3. PROMOTING DEVELOPMENT IN SOUTHEAST ASIA
EC playing important role in the assisting Development
Access to European Markets and European
development assistance are significant contributions.
Building Social Relationships between the European
Community and Civil Society in Southeast Asia.
Contradictions: EC Policies of integrating developing
countries into de world economy, on the one hand,
and those of poverty reduction and strengthening civil
4. DEVELOPMENT ASSISTANCE AS AN INTERSTATE
• ASEAN a factor of stability and balance that contributes to the maintenance of peace in
Southeast Asia (e.g. Vietnamese occupation of Cambodia)
• EC recognition of ASEAN as a developing region into practical actions required some
• ASEAN adopted a export-oriented industrial polices and was needed trade preferences.
• In the first few years of the GSP on ASEAN trade with EC countries’ agricultural exports
actually qualified for more preferences than manufactured products.
• The impact of GSP on ASEAN trade with the EC seems to have been limited.
• In the short run, the constraints on the EC’ development policy and the Common
Agricultural Policy prevented substantial modifications of the GSP to meet ASEAN trade
• ‘Globalist’ justified extending the EC’ development policy.
5. DEVELOPMENT ASSISTANCE AS AN INTERSTATE
1973 AID FROM EC
10 4.29 3.35
INDONESIA THAILAND MALAYSIA PHILIPPINES SINGAPORE
Southeast Asian Countries
Table 1: 1973 Aid from the EC to Southeast Asian Countries.
7. MAIN CONSTRAINTS OF DEVELOPMENT ASSISTANCE
The main constraints were inherent in the European
1. The preferential treatment accorded to the Africa
Caribbean and Pacific (ACP) countries: The funds
amounted to approximately US$26 millions while for the
Asia and Latin America treatment was disproportionate
of US$ 20 millions to their demographic weight.
2. Occasional lack of Coherence between EC
policies, particularly between the Common Agricultural
Policy and Development Cooperation.
3. Lack of Coherence between development policy and
other EC policies notably in the Common Agricultural
9. WAS INTERREGIONAL RELATIONSHIP A DECISIVE FACTOR IN
THE ECONOMIC DEVELOPMENT EXPERIENCED BY MOST
ASEAN MEMBER COUNTRIES IN THE 1970S AND 1980S?
From the outsiders observer, It is difficult to form an
accurate impression of the impact of EC development
projects, due to lack of access to monitoring and
What can be highlighted is that development
cooperation, which has so far been described as a
relationship between the EC on the one hand, and the
ASEAN as an organization in the other hand, also creates
an important Social Relations between the EC and Civil
Society (farmers, churches, organizations, groups among
the community) .
10. PROMOTING DEVELOPMENT IN SOUTHEAST ASIA
LIST OF PROJECTS
Indonesia Soya Pilot Project Sumatra 1976-83
Indonesia Pilot Project on Soya and Galawija Development 1976-1979
Thailand Pig Breeding Pilot Project 1977
Indonesia Baturraden Dairy Project Study 1978
Indonesia Bank of Indonesia Small Credit Programme
Thailand Seed Centre Study 1978
Thailand Crop Diversification Study 1978
Preliminary Crop Development 1979
Thailand Winged Bean Development 1979
Indonesia Talungagung Drainage Project 1979-83
Philippines Porgramme of Riverside Development along the Rio Bicol 1979-86
Indonesia Irrigation Studies 1979-83
Philippines Crop Protection Programme 1980-86
Thailand Huai Mong Irrigation and Drainage Project (1980-85)
Thailand Seed Production Centre 1981-85
Thailand Agricultural and Rural Credit 1983-85
11. WHY WILL DEVELOPMENT COOPERATION CONTINUE
GROWING IN THE SOUTHEAST ASIA REGION?
First, economic growth has not yet eliminated
poverty in sectors and subnational regions of two
of the most populous countries in this
region, Indonesia and the Philippines.
