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Growing Europe – Northeast Asia Cooperation

Monday, January 2nd, 2012
new year in stockholm

Certain movers and shakers are abuzz with the possibilities of closer Europe-Asia cooperation and ties. Of course, the recently-passed Korea-EU FTA has helped with this, but other geographical and political factors are also contributing to the growing energy around the idea. That the northern polar ice cap is melting is a reality. However, not all of the ramifications of this fact are bad. Perhaps the best result from this extremely significant change in our planet is that ocean traffic between Europe, the US, and Northeast Asia will become much more direct. The Northern Sea Route, the name given to the ship route between Europe and Asia by sailing in waters north of Russia, is 4000 nautical miles shorter as measured from Rotterdam to Ulsan, South Korea, than going through the Suez Canal. It was known to have opened in 2005 but closed again by 2007. However in 2008 it was reported to be open again. In 2009, a Bremen-based company claimed to have traversed the Northern Sea Route without the assistance of icebreaker ships. However, they did contract Russian icebreakers for a more well-documented trip from Ulsan back to Rotterdam. They claimed savings of 300,000 Euros (US$412,000) per ship, although the price for the Russian icebreakers is not known. It is believed that the average time taken and average fuel necessary to traverse the Northern Sea Route will consistently beat out the Suez Canal and going past India for shipping to and from Asia and Europe.

Metaphorical Melting

But as South Korea is benefiting from literal melting ice which connects it more tightly to the rest of Asia and Europe, it might also benefit from some metaphorical melting of its northern brother. The North Korean regime is said to be considering allowing a rail and/or natural gas pipeline through its territory to South Korea. The railway line is extremely promising for South Korean businesses which manufacture high-end electronics in the country and sell them in the lucrative European market. It would cut down the shipping times of goods from a few weeks to a few days. Proponents of the idea point to East and West Germany, which had a similar setup. Trains could pass from Eastern Europe through East Germany into West Germany, but the train cars were closed up and no one was allowed to get on or off for the duration of the trip through the communist nation. If a trans-North Korean railroad was implemented it would probably work something like this. Rumors and innuendo are all that flies around this idea now, but the possibilities are very profitable for some Korean chaebol.

There have also been rumors of a deal being struck between Russia, North Korea, and South Korea for a natural gas pipeline from Russia to be built into South Korea through North Korea. It is doubtful whether North Korea can be trusted with a vital piece of infrastructure like that, however. One can easily imagine several scenarios in which the shady regime either siphons off a significant amount of the energy, or throws tantrums and cuts off the flow periodically in order to gain some temporary political advantage. However, if countries on both sides of the pipeline object to such antics the regime might be hard-pressed to pull anything like that off. Even though it is only tangentially related to EU-Asia cooperation, any avenue through North Korea is good for international relations. It would be one more crack in the ice of Korea’s northern neighbors.

Ice Keeps EU and East Asia Apart

Another way that the European Union might be able to help Asia is by example. Several policymakers in Japan, Korea, and China have spoken before and continue to toy with the idea of trying to follow in Europe’s footsteps in creating a Union of their own. The first step in this idea would be the implementation of a common currency between participating countries. It would simplify and encourage trade, the lifeblood of modern politics, which would also bring the countries closer together. However, any potential Asian economic cooperation might want to make a note of Europe’s current economic troubles. Some experts say that the current problems with the EU banking system stem from having a common currency but not a common fiscal policy. That created the problem of nationstates that shared a common currency and a common web of debt, but with one state being more fiscally irresponsible than others. Out of an obligation of the web of debt, the other states are now caught between a rock and a hard place - both helping or refusing to help their neighbors bring bad consequences.

Other Examples

Of course talking about an Asia united in currency, economics, and fiscal policy is seen by many as a very tall order to fill indeed, and not something that can happen within the next 10, 20, or perhaps even 50 years. But the success and example of the European Union have set many Asian policymakers thinking. There are also other examples from the EU that Asian policymakers can use in order to solve problems at home. There is the issue of renewable energy and energy efficiency. Northern Europe is especially good with these issues, since they have to be. The polar ice caps may be melting, but it still gets cold in winter, and so energy efficiency is a very important part of the economies of countries like Sweden, Norway, and Finland. With excellent track records like being able to heat every home in the country with renewable energy, these northern EU countries can share a lot of ideas with Asian countries along those lines. Another possible area of cooperation is in social policy. Asia is being faced with the problem of an aging population, where the elderly are going to outnumber their descendants by an economically-significant amount soon. EU nations have a much higher birthrate and policies to support that, and such policies can be used as examples which East Asian nations may be able to use to adapt to their own societies.

Not everyone likes change, but as winter always melts into spring, change always comes. It is best if one is prepared for change and anticipating what can be uncovered from melting snows, rather than wasting time crying over the icemelt rivers.

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