EU-ASEAN FTAROADMAP

BY

Charles Santiago

Monitoring Sustainability of Globalisation (MSN)

Agenda:

EUs trade policy towards Asia; EUs demands of Asian governments; EUs Multi-prong trade approach towards

Asia.

a) Country strategy papers;

b) ASEM;

c) EU-ASEAN FTA.

PhilippinesPhilippines

Indonesia

Brunei

Myanmar

Malaysia

Thailand

VietnamLaos

Cambodia

Singapore

FTA concluded

AFTA

Japan

FTA under negotiation

US

Taiwan

FTA concluded

AFTA

Japan

FTA under negotiation

TIFA with the US

FTA concluded

AFTA

FTA concluded

AFTA

Australia

Bahrain

China

New Zealand

Japan

FTA under negotiation

US

Chile

PeruFTA concluded

AFTA

Japan

FTA under negotiation

US

Australia

New Zealand

Pakistan

Korea

India

FTA concluded

AFTA

Australia

Japan

New Zealand

US

India

Jordan

Chile

South Korea

Panama

Transpacific SEP (RTA including Brunei, Chile, New Zealand Singapore)

European Free Trade Association (EFTA)

FTA under negotiation

Canada

Sri Lanka

Peru

Iran

Egypt

Pakistan

Ukraine

Mexico

China

Golf Cooperation Council GCC (RTA including Bahrain, Kuwait, Qatar, United Arab Emirates, Oman and Saudi Arabia)

FTA concluded

AFTA

FTA under negotiation

TIFA with the US

Japan

ASEAN FTA ALREADY CONCLUDED

South Korea (2006)

AFTA

To be implemented by 2015

To be concluded by 2010

To be concluded by 2015

To be concluded by the end 2007

To be concluded by 2009

FTA UNDER NEGOTIATION WITH ASEAN

EU

MERCOSUR (Argentina, Brazil, Paraguay, Uruguay)

Korea

India

Golf Cooperation Council (Bahrain, Kuwait, Qatar, United Arab Emirates, Oman and Saudi Arabia)

CAN (Andean Community) Bolivia, Colombia, Ecuador, Peru

Central America (Guatemala, Salvador, Honduras, Nicaragua, Costa Rica, Panama)

African, Caribbean and Pacific (ACP) (78 countries)

ASEAN

EUs Trade Policy Goals in Asia.

To improve Market Access and Investment opportunities for EU MNC;

To ensure that EU corporations are not out-competed by US, Japan and Korean corp.;

To establish a pro-business environment & eliminate barriers to European trade;

To encourage changes in legislations and regulations which are barriers to European trade.

EUs Trade Policy in Asia.

EU’s ‘Towards A New Asia Strategy’ (1994) states:

“ to pursue all actions necessary to ensure open markets and a non-discriminatory business environment conducive to an expansion of European trade and investments”

How Does EU Policy Boost EU Private Sector Participation In Asia?

To demand changes to Standards and Quality Control, IPR, and Mutual Recognition Agreements (MRA);

To promote business cooperation bet. European and Asian business groupings;

To establish cooperation and links between European business and Chamber of Commerce;

To provide financial incentives for business through the European Investment Bank.

What Does EU’s Policy Demand of Asia?

Liberalisation – opening up and creating a non-discriminatory environment for European business;

Regulatory changes - towards a pro-business environment;

Convergence – Asian economies need to follow EU standards & QC, certification and custom procedures;

Integration - of Asian economies to European economies and business practices.

How are these demands played out – Asia strategy papers.

Asia (1994) - market opening; promote MNC presence and goods;

Korea (1993) - market opening; Japan (1995) - dismantle barriers to market access; China (1995) - promoting European MNC presence

(goods and investments); ASEAN (1996) – investment; and upgrading of bi-

lateral relationship; trade and investment facilitation.

ASEM

TFAP and IPAP - trade & investment liberalisation, removing trade barriers and promoting public-private partnerships.

Working groups, seminars and a reporting mechanism has been established.

Business community (AEBF) given a prominent role; Declining business interests in the economic pillar.

Towards An EU-ASEAN FTA?

ASEAN’s strategic interests to the EU: “ASEAN is not only back on its feet as one of the

world’s fastest growing regions, it is also being increasingly wooed by an array of Europe’s competitors - including the US - seeking new partnerships and alliances in the area. To secure global influence, the EU must also become part of he intense-weaving of economic ties currently underway in South East Asia”. Yale Global Project 2003

Important Agreements:

TREATI – 2003 ASEAN Integration Framework (AIF) – 2004 Inter-phasing of TREATI and AIF – 2005 Vision Group – April 2005 EU – ASEAN FTA viable - May 2006

EU’s TREATI for ASEAN (2003)

To establish a regulatory framework – on trade facilitation, market access and competition policy & investment;

Greater convergence between Europe and Asian regulatory systems;

The focus is on non-tariff barriers; Preparation for an FTA with EU

Implications for Asean

ASEAN exports need to conform to EU standards; ASEAN economies must adhere to WTO GATS

framework; ASEAN government’s must accord the highest

protection for EU MNCs IPR. ASEAN government’s must offer an open and non-

discriminatory rules for EU business and investors; ASEAN governments must open-up government

procurement to EU corporations.

ASEANs Framework on Integration of Priority Sectors (2004)

Progressive liberalisation of trade in services; Progressive elimination of restrictive

investment measures; Harmonization of product standards &

technical regulations Promote business communities in the region.

EU-ASEAN Harmonization and Integration.

In 2005, TREATI was inter-phased with ASEAN Integration of Priority Sectors

Collectively, it involves: Liberalisation of trade, investment, services; Elimination of non-tariff barriers; Elimination of technical barriers to trade; Tariff reduction; WTO + issues This Locks ASEAN into a irreversible neo-liberal

order.

EU-ASEAN FTA – Deepening & Widening liberalisation

Liberalisation – goods, services and investments – going beyond WTO commitments;

Elimination of technical barriers to trade, non-tariff barriers to trade;

Opening-up of government procurement; Protection of IPR; Implementation of Competition policy

Issues:

ASEAN nations are required to make significant economic changes for European Market Access and FDI;

Trade Rules are rewritten along neo-liberal order and works in favor of the stronger EU;

EU demand – “reorganize your economy if you want to trade with us”;

The neo-liberal order ignores existing asymmetries between the EU and ASEAN & within ASEAN.

FTA rules and regulation are not neutral.