Attention is inevitably focused on Pakistan’s relations with the US, India and Afghanistan. However, the election of a new democratically elected government also opens up new avenues for stronger EU-Pakistan relations.

The EU’s key priority should be to show strong, visible and sustained support for Pakistani democracy. And it should do so urgently. An EU-Pakistan road map will need to focus on three key issues.

These include the rapid convening of a third EU-Pakistan summit, quick action to re-energise and update the five-year EU-Pakistan engagement plans and the strategic dialogue between the two sides and further improvement in trade access for Pakistan’s textile exports.

The EU can also provide more support for Pakistani civil society, help improve a still abysmal record on human rights and through its own experience in regional integration encourage cross-border cooperation between India and Pakistan.

EU high representative Catherine Ashton has described the Pakistani elections as a “historic victory for the democratic life” of the country. Michael Gahler, head of the EU election observation mission, has also praised the polls but noted that various aspects of Pakistan’s electoral process should be improved. The mission failed to monitor Balochistan or the semi-autonomous tribal belt on the Afghan border where the Taliban and al Qaeda have strongholds.The EU’s greatest concern remained the deadly militant violence experienced both in the run-up to the ballot as well as on election day but members of the mission said the attacks and threats made by militant groups must not overshadow the achievements of the polls.

Behind the public statements, however, there is strong concern at the new prime minister’s ability to master the ethnic and sectarian complexities of Pakistan. Questions remain on the role of the army — and Nawaz Sharif’s attitudes towards the security establishment more generally. A dominant theme is whether the army will — once again — thwart any future moves by the new government to build bridges with India.

Doubts also linger over policies to be adopted vis-à-vis Afghanistan, especially in view of the 2014 withdrawal of Nato forces from the country. In spite of such justifiable concerns about what lies ahead, the EU must act quickly to make its mark in Pakistan — not just because the arena is crowded and Europe’s visibility remains low but also because the EU has a strong contribution to make to Pakistan’s post-election era and the challenge of good governance.

The EU, and national European governments, must start reflecting and acting on a range of measures to help Islamabad in the short and medium term. The focus has to be on helping Pakistan cope with its massive economic problems, starting with the power sector. Job-generating schemes need to be given priority as should education.

A third EU-Pakistan summit should be organised without too much delay to highlight EU support for democracy in Pakistan and set a new agenda for deeper and more comprehensive long-term relations. Such a meeting has already been mooted by EU foreign ministers — but preparations should not be delayed.

As EU foreign ministers recognised earlier this year, the so-called EU-Pakistan five-year engagement plan and strategic dialogue should be reinvigorated and updated to take account of the new government’s priorities. The plan is indeed wide-ranging — covering issues related to security, democracy, human rights and good governance — but requires real flesh on the bones.

Despite a recent warming in relations, Pakistan is still on the periphery of the EU’s Asia policy. And the key reason it is climbing slowly up the EU’s foreign policy agenda is because of the strong link with security in Afghanistan, connections between tribal areas in Pakistan and Europe’s ‘home-grown’ terrorists and persistent US and British insistence that the EU should help stabilise the country.

The EU does not have America’s clout or leverage in Pakistan. But the absence of an EU role in providing military support has built up Europe’s credibility with Pakistani civil society.

The EU needs to be more innovative and creative in forging a new strategy which looks at Pakistan not merely as a developing country, requiring traditional development aid actions, but as a fragile country in transition which needs help and assistance to modernise and reform its flagging economy, reinforce weakened political institutions and strengthen the rule of law.

Work on supporting the strengthening of democratic institutions and the electoral framework with particular focus on institution building, legislative reform and voter participation will have to continue.

Pakistan’s army and security services still need counterterrorism training to tackle the insurgency and fight radicalisation. Pakistan needs help to boost its exports to Europe and elsewhere. The EU has already given Pakistan improved market access by introducing autonomous trade preferences following a WTO waiver. The hope now is that Pakistan will secure access next year to the GSP Plus scheme for zero-duty, zero-quota exports to the EU.

This is good for Pakistan but also means that Islamabad will have to sign up to an array of labour conventions. The move will also boost the EU’s political influence in the country.

EU aid — about 500 million euros over the last four years — is significant but trade is more important for Pakistan’s development.

Finally, Pakistan will continue to need support from its friends to stay on the democratic path. Successful elections alone will not anchor democracy in Pakistan. Decisive domestic policies are needed to ensure good governance. Pakistan’s foreign partners also have a role to play in making sure that election promises are kept and peoples’ aspirations are not once again jettisoned.

The writer is Dawn’s correspondent in Brussels.

I am the only foreigner in the carriage. Once in a while, someone looks up at me with a shy smile and then quickly retreats to the minute screen on his/her phone. I smile back tiredly — I want to get to my hotel as soon as possible. But there is another hour and a half of train travel ahead, following on the heels of the 11 hours I have spent on the Brussels-Shanghai flight and the two hours of patient wait at the Shanghai railway station. I am exhausted.

I keep dropping off to sleep, waking up only when the train screeches to a halt at a station and travellers get on and off. They do so without much noise. In fact, it is eerily quiet although a few old folk break into chuckles once in a while.

I reach Yangzhou right on time where my hosts speed me to my hotel and some much-needed rest. I’ve only been in the country for about five hours so far and already I know: China is punctual, efficient and courteous. It is also big, bright and shiny — and it is doggedly forging ahead at still-impressive growth rates that are the envy of the rest of the world. Just like the train I have just been on.

