New hopes for free trade between Europe and Southeast Asia

5 October 2007

A paper launched today by Chatham House says that new negotiations aimed at a free trade agreement between the EU and ASEAN (Association of Southeast Asian Nations) have the potential to open up one of the world's largest markets to European trade.

Up to now Asia has been the 'missing link' in the foreign economic policy of the EU, as agreements already exist with many countries in Africa and Latin America. ASEAN and the EU have been slowly moving closer together for a number of years, but their political relations still lag behind those established by firms from the two regions.

A new agreement on free trade would greatly reduce the risk of trade diversion for both EU and ASEAN firms, and give renewed impetus to long standing technical cooperation between the two blocs. ASEAN estimates that trade and investment with the EU could expand by at least 10% annually if a trade agreement were concluded.

Liberalization of sectoral trade and non-trade barriers, is crucial for ASEAN if it is to create a genuine internal market and play a more prominent role in the global economy. The agreement will provide a framework to negotiate more contentious issues in the future. However the paper's author, Stephen Thomsen, points out that the very fact negotiations are taking place suggests a failure to progress at a multilateral level.

Stephen Thomsen is an associate fellow on the International Economics Programme at Chatham House. Click here to read his briefing paper - EU-ASEAN: The beginning of a beautiful friendship?

For further information please contact:
Sean Armstrong
Press Officer
Chatham House Press Office
Direct: +44 (0) 20 7957 5739
Mobile: +44 (0) 78 4985 3757
Email: Sean Armstrong

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