Second, ASEAN enlargement since 1995 has
added four new members-
Vietnam, Laos, Cambodia, and Burma- where
poverty is more widespread than in the original
In another sense, EC development cooperation is
once more compensating for the structural
limitations of Southeast Asian regionalism
referred to in the previous presentations, notably
the- unwillingness to ensure regional funding to
12. MAASTRICHT TREATY AND DEVELOPMENT
In this central treaty were the European Union was
formed, it were declared sustainable economic
development and social development, integration of
developing countries into the world economy and
campaign against poverty as objectives of
development cooperation for the following years.
The goals were specified as: Protection of the
environment and Natural Resources, the Combat
against Drugs, The Promotion of Women’s
participation in development, The Protection of
Children and Ethnic Minorities, Demographic
Questions, The Spread of Democracy, Good
Governance and Human Rights, Strengthening of
the capacity of national institutions, and the
improvement of the economic, legal and social
environment for the private sector.
13. KEY ISSUES TO BE CONSIDERED IN THIS TOPIC OF EC
Relationship between Development Cooperation (DC) and
other EC Policies (problem of COHERENCE).
Efficiency of DC assistance.
Tensions created with the Civil Society involvement in the
Efforts to reduce poverty could be undermine by other EC
Policies. (e.g. Common Agricultural Policies).
The concept of Regionalism (in order to facilitate
developing countries integration to participate in World’s
Economy might contradict the goal of Poverty Reduction.
19. CONSTRUCTING INTERREGIONAL FRAMEWORK FOR
Trade not remain just to the relationship between States and Regional
Organizations, but also FIRMS.
Interregional Relationship can be forge by FIRMS to the extent that their
strategies and actions treat the member countries of the two organizations as
constituting a Region.
In this chapter we are going to analyze the subsequent actions of the ASEAN and
the EC on behalf of firms and the way in which conditions and contradictions
deriving from global and regional levels have influenced both the actions of firms
and the two organizations.
20. CONSTRUCTING INTERREGIONAL FRAMEWORK FOR
In 1980s : Food and Beverages, Crude Materials, and other Primary Commodities
accounted for nearly half of ASEAN’s export to the EC.
Table 3: ASEAN Export to the EC by Sector
21. ASEAN / GSP: FROM (LESS) PREFERENTIAL
TREATMENT TO GRADUATION
Key Topic in regionalism: Discrimination between member and non-member
countries in access to European Markets.
The GSP’s aim was to promote Third World industrialization by providing market
access to developing countries’ exports. Preferential treatment would be non-
reciprocal, that is the Developing countries were not expected to grant similar
preferences to developed countries.
The EC/GSP, covering both agricultural and manufactured products was adopted
in 1971 for a 10 years period and subsequently revised in 1981, 1991, and
1995, with minor improvements being introduced every year.
Lobbying for GSP concessions opened up a new area of relations between the
EC and ASEAN, which hoped to obtain additional concessions on behalf of its
members. The relationship was and continue Asymmetrical.
22. RESTRICTIONS OF THE EC GSP SCHEMES
Minimum Import Price: goods entering the EC at prices (including insurance and freight)
below the minimum may be charged a duty or level equal to the difference between the
Tariff Quota: fixes the amount of goods for which a special, reduced tariff is charged. All
imports in excess of this amount must pay the normal common external tariff.
Tariff Ceiling: was similar to the tariff quota, with the difference that the normal tariff is
not automatically reemployed once the ceiling is exceeded but is subject to negotiations
between EC member states.
Member State Share: fixes amount of the tariff quota that a single member state may use.
When imports to the member state exceed this share, it must impose the normal duty on
further imports, though imports to other member states may continue at the reduced GSP
Butoir: fixes the amount of tariff quota or ceiling that any single country exporting to the
EC may use. All exports in excess of this amount must pay the full duty.
Quantitative Restriction: fixes amount of a product that can be imported irrespective of
the tariff charged. Imports in excess of this amount are not allowed.
Rules of Origin: to ensure that imports enjoying preferential treatment originate from a
23. RESTRICTIONS OF THE EC GSP SCHEMES
EC/GSP its professed objective was to stimulate
industrialization of developing countries but it sought
to protect the competitiveness of European producers
through all sorts of restrictions (De Lotto,1993)
The rapid increase of exports to Europe from several
ASEAN ensured that they would be severely affected by
restrictions on products.