China’s hold on the global imagination is nothing new. Many years ago, I remember my father coming back from an official trip to China with stories of the country’s determined drive for growth and development. I hung on his every word, devouring his descriptions of the banquets he attended, the factories he visited, the disciplined workers he met — and the Chinese leaders’ commitment to eliminating hunger and poverty.

Of course, it was not that simple. Then as now, China is a complicated and complex country which amazes, bewilders and fascinates. It is multi-faceted and difficult. Warm and breezy when it wants to be nice — but cold and intimidating when it turns its back on you. My job requires that I not only try and unravel the mysteries of the country from my perch in Brussels and through conversations with Chinese scholars, journalists and diplomats, but also that I visit China to see the evolution of the country first-hand.

This time I am attending a conference in Yangzhou, a ‘small’ town of about four to five million people, where modern skyscrapers and factories have not yet totally overtaken vestiges of Chinese history and ancient civilisation. Discussions with my Chinese colleagues inevitably turn to global — and especially European — perceptions of China. Why, they ask, is China so misunderstood?

China, they tell me, is committed to a peaceful rise, that it wants friendly relations with its neighbours and that even if China wanted to rule the world — as some contend — the domestic challenges facing the new leaders make it impossible that Beijing would embark on a foreign adventure. President Xi Jinping and Premier Li Keqiang are under public pressure to fight corruption, combat pollution and improve food safety and security.

As Chinese cities grow bigger, the focus is on improving the lives of China’s ‘urban billion’ and making Chinese urban centres more livable for all. Certainly, China is ‘misunderstood’, with foreign observers of the country still undecided on its future direction. There is consensus that political reform is not on the agenda — but no agreement on whether the current growth trajectory will be maintained or if China will fall into the ‘middle-income trap’ of economic stagnation.

There are, in fact, three competing Western narratives on China in the 21st century which mix confusion, admiration and fear. Foreign scholars, journalists and policymakers are confused and puzzled by China. The country breaks the mould; it is a communist one-party state with a dynamic, capitalist economy; it is the new kid on the block which is at the same time massively rich and hopelessly poor.

Europeans and Americans want to do business with China but cannot decide whether it is a rival or a partner, a force for good or bad. They worry about China’s rising economic dominance and influence over its neighbours but also recognise that without Chinese trade and investment, the rest of Asia would still be largely undeveloped.

Even as they try to make sense of China, many observers admit to strong admiration for the gigantic growth and development strides made by the country in the last 30 years. They admire China’s emergence as a regional and global power — but also profess fear at the country’s future direction. Opinion polls across Europe show continuing public unease about the country’s political system, human rights, increased military spending and trade practices.

European views of China are coloured by recent developments in the South and East China Seas and Beijing’s soft approach to the North Korean regime. Significantly, Europe’s economic troubles are also impacting on perceptions of China, with public opinion torn between a view of cash-rich China as a potential ‘saviour’ for ailing European economies and fear that Beijing is planning to ‘buy up’ European assets and use its expanding economic power to influence European policy.

As I head back to Europe after days of intense discussion with my Chinese friends, my head is buzzing with facts, figures and impressions. I worry that I am still no closer to really ‘understanding’ modern-day China. But then as a Chinese friend asks me consolingly: “Tell me, who is?”

The writer is Dawn’s correspondent in Brussels.

Myanmar’s rebranding as the cool new place to make money is getting global traction. Australia and Canada have eased or lifted all sanctions imposed on the country in the years it was under military rule, the US has made it easier to do business with Myanmar and early next week the European Union will lift all restrictions, except the arms embargo, on the country.

Not bad for a state whose military representatives were once barred from entering the  European Union (EU) and whose membership of the Association of Southeast Asian Nations (Asean) in 1997 led to a stalling of EU-Asean relations for almost a decade.

But times change, countries get rebranded and international relations keep evolving. Myanmar is by no means out of the woods. Human rights groups draw attention to ethnic strife and communal violence in the country, including the conflict between Buddhists and Muslims. Despite political reform, Myanmar still has political prisoners.
Human rights and the rule of law are not always respected.

Still, the business leaders keep pouring in. While it was China that once ruled the roost in Myanmar, Beijing now faces tough competition from the US, Europe and Southeast Asian countries.

The focus on making money is not bad. There is plenty to be made in Myanmar, a country rich in natural resources. But given Myanmar’s history of authoritarian rule and human rights abuses, the international community must continue to push, prod and pressure Myanmar on reform. Achieving this requires a difficult balancing act which allows a stepping up of international engagement with Myanmar while retaining the option of tougher action if reform efforts stall.

Myanmar certainly deserves credit for beginning an impressive process of transformation under President Thein Sein. After decades of military rule, the government has legalised the main opposition party, released hundreds of political prisoners and implemented a variety of legislative and regulatory reforms. “My government will do everything in its power to see Myanmar become a democratic and prosperous and peaceful nation,” Thein Sein told EU officials earlier this year. Not everyone is convinced.

In an open letter to EU governments, the International Federation for Human Rights has urged a continuation of the current regime of suspended sanctions for an additional year as a “necessary safeguard” to ensure Myanmar stays on its path to reform.

According to the Asean Inter-Parliamentary Myanmar Caucus, the EU must strike a “careful balance between encouragement and continued pressure” and a permanent removal of sanctions will send the wrong message.

