EU-Asia Free Trade Agreements

01 October 2006
Article
The EU's trade agenda towards the South has intensified its pursuit of a neo-liberal model, based on deregulation, privatisation and the indiscriminate opening of markets. Bilateral and Regional Free Trade Agreements (FTAs) are one of the main instruments used by Europe to guarantee the access of EU multinational corporations in countries and regions in the South. For more than 10 years, Europe has been pursuing the liberalisation of Europe-Asia trade and investment relations at bilateral, regional and multilateral levels. The EU has in recent years taken a more active approach towards Asia and it has developed important frameworks with key countries and regions in Asia (ASEAN, China and India being among the main targets). The EU aims to increase market access and investment for EU Transnational Corporations (TNCs); eliminate tariff and Non-tariff-barriers (NTBs), establish a pro-business environment and encourage changes in legislations and regulation which are perceived barriers to EU trade. ASEM is considered to be a significant arena, which has set the stage for the free trade regime. Mechanisms such as ASEM's Trade Facilitation Action Plan (TFAP), the Investment Promotion Action Plan (IPAP) and the Asia-Europe Business Forum (AEBF) have laid out the parameters to achieving the EU's policy goals in Asia. The current EU moves are seen as a response to a widening web of bilateral deals being negotiated in the region by the US, China, Japan and Korea which threaten to sideline European economic interests in the Asian region. The consequences of any further agreements will be deeper liberalisation of capital flows and the free movement of foreign investors; the protection of corporations' intellectual property rights; corporate access to government procurement; the privatisation of national assets and accelerated de-regulation of the economies of countries who sign on to such agreements. China has become a main player both at global and regional level. China's FTA strategy has been gradually established over the past few years, with neighboring regions as its focus. China claims that its strategy is based on the principle of "mutual benefit and a multi-win scenario," but research findings show that Indonesia and Thailand FTAs with China have brought negative impacts, China's engagement and strategy in terms of trade and investment, at both a multilateral and regional level, have also impacted inside China: a) China now faces the largest number of trade complaints worldwide; b) domestic industries and particularly agriculture have suffered a blow due to free trade, particularly with the closure of domestic industries resulting in job losses and the displacement of employees; and c) rural labor has been forced to flow into urban areas, triggering many social problems. In view of the WTOplus strategies being pursued in the proliferation of EU and US bilateral and biregional free trade agreements, resistance has been mounting in Asia. Civil society groups have tried to open up regional processes and have actively sought participation in such processes, particularly in the ASEAN Charter process (via joint submissions to the Eminent Persons Group on the ASEAN Charter and national consultations), the continuation of the regional civil society process in the lead-up to the December ASEAN Summit (in the hope of again having a civil society-ASEAN leaders interface), and national and regional processes to develop a people-based agenda for the region. Some notable gains have been recognised at the ASEAN level, particularly the acknowledgment of the role of non-state actors in regionalism in the ASEAN Vientiane Action Programme. The campaign to open up more spaces at the ASEAN continues, and the same demands on the ASEAN are now being brought before the ASEM. The engagement of these actors aims to ensure that the regional agenda will be truly people-based and people-led. Likewise, alternatives to this regime of trade and investment are also emerging globally from both social movements and from some progressive governments. In particular, some governments in Latin America have started to challenge the notion that to maintain trade preferences and receive foreign investments their countries have to accept the trade and investment rules set by the big powers. These governments have, instead, proposed alternative models, such as the Bolivarian Alternative for the Americas (ALBA) and the Trade Treaty of the People (TTP), which are based on justice and solidarity. After the collapse of the WTO Doha Round, it was already indicated in some EC Documents that the EU Trade Commissioner Peter Mandelson will shortly announce an even more ambitious and damaging new corporate-driven trade strategy. As expected in Helsinki, this was released on October 5 and it is quite clear that trade policy, already an instrument to introduce policy reform within the EU via the WTO will now directly dictate internal EU policy reform. Clearly the EU's external trade policy will undermine the European social model. The EC's aggressive new 'competitiveness' drive also threatens to cause mass unemployment and poverty in developing countries, pitting their poor farmers and fledgling industries against some of the world's most powerful transnational corporations. The AEPF Workshop concluded with a resolution to strengthen the links between the Asian and European organisations and networks campaigning on free trade and to give particular focus in 2007 to the EU-FTA being pursued with ASEAN and the EU-China strategy which will also be released in 2007. October 2006