ASEAN-EU FTA will bring disaster and sovereignty losing



Recently, a continuous negotiation in Joint Committee for The ASEAN-EU Free Trade Agreement is being carried out. Last negotiation was held in Brussels, Belgium from 30th January until 1st February 2008. It was planned that in the next Joint Committee will be more intensive in ASEAN countries, such as in Bangkok, Thailand on April; Philippines on July and Vietnam on October.

This was an aggressive step from European Union (EU), as been said by EU Trade Commissioner, Peter Mandelshon; “Strengthening the commitment and focus of EU trade policy in Asia is important part of the of the EU’s Global Europe trade strategy. An EU-ASEAN FTA is a key part of that. This meeting helped clarify issues and map out the work ahead. I remain strongly committed to a wide-ranging twenty-first century trade agreement...”

It was a Mandhelsohn’s direct statement for EU ambition. In 2006, EU has determined their new strategy in trading and investments called “Global Europe: Competing The World”. Above all, it decides an agenda progressing European Union global corporations (TNCs) to compete, by sacrificing the European people, European environment and the rest of the world. The document stated, “Getting rid of all barriers that hinder the operations of companies and making sure all regulations are minimally trade distorting”. Global Europe is a serious threat for social justice, gender equality and continuous development, not only for the outer European countries, but also for the inside of the EU. Key element of this is Bilateral Free Trade Agreements (BFTA) with their countries’ main target: India, South Korea, ASEAN, MERCOSUR, Central America and Andes Area. Main goal is to gain profit for European companies by market liberation and deregulation: improving their access for natural resources, especially energy supply; secure their profit by pushing Intellectual Property Rights regulation; and other trade mechanism. Adding an extra power towards corporation and diminish peoples’ sovereignty.

Valuable experience can be taken from EU-Africa EPA that been signed by African countries and European Union on 12th December 2007. EU has done unmannerly by pressurize and threatening African countries to approve the agreement, including the donation canceling and closing down the market access to Europe. The agreement pointing on deletion all trade barriers, like ensuring that African countries will not implement tax on import for highly-subsidized European food product, in order to protect their local peasants. Thus also the deletion local content regulation for SADC (Southern African Development Community) countries. Furthermore, EPA is a WTO-Plus characteristic, which far wider and comprehensive.

Acknowledging the statement of Nobel-prize winner on economics, Joseph Stiglitz; “Overall, bilateral agreements have been a disaster, for the developing countries and for the global trading system. The global trading system is based on principal of non-discrimination, which is called the most favored nation principle. These FTAs are creating a world in which there are two groups - the first consist of “my friends who can get in free” and the other, consist of countries that to pay tariffs. So, it is a disaster”. The he replied later by saying FTA “It’s not about trading goods; it’s about losing sovereignty”.

Assessment research done in 2007-2008 for ASEAN-EU FTA (AEUFTA), particularly on the effect in Indonesia, conclude that these agreement potentially deeps the differentiation or asymmetric economy relationship between two regions. ASEAN countries will get difficulties on tariff adjustment because of the deal. For Indonesia, adjustment tariffs will give bad impact on Indonesia’s people welfare. Study done by IGJ quantities and qualitatively shows two important things. First, is that there are several sectors predicted to gain loses and insignificant benefit for Indonesia. Second, is that the agreement only contributes minimally to national GDP (Gross Domestic Product). From qualitative findings, seems there were worries, especially in civil society, on the ASEAN-EU FTA outcome. On the other hand, developmental perspective is still needed in this trade agreement. As for qualitative, through IGJ-EMERALD economy model, was also mention that AEUFTA will effect the macro-economics condition, like export-price decrease or price changes in Indonesian economical sectors. AEUFTA will make development and economy gap wider between ASEAN and EU. Therefore, this research concludes AEUFTA works more for EU needs, rather than ASEAN interests, mainly for Indonesia.

Regarding this, we recommend that AEUFTA agreement process must be stopped. There are more loses than beneficial outcome if continuing the agreement. Again, Indonesian people became who suffers more. Indonesia will be strangled to face big disaster and losing its sovereignty.

19 March 2008

Chief Director
Institute for Global Justice

source : IGJ

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