Engaging with countries in transition is never easy and in Myanmar’s case, the transition from decades of authoritarian military rule towards a more open and representative system is proving especially difficult. Political change is continuing. There is certainly much to welcome in Myanmar: the economy is forecast to grow strongly as policy reforms continue and foreign investment surges into the resource-rich country.

With foreign companies lining up to gain access to Myanmar’s market, the government has been implementing measures to ease restrictions on investments. The country is also opening up to the global financial system.

Political reforms are continuing apace. By-elections held a year ago saw opposition leader and Nobel peace prize laureate Aung San Suu Kyi elected to parliament and over the past years, the government has released hundreds of political prisoners, increased media freedoms and adopted important reforms in labour laws.

Journalists no longer have to submit their work for censoring before publication and private daily newspapers are now sold in Myanmar after years of press censorship.
A commission to review the 2008 constitution has been set up, signalling that the ruling party could eventually allow Suu Kyi to contest the presidency in the 2015 general elections. The elections will in fact be a true test for progress towards democracy in the country.

EU-Myanmar relations are improving fast. European foreign ministers are frequent visitors to Myanmar, the EU has a representative office in the country and on several occasions has reiterated its commitment to supporting Myanmar’s peace process. Earlier this year, Myanmar and the EU pledged to build a lasting partnership, with the EU promising increased assistance and support for the country.

The European Commission has recommended that Myanmar be brought back into the EU’s Generalised System of Preferences (GSP) for least developed countries. Such a move could help raise Myanmar’s exports by 30 per cent according to the European Commission. The proposal follows a report by the International Labour Organisation which said the country has made “significant” progress in tackling forced labour, the reason Myanmar lost GSP status in 1997.

An end to sanctions, say those who favour such a move, will speed up Myanmar’s socio-economic development, attract investors into the country and allow European companies to compete on an equal footing with the US, China, Australia and others. Sanctions are also a blunt instrument, they say, which have had little impact on Myanmar’s generals and their friends while seriously hurting ordinary citizens.

In addition to helping bring much-needed capital back into the country, an end to EU sanctions will also encourage a transfer of skills and technology transfer and help the development of institutional capacity to help absorb the vast sums of money being poured into the country.

The lifting of EU sanctions will send an important signal of support. However, a careful step-by-step approach of increased smart engagement, which is conditional on continuing change and an end to violence, is required. Vigilance, monitoring and pressure will continue to be vital. The EU, along with other countries, will therefore have to maintain pressure for change, reform and openness.

The writer is Dawn’s correspondent in Brussels.

For journalists of all ages and nationalities, Thatcher brought oomph and glamour to the European beat. She loomed large in my life. I was starting off as a young, inexperienced reporter covering the EEC when Thatcher walked into No 10 Downing Street as the newly elected British prime minister. Thatcher made my first few years as a journalist in Brussels, interesting and exciting.

Sure I worked hard. Covering the European saga as many EU observers know only too well can be a challenge. Certainly, there are moments of suspense, tension, acrimony and drama. But, often in those days even more than now, it was a question of understanding dense technical details, listening to tedious men pontificate and running around trying to get a few good quotes that would make a story readable.

It was not easy. The EEC was even more Byzantine than modern-day EU; European decision-making was even more opaque, the stories much less exciting. I liked the European narrative — old foes coming together to create a peaceful and prosperous continent, one where there would be no more wars. But the daily grind of covering the intricacies of European integration was not for the faint-hearted.

On paper, Europe was about unity and harmony. In reality, all the leaders and their deputies appeared to be constantly bickering. I tried desperately to make sense of it all. Sometimes, the struggle was just too much and the stories we wrote were weak, rambling and without a core. Our hearts were just not in it. It was a time of European milk and butter mountains, huge farm subsidies, rows over arcane questions.

Yes, some of the leaders were impressive: French president François Mitterrrand, German chancellor Helmut Kohl and European Commission president Jacques Delors stood tall and proud. But in the early 1980s, the talk was about “euro sclerosis” and petty European problems. The European single market, the single currency and enlargement only came later.

And then Thatcher burst onto the European scene. I am sure she wore all kinds of different colours but as I remember it, she was always wearing that beautiful dark blue suit and carrying that iconic rigid handbag. Thatcher quite literally woke me up. First, because she was a woman — a feisty, tough-talking woman — in a world of men in grey suits.

But also, of course, because she knew what she wanted. At one of her first European summits, she called for the UK’s contributions to the EEC to be adjusted, warning that otherwise she would withhold VAT payments. “I want my money back!” she exclaimed while we struggled to note down everything she said. This tussle lasted four years, but she eventually won the British budget rebate. She passionately fought and won a number of battles against what she saw as the excessive powers of Brussels.

Ever the pragmatist when it came to Europe, Thatcher was influential in securing the Single European Act in 1986, which set a deadline of 1992 for the full completion of the single market. By 1988, however, Thatcher was making clear that Britain did not want further political integration. In a landmark speech made in Bruges, she insisted: “We have not successfully rolled back the frontiers of the state in Britain, only to see them re-imposed at a European level, with a European super-state exercising a new dominance from Brussels.”

That became the great divide. Many of Europe’s leaders were committed to closer integration. They believed in it, with the single market but a staging post. It was her rejection of further integration at an EU summit in Rome that prompted a rebellion and resignations of the pro-Europe members of her cabinet and led eventually to her downfall.

Intriguingly, she opposed German re-unification and — not surprisingly — was often at loggerheads with Kohl, a fact recognised in a recent interview by the former chancellor. “It is true — Margaret Thatcher was difficult, just as our relationship was difficult,” Kohl, 83, said. “Margaret and I simply never managed to build a trusting and warm relationship.” Thatcher’s wariness towards Europe still persisted in British attitudes towards the EU today, he said.

