Thursday, November 22, 2007

An Analysis of the E.U.-Asean Free Trade Agreement (F.T.A.) Currently Under Negotiation

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November 22, 2007

ABSTRACT

In 2006, the halt of the Doha Round resulted in a significant attack against the multilateral trading system. Since then the W.T.O. negotiations linked to the development of the Doha Round, which started in 2001 in Qatar, have slowed down and today there is no clear hint about a possible positive outcome of the negotiating process. Following this delay, all around the world there is a spree of negotiations related to the the signing of new and controversial free trade agreements (F.T.A.s). The aim of this paper is to analyze the F.T.A.s that the European Union (E.U.) is presently negotiating in Asia. In particular, specific attention will be given to the F.T.A. that the European Union is negotiating with the Association of Southeast Asian Nations (Asean). In fact, until today Asia has been a sort of missing link in the foreign economic policy of the European Union, which is very active in other areas of the world. The paper shows that it will be very difficult for the European F.T.A. to produce really good results because of the huge political and economic differences among the 10 countries participating to Asean.


INTRODUCTION

In 2006, the halt of the Doha Round resulted in a significant attack against the multilateral trading system. The Doha Round calls for a reduction of trade barriers applied on a most-favored nation (M.F.N.) basis to all the W.T.O. member states. This means that no W.T.O. member state can be discriminated against by another member’s regime. In any case, regional trade agreements (R.T.A.s) are an exception to this specific rule. In fact, under R.T.A.s the reductions in trade barriers involve only the parties of the agreement. This kind of exceptions are allowed according to Article XXIV of the General Agreement on Tariffs and Trade (GATT) with reference to trade in goods, Article V of the General Agreement on Trade in Services (GATS) for trade in services, and the enabling clause in relation to the Generalized System of Preferences (G.S.P.). With reference to the W.T.O. Doha Round, the July 2006 talks in Geneva were not able to reach an agreement about a way in order to reduce farming subsidies and import taxes. Since then negotiation has stalled and a successful outcome of the Doha Round is increasingly unlikely[i]. In June 2007, in Potsdam, Germany, the Doha Round negotiations broke down again following an important impasse between the United States and the European Union, India and Brazil. In specific, in Germany the big issue regarded how to open up the agricultural and industrial markets and how to cut the farm subsidies that rich groups, such as Europe, give to their farmers. As of the end of 2007, the multilateral trading system is facing a big divide between the developed nations on one side (the European Union, the United States and Japan) and the major developing countries on the other side (principally the G-20 developing countries whose most important members are India, Brazil, China and South Africa).           

Already before the impasse of these negotiations, there has been an important increase in the number of F.T.A.s. All across the world many governments have signed, are now negotiating, or are thinking of new bilateral agreements. In general, these F.T.A.s may be considered as transitory agreements toward a global free-market economy, but in reality they are a step back in comparison to the multilateral trading system that should have been negotiated in the Doha Round. In particular,

Apart from the G.S.T.P. initiative, since the stop of the Doha Round in 2006 (but also before) many developing countries have negotiated bilateral or regional integration agreements, which will reduce trade barriers. This tendency may be considered as a blow to the “most favored nation” (M.F.N.) principle that is one of the cornerstones of the W.T.O. South countries when negotiate with developed countries have the expectation of receiving some preferential trade benefits as well other non-trade benefits. In reality, preferential trade agreements especially when involve South countries “can lead to the diversion of trade among partners if imports from an economically inefficient regional trade agreement partner displace more competitive imports produced elsewhere”[ii]

Surely, in a certain way, F.T.A.s can speed up trade liberalization and create higher benchmarks for the multilateral system. In addition to this, it is also important to underline that under the F.T.A. category are included many different kinds of free trade agreements: some discriminate consistently between the parties of the agreement, while some others — principally the agreements negotiated by the United States and the European Union — normally utilize the existing W.T.O. agreements as their benchmarks. Both America and Europe often try to implement stricter rules than those envisaged by the W.T.O. (for instance the United States includes issues regarding services and investment).


