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Choosing the second best option

The endeavours of the European Union (EU) and the Association of South East Asian Nations (ASEAN) to clinch a Free Trade Agreement (FTA) represent a watershed in the pattern of bilateral trade deals being negotiated the world over as a response to the slow progress under the multilateral framework in the World Trade Organisation. The joint report finalised recently, which is expected to pave the way for talks to commence in 2008, is also evidence of the shift in the EU's own thinking on entering into an FTA, its first in Asia, with ASEAN. At the moment, its engagement with ASEAN is governed by the 1980 cooperation agreement and a more recent trans-regional trade initiative. The significance of the prospective trade pact lies in that it involves the world's single biggest trading bloc, the EU, and the world's emerging largest exporter, ASEAN. Moreover, the common vision that the two already share in the form of their respective experiments in regional integration could give their mutual engagement greater momentum. The EU originated as an economic union after the Second World War and is now experiencing an ever-increasing quest for political integration, and the ASEAN, essentially a regional political bloc, is seeking to expand into a single economically united zone. While the EU boasts a common currency, ASEAN took a major step in regional integration in 2003 when it set up its Free Trade Area.

The geographical contiguity of ASEAN to the rapidly emerging economies, China and India, and the industrial might of South Korea and Japan are major factors that influenced the EU's approach to FTAs, which until recently were viewed as the second best alternative to the global multilateral trading agreements represented by the WTO. It is likely that this newfound pragmatism will inform the EU's stance in its negotiations with ASEAN, not in the least on the question of insistence on respect for human rights in Myanmar under the military regime and more generally on issues of democratic governance. The process of regional integration over the past few decades has equipped the EU and ASEAN to face up to the tortuous process of identifying mutual interests and give-and-take possibilities.

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