Many in the former communist countries of Eastern and Central Europe have nothing but praise for Thatcher who encouraged the EU to embrace the newly democratic countries and bring them back into the European family. Other European leaders both resented her and admired her. François Mitterrand famously said she had “the eyes of Caligula and the mouth of Marilyn Monroe”.

Another French president Jacques Chirac said: “She was one of the most feared figures on the international stage.” He went on to say: “What made her great in my view was above all her conviction…. She never doubted being in the right.”

Thatcher’s eurosceptic policies are reflected in Britain’s current ambivalence towards the EU. London’s insistence on opt-outs, the belief in British exceptionalism, the profound unease at power slipping away to a bureaucracy in Brussels date back to Thatcher and her love-hate approach towards Europe.

“No. No. No,” Thatcher famously told the British parliament on Oct 30, 1990 after Delors called for the European Parliament to be the democratic body of the community, the commission to be the executive and the Council of Ministers to be the senate. Listen closely and if the wind is blowing in the right direction, you can hear David Cameron mouthing the same refrain.

The writer is Dawn’s correspondent in Brussels.

Goldman Sachs Asset Management Chairman Jim O’Neill coined the Bric term in 2001 to describe the four emerging powers he estimated would equal the US in joint economic output by 2020. Brazil, Russia, India and China held their first summit four years ago and invited South Africa to join their ranks in December 2010.

Since then, the Brics have been making headlines — and provoking global arguments. Most Western policymakers shrug off the “Brics phenomenon” as exaggerated. No need to sweat, they say. These countries are just cocky new kids on the block who will soon fade into oblivion.

The scepticism is shared by other emerging nations who are not yet Brics members but aspire to join the club. And then for many other developing nations, the Brics represent a new world order where emerging nations dare to question the traditional, Western-dominated way of doing things.

O’Neill was on to something. While the results of the latest Brics meeting in Durban may not have been overwhelming, emerging nations are slowly but surely shaping the new global agenda.

True, the five countries did not manage to launch the much-heralded development bank. Also true that the economies of all five countries are slowing down, partly due to the tardy global recovery, and partly to their own domestic challenges.

There is also no denying that China, with the biggest Brics economy and the brightest future, is the universally acknowledged leader of the grouping. And yes, that makes the leaders of other countries feel a bit miffed and jealous.

Finally, it is correct that intra-Brics differences are as significant: Brazil, Russia and South Africa are big resources exporters. China and India are importers. There are border tensions between China and India, and competition for influence in Central Asia between China and Russia. China is a communist state. Russia is an ex-communist authoritarian state. The others are democracies.

But so what? Having followed the ups and downs of many of the world’s much-renowned groupings including the European Union, Asean, the Group of 8, the G20, Nato and others, I have become accustomed to the wide gap between the high hopes and stark reality of cross-border cooperation.

Treaties are signed, speeches made, press conferences organised. The rhetoric is about unity, solidarity, cooperation and collaboration. In practice, leaders and officials spend much of their time on turf battles, internal quarrels and squabbling over policy.

When they are not at loggerheads, officials in these and other organisations do manage to make progress on their goals. Sometimes, things move along nicely. More often, well-laid plans run up against obstacles. In the end, however, most of the organisations survive — and some even flourish and expand to bring in new members.

The European Union is especially good at lurching from crisis to crisis — but also growing and maturing while it does so. The latest euro emergency over the crisis in Cyprus has further highlighted the difference between the goals and the reality of the EU. Despite last year’s dire predictions of an unravelling of the eurozone, however, the EU and the currency bloc have managed to survive. Asean has also stayed on course despite the differences in levels of development and government structures of its member states.

So let’s take a cool-headed look at the Brics and especially at the results of the latest Brics gathering. Leaders agreed to create a development bank to counter-balance Western-dominated institutions, although no firm details were unveiled. Finance ministers from Brazil, China, India, Russia and South Africa say they will now enter into “formal negotiations” to set up the bank’s structures. It is unclear how much money each of the countries will put into the bank.

The five leaders also agreed to set up a $100 billion currency crisis fund to ward off balance of payments or currency crises. China’s new president, Xi Jinping, who attended the summit in Durban, admitted the Brics countries had a lot of work ahead of them. “The potential of Brics development is infinite,” he said, adding “the real potential of Brics cooperation is yet to be realised.” Together the Brics economies account for 25 per cent of global output and 40 per cent of the world’s population.

The Brics accuse the World Bank and International Monetary Fund of not doing enough to address underdevelopment, and say Western governments exert too much control over the way they are managed.

All five countries are demanding a stronger voice in the two multilateral institutions. They argue that Europe is over-represented while emerging economies do not have the decision-making powers they deserve. There is undoubtedly a whiff of anti-Western rhetoric. But the Brics are not alone in demanding changes in global governance.

In fact, as the number of emerging nations increases, the Brics grouping will probably have to expand to welcome Turkey, Indonesia, Mexico and the Philippines, the so-called “Timps”. Other analysts prefer the label “MIST” to describe Mexico, Indonesia, South Korea and Turkey.

Whatever the alphabet soup they come up with in the end, the Brics and their ilk have made life in the 21st century exciting. Yes, the future is uncertain. The old, traditional unipolar world is history and the multipolar world is also slowly fading into the mists of time.