The restrictions adversely affected all ASEAN countries
except Thailand in plywood, Malaysia in Shoes, and
Singapore in Radios, TV sets and Diodes.
By 1981, 44 products exported by ASEAN member
states were affected by butoirs, tariff quotas, tariff
ceiling and special surveillance.
24. BENEFITS FROM EC GSP TO ASEAN COUNTRIES
Southeast Asia firms successful in exporting to Europe.
Asian Countries are the major GSP beneficiaries.
During the first decade on the 9 countries that accounted for the three-fourths
of imports under the GSP-The Philippines and Thailand, were ASEAN members.
1971-89 Singapore was one of the 4 counties for whom the terms of trade
benefits under the GSP were the largest.
ASEAN firms success using GSP preferences system could be reflected in the
doubled of exports goods covered between 1978-1985
25. COMMON AGRICULTURAL POLICY AND ITS
RESTRICTIONS FOR ASEAN COUNTRIES EXPORTS
CAP was the structural obstacle to expansion of coverage in agricultural
productions, Although ASEAN occasionally obtained piece meal concessions from
1973 GSP list of Agricultural Products just included:
-Preserved Pineapple, Palm Oil (Indonesia and Malaysia)
-Coconut Oil (Malaysia and Philippines)
-Shrimps and Prawns (Indonesia)
-Underground Pepper (Indonesia
-Orchids (Indonesia and Thailand)
26. BENEFITS FROM EC GSP TO ASEAN COUNTRIES
In the period 1990-92, exports from Indonesia, Singapore, and Malaysia
that received GSP benefits grew by at least 70% and exports from Thailand
rose by 37%.
1995 4 ASEAN countries were among the top seven beneficiaries of the
1991 Annual tariff preference on Thai exports under the GSP was worth
more than 200 million ECU, a figure that exceeded EC development
The ASEAN-EC discussions on the GSP reform are a graphic illustration of
the inequality in the relationship and the limits of ASEAN’s bargaining
power vis-à-vis the EC in trade, in the face of determined EC Action.
27. ASEAN’S BARGAINING POWER
Was too limited as a result we have :
The New GSP benefits for all products.
Agricultural Products European Council
Very Sensitive Products (Canned
Pineapple, Textiles, Garments, etc) 15% tariff
Sensitive Products (Timber, Timber
Products, Palm, Vegetable
Oil, Electrical, Electronics Products) 30% tariff
Countries and territories whose per capita income
was higher than that of an EC member states
28. ANTIDUMPING: TOWARDS AN INTERREGIONAL
Dumping: Export Price is less than a comparable price
for the like product, in the ordinary course of trade.
Purpose of Dumping: To unload overstock or to
eliminate competition in the foreign market, or to
realize maximum economies of scales.
Conditions if Dumping Exercise is to be Proven:
1. The existence of a Dumping Margin.
2. Injury to a branch of National Industry
3.A Cause-and-Effect relationship between the
alleged dumping and the injury.
Objective : Eliminate price Difference.
29. WHY ANTIDUMPING LEGISLATIONS?
They merely serve to protect Domestic Industries, particularly since tariff
barriers have been largely dismantled and non tariff barriers are
increasingly subject to regulation.
Antidumping in the view contradicts the ideology of trade liberalization
advocated by the EC. In ASEA-EC relations, this contradiction is generated
by the increase in ASEAN trade with the EC and the declining importance of
According to an independent study commissioned by the European
Parliament in 1993:
4/5 of imports to antidumping duties come From Japan.
7.4% from ASEAN NICs.
Cases in Antidumping rose from 10% (1981-1985) to 30% from (1986-
33. REGIONALIZATION IN EUROPE AS AN OBSTACLE TO EC
FDI IN ASEAN
1980 Investment is identify as a Priority by ASEAN-EC: Strengthening economic
links between the two regions by promoting trade and transfer technology.
Investment is the weakest area of Interregional Relations between ASEAN-EC.
Not attractive region for EC
Not great importance to the region.
