EU trade caution catches Asians unaware

EU trade caution catches Asians unaware

BRUSSELS (Reuter): European officials say their Asian counterparts, having prepared table-thumping responses to expected criticism of their trade policy, may have been won over by a softly-softly European Union approach.

As they made their way home yesterday, after two days of talks here, senior Asian trade officials can be forgiven for being a little confused.

The Asia European Meeting (ASEM) -- which groups the 15-member EU with the seven-nation ASEAN (Association of South east Asian Nations) plus Japan, China and South Korea -- met to plot a common approach to the World Trade Organization summit in Singapore later this year.

It was the highest-level gathering since ASEM heads of state met in Bangkok earlier this year to launch a new Asia-Europe cooperation strategy.

"There was no point in us delivering a sermon," said a senior official of the Commission, the EU's executive. "If we want Singapore to be a success we have to work on agreements, not disagreements."

The Commission deliberately avoided introducing issues likely to prove controversial, such as labor standards, political rights and the thorny question of trade with Burma.

Instead, the meeting focused on so-called "new issues", as well as investment, competition and development.

This was in sharp contrast to a meeting of ASEAN Foreign Ministers in Jakarta earlier this week, where the EU was blasted for trying to impose Western standards on its trade partners.

"It was not a confrontational meeting," said Horst Krenzler, head of the Commission's trade department.

"They expected an argument, but I think our approach was a more subtle way of effecting our position," said an official.

One Asian diplomat, however, said there was still a great deal of work to be done.

On WTO issues, the Asian participants indicated they would be prepared to put greater effort into exploring ways by which trade and investment in Asia could be made more accessible in exchange for an EU commitment to expanding the WTO.

Both sides agreed on the importance of expanding the WTO but, in a reference to China, an ASEM statement after the meeting said new members had to be judged on the basis of "appropriate rights and obligations".

Many Western governments fear the WTO's standing could be undermined if China joins and then withdraws the first time it is criticized or loses a trade dispute.

There was also concern expressed that a spate of regional trade agreements could undermine multilateral aims, and both sides agreed to support the work of a special WTO committee looking into this.

On bilateral relations, officials said the Asian participants agreed to put more effort into studying ways of unifying financial regulations.

In return, the Commission is to examine ways of promoting European investment in ASEAN.