The future world order will provide space to all kinds of nations, big and small, which influence global developments because of their strong economic performance and their, often patchy, ability to respond to the hopes of their citizens.

The writer is Dawn’s correspondent in Brussels.

The European Union (EU) was for long a defender of the World Trade Organisation (WTO) and the multilateral trading system it represents. For the last few years, however, trade experts in Brussels have turned their attention to bilateral free trade deals to achieve global trade expansion.

EU trade officials argue that their heart is still in the WTO and efforts to boost global trade liberalisation. But with the Doha round stalled and European businesses clamouring for open markets and new investment opportunities, the EU has no option but to strike bilateral free trade agreements.

An EU-India free trade agreement (FTA) is expected to be finalised this year, after seven years of difficult negotiations.
Discussions on FTAs are also under way with some Southeast Asian countries. But the real prize for EU policymakers and business leaders is the transatlantic free trade deal that Brussels and Washington are hoping to negotiate.

The agreement will be the “mother” of all FTAs, generating growth and jobs on both sides of the Atlantic and creating a harmonised regulatory environment that will in effect create a single, border-free transatlantic market. In recent discussions in Brussels, policymakers from the US and the EU were anxious to dispel impressions that they were “ganging up” against the emerging countries, especially China. But no one is convinced. If it ever sees the light of day, the transatlantic trade deal will in effect represent a major achievement of the West in what many view as the “Asian Century”.

Equally significantly, the EU and Japan are getting ready to launch negotiations on an economic partnership agreement which, along with a political accord, aims to open up a new era of closer relations between Japan and the EU. The two agreements can certainly inject fresh life into the EU-Japan partnership. To get good results, however, both sides will have to commit time, energy and effort to the exercise. Most importantly, European and Japanese policymakers will have to find the right balance between their high political ambitions and hard-nosed bargaining on key trade questions, including agriculture and automobiles.

The EU-Japan summit in Tokyo on March 25, to be attended by Japanese Prime Minister Shinzo Abe, EU Council President Herman Van Rompuy and José Manuel Barroso, the European Commission president, will kick-start the two separate political and economic talks.

The move to strengthen EU-Japan ties comes as Japan also prepares to join discussions on a Trans-Pacific Partnership, a free trade deal including the US and several leading Asia Pacific economies. A triangular trade deal is also being explored with China and South Korea.

“For Japan, the EU is a crucial partner, not just a strategic partner,” says Kojiro Shiojiri, Japan’s ambassador to the EU. “Both the economic and political agreements between the EU and Japan are very relevant.”

While it was important to reduce tariffs to boost EU-Japan trade, Shiojiri said he believed that regulatory reform and harmonisation were even more essential to reduce costs and step up competitiveness. “Regulatory change is the bigger prize with a bigger impact on economies and societies. We are more interested in reform to build a more resilient economy and society.”

Both the EU and Japan were becoming less competitive in their performance on East Asia’s dynamic markets, he added. The Economic Partnership Agreement (EPA) would help both Japan and the EU to upgrade their performance in a very competitive globalised world.

The EU mandate for the EPA with Japan was agreed at the end of November last year. According to EU Trade Commissioner Karel De Gucht, the mandate sets out a strict and clear parallelism between the elimination of EU duties and non-tariff barriers in Japan.

There’s a safeguard clause to protect sensitive European sectors and the EU will “explicitly reserve the right ‘to pull the plug’ on the negotiations after one year if Japan does not live up to its commitments on removing non-tariff barriers”.

Japan is serious about opening up its market and had already started to remove a number of key non-tariff barriers up front — such as granting liquor licences to European operators, the commissioner said, adding: “Such moves have given us all the reassurance we could reasonably expect before a formal negotiation is opened.”

The European Commission says a trade deal with Japan will boost Europe’s economy by 0.8 per cent of GDP, adding that 420,000 additional jobs in the EU are expected as a result of this agreement. Japan is the EU’s second biggest trading partner in Asia, after China. Both the EU and Japan have low tariffs on goods. But non-tariff measures are major barriers to EU exports to Japan.

Parts of the Japanese market, e.g. some agricultural products and some transport equipment and aeronautical products, are almost totally closed to EU exports. Seven business sectors that cover the bulk of EU exports to Japan are those most affected by existing non-tariff measures including chemicals, automotive, medical devices, processed foods, transport equipment, telecommunication and financial services.

Shiojiri and EU officials insist that any trade agreement between the EU and Japan must be negotiated quickly so that both sides can start reaping the benefits sooner rather than later. But that may be asking for too much: free trade deals may sound attractive on paper but negotiations are often painful and long-winded. As such, the jury is still out on whether the EU-Japan trade talks will break this tradition.

The writer is Dawn’s correspondent in Brussels.

Only a few will point to recent constitutional changes in Hungary which many believe are threatening democracy and the rule of law in the Eastern European nation which joined the European Union in 2004.

For those who believe in the EU’s core commitments to human rights, diversity, democracy and the rule of law, Hungarian Prime Minister Viktor Orban is taking his country down a dangerous road. His moves are not only a menace to Hungary’s democratic future but also to the EU’s global standing and reputation.

I confess that like many in Europe, I have not been paying adequate attention to recent developments in Hungary. Elections in Italy are more interesting. British politics, complete with sad scandals of politicians’ betrayed wives, are almost Shakespearian in their tragi-comic implications.

In comparison, Hungary is far away — not a part of Europe’s mainstream and not very high on the EU agenda. Things may be changing, however. If the EU is to be credible as a global defender of democracy and human rights, it can no longer turn a blind eye to Hungary’s clear disregard of European values.