1980s-1990s Southeast Asia Region was the most attractive region for investment
among Emerging Economies.
Regionalization of ASEAN, constitution of a regional market required to
compensated the risks associated with European FDI.
34. THE PROBLEMATIC OF EC’S FDI
Quantitative terms formulated (insufficient in Volume)
During the Colonial Period FDI was dominant, after the Independence had fallen
1980-1993 European FD more than quadrupled in volume, from $4.183 billion to
EC’s FDI account for 20% of total FDI in ASEAN 5.
Japan’s FDI account for 25% of total FDI in ASEAN 5.
USA’s FDI account for 14.5% of total FDI in ASEAN 5.
1982/1992 EC total FDI amounted just 1% for ASEAN.
Since 1970s ASEAN has been less attractive than other developing regions for
ASEAN interested in EC is not to depended merely from JAPAN.
ASEAN sees EC’s FDI as “accelerating and diversifying their industrial capacities”
mainly in labor intensive industry to adopt an export-oriented strategy and
36. EC FDI IN ASEAN
Chee (1980) “ASEAN wished to attract skill-intensive and
knowledge-based industries to move from Europe to
Post War Period: European FDI in the region was
Post War Period: Raw Materials
Colonial Pattern: Local Market
37. MALAYSIA EC FDI INDUSTRIES
Rubber Industry: British Subsidiary had succeeded in acquiring the capacity to
design and develop rubber processing machinery locally and export the
Telecommunication Industry: 50/50 Joint Venture, set up in 1969 with the Dutch
from Phillips for the assembly of television sets, purchase local materials or parts.
Starting local manufacturing of VHF, radios-telecommunications
equipment, followed by printed wiring boards.
! Technology Transfer was successful in this industry, after
three years foreign experts were not needed on permanent
38. MALAYSIA EC FDI INDUSTRIES
Chemical Industry: Very little transfer of Technology to Malaysia from EC firms.
Chemicals firms producing hairdressing cream and talcum powder were limited
mostly to mixing of mineral oil, perfume and wax.
Motor-Vehicle Industry: Merely assembled vehicles from Completed Knocked
Out kits containing 90% imported components.
The little Research and Development that was done in Malaysia focused on
product quality maintenance or minor modifications of products and processes
for the Local Market
! The lack of components from local suppliers was a difficulty for European Firms
and the behavior reflected the fact that investment was undertaken primarily
to supply the LOCAL MARKET, circumventing protectionist policies associated
with Import Substitution!
39. THAILAND DETAILS OF EC FDI
- 99 EC Firms benefiting from Government Incentives
- 23 Firms in Agriculture.
- 17 Minerals, Metals and Ceramics.
- 10 Chemicals.
- 10 Mechanical and Electrical Equipment.
- 10 Plastics, Medical Supplies, Component Parts, Natural or Synthetic Fiber
!Most of the Investment were oriented toward production for the LOCAL
Relative low of investment were oriented to labor-intensive sectors such as
textiles, garments, electric and electronic goods and plastic goods.
40. WHY PRODUCTION FOR THE LOCAL MARKET?
Logical Response to import Substitution
The problem from the ASEAN perspective was
that well after import substitution had been
abandoned by most of their member in favor
of EXPORT-ORIENTED strategies, EC
investment continued to be concentrated in
raw materials and in production for the Local
Market. Surveys showed that EC firms consider
ASEAN region as primarily a FINAL GOOD
market and not as a location for production for
the European or World Markets.
41. EC PERCEPTION OF ASEAN FOR FDI
High Transportation Cost.
Japan’s competitiveness could be attributed to production and marketing cost
advantages rather than to lower transport costs (Langhmmer,1987)
European has pointed out, Capitalist Economies, states and regional
organizations lack the power to coerce firms and can only provide incentives to
them. This difference in perception, is illustrate in the issue that initiatives to
create an interregional framework for firms were proposed by ASEAN.
EC did not seen the Interregional Framework as a mechanism for encouraging
European firms to invest in Southeast Asia.
Unfavorable Investment Climate in the Region.
