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De Gucht Calls For An EU-ASEAN FTA

by Mary Swire, Tax-News.com, Hong Kong

04 April 2012


During his speech to the European Union (EU) – Association of Southeast Asian Nations (ASEAN) Business Summit in Phnom Penh on April 1, Karel De Gucht, the European Commissioner for Trade, stressed that a comprehensive free trade agreement (FTA) was needed between the two regions.

He pointed out that at EUR160bn (USD213bn) per year, the EU accounts for over 10% of ASEAN's total trade in goods, with the percentage for services being even higher – at 13% of the total. However, according to De Gucht, “these figures probably underestimate the total trade between our two regions as today's global supply chains mean that of ASEAN's exports to China often end up in products eventually shipped to Europe”.

In addition, the current stock of bilateral investment stands at EUR260bn, and bilateral investment flows were over EUR31bn in 2010. European investment in ASEAN thereby accounts for a quarter of the annual total.

The FTA, he said, would “tackle the full range of barriers that obstruct flows of goods, services and investment between our regions”. It would not only eliminate tariffs, but also investigate regulations that block trade in goods and services, improve the protection of intellectual property rights and secure access to markets for government procurement.

While he appreciated that the establishment of an FTA would take some time, he revealed that the EU is nonetheless “making concrete progress towards that objective”.

De Gucht disclosed that the EU’s bilateral FTA negotiations with Singapore are close to conclusion, and it is making good progress with Malaysia. FTA negotiations are also being launched with Vietnam, after a scoping exercise was concluded last week, and he hoped that the EU can advance discussions with other ASEAN countries in the coming months.

However, he added that negotiating at a regional level rather than on a country by country basis was still the EU's preferred option in the long-term.

"I want to make very clear that as we engage in these negotiations our overarching goal of regional integration remains clear. That goal is made even more important by the programme to build an ASEAN Economic Community by 2015, which we fully support," De Gucht said.

"We have momentum now. I hope we can use it to get to the critical mass that will allow us to come back to the regional process very soon," he added.

TAGS: tax | European Commission | free trade agreement (FTA) | intellectual property | tariffs | Singapore | agreements | Malaysia | trade | European Union (EU) | Vietnam | Europe

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