Critics fear that a recent amendment approved by Hungarian lawmakers weakens the country’s constitutional court and undermines its democratic checks and balances. Orban’s conservative government holds a two-thirds majority in parliament, which it has used to push through a sweeping overhaul of the country’s institutions and its constitution.

Prime Minister Orban disagrees with the critics, however. The much-attacked recent amendments to Hungary’s constitution are in line with EU treaties, he said in Brussels recently, adding: “Hungary’s democratic institutions are strong enough to defend themselves.”

Since 2010, Orban has battled often with the EU over attempts to increase his executive control, ranging from limiting the central bank’s independence to curbing media freedom. His government has altered some legislation to comply with EU demands, but critics claim the changes were only superficial.

Dutch Prime Minister Mark Rutte has warned that Hungary’s constitutional changes are cause for “great concern,” especially for minorities. “Europe is not only about the market and the currency, but it is also a community of values that we share — human rights, democracy,” Rutte said.

German Chancellor Angela Merkel has also voiced concern, saying a government with such a strong majority bears a special responsibility to protect minorities. European Parliament President Martin Schulz has urged EU leaders not to allow a member state to slide back on the EU’s core principles.

Hungary’s constitutional amendment allows local authorities to fine or jail homeless people, bans political campaign ads on commercial radio and TV stations, and forces university students who accept state scholarships to work in Hungary for years after their graduation.

Crucially, the amendment also limits the court’s right to review constitutional amendments. That allows any government with a two-thirds majority — as is the case with Orban’s Fidesz party — to put whatever it wants into the constitution.

For the EU, it is a terrible dilemma. While the European Commission has sweeping monitoring and enforcement powers on many economic matters, it lacks authority if a member state changes its laws to curb the rule of law or democracy itself.

So far no leading EU politician has explicitly called for Hungary to be stripped of its voting rights in the EU’s institutions, but several EU countries have suggested the setting up of a powerful new watchdog mechanism to monitor legal compliance with the EU’s fundamental values.

Four foreign ministers — from Germany, Denmark, Finland and the Netherlands — have highlighted that the EU needs “a new and more effective mechanism to safeguard fundamental values in member states”.

There is no doubt that the 2004 enlargement of the EU has brought several former communist nations into the Union which do not fully share the same norms of democracy, human rights and the rule of law as the others. There is general consensus that if the EU takes no action against their policies and actions, Europe will lose its global credibility and internal legitimacy. “It is important that every country in the EU understands that we belong to a community of values,” according to German Foreign Minister Guido Westerwelle.

But for all the frustration and denunciation, there is little the EU can do to prompt an immediate change in attitudes. In the case of Hungary, and similar stand-offs with Romania and Bulgaria in recent years, the first response from fellow member states and the European Commission tends to be political pressure or moral persuasion to try to make the government in question change its behaviour.

Beyond political pressure, the Commission can launch what is known as an “infringement proceeding” against a country. But that relies on having hard evidence that EU law has been breached and pursuing the case through tortuous legal channels.

One article of the treaty that binds EU member states together does allow for the near-immediate sanctioning of a member country, but it requires unanimous backing of all other member states and is considered a “nuclear option”. In another era — 2000 — for the first time in its history, the EU did impose diplomatic sanctions on a member state, Austria, after Joerg Haider’s extreme right-wing Austrian Freedom Party entered into government. The sanctions — more symbolic than practical in nature — were lifted after several months.

Some EU politicians believe it is time to take similar action against Hungary. But the majority view is that moral pressure is the best way forward. At least for now.

The writer is Dawn’s correspondent in Brussels.

China’s new leaders face old problems. Little movement is expected on political reform in the coming decade but the new president and premier will have to tackle an array of social and economic challenges.

China’s rise, its success in delivering growth and development to millions of people and its increased confidence in global affairs continues to mesmerise a closely watching world. There is consensus, however that the current economic model is no longer able to ensure future development. Three decades of impressive, non-stop growth have also come at a huge price.

China’s new leaders have vowed to fight corruption, narrow the urban-rural income divide, improve the lives of China’s “urban billion” and tackle environmental problems. They will also focus on meeting the aspirations of China’s growing middle class which wants quality-of-life improvements such as a cleaner environment, higher food-safety standards, water security, and social protection.

“We should unwaveringly combat corruption, strengthen political integrity, establish institutions to end the excessive concentration of power and lack of checks on power and ensure that officials are honest, government is clean and political affairs are handled with integrity,” said outgoing premier Wen Jiabao at the National People’s Congress.

Wen has enumerated major domestic challenges that have caused public discontent in recent years. His speech was a tacit admission that quality of life had been sidelined by a focus on breakneck economic growth.

While the Chinese leadership also announced a boost in defence spending, the focus of this year’s Congress appeared to be decidedly domestic. A big challenge for the government, and a possible impediment to addressing environmental concerns, will be the need to maintain high rates of economic growth.

Seeking to counter public anger over corruption, Xi Jinping has also declared a ban on official extravagance and banished some of the usual pomp from this year’s gathering of the National People’s Congress. The lavish lifestyles of officials — who often drive luxury cars, own multiple villas and send their children to elite foreign universities — are a stark reminder of the unfairness of a system that’s enabled a small fraction of people with high-level political connections to accrue massive wealth.