State Regulation were Excessive and Inadequate.: Intellectual Property and
100% of Ownership: Requiring setting up of Joint Ventures.
Restrictions of FDI in certain Industries and Regions, Restrictions on Capital
Investment Conditions not Harmonized.
42. EC SEEKING FDI CONDITIONS AS:
Fiscal incentives and Investment Guarantees.
Accelerated depreciation allowances.
Exemption from Import Duties on Equipments and Raw Materials.
Tariff Protection for the Domestic Market.
Incentives to Export.
Guarantees regarding expropriation.
Europeans firms argued that Southeast Asia regionalization was going in an
very slow pace: Often cited the existence of 5 separate markets, instead
of a SINGLE MARKET, this is one of the most important disincentive to
invest in the Southeast Region.
43. WHAT IS HAPPENING IN THE EC DURING ASEAN
Treaty of Maastricht: Accomplishment of a new
momentum for the Single Market including a
Single Currency and strengthening the three
pillars of EC: The European Parliament, The
Council of Ministers, The European Commission.
German Economist Hiemenz and his colleagues
believed that Regional Development Policy was
probably more than sufficient to attract
investment that would otherwise have gone to
Development Policy, also influenced the
orientation of FDI towards certain developing
countries and regions.
44. SINGLE EUROPEAN MARKET (SEM)
Fears among Developing Countries that
investment would be diverted away from
them in favor of the EC members, whether
developed or less developed.
Little doubt that the SEM stimulated intra-
EC investment. Between 1984 and
1988, the latter more than quintupled.
Europeans firms increased their intra-EC
FDI, primarily in the form of Merges and
Acquisitions, the goal of which was to
consolidate their competitive position in
preparation for the SEM.
45. 1987 REGIONAL INVESTMENT ADVISERS
Warned that investments in Southeast Asia
were being reoriented towards production
for exportation to the World Market, thus
potentially threatening European firms’
export markets. The warning was followed
by another 1989 that added Taiwanese and
South Korean firms to the Japanese firms
investing in Southeast Asia and pointed to
the danger that products from Southeast
Asia would compete with European
products in Europe itself.
46. REGIONALIZATION IN SOUTHEAST ASIA AS AN INCENTIVE
TO EC FDI
In the 1990s Southeast Asia as a region became one
of the primary destinations of European FDI in the
developing world. In 1992 European investment in
Malaysia, Thailand and the Philippines already
exceeded those made in the African Countries
belonging to the ACP, reaching a peak in Southeast
Asia in 1994, after that year, Latin America became
more attractive as an investment site (See table 5)
47. WHERE GOES THE EC INVESTMENT IN ASEAN?
1993 DATA INFO.
Electrical and Electroniccs
Electrical Appliances, for domestic markets
Food, Beverages, Tabacco
Mining Mining and Quarrying
Chemicals and Petroleum
Raw Materials (Petroleum and Coal)
Tourism 0 0.5 1 1.5
Singapore Mining and
Philippines Thailand Petroleum Appliances, for
0 0.05 0.1 0.15 domestic markets
0.2 0.25 0.3 0.35
0.082 0.084 9.90%
0.086 0.088 8.80% 0.092 0.094 0.096 0.098
0 Malaysia Materials (Petroleum and Coal) 0.5
0.1Raw 0.2 0.3 0.4 Rubber 0.6 0.7 Electrical and 0.9
Food, Beverages, Tabacco Electroniccs
Series3 30.50% 6.70% 20.20% 12.10%
Series1 30.50% 6.70% 20.20% Machinery12.10%
Series4 Singapore 74.80% Chemicals and Petroleum
Philippines Tourism Mining Manufacturing
Series1 22.50% 9.90%
6.90% 74.60% 8.80%
Series2 9.90% 8.80%
Series1 74.80% 12.10% 8.20%
48. WHY FDI IN SOUTHEAST ASIA IS ENHANCE BY ASEAN
Enhance their capacity to export not only to Europe, but also to the rest of the
ASEAN-EC cooperation should seek to apply technology to Industrial Activities and
to Promote Innovations in Technologies that ASEAN countries acquired.
