EU-ASEAN: EU upbeat on prospects
The Nation (Bangkok) | August 20, 2007
EU upbeat on prospects
Pact ’would double trade, investment’
Petchanet Pratruangkrai
The soon-to-start negotiations of the world’s most important trading bloc, the Asean-EU free-trade agreement, should result in an efficient economic agreement which will cover all areas of cooperation, including trade, services and investment, according to an EU trade envoy in Bangkok.
Counsellor Jean-Jacques Bouflet said last week that once the pact was complete the FTA would be capable of doubling trade and investment between the two regions.
Asean and the EU have long floated the idea of creating a trade deal between the two regions. A study set up by the two sides found that the agreement would benefit both sides. The FTA is expected to stimulate the economy of Asean members by another 2 per cent of gross domestic product by 2020. Exports from Asean will increase 18.5 per cent, while exports from the EU will increase 24.2 per cent after implementation of the FTA. Following the study, EU and Asean governments decided to initiate the FTA in April this year
The EU is Asean’s third largest trading partner.
Asean and the EU started unofficial talks on the free-trade agreement in Vietnam in July. They are scheduled to draw up a modality framework of the free-trade talks in the Philippines next month. This preparation is before Asean holds official negotiations with the EU early next year.
The 27 members of the EU will participate in the pact in order to ensure equal benefits to all member states, and all members of Asean will also join the agreement, including Burma, despite differences in politics. Early this year the EU extended its membership from 25 to 27 by including Bulgaria and Romania.
Bouflet said the EU wanted to wrap up the negotiation in two years as the members wanted short negotiations to accelerate advantages from the pact.
Asean also wants to finalise talks in a short period as the EU has conducted many free-trade pacts with other countries.
Due mainly to the failure of the World Trade Organisation, the EU has geared up free-trade talks with many countries in Asia, including South Korea and India.
Bouflet said the negotiations between Korea and the EU were progressing rapidly and would be wrapped up soon and the EU would complete negotiations with India by yearend.
The EU has concluded many free-trade pacts with Asean’s trading partners and competitors. It has a free-trade pact with South America’s Mercosur group of Argentina, Brazil, Paraguay and Uruguay.
The union concluded an FTA with the Gulf Cooperation Council last year. The Gulf members are the United Arab Emirates, Kuwait, Bahrain, Oman, Qatar and Saudi Arabia.
This latest FTA will facilitate trade growth between Asean and the EU and decrease trade barriers between both sides as the EU will offer a special deal for Asean on the rule of origins. The so-called "cumulative rule of origins and value-added rule of origins" package will provide more flexibility for Asean to export products to the EU market.
Board of Trade of Thailand vice chairman Pornsilp Patcharintanakul said the private sector fully supported the negotiations if all members of Asean agreed to step forward and join the negotiations as a whole.
The pact will definitely benefit trade, services and investment growth, he said.
