EU eyes Singapore as step to Asian trade pacts

(SINGAPORE) - The European Union is looking to seal commercial pacts across Southeast Asia, a top official said Wednesday after announcing the launch of free-trade talks with Singapore.

EU Trade Commissioner Karel De Gucht and Singapore Trade Minister Lim Hng Kiang agreed to launch the talks for a free-trade agreement (FTA), and Lim's ministry said the first round would be held from March 8 to 12.

"Although Singapore is the first one in, our door remains open for other ASEAN countries interested in negotiating a comprehensive free-trade agreement with us," De Gucht said in a speech.

"We are not available to do shallow FTAs, but we will be mindful of differences in levels of development. I feel encouraged by the signals I am getting from certain ASEAN capitals," he said.

The talks with the wealthy city-state follow an announcement on Tuesday that the EU would also begin FTA negotiations with Vietnam, as the European bloc steps up efforts to engage with a booming region that sits in China's backyard.

The Singapore dialogue would be good for the business world and consumers alike, De Gucht said, adding: "For Europe, it will also mark an important stepping stone in the EU's engagement with the ASEAN region."

The EU had earlier abandoned its strategy of negotiating a trade pact with the Association of Southeast Asian Nations (ASEAN) as a whole, publicly citing different levels of economic development within the 10-member bloc.

Instead, the EU decided it would secure free-trade pacts with individual ASEAN states.

Diplomats have said, however, that the change in EU strategy is also due to disagreements over the human rights record of military-ruled ASEAN member Myanmar.

The EU still maintains sanctions on Myanmar, including a travel ban on regime figures, a freeze of their assets and an arms embargo.

In 2007, after the Myanmar junta's violent suppression of popular protests led by Buddhist monks, the sanctions were extended to include a ban on timber, metals and gemstones exports from the country.

The EU is Singapore's largest trading partner and foreign investor, with bilateral trade exceeding 55 billion euros (75 billion US dollars) in 2008, the government said.

Singapore is the EU's 15th biggest trading partner and its largest in ASEAN.

ASEAN's market of 550 million people groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

In his speech, De Gucht said support for free trade was imperilled by the global financial crisis as unemployment rose and complaints over unfair national practices intensified.

The Belgian official said policymakers had to rebut the notion that free trade is "one of the things that got us into a crisis".

"We have to turn around this idea and support international trade to get out of it (the downturn)," he said.

EU relations with Singapore