Mobilize Financial Resources to support Joint projects between firms.
SME’s should be given priority access to capital, appropriate technology and
Cheaper but high quality manufactured products in ASEAN are predicted to benefit
European consumers by adding variety and choice while stimulating competition
European FDI in Southeast Asia would not substitute trade, but would instead
intensify trade between the two regions.
Potential Imitation effect in the home country, encouraging other companies to
engage in Production Overseas.
Increase the parent company’s international competitiveness.
49. EC-ASEAN INTERREGIONAL RELATIONS OUTCOMES
1993 : European Business Information Center (EBIC)
established in Manila, Philippines, followed by others in
Provide or facilitate information to European and Southeast
Asian firms on trade, infrastructure, firms, factors costs, and
regulations and standards.
Organize Seminars, workshops and Conduct other trade
50. EC-ASEAN INTERREGIONAL RELATIONS OUTCOMES
European Investment Bank (EIB) financing in ASEAN:
Founding on investment projects.
Facilitate Joint private sector investment projects.
Financing to Technology-Transfer Projects, Capital Investment, and
Projects implemented by Joint Ventures between EC and Asian or
Undoubtedly EIB operations have facilitated the conclusion of Joint
Ventures involving European firms in several ASEAN countries. The
beneficial consequences on industrial activity of energy or water
supply projects are evident.
51. EC-ASEAN INTERREGIONAL RELATIONS OUTCOMES
European Community Investment Partners (ECIP):
Programme to assist in creating or developing Joint
Ventures, Privatization or Private Infrastructure Projects in all
developing countries outside the ACP.
Complete Cycle of Investment Process Consultancy.
Creation of ASEAN-EC Partenariat which arranges business
meeting and set a target of 500 strategic alliances between
EC-ASEAN with a 45 million budget for a 5 year period.
52. CONCLUSIONS AND RECOMMENDATIONS
European SMEs employ more than large transnational companies are a KEY
partnership in order to enlarge the Interregional Relations between EC-ASEAN.
In the Short and Medium-Term , the progress of regionalization in Europe and
Southeast Asia will continue to determine European firms’ tendency to invest in
The enlargement of EC to the Central and East European Countries (CEEC), will
expand the coverage of EC regional development policy and broaden the group of
countries that can compete with developing regions for EC FDI.
Risk: The strategic position of the CEEC is more favorable than that of the ASEAN
and other developing regions.
ASEAN efforts to create and sustain an interregional relationship in the field of
investment bore fruit in the 1990s, in the form of ASEAN-EC investment promotion
Contradictions with EC Policy of the aim of integrating developing countries into de world economy, on the one hand, and those of poverty reduction and strengthening civil society participation.
ASEAN a factor of stability and balance that contributes to the maintenance of peace in Southeast Asia (e.g. Vietnamese occupation of Cambodia)EC recognition of ASEAN as a developing region into practical actions required some negotiations, because of this the EC responses were cautious, simply due to the significant share of the cost and the burden resettlement. ASEAN adopted a export-oriented industrial polices and was needed trade preferences. ASEAN’s desire for tariff reduction “trade preferences” ran up against the constraints inherent in the EC development policy, which continued to be dominated by those favored preferential treatment for former European colonies in Africa ‘Regionalist’. In the first few years of the GSP on ASEAN trade with EC countries’ agricultural exports actually qualified for more preferences than manufactured products. The impact of GSP on ASEAN trade with the EC seems to have been limited. In the short run, the constraints on the EC’ development policy and the Common Agricultural Policy prevented substantial modifications of the GSP to meet ASEAN trade demands. Given this restrictions Financial Cooperation appeared to be ‘the most necessary instrument of an overall cooperation policy’‘Globalist’ justified extending the EC’ development policy as a way of ensuring EC presence in the major developing regions resulting in the launching of a program call: Financial and Technical Aid, US$20 million , it is doubtful whether consideration if ASEAN’s concern alone was decisive in the decision to launch this program. More likely it was the outcome of combined pressures form Asia and Latin America, the latter being equally, if not more, frustrated, over the EC’s inability or unwillingness to enter into a sustained dialogue with it. The fact that ASEAN countries received only a modest amount of development assistance from individual EC member states, and none at all from the EC as an organization, was an additional argument for launching an aid program.