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Some months after the Doha failure, around at the end of 2006, the European trade commissioner, Peter Mandelson announced the necessity to have a new European policy with reference to F.T.A.s. The framework of the new policy is contained in the document of the European Commission (E.C.) called Global Europe Competing in the World. With this document, the commission recognized that it was possible to guarantee the European competitiveness in the world with a process aimed at removing trade barriers. In practice, it was mandatory to have a new approach to trade policy and to improve the European rules. In particular, the report underlined that the commission still supported the idea that the best way for Europe in order to achieve good results with reference to its foreign and external trade policy was the system of multilateral negotiation and multilateralism.[iii] According to the commission a world trading system based on the W.T.O. standards can provide predictability, stability and other fundamental conditions for global growth. Then, the commission affirmed that in the following months it would be very important to open up markets and to tackle trade distortions both within the multilateral system and with new bilateral initiatives. These general targets are well exemplified with the following bullet points from the document Global Europe Competing in the World:

  • Maintaining our commitment to the Doha Trade Round and the W.T.O. as the best way of opening and managing world trade.
  • Making proposals on priorities in trade and investment relations with China as part of a broad strategy to build a beneficial and equal partnership.
  • Launching a second phase of the E.U. intellectual property rights (I.P.R.s) enforcement strategy.
  • Making proposals for a new generation of carefully selected and prioritized F.T.A.s.
  • Making proposals for a renewed and reinforced market access strategy.
  • Proposing measures to open procurement market abroad.
  • Conducting a review of the effectiveness of our trade-defense instruments[iv].


In particular, the fourth point above is very relevant because it traces a real change of the European strategy putting the accent on the importance of having a new generation of carefully selected and prioritized F.T.A.s. These agreements should be able to improve and strengthen the European competitiveness. Europe has one more than one time restated its commitment to the W.T.O. and the Doha Round, but a very important priority is now given to bilateral and region-to-region agreements in order to get an increased market access. This way of thinking is compatible with the European trade policy dating back to the 1990s, but there are some differences with that policy, which was implemented by the then trade commissioner Pascal Lamy (1999-2004). In fact, before releasing Global Europe, Europe was totally focused on the Doha Round and the advancement of the W.T.O. The approach followed by Mr. Lamy was undoubtedly a globalized one while it researched an increased market access in a context where it was also important to regulate globalization through equity and public legitimacy. But with the new trade commissioner Peter Mandelson, who entered into office on November 22, 2004, things have radically changed. In fact, in 2006 the European Union understood that the Doha Round was stalling with no visible possible outcomes, that other important global players were gaining better positions with reference to F.T.A.s than Europe's and, last but not least, that the old European strategy was less understandable for the Asian countries than the American strategy. The document that defines the way Europe has to change its trading strategy is Global Europe where with reference to F.T.A.s is stated that:  

Free Trade Agreements (F.T.A.s), if approached with care, can build on W.T.O. and other international rules by going further and faster in promoting openness and integration, by tackling issues which are not ready for multilateral discussion and by preparing the ground for the next level of multilateral liberalisation. Many key issues, including investment, public procurement, competition, other regulatory issues and I.P.R. enforcement, which remain outside the W.T.O. at this time can be addressed through F.T.A.s. But F.T.A.s can also carry risks for the multilateral trading system. They can complicate trade, erode the principle of non-discrimination and exclude the weakest economies. To have a positive impact F.T.A.s must be comprehensive in scope, provide for liberalisation of substantially all trade and go beyond W.T.O. disciplines.[v]

In the document, the European Union proclaimed to have the goal of using all its future F.T.A.s (in any case, F.T.A.s are new instruments for the European Union) as an important stepping stone for promoting international multilateral liberalization.   

SHAPING THE NEW E.U. F.T.A.s in ASIA

According to the document Global Europe it is important that:

The key economic criteria for new F.T.A. partners should be market potential (economic size and growth) and the level of protection against E.U. export interests (tariffs and non tariff barriers). We should also take account of our potential partners’ negotiations with E.U. competitors, the likely impact of this on E.U. markets and economies, as well as the risk that the preferential access to E.U. markets currently enjoyed by our neighbouring and developing country partners may be eroded.[vi]

