ASEAN, EU to Boost Trade Ties Amid Growing US Protectionism

Southeast Asia and Europe pledged Friday to speed up efforts for an elusive free trade deal, vowing to support open markets in the face of growing US protectionism under Donald Trump.

EU trade chief Cecilia Malmstrom said a deal would “send a strong signal to the world” after Trump’s plan to put tariffs on steel and aluminum sparked an outcry among American trade partners, including Europe, AFP reported.

Trump said Thursday he would sign off on the measures next week, sending stock markets into a tailspin.

The 28-member European Union and 10-member Association of Southeast Asian Nations have been discussing a free trade deal for years, first launching talks in 2007 but abandoning them two years later.

The two sides last year agreed to put the deal back on the agenda and have been hammering out their positions before the process formally begins.

In the interim, the EU has struck a free trade deal with ASEAN member Singapore and has started talks on bilateral pacts with other states in the bloc.

“These agreements are important in their own right but they are also part of a bigger picture. We see them as building blocks on the way to broader integration,” EU Trade Commissioner Malmstrom said at a forum of Southeast Asian and European business executives in Singapore.

“A regional agreement between us will send a strong signal to the world, a signal that the EU and ASEAN ... will stand shoulder-to-shoulder in support of open trade.”

Malmstrom also slammed the US tariff plan and warned the EU was not ruling out taking “retaliatory measures. We must be very careful in using the term trade war. But it is definitely not a good development what happened Thursday,” she said.

Cambodia’s Minister of Commerce Pan Sorasak told the forum that an EU-ASEAN trade deal would be “more beneficial for all of us, especially Cambodia. “I believe that the (free trade deal) negotiations should be re-launched as soon as possible.”

Meanwhile, the European Union is looking at extending incentives to up to 600 more product lines that are imported from the Philippines under its GSP+ scheme, a trade representative said.

The EU is looking at free trade agreements to expand relations with Southeast Asia, said the president of the European Chamber of Commerce of the Philippines, Guenter Taus.

"We’re looking now between the Philippines and the EU on the GSP+, we’re looking at the potential to increase the amount of items that are included, about 300 to 600 items to be included in the agreement ,” Taus told ANC.

Widening Cooperation

The European Union and Singapore have committed to work together towards the ratification of a bilateral trade and investment deal by the end of this year, and its implementation soon after.

This came out of a meeting on Friday between Singapore's Minister for Trade and Industry Lim Hng Kiang and Malmstrom.

"This is an important step towards closer relations with the EU, which is our third largest trading partner and largest investor in Singapore," said Lim. "It also reinforces EU’s economic engagement in the ASEAN region."

Welcoming the commitment, Malmstrom said: “Together with the EU-Singapore Partnership and Cooperation Agreement, this trade and investment agreement will confirm our strong engagement with Singapore and will open up a new dimension in our ties with Singapore and ASEAN.”

Negotiations on the EU-Singapore Free Trade Agreement were concluded in October 2014. When concluded, it will be the first trade deal that will be implemented between the EU and an ASEAN member state.

Lim said that the time is right for both blocs to pursue greater region-to-region integration. He added that he looks forward to "constructive engagement" to help pave the way towards the eventual resumption of negotiations for an ASEAN-EU Free Trade Agreement.

Discussions to lay out a framework for a future ASEAN-EU FTA began at the last consultation session in 2017. Lim also noted that in its 2017 survey, the EU-ASEAN Business Council found increasing and overwhelming support for the EU to pursue a region-to-region FTA with ASEAN.

On her part, Malmstrom said that the EU and ASEAN can demonstrate the importance of preserving the multilateral trading system based on rules and institution, in the face of growing US protectionism under Trump.