EU, Asia look to settle trade issues

EU, Asia look to settle trade issues

HANOI (Reuters): Economic ministers and officials from Asia and Europe get together in Hanoi this week to try to iron out differences in the way of a new trade liberalization round and revive economic ties between their regions.

The European Union (EU) and the United States want to launch a new round of world trade liberalization talks at a Nov. 9-13 meeting of the World Trade Organization (WTO) in Doha, Qatar, a move they hope will help boost a flagging world economy.

But to do this they need to convince developing countries, some of whom fear a new round of liberalization will only create bigger profits for rich countries at their expense.

"The active support of the Asian countries will be essential if we are to launch a new round at WTO negotiations in Qatar," said EU Trade Commissioner Pasal Lamy ahead of his Hanoi trip.

The last attempt to launch a new trade round failed in Seattle in December 1999 when Europe and the United States, the world's two biggest trading blocs, fell out over the agenda.

A week of meetings in Hanoi will involve the 15 EU countries, the 10-member Association of South East Asian Nations, China, Japan, South Korea, Australia, New Zealand and the United States.

While Southeast Asian countries generally back the launching of a new round they see some major hurdles that have to be overcome if that is to happen in Qatar in November.

Some Asian officials in Hanoi for the talks have warned there was little time left to settle their concerns before Qatar.

Philippines Assistant Secretary for Trade Jose Antonio Buencamino said on Friday two changes to WTO rules proposed by developed countries covering investment and the environment were "non-starters". He said Manila also had serious concerns about an EU proposal on food safety.

The director general of the Thai Commerce Ministry's Department of Business Economic, Boontipa Simaskul, said positions were still far apart on five core issues -- environment, investment, competition policy, implementation and agriculture.

Last week, even France suggested efforts to launch a new round in Qatar might fail.

A European official said the EU was prepared to be flexible in order to reach compromises with Asian countries.

"There is put in place an overall EU strategy and proposal for all these things," said the official, who did want to be identified.

Another European official said Europe was opening up to Asian goods and in return was looking for greater access to Asian markets, in particular for its services.

"We believe we are a fairly open market...We are opening the market to allow them to export their products and we would just expect something in return," the second European official said.

An Asian official said he expected the Asian ministers to show guarded support for a new round of liberalization talks at the Hanoi meeting, but there would be a lot more hard bargaining between now and the Qatar meeting.

Another issue of concern to both Europeans and Asians is emerging powerhouse China's admission to the WTO, which is expected later this year.

Both the Asians and the Europeans say they want to strengthen economic ties between their regions.

The Asians, in particular the Southeast Asians, realize they have to overcome dimmed European perceptions of their region as an investment destination in the wake of the 1997 financial crisis and subsequent sluggish growth.

Some EU leaders see EU-Asia as the weak link in a global triangle binding the United States, EU and Asia and want to strengthen engagement with Asia in the political and security fields, and to boost business ties.