The principal target is to have comprehensive W.T.O.-plus F.T.A.s. Tariffs and quantitative restrictions should be eliminated at least for 90 percent of the tariff lines and trade volumes. In this way, it could be possible to comply with the “substantially-all-trade” criterion included in article XXIV of GATT. In addition to this, it is of paramount importance to get the liberalization of services and investment. In this regard, the European Union would like to go beyond the framework of the W.T.O. in the field of competition, government procurement, intellectual property rights (I.P.R.s) and trade facilitation. An important consideration is also given to provisions related to labor and environmental standards and to the fact that in the new F.T.A.s rules of origin have to be simpler. Last but not least, improved regulatory disciplines and regulatory cooperation will be necessary in order to tackle non-tariff barriers that are the hidden instruments capable of messing up international trade and commerce.

Following this blueprint, this year the European Union has done a selection and has started negotiations in Asia with India, Asean[vii] (an association) and South Korea. The decision to begin negotiations has been taken on a case-by-case methodology on the premises of economic criteria, partners’ readiness for an F.T.A. and geopolitical considerations relevant to Europe. These three partners have high levels of protection with large market potential and in particular South Korea and Asean are very active in concluding F.T.A.s with countries competing with Europe such as the United States. Europe has already opened F.T.A. negotiations with countries in different areas of the world like Mercosur and the Gulf Cooperation Council (G.C.C.), while with Central American and Andean countries there are existing F.T.A.s or preference trade agreements (P.T.A.s). India, Asean and South Korea are the three most important priorities for the European Union. Following this Asian strategy, it is strange not to consider China as a priority. But with reference to China in the document Global Europe was said that the country could meet many of the criteria requested by the European Union in order to start the negotiations for a new F.T.A., but that at the same time China required a very special attention because of the opportunities and the huge risks it presented.

In comparison to many agreements already signed by the European Union, the three proposed F.T.A.s are more reciprocal than many precedent agreements. To give an example, the EuroMed agreements and the Economic Partnership Agreements (E.P.A.s) with the African, Caribbean and Pacific states (A.C.P.s) are not overlapping the W.T.O. template and in particular they tend not to be mutually balanced: It is the European Union that does a lot of concessions not the counterparts. The new three EU-Asian F.T.A.s are closer to the F.T.A.s already signed with Mexico, Chile and Mercosur (but with these three agreements the motivation was purely commercial). The new three F.T.A.s differ one from another. It is not clear whether Europe has the capacity to close these deals. If the European Union wants to close these three new F.T.A.s, there are at least three important issues that have to be addressed.

First, Europe is always trying to export its regulatory practices. The European Union at multilateral, regional and bilateral level tries to promote the adoption of its own standards with reference to product safety, environment, and corporate governance. As a matter of fact, the European Union when is negotiating a trade agreement tries always to connect this to non-trade targets. In doing so, it considerably limits the negotiating freedom of its partners, which in many cases are obliged to accept the European standards if they want to negotiate. Recently, the European Union has added the issue of climate change seen as one of the most pressing concerns in today’s world. Other non-trade targets that Europe is pushing more and more through trade agreements are democracy standards and human rights. Another important aspect that the European Union is trying to export is its own regulation of risk in international trade. In fact, while the United States and the W.T.O. have a very scientific approach to assessing the risks of product standards in international trade (a good tool are the W.T.O. sanitary and phytosanitary measures (S.P.S.s) and the technical barriers to trade (T.B.T.s)), the European Union has a non-scientific approach where different kinds of considerations may emerge. In this way, this non-scientific approach can be used to block trade on the ground of concerns linked to public health and public safety. In other words, it is a sort of hidden protectionism applied by the European Union.

Second, in comparison with the American approach toward F.T.A.s, Europe appears considerably less clear and professional than the United States that tends to subscribe market-oriented F.T.A.s. For the United States, market access should be granted very fast and transition periods have to be very short. The United States tries always to adopt W.T.O.-plus provisions on competition, trade facilitation and government procurement and to force strong disciplines on domestic regulatory discretion. On the other side, the European Union does not use an investor-state dispute settlement and is not able to get strong disciplines on domestic regulation. Similarly, Europe has non-binding provisions in the sectors in which the United States tries to adopt W.T.O.-plus provisions. In this way both, the European Union and its partners are allowed to put aside of the agreements sensitive services sectors and instead put into action weak disciplines in other areas (among the sensitive services sectors which were put aside the most important are often: health care, education, utilities and audiovisual services). Another big difference between America and Europe is linked to the approach toward intellectual property rights (I.P.R.s), labor and environmental standards. Europe wants acceptation of general international standards without obtaining the so-called W.T.O.-plus obligations. The United States instead wants Trips-plus provisions in its F.T.A.s while restricting also short-term capital controls.

