Indonesia calls for more formal ASEAN-EU economic ties

May 5, 2011, 5:57 GMT

Jakarta - Indonesian President Susilo Bambang Yudhoyono on Thursday called for a more formal economic agreement between the Association of South-East Asian Nations (ASEAN) and the European Union.

'There is no doubt that ASEAN and the EU are important to each other,' Yudhoyono said at the opening of the 1st EU-ASEAN business summit in Jakarta.

'Thus, it is timely to increase our engagement, including discussions towards a more formal economic cooperation agreement between ASEAN economies and the EU,' he added.

The summit was attended by EU Trade Commissioner Karel De Gucht and economic and trade ministers from the 10 ASEAN member countries.

ASEAN, a market of more than 500 million people, is the EU's third largest trading partner, after the United States and China, with more than 175 billion euros (260 billion dollars) of trade in goods and services in 2010.

The EU is ASEAN's second largest trading partner after China, accounting for around 11 per cent of ASEAN trade.

The EU opened negotiations on free trade agreements with Singapore and Malaysia in 2010, a move which could pave the way for a future deal with the whole region.

De Gucht said other ASEAN countries, including the bloc's largest member Indonesia, were seriously considering embarking on such negotiations.

'We see big efforts to make free trade agreements between the EU and ASEAN,' he said at a press conference.

'To make this actually work, that's the role of the business community, because finally it's up to private businesses to demonstrate this can have results, to engage, to invest and make trade grow,' De Gucht said.

ASEAN Secretary General Surin Pitsuwan said an ASEAN-EU free trade agreement was currently difficult because of different tariff regimes.

'I think what they are working on now is bilateral, one-to-one (agreements) and in the end put the whole thing into an ASEAN-EU free trade agreement,' he said.

'I think we realize that we have to bring down the tariffs, we have to bring down barriers in order to attract investment,' he added.

At the summit, EU and ASEAN companies were to discuss opportunities and issues in five main areas - infrastructure, agriculture and food, healthcare, automotive and services, organizers said.

The companies would directly present and discuss their conclusions with the ASEAN ministers and De Gucht, who were due to meet Friday.

ASEAN consists of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

The bloc, whose leaders were due to meet for their annual summit on Saturday and Sunday in Jakarta, seeks to create an ASEAN economic community by 2015, modelled on European integration of the 1960s and 1970s.

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