EU seeks to boost ties in face of Asia challenge

BRUSSELS, Sept 7 (Reuters) European leaders host their Asian counterparts this weekend, hoping to move closer to new, tighter relationship with a region challenging Europe's status as a global economic and political power.

Presidents and prime ministers from nearly 40 European Union and Asian countries are to meet in Helsinki on Sunday and Monday for a biennial summit, preceded on Saturday by top-level meetings of the European Union with China and South Korea.

With Asia's growing export might being felt by European industry and EU diplomats anxious to harness China's growing clout on issues such as Iran's nuclear programme and global warming, officials say it is time to upgrade East-West ties.

They are also mindful of US inroads into the region where Europe was once a colonial power but now has little sway.

''We are still dealing with a set of relationships with Asia that were launched as purely trade relationships. Now are trying to persuade them that we are important political players too,'' said an EU official who asked not to be named.

The two-day Asia Europe Meeting (ASEM) is billed as a chance for leaders to discuss key issues such as energy security and terrorism on an informal basis, free of the formalities of official negotiations. Critics dismiss it as a ''talking shop.'' But European officials say there is a chance the summit with China could yield enough real progress to announce the launch of wide-ranging talks about a new strategic alliance with Beijing.

A ''Partnership and Cooperation Agreement'' could soothe the EU's often tense trade ties with China -- strained by anti-dumping cases -- with new rules on issues such as investment, public procurement and intellectual property.

HUMAN RIGHTS China wants the end of an EU arms embargo imposed after the killing of pro-democracy protesters in Beijing in 1989 but EU officials, aware of US concerns, say it will not be discussed in Helsinki.

Human rights in China and Myanmar's military dictatorship are on the agenda. Rights groups have criticised an EU decision to invite Myanmar's foreign minister despite a visa ban and fear Brussels will soft-pedal on China for fear of upsetting Beijing.

The EU's existing economic agreement with China was sealed 20 years ago, when Chinese exports to the EU were a rarity.

Earlier this year, China's exports of manufactured goods to the bloc overtook those from the United States.

Asia's growing economic prowess has increasingly raised concerns that Europe, struggling to boost productivity, could eventually be left in the dust.

''There are already signs that the emerging Asian economies could surpass Europe and relegate it to the status of a third-grade global power,'' wrote former Finnish prime minister Esko Aho in a report for the European Policy Centre think tank.

Trade and investment are likely to feature too in private EU discussions in Helsinki with South Korea and the 10-nation Association of South East Asian Nations (ASEAN), both of which are being targeted by Brussels for possible free trade deals.

But with no mandate yet from member states, the EU is unable to discuss free trade formally in Finland, officials say.

Meanwhile, the United States is negotiating trade deals with South Korea and Malaysia and could resume talks with Thailand.

Reuters SP MIR RN1721