Third, another relevant issue is why the European Union is negotiating F.T.A.s with India, Asean and South Korea and not with China and Japan, which are the biggest players in Asia? The last two countries alone comprise 55 percent of all the European potential market in Asia (according to data from the European Commission). Probably, an F.T.A. with South Korea could be considered as a first move in order to conclude in the future another F.T.A. with Japan. But China is out from the European consideration for an F.T.A. despite China's huge economic importance. The reason is that probably the EU fears the Chinese economic competition. Yet, it is true that the European Union with China needs “a much stronger framework for trade-related regulatory cooperation”.[viii] In fact, it is more important for Europe to get results related to concrete issues than just to sign agreements that will be relevant only on paper. The European Union should try to set standards with China for containing protectionism, strengthening bilateral relations and pressing Beijing to move forward with the W.T.O.-plus reforms in order to open up the Chinese economy. 

 Of the three Asian F.T.A.s, the only one that has serious chances to bring about a good result is the one with South Korea. This country is very interested in increasing its commercial platform and it has already shown this mindset in negotiating a similar agreement with the United States. With the United States, South Korea agreed on eliminating almost all tariffs on bilateral goods trade and to open up the majority of its services market to American exporters and foreign investors. The European Union would like to use this agreement as a template for its own agreement with South Korea. Brussels would like to remove all Korean tariffs on industrial goods, the majority of the agricultural tariffs and to get major services liberalization, the removal of ownership, the establishment and operating restrictions for European Union investors (in sectors such as banking, insurance and telecommunications). In addition to these requests, Brussels tries to get through the agreement the opening up of government procurement, competition law, state subsidies and less restrictive Korean food-safety standards. In exchange to these points, Europe will abolish all tariffs on bilateral goods trade. Probably not all these subjects will be included in the final agreement, but it is very likely that the F.T.A. with South Korea will be fruitful on both sides. It is clear that there will be some eventual gaps with reference to the Korean agriculture sector, competition law or government procurement rules, but in the end the result will be positive for both the European Union and South Korea.    

The F.T.A. with India is not very understandable. In fact, India has a very light approach toward international trade. All the Indian agreements related to trade are in practice goodwill agreements aiming at developing international relations more than serious trade pacts (India's agreements often lack a commercial substance). Since the beginning of the negotiations, India has stated that its agricultural sector will be exempted by the negotiating F.T.A. On the other hand, giving the strong European protectionism linked to the Common Agricultural Policy (CAP) this is not a big concern for the European Union. Manufacturing and services liberalization offer better perspectives because India since 1990s has progressively liberalized these two sectors (although in the last years no big progress has been achieved in these two sectors). In addition, there is no strong leverage for Europe in order to tackle India’s regulatory barriers through an F.T.A. Almost certainly, with India it could be better to obtain a strong agreement on regulatory cooperation than a very weak F.T.A.            

THE E.U.-ASEAN F.T.A.

 Between the European Union and Asean there are 30 years of close relations. During this timeframe the European Union has supported Asean integration with approximately €250 million in addition to bilateral cooperation with Asean member states. In specific, the E.U.-Asean relations were established in February 1977 while in 1980 followed the Cooperation Agreement.[ix] Since 2004, the European Union has been negotiating Partnership and Cooperation Agreements (P.C.A.s) with individual Asean countries on the ground of the respect for human rights, democratic principles and the rule of law. It is evident that Asean is an important area for the European Union trade although the E.U.-Asean trade is inferior to the bilateral trade that the union has with China and Japan. Conversely, the European Union F.D.I.s quota in Asean is higher than in any other Asian country excluded Japan. Apart from these considerations, for Europe it will be very difficult to negotiate a strong F.T.A. with Asean as a whole.[x] First of all, Asean countries have been until now more of an association of countries than a real organization like the E.U. Moreover, only four states out of 10, i.e., Indonesia, Malaysia, Philippines and Singapore, can although with some difficulties be considered democratic countries and not authoritarian regimes (with reference to democracy the worst case is Myanmar/Burma). The other six countries are not democratic and often do not respect basic human rights.  

