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Asean, EU in accord to resume trade talks

LEADERS from the European Union and the Association of Southeast Asian Nations agreed on Friday to resume free trade talks, eight years after talks quietly broke off due to human rights violations of Myanmar.

In the annual EU-Asean ministerial consultations, EU Commissioner for Trade Cecilia Malmstrom said the two regions have agreed to create a framework encompassing the parameters of a future Asean-EU Free Trade Agreement.

“I am glad to see that both sides are now ready to seize the momentum and start preparations towards relaunching these negotiations,” Malmstrom said, who arrived on Thursday to attend the annual Asean Business Summit, which the country hosts this year as chairman.

A joint statement during the ministerial meeting said all regions agreed to order their senior officials to work out the parameters of the negotiations for a future Asean-EU region-to-region agreement.

ASEAN UNITY. (from left) Tran Tuan Anh, Vietnam’s Minister of Industry, Ramon Lopez, Philippines Secretary for Trade and Industry and chairman of the Asean Economic ministers meeting, Cecilia Malmstrom, European Union Commissioner for Trade; and Le Luong Minh, Asean secretary general, join hands after a news conference Friday, underlining the links among members of the largely economic alliance. AFP
The regions also agreed to organize expert meetings in new areas of cooperation such as public procurement, e-commerce, and simplifying trade for small and medium-sized enterprises.

“This is a significant and timely initiative, and it shows that the EU and Asean are committed to take the lead together on regional and global trade,” Malmstrom said.

She also noted the 40th anniversary of “fruitful cooperation” between the EU and Asean this year, emphasizing their commitment to advancing a positive global trade agenda that benefits both parties.

“2017 marks the 40th anniversary of fruitful cooperation between the EU and Asean. There is still much to be done to unlock the full potential of the EU-Asean relationship, and the quickly changing international environment now makes us turn our eyes even more towards Asia,” she said.

In 2007, the Asean and EU began negotiating a free trade agreement, but the talks quietly broke off two years and seven rounds later, due to human rights violations in Myanmar.

The differences in level of economic development and openness between the members of the South-East Asian grouping made Europe pursue the talks in separate settings with individual members of Asean in 2009.

The EU has a legal obligation under the Lisbon Treaty to incorporate human rights issues into external trade and investment frameworks, to ensure that the economic benefits do not come at the expense of human rights abroad. 

Malmstrom said they already started negotiating with the Philippines just two weeks ago, amid widespread reports of extrajudicial killings in the country.

So far, the EU has concluded, but not yet ratified, bilateral trade agreements with Singapore and Vietnam and is still pursuing negotiations with Indonesia.

Next year, the EU and Asean countries are expected to continue to advance bilateral free trade talks and discuss other topics.

The EU-Asean officials have also agreed to explore the idea of a multilateral court for investment, that can serve as a single global judicial instance for resolving investment-related disputes. This initiative was launched jointly by the EU and Canada some months ago.

At the sidelines of the EU-Asean meeting, Malmstrom also met with trade and economic ministers from several Asean countries, including Cambodia, Indonesia, Malaysia, the Philippines and Vietnam.

The EU is the most important investor in Asean and its second trading partner. With bilateral trade in goods worth more than 200 billion euros per year, Asean is the EU’s third trading partner.

Malmstrom on Friday said the EU parliament and EU member states have concerns about extrajudicial killings and the proposed revival of the death penalty that may jeopardize the Philippine accreditation to the EU Generalized System of Preferences+ (GSP+).

“We have an agreement (with the Philippines) we called GSP+ which opens good trade opportunities. But those are subject to certain international conventions,” she said.

The EU-GSP+ allows the Philippines to export 6,274 eligible products duty-free access to the EU market after it was granted beneficiary country status in December 2014.

Malmstrom said the EU is still undecided if it will pull out the trade program with the Philippines “but we are discussing this with our partners.”

The EU, she added, is very much attentive to the issues in the Philippines as its fourth biggest trading partner.

“We will discuss this and see how these [issues] develop. I know that [the death penalty] is now at the Senate, as well,” she said.

Trade Secretary Ramon Lopez, meanwhile, said that should the EU decide to strip the Philippines of the GSP+ scheme, he will ask it to reconsider its decision.

“If their intention for cooperation is purely on a commercial and trade basis, to me that should not be linked to noncommercial issues like the extrajudicial killings and death penalty. And I still stand by my position that there [are] and [were] no extrajudicial killings in the Philippines,” he said.

In a joint media statement, the AEM and Malmstrom were pleased with the conduct of various projects on trade facilitation, intellectual property rights, air transportation and statistics and integration monitoring.

Both sides discussed the next steps towards the resumption of the Asean-EU Free Trade Agreement negotiations and agreed to develop a framework on the parameters of the FTA.

Both also noted the improved outlook of global economic growth which is expected to pick-up to 3.4 percent in 2017, from 3.1 percent in 2016.

EU statistics showed that two-way trade stood at 208 billion euros in 2016. EU remains the biggest source of foreign direct investments into the Asean in 2015 at 23.3 billion euros.

Topics: European Union , EU , Association of Southeast Asian Nations , Asean , free trade talks , Asean-EU Free Trade Agreement , EU Commissioner for Trade Cecilia Malmstrom
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