An uphill drive:
Creating an FTA between Asean and EU
There are great opportunities indeed for the ten-nation Asean (the Association of South East Asian Nations) and twenty-seven-nation EU (the European Union ) if they could realize the ambitious plan to set up a free trade agreement. The gains are obvious.
Observers said the Asean-EU trade deal could double two-way trade in just one year after implementation, considering the size of consumers – almost one billion, more than 500 million in Asean and 490 million in EU - with high demand for imports both ways.
Most significantly, the mega FTA, once negotiated, will see import tariffs going down to zero on more than 90 percent of the trade. For EU, which doesn’t have any FTA in Asia, it is imperative to set up an accord in the world’s fastest growing region to catch up with rivals like the United States, which has already inked several trade pacts in Asia. For the US, it seems much easier to sign bilateral deals with individual Asean members than to establish an Asean-US FTA.
As Peter Mandelson, the EU trade commissioner, has pointed out, FTA with Asean and other countries in Asia will open new markets to EU businesses. The agreements could increase EU exports by as much as €40 billion, or $54.2 billion, a year, according to the European Commission.
No doubt. Both Asean and EU stand to benefit from the FTA. However, it will be an uphill task for both sides to seal the big deal.
|• ArnaldoAbruzzini, Secretary General, EUROCHAMBRES
There will be painful adjustments, there will be giving and taking, there will be losers and winners … the process will be slow, frustrating and at times hopeless, but if the deal does go through then more than one billion people will be grateful, said Dr Surin Pitsuwan, Asean’s new secretary-general, at a recent event in Bangkok, entitled, “The trans-regional partnership for shared and sustainable prosperity: Roles of trade intermediaries in the Asean-EU Free Trade Agreement.
AseanAffairs magazine has followed up on the ongoing drive to set up an FTA with Asean by EU and the US, and subsequently obtained insights and opinions from three exclusive interviews with EU and US senior officials, which shed some light on their expectations from and concerns over the trade negotiations with Asean.
Why EU-Asean talks may take the slow lane AseanAffairs magazine explores the pros and cons of the proposed talks between Asean and EU in a recent interview with Mr. Arnaldo Abruzzini, Secretary General, EUROCHAMBRES, Belgium.
What are your concerns regarding Asean integration and what are your suggestions.
Our main concern on the Asean integration process is the huge differences that currently exist among the ten countries belonging to this bloc. In fact, GDP per capita of countries such as Brunei or Singapore was around US$30,000 in 2006 while countries such as Myanmar, Cambodia, Lao and Vietnam can range from US$210 to US$725, respectively. However, we are convinced that both the Asean Charter and the Asean Economic Blueprint will not only consolidate Asean’s institutional and legal framework but also concretely initiate the establishment of a single regional economic market.
What are the sectors/issues in EU-Asean trade that you think might contradict the WTO framework?