EU urges Asia to avoid trade protectionism

European leaders yesterday urged Asia to avoid trade protectionism and appealed to the region to aid efforts to boost the struggling global economy. “Promoting trade is not only fostering domestic demand but also avoiding protectionism,” European Union president Herman Van Rompuy said at a summit of Asian and European leaders in Laos. “We trust that our Asian partners will remain committed to open economies and to the commonly agreed multinational trade rules,” he added. European leaders sought to reassure their Asian counterparts at the meeting that they are finally getting a grip on the long-running eurozone debt crisis. “The financial stability of the eurozone is much stronger than a few months ago. The euro is an irreversible project and on this basis growth can pickup in the course of 2013,” Van Rompuy said. “The economic and financial pressures in Europe are only one part of a wider set of problems worldwide. Growth is a global collective responsibility,” he added. The diplomatic offensive is seen as a sign of the growing importance that Europe places on Asia’s vibrant economies. Italian prime minister Mario Monti told the summit the European Union had made a “huge effort” to tackle the crisis “by more coordination, by fleshing out the future of a genuine economic and monetary union”. He said that Asia also faced slowing economic growth and the risk of financial contagion. “Past events showed us that the current crisis does not stop on the edge of town but it is really knocking at all doors,” Monti said. Meanwhile, Malaysian prime minister Najib Razak yesterday said Southeast Asia will “chart its own course” as it deepens economic linkages, building on the successes and learning from the mistakes of the European Union. Speaking at the summit of Asian and European leaders in Laos, Najib said the Association of Southeast Asian Nations (Asean) was on course to establish an economic community by 2015. “It is our chance to restate the case for economic cooperation across borders,” he said on the first day of the Asia-Europe Meeting, held against the backdrop of the festering eurozone debt crisis. “Of course, Asia is not Europe. But the fundamental principles behind free trade are the same wherever you are in the world.” Najib said the Asean economic community aims to boost trade among the 10 member states by reducing barriers, harmonising rules and easing the flow of goods and services. Asean has, however, taken a cautious approach to accommodate the needs of its diverse membership, which ranges from communist-ruled states to democracies and a sultanate at various levels of economic development. The regional bloc has shied away from talk of a single currency like the euro or setting up a mechanism like the EU, a common central bank or other related institutions. “Asean will chart its own course, building on the successes of the European project whilst learning from its failures,” Najib said.