English | 中文版 |  Русский

Breaking News:

Source: www.asiaecon.org |


The Philippines is ready to pursue bilateral trade talks with European Union (EU) member-states in the case that the ASEAN-EU Free Trade Agreement (FTA) fails to materialize.

The Philippines is ready to pursue bilateral trade talks with European Union (EU) member-states in the case that the ASEAN-EU Free Trade Agreement (FTA) fails to materialize.

During the sixth ASEAN-EU joint committee meeting held in Kuala Lumpur this month, ASEAN trade officials asserted that the group would sign an FTA with the EU as a collective.

Discussions on the ASEAN-EU FTA have been going on since May 2007. The original plan was to conclude talks and sign an agreement by this year. But talks have been stalled on several issues. The EU recently maintained that it would not sign any agreements that includes Myanmar – a member of ASEAN – because of its poor human rights record. Meanwhile, ASEAN insisted to exclude sustainable development issues, government procurement provisions and competition policy from the FTA, areas which the EU wants to be included.

Despite the minor disputes, the overall consensus is that an ASEAN-EU FTA would benefit both sides. A May 2008 report shows that, under an FTA, ASEAN exports to the EU could rise by 18.5 percent, or 2 percent of its gross domestic product, by 2020, while total EU global exports could rise by almost 2 percent. Moreover, the report argued that both regions can gain significantly in the area of business services. Currently, the ASEAN region is the fifth largest trading partner of the EU, while the EU is the second largest trading partner for most ASEAN member countries.

To break the current deadlock, the EU has recently proposed a variable geometry approach, where instead of a region-to-region FTA, ASEAN would act as an umbrella under which its member countries could enter agreements with EU member countries on its own, even without the inclusion of other members.

In reaction to the EU’s proposal, Philippine Trade Assistant Secretary Ramon Vicente Kabigting reaffirmed ASEAN’s firm stance on region-to-region FTA negotiations. However, he also added that the Philippines is open to start bilateral talks with the EU. “[It is] my personal assessment that if we have to do it in a bilateral [trade agreement], we can do it. We are ready to engage,” Kabigting said.

The Philippines is hoping to speed up the process of establishing a trade pact with the EU amid the current stalling of FTA talks between ASEAN and the EU. The country has been mostly left behind by its Asian neighbors in attracting FDI destination among middle-income ASEAN countries. The Philippines only took in $1.8-billion worth of investments from Europe between 1995 and 2006, compared to $50 billion in Singapore, $11 billion in Malaysia and $3 billion in Vietnam.

Similarly, Philippine-EU trade has declined by 2 percent annually between 2002 and 2007, compared with an annual increase of 6 percent in two-way trade between the EU and other middle-income ASEAN members.
“We believe that if the Philippines [enters an] FTA with EU, tremendous potentials would be tapped,”  Viñals said.

Source: www.AsiaEcon.org
Please send comments and constructive suggestions to feedback@AsiaEcon.org

Source: www.asiaecon.org |

More Special Articles - Asia Business & Economy Articles