EU LAUNCHES FREE TRADE TALKS WITH GROUP OF TEN SOUTHEAST ASIAN NATIONS
The EU and the Association of Southeast Asian Nations (ASEAN) have launched talks aiming at a free trade agreement (FTA), kicking off one of the largest regional trade negotiations in the world.
The ten-member ASEAN group, which includes countries such as Indonesia, Vietnam, Thailand, Cambodia, Singapore, and the Philippines, entered into the negotiations with the EU on 4 May with the aim to boost international trade and economic growth. Given the increasing competition posed by neighbours India and China, ASEAN has stressed the importance of strengthening its regional integration, economic ties, and overall engagement in global trade processes.
In 2005, trade between the EU and South East Asia reached about US$ 140 billion annually, according to ASEAN. It is estimated that an FTA between the two groups of nations would result in increases in exports for each region, with ASEAN experiencing an 18.5 percent growth and the EU an additional EUR 40 billion annually. A bilateral agreement also opens up large market potential; currently, the regions boast populations of 560 million and 490 million, respectively.
The EU-ASEAN FTA is set to cover issues outside the scope of the WTO, such as investment, trade in certain services, and opening trade barriers that restrict the free movement of professionals. Strengthening intellectual property rights protection and liberalising trade to the greatest possible extent are also high priorities on the agenda.
EU Trade Commissioner Peter Mandelson commented that an EU-ASEAN FTA would "add to the sum total of world trade," extending into areas "that cannot be achieved in the current round of multilateral talks."
Following talks with ASEAN, the EU also launched FTA negotiations with South Korea on 7 May in Seoul. While discussions around establishing an agreement have been ongoing since 2003, the recent move signifies the most concrete development over the past four years. "The Korea-EU FTA will provide an excellent opportunity for Korea to become the East Asia FTA hub linking Europe, Asia, and the United States," said South Korean Trade Minister Kim Hyun-chong.
Several weeks ago Korea signed an FTA with the US (see BRIDGES Weekly, 4 April 2007) and has been actively seeking trade deals with other partners; at present, Seoul has forged agreements with nine of the ten ASEAN members.
While not dismissing the significance of bilateral agreements, Commissioner Mandelson reiterated the importance of concluding negotiations under the Doha Round. "I see any bilateral agreement between us as a complement to the [Doha Development Agenda], not an alternative to it," he said.
A timeframe for concluding FTA talks has not yet been set.
ICTSD reporting; "European Commission welcomes adoption of negotiating mandates for new Free Trade Agreements with India, Korea and ASEAN," EUROPEAN COMMISSION, 23 April 2007; "Philippines cautious over ASEAN-EU Free Trade Deal," BUSINESS WORLD, 7 May 2007; "South Korea, EU Launch Trade Talks," ASSOCIATED PRESS; "European Union, SE Asia Launch Free-Trade Talks," REUTERS, 4 May 2007.