EU-Asia summit boosts calls for free trade pacts
Reuters | Mon, Oct 4 2010
EU-Asia summit boosts calls for free trade pacts
By Juliane von Reppert-Bismarck
BRUSSELS (Reuters) — EU leaders homed in on business opportunities with Asia’s fast-growing economies on Monday, looking towards trade pacts with India, Vietnam, Malaysia and Thailand after a ground-breaking deal with South Korea.
The European Union and Asia account for more than 60 percent of world trade, with a growing dominance of trade flows into and out of China.
Europe’s first bilateral trade agreement in Asia — to be signed with South Korea on Wednesday — would pave the way for other trade pacts in the region, the president of the council of EU states, Herman Van Rompuy, said.
"It will boost economic relations between the European Union and other Asian economies as well," he said at the opening of a two-day EU-Asian summit.
The EU will launch formal talks on Tuesday on a trade deal with Malaysia, while Indian Vice President Hamid Ansari and Van Rompuy expressed a "clear wish" on Monday to push ahead with such an agreement, EU officials said.
EU Commission President Jose Manuel Barroso told briefings that Brussels was also keen to launch trade talks with Vietnam "as soon as possible", as well as with Thailand.
Malaysian Prime Minister Najib Razak said Europe should use the momentum of the deal with Seoul to seek other footholds in Asia and avoid being "mesmerised by opportunities in China".
Like China, other Asian states have registered positive growth through the economic crisis and are home to growing consumer markets, creating opportunities for European exporters of cars, fashion, telephones, environmental technology, banking and construction services.
Europe hopes trade pacts with Asia will allow it to impose environmental and anti-counterfeiting rules to secure European dominance of technology sectors and guarantee intellectual property when European firms invest abroad.
Asian nations are looking to open European markets for manufactured goods and allow developing nations to diversify away from raw material exports.
"Our small and medium enterprises will have opportunities to export, and it’s good for our commodities as well," Malaysia’s Razak said.
EU ENVIRONMENTAL LAWS UNDER FIRE
Regardless of momentum, trade agreements often take years to complete. Hurdles to be overcome were already apparent at the summit, among them recent European measures to raise import tariffs on industrial imports into Europe, and the bloc’s demands on environmental protection and human rights.
A draft statement due to be agreed at the two-day meeting said laws by individual states to combat climate change should not get in the way of trade between Europe and the Asian region.
"Sustainable development policies, including environmental measures, (should) not lead to arbitrary or disguised restrictions on international trade," it said.
Europe has come under fire from several trading partners for environmental regulation, such as that on sustainable energy production, that could make it harder for energy-intensive exporters to gain access to the EU market.
Malaysia, meanwhile, wants to remove EU objections to imports of its palm-oil based biofuel.
Malaysian hopes of supplying Europe’s booming demand for such fuels have been frustrated by EU science that says palm-oil-based biofuel from the Asian country harms the environment — science which Malaysia disputes.
"Rules should be based on scientific evidence," Malaysia’s Razak said. "We hope that we will not be unduly penalised because of certain misinformation."
The EU will also come under pressure from Asian states over its human rights requirements in trade negotiations.
Any trade talks will open debate about the EU’s application of trade rules, which exporters — notably in China — have branded protectionist. The EU has launched a slew of measures in recent months to raise duties on Asian imports, from fibreglass used in wind turbine production, to car wheels and wireless modems.
(Reporting by Juliane von Reppert-Bismarck, editing by Rex Merrifield)
