EU/ASEAN : EU COUNTING ON FREE TRADE TO STAY IN THE RUNNING.

The EU intends in 2007 to start free trade negotiations with the Association of South East Asian Nations (ASEAN) so as not to be left lagging behind by its main competitors in an expanding market with 540 million consumers. These negotiations on free trade agreements (FTA) with ASEAN and South Korea and India are now the priority in the European Trade Commissioner Peter Mandelson's new strategy, presented in October 2006, aimed at securing better access for European companies to the emerging Asian markets by placing the emphasis on non-tariff barriers. Over the next week Europolitics will publish a series of articles analysing the principle stakes in the future negotiations.

'The logic of these agreements is not political but economic,' said a source from the Commission, emphasising Mandelson's practical approach as he prepares to fight for European businesses in the globalisation war'. His stand still needs to be approved by the Council, where certain member states may be tempted, under pressure from NGOs, to add further clauses pertaining to social and human rights issues which might complicate the task of the European negotiator.

ASIAN DEMAND

Launching a new wave of FTAs is a change for the EU which until now has given priority to the multilateral negotiations of the Doha Round, driven by Pascal Lamy, the previous trade commissioner. After April 2005 Peter Mandelson moved away from this line by authorising the creation of an EU-ASEAN vision group' responsible for carrying out a feasibility study on a possible FTA. The initiative responded to the insistent demands from several ASEAN countries, led by Singapore, which since 2002 had been actively involved in free trade negotiations with their main competitors such as China, Japan, Australia and the United States.

Fear of losing ground to their main trade competitors in one of the most dynamic economic regions in the world combined with the arrival of a liberal commissioner both contributed to the EU's about turn. The threat to EU trade...