In specific, today for Europe one of the biggest problems in dealing with Asean is the controversial participation of Burma to the Association of South East Asian Nations. Since August 2007 during the meetings between Asean foreign ministers and Javier Solana, the European high representative for the Common Foreign and Security Policy (C.F.S.P.), the latter has expressed his approval for the draft Asean charter , especially because the charter calls for the creation of a human rights body). But while supporting the charter, Mr. Solana insisted that Burma should not be automatically included in the future F.T.A. with the European Union.[xi] Then, following the massive human rights violations in Burma in September 2007 (when unarmed citizens were attacked by the Burmese army and at least 15 people died while thousands were injured) the relations between the European Union and Asean have worsened. The European Union sees with big disappointment the fact that Burma is not able to implement any serious democratic reform and to free political prisoners (among them Mrs. Aung San Suu Kyi, the democratic leader and Nobel Prize winner). In relation to the problem linked to Burma, the adoption of the Asean charter,[xii] which was signed by the member states on Tuesday, November 20, 2007, in Singapore during the 13th Asean Summit is not a reliable solution. The charter has still to be ratified by all the ten countries before it takes effect. The message of the charter is that Asean countries will seek to promote free trade and human rights “but their vision to create an integrated, European Union-style bloc was marred by Myanmar’s snub to democracy.”[xiii] The Burma case is a real menace to Asean political powers. The Asean charter has the goal of turning the organization (created 40 years ago during the Cold War in 1957) into a rule-based entity[xiv]. In fact, the association has been until now an informal group centered on the principles of non-interference and consensus between its members. Under the provisions Asean “can sue and be sued under the charter and will be held accountable for all the treaties and agreements it signs. It will also set up enforceable financial, trade and environmental rules.”[xv] One of the most important outcomes of the new document should be the creation of a regional human rights body but the presence as a full member of Burma reduces the authority of the document. At this regard, already during the meeting in Singapore, the Philippines took a very tough stand versus Burma and called into question the destabilizing factor represented by this country. Notwithstanding this intervention of the Philippines, the other eight members (apart from Burma) remained very reluctant to take a strong position and to confront the Burmese military junta.   
 
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Asean is formed by 10 very different countries, and it is not an integrated economic region. The 10 countries have very different history, political systems, economic and institutional capacities. Singapore has the same development level as Western countries; Malaysia is developing very well and has a lot of economic potential; Thailand is a middle-income developing country; Indonesia has huge economic possibilities but still has not solved all its problems linked to the recurrent political instability; the Philippines is a country with good potential but its economic outcomes are a puzzle yet; Vietnam and Cambodia (two communist countries) although moving forward have very low per capita incomes; Brunei is rich only thanks to its oil revenues and Laos and Burma are in bad economic (but not only) conditions. Among Asean countries trade barriers — especially non-tariff and regulatory measures — are still very high.

 The impact of an F.T.A. between the European Union and Asean could be very different according to the different structure of the agreement. The European Union commissioned a study on the economic results of an F.T.A. with Asean[xvi]. The best scenario was with zero tariffs on all goods and 50 percent reduction in barriers to services trade. With this scenario, the European G.D.P. could increase 0.1 percent while the Asean G.D.P. nearly 2.2 percent. The other scenarios are irrelevant for the European Union with reference to the possible economic outcomes. In other words, also with the best scenario there is only a discreet gain for Asean, but there is a very modest result for Europe. Principally, the problem for the European Union is that non-tariff measures far outweigh tariffs as impediments to increase businesses. Only Singapore, among the 10 Asean countries, has very low non-tariff and regulatory barriers. The other nine countries have instead relevant barriers. An F.T.A. could have an interesting perspective if it traced a discipline with reference to non-tariff and regulatory barriers in Asean countries other than Singapore, otherwise it is useless.  

