EU’s FTA roadmap in south east asia


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@mpklang's presentation on why Malaysia should reject the EU free trade agreement.

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  • Improving Market Access entails a) trade, services, investment liberalisation; b) removal of technical barriers to trade; c) removal of non-trade barriers (local legislations); The EU is playing catch-up to the US and Japan in Asia. The EU states that European dominance in Asia is central to positioning itself in a leading role in the world economy.
  • MRA involves agreements on Standards, testing and certification, in order to allow convergence between EU & Asian economies. The EU will establish European Business Councils and European Business Information Centers will be established in Asia.
  • EU core objectives are trade and investment. It involves market access, eliminating trade barriers, promoting investments and EU MNCs and economic relationships. Clearly,
  • a) ASEM was launched in 1996 with 3 major focus: political, economic and socio-cultural pillars. B) TFAP - trade facilitation action plan and IPAP Investment Promotion Action Plan; the Asia-Europe Business Forum is allowed closer relationship with the ASEM Economic Ministers and recently the SOMTI indicated that AEPF should be given a greater role in influencing ASEM business strategies. Working groups: a) IPR, Customs Procedure and Confromity Assesment (SCA), Sanitary and Phytosanitary Measures, Electric Commerce.
  • a) Acknowledges that ASEAN’s growth and expansion is an attraction for the EU; has to compete with the US and others for the expansion that is happening.
  • Non tariff barriers include trade facilitation, technical barriers to trade, and sanitary & phytosanitary (SPS), industrial products standards. It also includes competition & investment policy. These issues are considered to be impediments to trade. Thus the purpose of the TEATI is to address contentious regulatory barriers before FTA discussions begin.
  • Asean Business Council and ASEAN Chamber of Commerce and Industry.
  • EU’s FTA roadmap in south east asia

