EU-Asia trade pact in prospect
Financial Times | May 17 2006
EU-Asia trade pact in prospect
By John Burton in Singapore
The European Union is likely to decide by the end of the year whether to launch talks on a comprehensive trade agreement with south-east Asia, its first in Asia, Peter Mandelson, the EU trade commissioner, said yesterday.
The EU and the 10-member Association of South East Asian Nations (Asean) yesterday issued a final report on the prospects for a trade deal that "made a strong case for such an agreement with benefits for all sides", Mr Mandelson told the Financial Times.
The EU move is seen as a response to a widening web of bilateral deals being negotiated in the region by the US, China, Japan and Korea that threaten to sideline European economic interests.
Mr Mandelson acknowledged that Asia represented a "gap" in the trade negotiations the EU has been conducting around the world, including with Africa, the Gulf states and South America. "We were at risk of taking our eye off the ball" in Asia, he said.
But he emphasised that a trade deal with south-east Asia would complement rather than undermine the current Doha round ofWorld Trade Organisation talks to achieve a global trade pact.
The talks on a WTO agreement, if they are to succeed, have to be completed next year, ahead of the proposed EU talks with south-east Asia, which would probably begin in 2008.
"We would build on the platform of the multilateral framework," the trade commissioner said, suggesting that talks with south-east Asia would include items that had been dropped from the Doha round, such as rules on investment, competition and government procurement.
Asean nations, led by Singapore, have been pushing for a trade agreement with the EU. That has made the region favourite to be the first in Asia to reach a trade deal with the EU, ahead of China or India. Asean trade ministers are expected to give their assent in August for talks with the EU.
But large differences in economic development among the Asean members could pose problems in reaching a comprehensive trade agreement.