A major source of concern is that China’s economic future looks uncertain. As the world economy slows, the once turbo-charged Chinese growth machine is under strain, putting the new team under pressure to rebalance the economy by shifting from exports and labour-intensive manufacturing to growth based on domestic demand and innovation.

The Asian Development Bank has warned that China risks being caught in the middle-income trap, an economic situation where a developing country attains a certain income but remains stuck at that level, usually because of rising wages and falling cost competitiveness.

The Asian Development Bank advises investing in technology, promoting innovation by the private sector and loosening the state’s control over the financial sector. In addition, it says, China should expand its service sector, speed up urbanisation, and try to reduce income inequality so that ordinary people benefit more from economic growth.

China used to focus on constructing factories, roads and bridges; it must now devote as much time, money and attention on improving its education system and encouraging innovation.

Urbanisation is a key driver of China’s modernisation. More than half of China’s total population now lives in cities, compared to less than one-fifth in 1980. The urban economy will continue to be a “huge engine” of China’s economic growth, spurring domestic consumption, says Li who is known as a “champion” of urbanisation.

“Urbanisation is not about simply increasing the number of urban residents or expanding the area of cities,” Li said in a recent article in People’s Daily. “More importantly, it’s about a complete change from rural to urban style in terms of industry structure, employment, living environment and social security.”

However, China’s “urban billion” pose a number of urgent challenges to the new leaders who must take action to integrate migrant workers into urban life, ensure sufficient public funding for social services, work for a pollution-free environment and improve water and waste management. Regulation of the real estate sector is also urgently needed. A key — and divisive — challenge facing the new leaders is to give rural migrants and their families the same opportunities in cities as other urban inhabitants.

As a result of advances in healthcare and nutrition, combined with the one child policy and very low fertility rates, China is one of a small number of countries in which the population has aged before it has gotten rich. An estimated 14 per cent of the Chinese population is aged 60 or above and the country is expected to count some 400 million people (about one-third of the population) over 60 years by 2050.

Foreign policy poses another headache: China’s new leaders will have to contend with an increasingly fraught relationship with the US and their Asian neighbours. Beijing is also under pressure to take on “international responsibilities” by joining the Western consensus on tougher action against North Korea, Iran and Syria.

Both the new president and premier are experienced party officials who can be expected to play by the rules and keep to the party line. But the scale of China’s domestic challenges will require that the new leaders are also nimble enough to adapt to emergencies and ease public discontent on quality-of-life issues, with special emphasis on the environment.

The writer is Dawn’s correspondent in Brussels.

There is undoubtedly much to love and admire in Italy: wonderful people, exquisite food, uplifting music, magnificent churches and glorious scenery. If I had more time, I would learn Italian, spend my weekends exploring Italian cities and eat nothing but Italian food for the rest of my life. (Of course I would not be able then to fit into those chic Italian clothes — but one can dream.)

As I said, Italy is good news for the body and for the soul. The same cannot be said for Italian politics, however. Elections on Feb 24-25 have left Italy looking a bit frayed at the edges, in political deadlock, provoking fears of prolonged uncertainty and infighting. A resurgence of the country’s economic problems appears on the cards.

Leaders of the eurozone’s battered economies, hoping to get the bloc back on its feet, are watching in alarm as Italian politicians fiddle collectively while the country’s economy burns.

Even while many wring their hands over Italy’s political mess, there is grudging admiration for a nation which can produce the likes of the colourful former prime minister Silvio Berlusconi and the country’s new rising star, comedian-turned-politician Beppe Grillo.

True, the current technocrat Prime Minister Mario Monti is a careful, cautious academic who appears more at ease in international fora than in the cut and thrust world of Italian politics. But Monti’s time at the helm of government was never expected to be long and he has alienated many of his countrymen and women with his focus on austerity.

Pier Luigi Bersani, whose centre-left Democratic Party won a majority in the Chamber of Deputies, is also a solid and careful mainstream politician. But he cannot form a government because his party did not win a majority in the Senate where he was trumped by extraordinary performances from two of his rivals: Berlusconi, who had been forced from power not much more than a year earlier with Italy’s finances in ruins around him, and Grillo whose Five-Star Movement managed a stunning performance in the polls by winning a quarter of the votes.

However, neither Berlusconi nor Grillo command much respect in Europe as illustrated by a German opposition politician’s remark that “a pair of clowns” had won the Italian elections. Italian President Giorgio Napolitano cancelled a dinner with the said German after learning of his remarks. The comment is unlikely to endear Germans to Italians who are already chafing under the politics of austerity favoured/imposed by Berlin.

Many Italians, however, are more worried about just how “ungovernable” their country has become than about relations with their neighbours. Weeks of political horse-trading lie ahead. But forming a new governing coalition will not be easy.

Without the Senate majority he needs to govern, Bersani will have to come to a deal with Berlusconi’s centre-right People of Freedom movement or Grillo’s Five-Star Movement.

There is (hopeful) speculation that the winners could agree on a grand coalition including Bersani, Berlusconi and Monti. Just such a combination governed Italy from November 2011 until now. But no one believes this will happen this time around.

Whatever combination they manage to come up with, all eyes in Italy and the rest of Europe are on Grillo and his agenda for change which he first revealed on the internet and then took to town squares all over Italy.

The Five-Star Movement campaigned successfully against an establishment which they say is composed of corrupt, self-serving traditional parties which have failed the nation. The protest movement has certainly connected with huge numbers of Italians who want a change from the country’s traditional governing elite. Grillo’s message is simple: austerity, the euro and corruption are jointly to blame for Italy’s continuing ills. He favours a referendum on Italy’s membership of the single currency, a move that Bersani warns would be a “disaster.”