Colonial relationship still influences heavily the pattern of aid distribution. The primary recipient of DUTCH grants was Indonesia, which accounted for 94% of total DUTCH grants, Malaysia received nearly 34% iof UK Grants. France , which had no former colony among the ASEAN member nations, gave no grants at all to any country. For the other Three EC member countries with no colonial links (GERMANY, BELGIUM, AND ITALY) Indonesia was the primary recipient, a choice which can be explained by the size of that country’s population and its abundance of natural resources of strategic interest to the European countries. Only Denmark deviated with this pattern having Thailand as the first recipient of its modest effort. ASEANS acceptance of the offer of developmental assistance, which it had not pursued aggressively, should be interpreted in the context of the structural limitations of regionalism in Southeast Asia. First year of ASEAN existence, no economic cooperation project had initiated a process of regionalization in Southeast Asia.
One advantage of the recipient countries was the fact that assistance consisted entirely of grants. In the case of a heavily indebted country such as the Philippines, although EC assistance accounts for only 14% of all European aid to the Philippines, it is 99% in grant form, in contrast to total European assistance , which is only 56% in the form of grants. Within the recipient countries, European policy was focused on RURAL DEVELOPMENT. At 1980 AEMM food production, storage, and distribution, land and rural development, and water utilization were identified as priorities. Most of the major projects funded by the EC, whether autonomously or in collaboration with others institutions, has been in support of AGRICULTURE or otherwise located in the COUNTRYSIDE. Irrigation, rural production, and services or integrated rural development represented over half (55.67%) of total ASEAN member states between 1976 and 1995. Scarcely any INDUSTRIAL PROJECTS, unlike in Latin America, nor major INDRASTRUCTURE PROJECTS. This could be seen as EC responsiveness to the MAJOR NEEDS of the MAJOR POPULATION. EC and ASEAN do not interfere in Domestic affairs of individual member countries, but during dictatorship in the Philippines, EC commitments increased dramatically, as a form of support for the democratization process in Philippines.
However Indonesia the Philippines and Thailand and ASEAN received 17% of commitments between 1976 and 1991 which represented more than half of the total share (29%) of the entire Latin American Group, composed of nearly 20 countries.
From the outsiders observer, It is difficult to form an accurate impression of the impact of EC development projects, due to lack of access to monitoring and evaluations documents. What can be highlighted is that development cooperation, which has so far been described as a relationship between the EC on the one hand, and the ASEAN as an organization in the other hand, also creates an important Social Relations between the EC and Civil Society (farmers, churches, organizations, groups among the community) . This relationship between the EC and Civil society was a crucial factor for the long term sustainability of development projects. Civil Society Participation from project identification, planning, and preparation up to implementation is significance. Some projects evaluations concluded that they were not successful. Among its recommendations was the need to involve beneficiaries from the very beginning of project planning. Planning and implementation were participatory. As a result, project sustainability was assured at both the farm and institutional levels. This were the main lessons learn from the EC development projects assistance.
First, economic growth has not yet eliminated poverty in sectors and subnational regions of two of the most populous countries in this region, Indonesia and the Philippines. Second, ASEAN enlargement since 1995 has added four new members-Vietnam, Laos, Cambodia, and Burma- where poverty is more widespread than in the original member countries. In another sense, EC development cooperation is once more compensating for the structural limitations of Southeast Asian regionalism referred to in the previous presentations, notably the- unwillingness to ensure regional funding to regional projects.
After this the Question was: The range of objectives assigned to development assistance was so vast and the objectives themselves so ambitious that one is prompted to ask whether the small volumes of funds available can suffice for projects to meet these goals.
Relationship between Development Cooperation (DC) and other EC Policies (problem of COHERENCE) including harmonization of development policy and other external policies (i.e. trade policy and Common Foreign and Security Policy)Efficiency of DC assistance. Tensions created with the Civil Society involvement in the DC projects. Efforts to reduce poverty could be undermine by other EC Policies. (e.g. Common Agricultural Policies).The concept of Regionalism (in order to facilitate developing countries integration to participate in World’s Economy might contradict the goal of Poverty Reduction.
