EU mulls individual FTAs for ASEAN
Jakarta Post, Indonesia
EU mulls individual FTAs for ASEAN
By Mustaqim Adamrah, The Jakarta Post, Jakarta
2 March 2011
Despite ASEAN emerging as a fast-growing market of 591 million people, one major trading partner — the European Union (EU) — still won’t ink a free trade agreement with the bloc, preferring to strike individual deals.
The EU ambassador and head of the EU delegation to Indonesia and Brunei, Julian Wilson, said Tuesday the EU was negotiating free-trade agreements with a number of ASEAN member states separately, instead of hammering out a general FTA with ASEAN as a bloc.
“ASEAN doesn’t have an internal market, so how come we negotiate with ASEAN?” he said on the sidelines of a seminar on regional integration organized by the EU.
In an internal market, he said, goods and services flowed across borders without constraints. Intra-ASEAN trade accounted for 24 percent of the total bloc’s trade, while intra-EU trade stood at 66 percent of the total bloc’s trade, Wilson said.
It is believed human rights issues in Myanmar have also influenced the EU’s decision not to have an FTA with the Southeast Asian bloc. Despite the absence of an ASEAN internal market, the EU maintains that a free trade-like agreement with ASEAN states should be in place.
“If you’re an internal market, that will certainly expand your wealth. But you’re still going to be trading externally,” Wilson said.
“And for that reason, ASEAN will need to develop those agreements with external partners to protect trade and to protect investments abroad.”
He said the EU began negotiations with Singapore and Malaysia. It is now also starting discussions for an FTA with Brunei, Vietnam, Thailand and the Philippines, he said.
Meanwhile, Indonesia, compared to other ASEAN countries, is “less advanced” in negotiations on comprehensive economic partnership agreement with the EU, Wilson said.
He said Indonesia’s fear that an FTA would harm local manufacturers was likely the main stumbling block to negotiations on a comprehensive economic partnership agreement with the EU. “We don’t just trade. We want to create investment that actually creates jobs. Indonesia knows that it needs that.”
He said Indonesia recorded a ¤6 billion surplus every year in trade with the EU.
Wilson said EU investments in ASEAN and in Indonesia last year stood at US$11 billion and $2 billion, respectively. Meanwhile, ASEAN investments in Europe in the last five years reached $69 billion.
“We need to thoroughly evaluate and analyze our position on par with the EU. We need to look carefully at how each one of us can benefit from the other,” Deputy Trade Minister Mahendra Siregar, who was present at the seminar, said.
He said the government was also cautious about possible threats to local industries if such a partnership agreement — similar to the ASEAN-China FTA — was in place.
Producers of textiles, electronics, steel, shoes and children’s toys protested when the ASEAN-China FTA was first fully enforced early last year, saying their products would be competing with cheaper imports from China.
