European, Asian ministers meet on trade

European, Asian ministers meet on trade

CHIBA, Japan (Reuter): Trade and economic ministers from
Europe and Asia gathered near Tokyo yesterday for their first
annual meeting, which host Japan said would set the basic
standard for economic cooperation between the two regions.

The Asia-Europe Meeting (ASEM) of 26 ministers -- 10 Asian and
16 European -- were scheduled to discuss how to liberalize trade
and investment flows between Europe and Asia, traditionally
closer to the United States than to each other.

"This meeting will set the standards of the basic cooperation
of Asia and Europe," Japanese trade minister Mitsuo Horiuchi, the
host of the meeting, told ministers in a series of bilateral
meetings ahead of today's official opening.

But setting standards may be easier said than done.

Asia, once the El Dorado of emerging markets, is grappling
with a range of economic problems, including currency market
turmoil, an economic slowdown, and spreading smog while Europe
faces a new era of a single currency.

Asia's economic problems, thrown into the spotlight by the
recent currency crisis ignited by Thailand's de facto devaluation
of the baht on July 2, were brought on by a combination of
factors, including a slowdown in exports and rapid capital
inflows -- matters up for discussion in this seaside city on the
outskirts of Tokyo.

German Economics Minister Guenter Rexrodt said European
businesses were ready to support Asia through its struggle to get
back on track.

"You have to stick with your investments, you have to enlarge
your investments," Rexrodt told Reuters Financial Television.

"Everybody around the globe should be interested in solving
these problems because Asia is a very important region."

Thai Minister of Commerce Narongchai Arkasanee set the tone
for what Asia needs when he told Horiuchi in a bilateral meeting
that export growth and infrastructure development were vital to
Thailand's economic recovery.

"The Thai minister expressed his view that continued exports
and infrastructure developments were important for the Thai
economy," a Japanese trade ministry official told reporters.

But securing the flow of trade from Europe and its investment
in infrastructure projects may hinge on Asia's willingness to
join multilateral trade agreements, mostly being forged by the
developed nations.

The hammering of Southeast Asian currencies has made Thailand
and some Asian governments wary of joining further market
liberalization pacts that could threaten their exports or put
more competitive pressure on ailing businesses.

On the agenda for today's main discussions is a World Trade
Organization (WTO) proposal for a pact to open up the global
financial services industry which faces a Dec. 12 deadline for
completion.

None of the four Asian nations worst hit by the currency
crisis -- Thailand, Malaysia, Philippines and Indonesia -- has
made any fresh liberalization offers to the proposed WTO pact,
arguing that their hands are tied by domestic economic problems.

While Europe, anxious to make up ground lost to the United
States in Asia, wants to press ahead swiftly with trade
liberalization measures, Asian nations believe that in view of
the present fragility of many of their economies, caution is
needed.

The ASEM ministers are scheduled to endorse a finalization of
a Trade Action Facilitation Plan, which aims at reducing non-
tariff barriers and transaction costs, areas in which Asia still
lags.

ASEM was founded last year in Bangkok when leaders of the
member nations held a summit.

ASEM groups Japan, China, South Korea, Brunei, Indonesia,
Malaysia, the Philippines, Singapore, Thailand, Vietnam, Belgium,
Denmark, Germany, Greece, Spain, France, Ireland, Italy,
Luxembourg, Netherlands, Austria, Portugal, Finland, Sweden,
Britain and the European Commission.