EU, ASEAN agree to set up trade pact

Adianto P. Simamora, The Jakarta Post, Jakarta

The Association of Southeast of Asian Nations (ASEAN) and the European Union have agreed to establish a trade pact in a bid to boost trade between the two regions, a senior official at the Ministry of Industry and Trade said.

The agreement was reached during a meeting between EU trade commissioner Pascal Lamy and ASEAN economic ministers in Laos last week.

"The 10 ASEAN members have accepted the EU's proposal to establish the Trans Regional EU-ASEAN Trade Initiatives (TREATI)," Pos M. Hutabarat, the director general for industrial cooperation and international trade at the ministry, explained over the weekend.

He said that top officials from EU and ASEAN countries would meet in August in Singapore to further discuss the planned trade pact.

"We will discuss various issues, including the commodities to be included and the schedule for the launching of the TREATI pact," Pos said.

The leaders of ASEAN and the EU are expected to officially sign the pact before the end of this year.

President Megawati Soekarnoputri will be appointed as the new chairwoman of ASEAN in October for a one-year period at a summit in Bali.

In 2001, the EU was ASEAN's third largest export market after the United States and Japan.

According to statistics from the European Commission, the EU's exports to ASEAN in 2001 totaled 42.2 billion euro (US$ 45.8 billion), while imports reached 65.7 billion euro.

The 10 ASEAN members are Indonesia, Singapore, Malaysia. Thailand, Brunei, the Philippines, Laos, Cambodia, Myanmar and Vietnam.

The six founding members of ASEAN signed the ASEAN Free Trade Area (AFTA) agreement in 1993. But AFTA only came into full effect in January 2003, with import tariffs on the affected products now ranging from zero to five percent.

The grouping is now also looking to set up free trade deals with China, India and Japan.

Individual ASEAN members are also actively seeking opportunities to conclude free trade deals with the United States.

Elsewhere, Pos said that the move to create a trade pact with EU would give a chance to Indonesia to boost exports to EU member countries.

The country's annual exports to the EU are estimated at $7 billion, and include fishing products, textiles, footwear and crude palm oil (CPO).

Indonesia has long been working together with the EU under the mutual recognition agreement (MRA) on the fishing industry.