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The European Union, which has only recently woken up to the importance of strengthening its relations with Asia, hopes to reach a compromise in its dealings with the continent over such issues as labor rights and social welfare.

Having spent the post-war years building up cozy but costly welfare states, Europeans are finding it hard compet-ing with Asian companies that are not required to bother with social insurance costs.

But now the EU has apparently recognized that it is in no position to impose its social values on Asia. "There are many countries that we could never ask to maintain the same social standards as Europe. It would be absurd," said European Commission vice-president Manuel Marin. "They simply can't afford it - they would have no money left to develop themselves."

Such sentiments should please Asian leaders, many of whom Marin will meet in a four-nation tour of Asia this month which will take in the Association of Southeast Asian Nations (ASEAN) post-ministerial conference in Jakarta.

Asian leaders such as Malaysian Prime Minister Mahathir Mohamad have often accused the West of imposing its values on developing nations.

Europe, however, will not abandon its principles in its rush to make friends. "We are going to have to find some kind of balance. We would like to see a voluntary move toward a certain standard of living, a certain welfare," said Marin.

The most powerful weapon in the EU arsenal is trade. The generalized system of preferences, which gives poor countries low-tariff access to Europe's affluent consumers, has all manner of social strings attached. Countries risk seeing their privileges suspended if they employ forced labor, for example, or if children form a large part of their work force.

Some taste of the troubles that lie ahead came on Monday, when European foreign ministers officially expressed their distaste for Myanmar's leadership. ASEAN, whose own foreign ministers will meet in Jakarta next week, has reportedly made the decision to officially admit Myanmar as an observer on Saturday, the first step toward membership in the regional club. Holes immediately app eared in the EU's new, more accommodating cloak. Several foreign ministers expressed dismay at the move and officials said the EU would continue to put pressure on Myanmar regardless of whether it was an ASEAN member.

While the European Commission tries to grow more pragmatic, it is held back by the European Parliament. Ignoring the back-room problem-solving favored by the commission, parliamentarians often pass resolutions designed to cause maximum offense.

That they rarely have the power to turn their words into action does not prevent them from achieving that aim.

Copyright 1996 Asia Times.

(c) 1996 Chamber World Network International Ltd.