Southeast Asian states and the European Union agreed Friday May 4 to launch free trade negotiations, setting aside differences over alleged human rights violations in army-ruled Burma, officials said.
EU Trade Commissioner Peter Mandelson reached the agreement with Association of Southeast Asian Nations (Asean) economic ministers during a meeting in Brunei, Asean Secretary general Ong Keng Yong told AFP.
“Yes, we agreed to launch the Asean-EU free trade negotiations,” Ong said from the Brunei capital Bandar Seri Begawan.
“We will set up a joint working committee to follow through this announcement… The understanding is that we are talking to the EU as a group of 10 member countries and Burma is a member of Asean. No one will be excluded from the negotiating process.”
An Asean-EU free trade zone will cover nearly one billion people and is potentially one of the largest in the world. Two-way trade totalled 137 billion US dollars in 2005.
Renate Nikolay, a member of Mandelson’s cabinet said the agreement marked an important step in Asean-EU ties, which have been strained by European concerns over political repression and human rights violations in Asean member Burma.
The EU last month extended its sanctions against the military regime there for another year.
EU foreign ministers expressed “deep concern on the lack of tangible progress on the promised transition towards a legitimate civilian government” and called for the release of democracy icon Aung San Suu Kyi.
The sanctions were first introduced in 1996 after Yangon failed to meet EU demands for greater democracy.
Malaysia’s state-run news agency Bernama quoted Mandelson as saying in Brunei the 27-member EU remained firm on Burma.
“Our stance on Burma, as you know, has not changed,” Mandelson said.
Nikolay told AFP on Thursday: “We never made it a secret that there is a political issue involved. What we are trying to avoid is to make this a stumbling bloc for the negotiations.”
On Friday May 4, Nikolay said both sides “found a joint language and we agreed to launch the process.
“We are going to appoint a committee of senior officials who will work out the work schedule and work programme.”
Talks for an Asean-EU free trade agreement began two-years ago in Vietnam’s Ha Long Bay resort. A feasibility study showed there was a “solid case” to deepen economic ties.
But differences over Burma and the EU’s focus on strengthening the multilateral trade system under the World Trade Organisation (WTO) have slowed down progress.
However, since the Doha round of WTO talks ground to a halt in July in disputes over farm trade, the EU has tried to give a new push to bilateral deals, a strategy already being pursued by economic rivals the United States and Japan which have concluded or are pursuing FTAs in Asia.
The European Commission, the EU’s executive arm, was mandated by member states to negotiate FTAs with Asean, South Korea and India.
An independent analysis carried out by CEPII, France’s leading institute for research on the international economy, and Copenhagen Economics showed a free trade agreement would boost EU exports to Asean by 24.2%.
Asean would also see an 18.5% rise in its exports to the EU if an agreement is reached.
The study showed that the three free trade deals could add more than 40 billion euros (54.26 billion US) to EU exports annually.
Ong, the Asean chief, also lauded the economic benefits of a free trade pact.
“With this announcement, we basically agreed that Asean and the EU have very significant trade ties and we should now sit down and talk,” he said.
Asean’s other members are Brunei, Cambodia, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand and Vietnam.