EU-Asean FTA hinges on political, economic issues

THE European Union (EU) trade commissioner said the bloc would still seek a free-trade agreement with the Association of Southeast Asian Nations (Asean) if the political and economic issues are hurdled.

Karel de Gucht said the 10 Asean member-states would have to work first on the full integration of its internal market to harmonize trade and investments in the region.

The EU and Asean called off negotiations for the ambitious region-to-region free-trade deal in March 2009 after seven rounds of talks. The EU said it could not proceed to negotiations for free trade with Asean due to political and economic reasons.

De Gucht said the political issue is obviously the rights atrocities in Burma/Myanmar. The EU tried to exclude Burma/Myanmar in the negotiations, but Asean had to maintain its policy of consensus.

“It is obvious that the economic development of 10 member-countries is not exactly the same,” said de Gucht. “It is difficult to agree when economic policies are not the same in each member economy, particularly in Myanmar, Laos and Cambodia.”

The EU has opted to seek bilateral free-trade agreements with Asean’s six members. He said talks are expected to be concluded with Singapore at the end of the year, while exploratory talks are being held with Vietnam. Other Asean members—Thailand, Malaysia, Indonesia and the Philippines—have also expressed interest.

“Bilateral free-trade agreements [with Asean members] should ultimately provide a stepping stone for a future agreement in the regional context,” said De Gucht.

The Philippines and the EU have initialed the partnership cooperation agreement (PCA) that covers issues on human rights, migration, trade, political and security.

The leaders of the EU and the Philippines are expected to sign the PCA at the Asia Europe Meeting Summit in Brussels in October.

EU is the biggest trading partner of Asean behind China, and by far the largest investor in the region, accounting for 24.5 percent of total investments.

In 2009 bilateral merchandise trade between the regional bloc reached €118 billion, more than 5 percent of the total EU trade. –Estrella Torres / Reporter, Businessmirror