Tremendous potential for Asia-Europe trade : Tommy Koh
SINGAPORE’S ambassador-at-large Tommy Koh yesterday called on Asian and European businessmen to exploit the potential of their regions and step up trade and investment flows.
In a speech at the Asia-Europe Business Conference here he said economic trends showed that trans-Atlantic and trans-Pacific ties, including trade and investment, were stronger than those between East Asia and western Europe.
“The conclusion is obvious: Asia and Europe are under-trading with, and under-investing in, each other’s economies,” he said, adding that both regions formed the “weakest side” of the world economic triangle, which included North America.
Professor Koh, who heads the Asia-Europe Foundation (Asef), told a three-day conference that the potential to do more was tremendous.
He cited the Asia-Pacific’s credential as the world’s fastest-growing economic region where European companies could increase profit margins and expand global market shares.
Europe, on the other hand, offered Asian businessmen the world’s largest, most integrated and sophisticated economy.
One reason European and Asian firms were not active in each other’s economies was that many Europeans lacked an in-depth knowledge of the Asian market, he said.
“It is important for European companies to understand the cultures of doing business in the various Asian countries,” he said, adding that in Asia, it was important as to “know who” as to “know how”.
He said European investors were also discouraged by the lack of transparency and a clear regulatory framework.
On the flip side, he said that apart from the United Kingdom, Ireland and, to some extent, the Netherlands, Asians perceived the European business environment as being expensive and its workforce inflexible.
He said: “Asians also suffer from a knowledge gap. They lack detailed knowledge of the developments and opportunities in Europe.
To increase two-way trade and investment flow, Prof Koh suggested building Euro-Asia business networks at the bi-regional and bi-national levels.
He said this process had already started with the First Asia-Europe Business Forum, which was hosted by France, in October last year.
At the same time, Asian and European governments should work to create a more conducive business environment and a better cultural undertanding.
“Better cultural understanding will support successful business relations between our two regions,” he said, adding that the mass media played a critical role in this respect because it shaped public perceptions.
Prof Koh said that Asef would convene a meeting of leading news editors from Asia and Europe in Luxembourg on October 25 to brainstorm ways of discarding “old stereotypes” of media coverage. “We need to persuade the mass media in our two regions to report each other in a more accurate and balanced manner,” he said.
Asian companies * Fear of Europe: Apart from the United Kingdom, Ireland and, to a certain extent, the Netherlands, Asians perceive the European business environment as being expensive and their workforce, inflexible.
* Lack of in-depth knowledge: Asian firms lack knowledge of the Europeanmarket.
European companies * Culture gap: European companies need to understand the culture of doing business in various Asian countries. In Asia, it is as important to “know who” as to “know how”.
* Asian problem: European firms are discouraged by the lack of transparency and a clear regulatory framework.