______________________________________ Stratfor's FREE Kosovo Crisis Center - http://www.stratfor.com/kosovo/crisis/ The most comprehensive coverage of the Kosovo Crisis anywhere on the Internet ______________________________________ STRATFOR's Global Intelligence Update April 1, 1999 Europe Slides Toward Stronger Role in Asia Summary: As the United States continues to push for concessions from China during negotiations on its entry into the World Trade Organization (WTO), the European Union has revealed an interest in holding separate negotiations with China. The EU has also said it is moving toward a consensus to support Thai Foreign Minister Supachai Panitchpakdi in his bid to be the next WTO chief. Along with these initiatives, there are other signs of a growing move by the Europe to take a stronger position in Asia. Analysis: An anonymous European Union official has reportedly suggested that the EU is interested in holding separate talks with China over its bid to become a member of the World Trade Organization (WTO). The official was quoted as saying, "We welcome any progress but we have also made it known that no one party to the talks can determine the outcome on its own." There appears to be a growing dissatisfaction in Europe with the style and speed of talks between the United States and China. In addition to the proposed direct negotiations of the EU with China, the EU has been making other moves to shore up its relations with Asia. In the race for the new chief of the WTO between Thai Foreign Minister Supachai Panitchpakdi and former New Zealand Prime Minister Michael Moore, the EU has said it is leaning toward backing Supachai. Following the Asia-EU (ASEM) foreign ministers meeting in Berlin on March 29, German Deputy Foreign Minister Ludger Volmer said, "We are happy to announce that there is clear support becoming apparent for Supachai Panitchpakdi." The U.S., however, has said it is backing Moore for the position, due to his labor union background. This is causing friction with Thailand, which has warned the U.S. not to neglect it, or a "new chapter" in relations will be opened. Thai Deputy Foreign Minister Sukhumband Paribatr said, "We'll see if the U.S. will hurt our feelings for a second time. Thais still remember well how the U.S. hurt our feelings by neglecting us during the economic crisis." The swing vote in Europe, according to some, will be France, which previously supported the Moroccan candidate who dropped out of the race. Following the ASEM meeting, French Deputy Minister for Development and Cooperation Charles Josselin said, in response to Europe's apparent backing of Supachai, "I can see that a consensus is emerging in favor of Supachai. France will not oppose it." Along with gaining a stronger EU backing for Supachai at the ASEM meeting, Asia also received positive signs of increased cooperation between the two regions, even in the area of human rights, a sensitive issue that has clouded relations between Europe and Asia. Volmer said, "There are not just human rights problems in Asia but also in Europe. With the situation in Kosovo, we in Europe cannot just point our finger at Asia." The increased attention Europe is paying to Asia is the result of several factors. Prior to the financial crisis, Asia was effectively an instrument of production, working loosely within U.S. and Japanese guidance. When the economies of Asia crashed, there was a leadership vacuum that the U.S. and Japan attempted unsuccessfully to fill. There are several reasons for their inability to take on this role. The United States is faced with crises in the former- Yugoslavia and in Iraq. In Asia, it has been steadily moving to diffuse any possible hotspots to avoid a third front. The U.S. answer to the Asian crisis was the International Monetary Fund and stiff austerity packages to bring Asian countries in line with U.S. views. However, the U.S. was not willing to expend extensive resources or attention to the region, hoping instead that benign neglect would amount to passive leadership. For its part, Japan remains too weak economically to lead Asia, despite attempts to woo its neighbors with cash from its Miyazawa fund and with other financial incentives. This lack of attention on the part of the U.S. and lack of strength on the part of Japan opened an opportunity for the EU and Europe. Europe has a mature economy, with little opportunity for rapid, booming growth. It also recently launched the Euro, which has so far failed to become an international sensation. With Asia in need of capital and lacking a leader, the EU is exploiting the opportunity. Despite differences between the EU and the Association of South East Asian Nations (ASEAN) over the role of Myanmar, Europe has been much less eager than the U.S. to use human rights as a tool. This has played well in Asia. In addition, the EU has suggested using the Euro as a way to redefine the international financial system, another winning proposal in Asia. While the EU is feuding with the U.S. over bananas and other trade issues, it is not necessarily hostility toward the U.S. that is motivating Europe's moves into Asia. The opportunity has presented itself, and Europe is looking to exploit it. It can be expected that this European tendency toward Asia will continue to grow, while the U.S. continues to shift its attention and dissipate its resources rapidly around the world. ___________________________________________________ To receive free daily Global Intelligence Updates, sign up on the web at: http://www.stratfor.com/services/giu/subscribe.asp or send your name, organization, position, mailing address, phone number, and e-mail address to [EMAIL PROTECTED] ___________________________________________________ STRATFOR, Inc. 504 Lavaca, Suite 1100 Austin, TX 78701 Phone: 512-583-5000 Fax: 512-583-5025 Internet: http://www.stratfor.com/ Email: [EMAIL PROTECTED]