 The European Commission has a mandate to negotiate the F.T.A. with the Asean with which it has started (or is thinking  of starting) a P.C.A. (Partnership and Cooperation Agreements) negotiation. Brussels would like to close the negotiation by 2009. For the time being, Cambodia, Laos and Burma/Myanmar are definitely out. Cambodia and Laos have duty-free access to the European market, but Burma is out given the problems linked to human rights in the country under the rule of the generals.[xvii] The problem is that — as confirmed in Singapore during the13th Asean Summit — Asean leaders want to negotiate an F.T.A. with the European Union including all Asean members including Burma. Apart from these political considerations, which are indeed still very important, the European Union wants a transition period of ten years for tariff elimination and commitments in services and investment. In addition to this, the Europe Union could accept a longer transition period in relation to sensitive agricultural products. Brussels desires to guarantee to the less developed Asean countries special and differential treatment (S.D.T.) for a longer period of transition. The European Union requires to have a sort of compatibility with the W.T.O. Agreement on Government Procurement (G.P.A.) “and regulatory cooperation on competition issues”[xviii] while it mentions neither G.P.A.-plus market access commitments, nor binding commitments on competition enforcement.

 The perspectives for this kind of F.T.A. to be successful are really scarce. First of all, the existing Asian F.T.A.s – both F.T.A.s between single ASEAN countries and third countries and collective ASEAN F.T.A.s –  have difficulties in trying to overpass tariff elimination on 90 percent of goods trade (Singapore is an exception). The United States tried to get better results with Asean countries, but it succeeded only with Singapore. Secondly, inside Asean for the moment – although the signature of the new charter that still has to be ratified by all the countries – there is no serious common negotiating machinery. Asean is still very good on papers but then when it is time to transform the papers into reality there are always a lot of obstacles (often dilatory procedures). These are the two reasons for which it is probably better for the E.U. to follow different roads instead of signing a relatively trade-light F.T.A. that won’t tackle non-tariff and regulatory barriers. In any case, it should be pointed out that such a trade-light F.T.A. could have a residual political meaning although absolutely no commercial sense for the European Union.

 Probably, the European Union should stop negotiating with Asean countries collectively. Probably it could be better a sort of dual approach. A first step could be trying to obtain an improved Trans Regional E.U.-Asean Trade Initiative (Treati) framework for regulatory cooperation with Asean. In fact, Treati since 2004 has been the basic framework for region-to-region regulatory cooperation on trade, investment and trade facilitation issues. Then, this improved Treati framework should be coupled with stronger trade-and-investment regulatory cooperation with the single Asean countries and with a P.C.A. framework. This path would be very close to the one followed by the United States. Right now the only country in the Asean region with which it is possible to reach a valid and serious F.T.A. is Singapore, which is a country strongly in favor of trade. This agreement with Singapore could be obtained very quickly. Instead, the European Union should rethink its strategy with all the other nine states. In fact, also singularly with these countries, it won’t be possible in a short term to sign bilateral F.T.A.s. It is true that Malaysia and Thailand are the best candidates after Singapore, but they lack the Singaporean economic, political and social capacities. In specific, Malaysia is not a transparent country (it is sufficient to think of the actual discrimination in favor of the Malay majority). And Thailand is under the military rule and is not proceeding as fast as it was doing before the military coup of 2006. In that country, protectionist interests are emerging together with strong economic-nationalist rhetoric. The other countries are not in the conditions of minimally thinking of an F.T.A. with the European Union.

 CONCLUSION

 Both the European Union and Asean are aware of all the potential benefits that an increased cooperation could bring them.  Probably, right now it is impossible to set up a strong F.T.A. between all the Asean countries and the European Union. At the moment, such an agreement can be achieved only with Singapore. With the other nine countries it is important to continue the negotiations but with different targets: an improved Treati and trade-and-investment regulatory cooperation. In addition to this, it is also necessary for the European Union to rethink its strategy in Asia. In fact, if the European firms are today not very competitive in Asia this is not linked to the presence of  huge barriers that have to be eliminated through new F.T.A.s. This is only a part of the problem. To get a better access to the Asian markets, European firms need to be more competitive domestically in Europe and then with this added value it will be surely easier for them to export to Asia. At the moment of the three proposed F.T.A.s only the one with South Korea is meaningful for the European Union (this because the European Union and South Korea are on similar positions), while the other two proposed agreements, with Asean and India, lack a lot of economic substance. In general, with Asean but also with the other countries in Asia, stronger bilateral frameworks of cooperation are more useful than weak F.T.A.s. And to support this point it is important to consider that Japan and China alone comprise 55 percent of Europe's potential Asian export market and that he European Union does not have and has no intention in the near future to negotiate any bilateral F.T.A.s with these two countries.
 
