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Decision on Asean-EU free trade pact in August

Business Times (Kuala Lumpur)

Decision on Asean-EU free trade pact in August


March 16 2006

THE European Union (EU) and the Association of South-East Asian Nations (Asean) are still studying the possibility of having free trade agreements (FTAs) either on a regional basis or bilaterally with individual countries, says European Commission ambassador and head of delegation Thierry Rommel.

He said a fourth round of meetings is expected to be held in Kuala Lumpur between senior economic officials from the EU Trade Commission and 10-member Asean at the end of this month.

"We can expect a decision to be taken by the respective trade ministers and EU Trade Commissioner Peter Mendelson by August on whether an EU-Asean FTA is on the cards," he told Business Times yesterday.

Three rounds of meetings have been held by the vision group, comprising senior economic ministers, that was set up by Asean in Vietnam in April last year.

Malaysia’s total trade with the EU last year was valued at RM113.14 billion, an increase of 4.4 per cent, with a trade surplus of RM12.12 billion.

"The FTA with the EU will have depth as it will also address non-tariff barriers such as rules and technical norms, regulatory market access restrictions and intellectual property," Rommel said.

Unlike the FTA initiative with the US, where the window for negotiation is restricted due to legislation, the initiative with the EU will take its own course of time, he added.

Malaysia had said that an Asean-EU FTA was important for both regions, especially since the Asia-Europe Meeting had not produced favourable results on economic cooperation.

It has been reported that Malaysia, Thailand, Singapore and Indonesia may be the individual member countries with the "readiness" to enter into bilateral FTAs with the EU.

Last year, the EU was Malaysia’s largest regional export destination. It was also the 19th largest exporter to the EU.

The major products exported to the EU were E&E products (RM37.32 billion); palm oil (RM3.99 billion); machinery; appliances and parts (RM2.21 billion); optical and scientific equipment (RM1.91 billion); and textiles and clothing (RM1.81 billion).

Rommel also said that with the accession of 10 new members to the EU two years ago, the 25-member states will provide Malaysia with a wider market access for its products.

"We can look to new growth areas in the service sector in Malaysia, such as financial services," he said.

 source: Business Times