WITH US President Donald Trump apparently hell bent on creating global trade chaos, can Europe and Asia join forces to stabilise the rules-based multilateral trading system?

The response from the European Commission last week was “yes, we can” as officials unveiled an ambitious blueprint for revamping the World Trade Organisation (WTO) and a new connectivity strategy to upgrade transport, energy and digital links between Europe and Asia.

Both initiatives are important, signalling Europe’s readiness to take on the challenge of re-ordering key elements of the global trade and investment landscape.

But Europe, despite its “market power” and strong regulatory framework, cannot rewrite the rules unilaterally. Neither should it try. The US may be brought on board at a later stage but for now fashioning a modern, up-to-date multilateral trade order will require that Europe and Asia’s leading economies work hand in hand to design a new system.

The EU plans for WTO reform focus on updating the organisation’s rules to reflect new global economic landscape, strengthen the WTO’s monitoring role and overcome an imminent deadlock on the WTO dispute settlement system. In many ways, therefore, they ref­lect and address Trump’s concerns about the organisation.

Meanwhile, the EU connectivity strategy, described by some as “Europe’s answer to China’s Belt and Road Initiative”, sets out clear norms and standards for the myriad transport, infrastructure, energy and other network projects which are being discussed, negotiated and implemented across the world.

The EU cannot do it alone, however. America under Trump is still a key trade and investment partner but an unreliable one. It’s still unclear if the current truce in transatlantic trade relations brokered by the European Commission in July will stand the test of time.

In any case, the US president has railed against the WTO, calling it a catastrophe and a disaster. If Washington does block the reappointment of a WTO appeals judge, the organisation’s much-respected dispute system will be paralysed.

The focus therefore is not on traditional transatlantic partners but on Europe and Asia as change-leaders working together to overhaul rules which are clearly out of step with new economic realities, including the rise of China.

First, WTO reform. It’s not going to be plain-sailing. True, Europe-Asia trade is worth almost 1.5 trillion euros a year, leaders from both sides make strong statements on fighting protectionism and the EU has negotiated free trade agreements with many Asian countries.

This time around, however, it will be about co-shaping and co-designing new rules which take account of often diverging European and Asian interests. Most importantly, it will be about dealing with rising global concerns about access to Chinese markets but also the forced transfer of technology, the role and power of state-owned enterprises, protection of intellectual property rights and industrial subsidies.

The good news is that China and the EU have set up a working group on WTO reform. But the jury is still out on whether China will agree to rewrite rules which would discipline a number of fundamental features of its economy.

Second, connectivity. The EU strategy is undoubtedly a response to China’s Belt and Road Initiative – but it is also more than that. Europe has watched with a mixture of confusion, curiosity and concern as China has embarked on its ambitious BRI plans worldwide but also within Europe.

European opinion about the BRI varies. For some, Beijing is searching global dominance, seeking to rewrite global trading rules and/or looking for ways to use its steel and cement surpluses.

European businesses are interested in participating but say they don’t get the contracts they compete for. There is concern about the sustainability of some of the projects and fears that developing countries, desperate for cash, are walking into debt traps.

The new blueprint builds on the EU’s own experience of enhancing connections between its member countries and with other regions. The focus is on “sustainable, comprehensive and rules-based connectivity” and projects which comply with international environmental, labour and fiscal standards.

If “marketed” properly therefore the EU plan could be a godsend for baffled Asian, African and Latin American nations which are looking for help in negotiating infrastructure projects with China and other countries.

The potential for Europe-Asia cooperation will be further spotlighted at the ASEM summit in Brussels on October 18 when 53 leaders from both regions meet to discuss the most pressing geopolitical and global trade challenges.

The time is right for further Europe-Asian synergies and joint actions on a range of bilateral and multilateral fronts. The ASEM dialogue has intensified and expanded over the years but it isn’t always easy.

If they are to play a constructive and stabilising role in a turbulent world, Europe and Asia will have to wean themselves off their traditional reliance on America. Only then will they be able to manage their differences, overcome the divides and strike a partnership for a Eurasian future.

The writer is Dawn’s correspondent in Brussels

Published in Dawn, September 23rd, 2018