EU, ASEAN agree to set up trade pact

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.