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[i] In addition to the difficulties between the different negotiating groups, another hurdle may be that in America the broad authority given to the American president under the Trade Act of 2002 expired in July 2007. Any trade pact has now to be approved by the Congress with possibilities of amendments. Consequently, the other countries may be less interested in negotiating an agreement that can be profoundly transformed by Congress.  
[ii] BACCI, A., How to Improve South-South Trade, Sciences Po, Paris, May 2007, in http://www.alessandrobacci.com/2007/05/policy-note-how-to-improve-south-south_14.html
[iii] “This paper argues that there are benefits for the EU’s external action in establishing closer and mutually supportive relations between all the actors involved at both EU and national level. In the short-term, individual actors and institutions may see advantages in the freedom of manoeuvre that comes from exercising their responsibilities in an autonomous way. In the medium and long term, the EU has shown its capacity to help Member States to meet their external policy objectives. The overall effectiveness and therefore the global influence of the EU depend on optimal use of all available leverage in support of external goals. Underlying the practical steps proposed in this paper is the conviction that flexibility, the provision of value-added in external policy, and the building of common approaches among the Member States and the institutions must be at the top of our agenda”, in Europe in the World – Some Practical Proposals for Greater Coherence, Effectiveness and Visibility, Communication from the Commission to the European Council of June 2006, COM (2006) 278 Final, in http://ec.europa.eu/external_relations/euw_com06_278_en.pdf.  
[iv] In Global Europe Competing in  the World, in http://trade.ec.europa.eu/doclib/html/130376.htm
[v] In Global Europe Competing in  the World, in http://trade.ec.europa.eu/doclib/html/130376.htm
[vi] In Global Europe Competing in  the World, in http://trade.ec.europa.eu/doclib/html/130376.htm
[viii] In Global Europe Competing in  the World, in http://trade.ec.europa.eu/doclib/html/130376.htm
[ix] In February 1977, the Special Meeting of Asean foreign ministers in Manila proposed that Asean established some ties with the Council of Ministers of the European Economic Community (E.E.C.) and the Committee of Permanent Representatives (Coreper) through which Asean could make representations against the growing protectionism of the E.E.C. countries. Following that event during the same year Asean’s relationships were formalized with the E.E.C. Instead, under the Cooperation Agreement of 1980, objectives for commercial, economic and technical cooperation were established and a Joint Cooperation Committee (J.C.C.) was formed as a mechanism to monitor Asean-E.E.C. cooperation  
[x] SALLY, R., Brussels Looks East, in The Wall Street Journal, November 15 2007. 
[xi] LANDINGIN, R., EU-ASEAN Trade Pact Stalls Over Burma, in The Financial Times, August 2 2007.
[xii] Charter of the Association of Southeast Asia Nations in http://www.Aseansec.org/21069.pdf 
[xiii]ASSOCIATED PRESS, ASEAN Charter Is Adopted, in The Wall Street Journal, November 2 2007.
[xv]ASSOCIATED PRESS, ASEAN Charter Is Adopted, in The Wall Street Journal, November 2 2007.  
[xvi] E.U. COMMISSION, Economic Impact of a Potential Free Trade Agreement (FTA) Between the European Union and ASEAN, Brussels, May 2006, in www.trade.ec.europa.eu/doclib/docs/2007/may/tradoc_134706.pdf>
[xvii] This duty-free access is granted to Laos and Cambodia under Everything But Arms package for least developed countries.  
[xviii] SALLY, R., Looking East: The European Union’s New FTA Negotiation in Asia,   http://www.ecipe.org/looking-east-the-european-union2019s-new-trade-negotiations-in-asia-1/PDF




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