Asean wary of EU approach to expanding free trade talks

TRADE

Asean wary of EU approach to expanding free trade talks

SOMPORN THAPANACHAI & PHUSADEE ARUNMAS

The European Union is considering ''deeper'' free trade area (FTA) discussions with Asean members that would cover political issues sensitive for some Asean governments.

The EU is negotiating for Asean countries to sign up to the EU's demands on labour rights, pro-environment legislation, competition policy, transparency in government procurement, and liberalisation in services, said an EU official.

''If the free trade agreement is just about tariff reduction, we would not be interested in [it],'' said Asa Larsson, trade adviser at the Delegation of the European Commission to Indonesia, Brunei and East Timor.

Despite pressure from the EU side, Asean members want labour rights and the environment _ which are covered under ''sustainable development'' _ to be excluded from the negotiations because each Asean country already has laws on those issues, said Chutima Bunyapraphasara, director-general of the Trade Negotiations Department.

Ms Chutima added that Thailand might agree to negotiate labour rights and the environment but would certainly not consent to these issues being included in the standard agreement.

''The mandate that Thailand has to negotiate these issues is only under the framework of co-operation,'' she said.

The EU aims to conclude deals with the most advanced Asean economies within two to three years before moving on to other negotiations. But this target is seen as ambitious from the Asean perspective, said Asean secretary-general Surin Pitsuwan, who added that the recently concluded Asean-India free trade negotiations took five years.

Friedrich Hamburger, the head of the European Commission delegation to Thailand, last Friday met Thai Commerce Minister Chaiya Sasomsap to discuss progress in Asean-EU FTA negotiations. Mr Hamburger said European Trade Commissioner Peter Mandelson would attend the next round of negotiations in Hanoi, scheduled in October.

Negotiations started in July last year, but five rounds of talks have yet to deliver any substantial agreements. The EU aims for pacts that abolish 90% of tariffs within seven years and is concerned about non-tariff barriers and regulatory issues.

Ms Larsson said the EU wants to include government procurement in the pact, which would open a market estimated at 1.6 trillion. The EU's view is that its government purchasing system is one of the world's most open markets while the Asean side is quite closed.

The EU started shifting from multilateral talks under the umbrella of the World Trade Organisation (WTO) toward regional negotiations after the failure of global trade talks in Hong Kong in 2005.

It wants ''new-generation, comprehensive'' free trade agreements showing the highest possible degree of trade liberalisation, including far-reaching liberalisation in services and investment.