ASEAN-EU FTA talks to be 'challenging'

The Jakarta Post ,  Jakarta   |  Tue, 05/08/2007 7:00 AM  |  Business

Andi Haswidi, The Jakarta Post

The newly launched negotiations for an ASEAN-EU free trade agreement (FTA) are facing a tough challenge to create a framework that will ensure mutual benefit for both regions, an analyst says.

""The European Union is a big region with 25 developed countries, while ASEAN has 10 members, with most of them being developing countries. This affects the chances of ensuring mutual benefit,"" said Djisman Simandjuntak, an expert on the ASEAN economies.

He said that ASEAN would prefer to see development cooperation with the EU covered by the FTA framework, on top of the removal of trade and investment barriers, in order to secure equal benefit.

""This is where the problem arises. Even though the European countries are integrated to some extent in the EU, each country has different development cooperation policies. Meanwhile, each ASEAN country differs in its level of development,"" he said.

""Without substantial commitment from the EU side on development cooperation, it will be very unlikely that ASEAN will to benefit from the FTA,"" said Djisman, who is a researcher with the Center for Strategic and International Studies (CSIS).

Djisman said that with development cooperation, the ASEAN countries, including Indonesia, would benefit from the transfer of knowledge, and scientific and cultural exchanges with their European counterparts.

""For instance, Europe can give us assistance on how to get greenhouse gas emission program certificates, which are a top priority in the world today due to global warming.""

""There is a growing demand for emissions trading,"" he said, referring to the administrative approach used to control pollution by providing economic incentives for achieving reductions in the emission of pollutants.

Another issue that would arise in connection with the proposed ASEAN-EU FTA negotiations, he said, was the fact that negotiating an FTA with another regional grouping would be a new experience for ASEAN.

""ASEAN has never held FTA negotiations with another region. So, this will be a new experience, things will be a lot different compared to negotiating a bilateral agreement,"" he said.

By contrast, following the recent negotiations with Central America and the Andean region, the EU now had the whole of Latin America covered, as well as the whole of Africa, and large parts of the Middle East and the Pacific. The only region where the EU did not yet have an FTA was Asia.

ASEAN economic ministers and the EU trade commissioner jointly stated during the launch of the negotiations for the FTA last week that the negotiating process would be based on a region-to-region approach, which recognizes and takes into account the different levels of development and capacity of individual ASEAN members.

""During the talks last week, we asked the EU countries to acknowledge the different capacities of ASEAN members, and to take these into account during subsequent negotiations,"" Director General for International Trade Herry Sutanto told the Post on Monday.

Herry also said that a joint committee would soon be established, comprising senior officials from members of ASEAN and the EU to develop the modalities, work program and schedule for the negotiations.

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