ABSTRACT
Since both Asia and Europe maintain a well-developed and important political and security relationship with the United States and have rather weak political and security ties with each other, some observers rashly conclude that Asia-Europe trade and investment ties are also secondary when compared to transpacific and transatlantic relations. Asia-Europe interregional economic relations are thus considered the weak link in the global economic triangle between North America, Europe and Asia. As will be shown in the following, the empirical reality is rather differentiated and less negative. The following analysis investigates the status of the Asian-European relationship in economic terms and takes both regions’ relations to the US or to the North American Free Trade Agreement (NAFTA, i.e. the US, Canada and Mexico) as a benchmark. On the Asian side, the analysis will focus on Japan, China, India, the NIEs-4 (Hong Kong, Korea, Singapore and Taiwan) and the ASEAN-6 (Brunei, Indonesia, Malaysia, the Philippines, Thailand and Vietnam), which will collectively be referred to as “Asia”; and on the European side, it will focus on the EU-25, the EFTA-2 (Norway and Switzerland) and Russia, which together will be referred to as “Europe.” Asia and Europe also include other countries in a geographical sense, of course, but their small shares in international trade and investment may be neglected for the purpose of the present analysis. Because of lack of data, the subsequent analysis of interregional investment considers an even smaller set of countries. Having discussed the quantitative importance of Asia-Europe economic links, we attempt to classify the countries in our sample into regional and sub-regional groups on the basis of their trade relations, comparing groups for 1988, 1995 and 2005. By so doing, we aim to shed light on de facto as opposed to formal trade relationships both within the regions and interregionally.