    1. 1. EU-ASEAN FTA ROADMAP BY Charles Santiago Monitoring Sustainability of Globalisation (MSN)
    2. 2. Agenda: <ul><li>EUs trade policy towards Asia; </li></ul><ul><li>EUs demands of Asian governments; </li></ul><ul><li>EUs Multi-prong trade approach towards Asia. </li></ul><ul><li>a) Country strategy papers; </li></ul><ul><li>b) ASEM; </li></ul><ul><li>c) EU-ASEAN FTA. </li></ul>
    3. 3. Philippines Indonesia Brunei Myanmar Malaysia Thailand Vietnam Laos 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 Peru FTA 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
    4. 4. ASEAN FTA ALREADY CONCLUDED South Korea (2006) AFTA
    5. 5. 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
    6. 6. 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
    7. 11. EUs Trade Policy Goals in Asia. <ul><li>To improve Market Access and Investment opportunities for EU MNC; </li></ul><ul><li>To ensure that EU corporations are not out-competed by US, Japan and Korean corp.; </li></ul><ul><li>To establish a pro-business environment & eliminate barriers to European trade; </li></ul><ul><li>To encourage changes in legislations and regulations which are barriers to European trade. </li></ul>
    8. 12. EUs Trade Policy in Asia. <ul><li>EU’s ‘Towards A New Asia Strategy’ (1994) states: </li></ul><ul><li>“ to pursue all actions necessary to ensure open markets and a non-discriminatory business environment conducive to an expansion of European trade and investments” </li></ul>
    9. 13. How Does EU Policy Boost EU Private Sector Participation In Asia? <ul><li>To demand changes to Standards and Quality Control, IPR, and Mutual Recognition Agreements (MRA); </li></ul><ul><li>To promote business cooperation bet. European and Asian business groupings; </li></ul><ul><li>To establish cooperation and links between European business and Chamber of Commerce; </li></ul><ul><li>To provide financial incentives for business through the European Investment Bank. </li></ul>
    10. 14. What Does EU’s Policy Demand of Asia? <ul><li>Liberalisation – opening up and creating a non-discriminatory environment for European business; </li></ul><ul><li>Regulatory changes - towards a pro-business environment; </li></ul><ul><li>Convergence – Asian economies need to follow EU standards & QC, certification and custom procedures; </li></ul><ul><li>Integration - of Asian economies to European economies and business practices. </li></ul>
    11. 15. How are these demands played out – Asia strategy papers. <ul><li>Asia (1994) - market opening; promote MNC presence and goods; </li></ul><ul><li>Korea (1993) - market opening; </li></ul><ul><li>Japan (1995) - dismantle barriers to market access; </li></ul><ul><li>China (1995) - promoting European MNC presence (goods and investments); </li></ul><ul><li>ASEAN (1996) – investment; and upgrading of bi-lateral relationship; trade and investment facilitation. </li></ul>
    12. 16. ASEM <ul><li>TFAP and IPAP - trade & investment liberalisation, removing trade barriers and promoting public-private partnerships. </li></ul><ul><li>Working groups, seminars and a reporting mechanism has been established. </li></ul><ul><li>Business community (AEBF) given a prominent role; </li></ul><ul><li>Declining business interests in the economic pillar. </li></ul>
    13. 17. Towards An EU-ASEAN FTA? <ul><li>ASEAN’s strategic interests to the EU: </li></ul><ul><li>“ 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 </li></ul>
    14. 18. Important Agreements: <ul><li>TREATI – 2003 </li></ul><ul><li>ASEAN Integration Framework (AIF) – 2004 </li></ul><ul><li>Inter-phasing of TREATI and AIF – 2005 </li></ul><ul><li>Vision Group – April 2005 </li></ul><ul><li>EU – ASEAN FTA viable - May 2006 </li></ul>
    15. 19. EU’s TREATI for ASEAN (2003) <ul><li>To establish a regulatory framework – on trade facilitation, market access and competition policy & investment; </li></ul><ul><li>Greater convergence between Europe and Asian regulatory systems; </li></ul><ul><li>The focus is on non-tariff barriers; </li></ul><ul><li>Preparation for an FTA with EU </li></ul>
    16. 20. Implications for Asean <ul><li>ASEAN exports need to conform to EU standards; </li></ul><ul><li>ASEAN economies must adhere to WTO GATS framework; </li></ul><ul><li>ASEAN government’s must accord the highest protection for EU MNCs IPR. </li></ul><ul><li>ASEAN government’s must offer an open and non-discriminatory rules for EU business and investors; </li></ul><ul><li>ASEAN governments must open-up government procurement to EU corporations. </li></ul>
    17. 21. ASEANs Framework on Integration of Priority Sectors (2004) <ul><li>Progressive liberalisation of trade in services; </li></ul><ul><li>Progressive elimination of restrictive investment measures; </li></ul><ul><li>Harmonization of product standards & technical regulations </li></ul><ul><li>Promote business communities in the region. </li></ul>
    18. 22. EU-ASEAN Harmonization and Integration. <ul><li>In 2005, TREATI was inter-phased with ASEAN Integration of Priority Sectors </li></ul><ul><li>Collectively, it involves: </li></ul><ul><li>Liberalisation of trade, investment, services; </li></ul><ul><li>Elimination of non-tariff barriers; </li></ul><ul><li>Elimination of technical barriers to trade; </li></ul><ul><li>Tariff reduction; </li></ul><ul><li>WTO + issues </li></ul><ul><li>This Locks ASEAN into a irreversible neo-liberal order. </li></ul>
    19. 23. EU-ASEAN FTA – Deepening & Widening liberalisation <ul><li>Liberalisation – goods, services and investments – going beyond WTO commitments; </li></ul><ul><li>Elimination of technical barriers to trade, non-tariff barriers to trade; </li></ul><ul><li>Opening-up of government procurement; </li></ul><ul><li>Protection of IPR; </li></ul><ul><li>Implementation of Competition policy </li></ul>
    20. 24. Issues: <ul><li>ASEAN nations are required to make significant economic changes for European Market Access and FDI; </li></ul><ul><li>Trade Rules are rewritten along neo-liberal order and works in favor of the stronger EU; </li></ul><ul><li>EU demand – “reorganize your economy if you want to trade with us”; </li></ul><ul><li>The neo-liberal order ignores existing asymmetries between the EU and ASEAN & within ASEAN. </li></ul><ul><li>FTA rules and regulation are not neutral. </li></ul>