ASEAN IMPORTED from the EC transport equipment and machinery, contributing to EC surplus in TRADE with ASEAN. 1970s ASEAN adopted EXPORT-ORIENTES industrialization programs as early as the 1970s.The ASEAN member countries will become even more export-oriented in the 19880s all … will.. Need to find markets for their exports of resource-based as well as other manufactured goods… In the near future ASEAN trade expansion is likely to be extra-ASEAN rather then intra-ASEAN . The EC will therefore continue to be one of the most important markets for ASEAN. (AKRASANEE 1982)Only 13.7% of ASEAN countries imports originated from Europe. For the EC perspective ASEAN accounted for only 1.8 percent of EC imports, Thus it would be also the EC to increase the INTEREFIONAL TRADE. At the present three-fourths of EC primary textiles, garments and consumer electronic products came from ASEAN exports. See Table 3
Key Topic in regionalism: Discrimination between member and non-member countries in access to European Markets. The GSP’s aim was to promote Third World industrialization by providing market access to developing countries’ exports. Preferential treatment would be non-reciprocal, that is the Developing countries were not expected to grant similar preferences to developed countries.The EC/GSP, covering both agricultural and manufactured products was adopted in 1971 for a 10 years period and subsequently revised in 1981, 1991, and 1995, with minor improvements being introduced every year. Lobbying for GSP concessions opened up a new area of relations between the EC and ASEAN, which hoped to obtain additional concessions on behalf of its members. The relationship was and continue Asymmetrical. In the other hand, other European Policies set strict limits to the scope of the GSO, as is the Common Agricultural Policy (CAP) which severely circumscribed the scope of preferences that could be granted to food and agricultural products. For the EC, industrialization in developing countries simultaneously offered opportunities and constraints. It would sustain demand for imports of technology-intensive manufactured products from the EC, thus supporting employment in the industrial sectors concerned. On the other hand, abundant labor supply in developing countries, particularly Asia, reduced the cost of production of simple consumer goods, which would compete with European Goods and in the medium and long term, aggravate unemployment in Europe
EC/GSP its professed objective was to stimulate industrialization of developing countries but it sought to protect the competitiveness of European producers through all sorts of restrictions (De Lotto,1993)In reality, even if the more advanced developed countries’ share in exports enjoying preferences was reduced, the low level of industrial development in the least developing countries prevented them from increasing their share of exports in the short term. European firms could then make up the difference. The rapid increase of exports to Europe from several ASEAN ensured that they would be severely affected by restrictions on products. The 1980 GSP reform fixed, for 64 very sensitive products, maximum amounts of duty-free exports in absolute terms (indiv. Country tariff quotas). The restrictions adversely affected all ASEAN countries except Thailand in plywood, Malaysia in Shoes, and Singapore in Radios, TV sets and Diodes. By 1981, 44 products exported by ASEAN member states were affected by butoirs, tariff quotas, tariff ceiling and special surveillance.
In the period 1990-92, exports from Indonesia, Singapore, and Malaysia that received GSP benefits grw by at least 70% and exports from Thailand rose by 37%.1995 4 ASEAN countries were among the top seven beneficiaries of the GSP. 1991 Annual tariff preference on Thai exports under the GSP was worth more than 200 million ECU, a figure that exceeded EC development assistance. At 1992 AEMM the EC proposed to gradually apply GATT principle of reciprocity in relations between the two groups. The ASEAN would have had to grant to the EC the same treatment that the EC granted to it, otherwise the EC could withdraw preferential treatment from ASEAN. The ASEAN-EC discussions on the GSP reform are a graphic illustration of the inequality in the relationship and the limits of ASEAN’s bargaining power vis-à-vis the EC in trade, in the face of determined EC Action
After conditions have been established, the importing country may impose antidumping duties (tariffs) whose effect is to eliminate the price DIFFERENCE.