 May 2018, but the next day suggested it could go ahead. Active preparations were launched with the aim of reinstating the US-DPRK summit, and a series of high-level meetings was scheduled for 31 May 2018.

 

[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 

Anna Saarela / Jorge Sotullo