Grillo’s first comment after the election was a tweet saying simply: “Honesty will become fashionable.” He proposes to slash lawmakers’ salaries, impose a salary limit for public sector managers of 12 times the average salary of their workers, and a minimum income for jobless Italians. Other policy planks include breaking down state monopolies in transport, energy and communications, free internet access for everyone and the abolition of state funding for newspapers which he says limits their independence.

His programme also has a strong ecological slant, promising incentives for green energy production, a tax on the use of cars in city centres and an extensive network of urban cycle tracks.

Recently, Bersani has started to court Grillo but the latter is having none of it — at least for the moment — and has accused his rival of making “indecent” proposals. Bersani is a “dead man talking”, says Grillo.

Even if a government is formed, it is expected to be weak and indecisive and unlikely to last long. As such, fresh elections are expected later in the year. This is definitely not good news for other eurozone economies. European leaders have been desperate to see a stable government in Italy, and are horrified at the triumph of populism in the eurozone’s third biggest economy.

That is why, despite their misgivings of Grillo, many are hoping that he will eventually join a government and start working seriously to get Italy’s finances in order. That may or may not happen. Like Grillo, Italian politics are unpredictable.

The writer is Dawn’s correspondent in Brussels.

For many outside the magic circle, however, the proposed Transatlantic Trade and Investment Partnership (TTIP) is more of a nightmare.

But perhaps those who fear that the US and the European Union are ganging up against the rest of the world should think again: the free-trade initiative could act as a much-needed wake-up call to restart serious negotiations on the Doha round of global trade talks.

“These negotiations will set a standard, not only for our future bilateral trade and investment, including regulatory issues, but also for the development of global trade rules,” according to European Commission President José Manuel Barroso.

The deal would be the most ambitious since the founding of the World Trade Organisation (WTO) in 1995, embracing half of world output and a third of all trade. It reflects growing impatience in Brussels and Washington at the long-stagnant WTO talks on global trade expansion which were launched in the capital of Qatar in 2001.

Both the EU and the US have used the last decade to open negotiations on an array of free-trade agreements with Asian, Latin American and some African countries. Critics say the deals are often light on content but heavy in symbolism and political significance.

Many experts have warned that the existing “spaghetti bowl” of trade agreements lead to a fragmentation of the world trading system and penalise smaller nations which are left outside such deals.

“The more problematic side of myriad different preferential trade agreements is that they create a hodgepodge of different regulations, standards and norms that can evolve into serious non-tariff barriers,” according to Keith Rockwell, chief spokesman at the Geneva-based WTO.

Under an agreed outline for the TTIP, the two sides expect it to add 0.5 per cent to the EU economy and 0.4 per cent to the US economy by 2027.

While it may not take a decade to negotiate a transatlantic trade pact, negotiating the TTIP will be no easy task. They may talk of common values and goals but Europe and America will find it difficult to agree on many key trade issues once negotiations start.

EU trade commissioner Karel De Gucht has warned that the talks will be tough, with no “low hanging fruit”. Import tariffs between the two are already not high.

Negotiations will focus on harmonising standards, from car seatbelts to household cleaning products, and regulations governing services. But fleshing out the negotiating plans could cause friction — last year it took EU trade ministers four months to persuade the European car industry to let Brussels officials talk to Japan about creating a similar free-trade pact.

EU negotiations on a free-trade agreement with South Korea faced similar difficulties from the European car manufacturers. Talks on an EU free-trade pact with India are now in their sixth year, having run into trouble with the Indian pharmaceutical, car and other sectors.

One of the key sticking points in the upcoming EU-US talks is likely to be agriculture. Washington has long been frustrated by EU restrictions on US farm produce, such as foodstuffs made with genetically modified organisms (GMOs), poultry treated with chlorine washes and meat from animals fed with the growth stimulant ractopamine.

Barroso has admitted that consumer health issues will remain on top of the EU agenda. “We will not negotiate changes that we do not want of the basic rules on either side, be it on hormones or GMOs,” he warned recently.

Another thorny issue that is unlikely to be resolved directly by the EU-US negotiation is the battle over subsidies for Europe’s Airbus and Boeing of the US, the biggest and longest-running dispute in the WTO’s history.

The TTIP has the full backing of Germany, with Chancellor Angela Merkel describing the initiative as “by far the most important future project” of the EU. Such a move would “not just be an agreement but a real growth project”, Merkel told Germany’s parliament, the Bundestag. Resistance is expected, however, from France and other southern European nations which want to exempt issues like food regulation and gene technology from the talks in order to protect the interests of their farmers.

Negotiations are due to start in June. Analysts say that President Obama regards a trans-Pacific trade agreement as far more important than the transatlantic deal but say the proposal is meant to signal continuing US engagement with Europe.

For some, the EU-US agreement represents the aspirations of a “common West” faced with competition from rising China and other emerging Asian and Latin American powers. But if the agreement with the EU takes too long to negotiate, Washington may decide it’s more important — politically and from the economic point of view — to direct its time and energies towards the conclusion of a pan-Pacific trade agreement.

Whether or not the transatlantic deal sees the light of day, the WTO — which will be under new management as of autumn this year — should use this moment to try and inject life into the Doha round. A global trade agreement which benefits all countries, big and small, would be infinitely better than one that separates the world into the West and the rest.

The writer is Dawn’s correspondent in Brussels.