free trade talks with India, South Korea and Asean

EU foreign ministers have given the go-ahead for free-trade negotiations with key trading partners in Asia, in a move that WTO chief Pascal Lamy says could divert attention from talks on a global trade pact.

EU foreign ministers agreed, on 23 April 2007, to open negotiations on free-trade agreements (FTAs) with India, Korea and the ten countries of the Association of South-East Asian Nations (ASEAN), in a move to increase its competitiveness vis-à-vis Japan and the US in these regions, which represent just under 10% of the bloc's total trade with the world.

Member states stressed that concluding the so-called Doha Round of global trade talks in the World Trade Organization remained the EU's number one trade priority but added that, with multilateral talks stalled since last July, bilateral agreements "should be taken forward rapidly to improve the external competitiveness and market access conditions of European industries on these important markets vis-à-vis global competitors".

The Commission says the agreements will boost EU exports to ASEAN by 24.2%, to India by 56.8% and to Korea by 47.8%, adding more than €40 billion to exporters' revenues annually.
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Trade Commissioner Peter Mandelson said that the deals will help open up new markets for European companies and ultimately drive forward the multilateral trade agenda, as they will cover areas such as investment, intellectual property and public procurement not included in global trade talks.

Europe's business lobby has indeed welcomed the EU strategy to develop a new generation of FTAs based on economic criteria rather than on geopolitical or development concerns, saying that complementary approaches to the WTO process had become necessary with the continuing delays in the Doha negotiations and the rapid proliferation of bilateral and regional free-trade agreements among Europe's major trading partners. "Without prompt action, the trend to is likely to have a considerable negative impact on EU market share in major high-growth markets around the world and a consequent effect on competitiveness, growth and jobs in Europe," stated BusinessEurope.

But Europe's decision to seek bilateral deals has been criticised both by NGOs and by the World Trade Organisation (WTO). A recent report by the international trade body on the EU's trade policies and practices stated that the bloc's decision to launch new bilateral trade negotiations "could further complicate its trade regime, and divert interest from the multilateral trading system".

"Most [WTO members] cannot afford to ride both horses. There is a resource diversion problem," WTO Director General Pascal Lamy explained, adding that the world's poorest countries' problems need to be tackled at WTO level: "Most developing countries have more problems with subsidies, with anti-dumping than they have with tariffs. These are systemic issues."

Head of Oxfam's Make Trade Fair campaign Celine Charveriat has said that the new strategy poses a serious threat to poor countries: "The EU plan to use free trade deals to force concessions on issues that developing countries have repeatedly rejected at the WTO will undermine multilateralism and increase poverty and inequality," she said, criticising the EU's hypocrisy at calling on other countries to deal with non-tariff barriers when Europe continues to "pay vast sums in trade-distorting farm subsidies".

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