Exports from the Association of Southeast Asian Nations (ASEAN) to the European Union (EU) are expected to post double-digit growth rate once the free trade agreement (FTA) between the two groups is signed, a study showed.
Based on a study commissioned by the European Commission showed that exports of ASEAN to EU are expected to increase by 18.5 percent once the FTA is in place.
The EU is the second largest trading partner for most countries in ASEAN after the US. ASEAN exports to the EU account for about 13 percent of the region’s total exports.
In turn, exports of EU to the ASEAN will likewise grow by 24 percent, increasing total EU global overseas sales by almost two percent. EU exports to ASEAN account for around four percent of its total exports.
Also, the study said the FTA will bring economic gains equivalent to two percent of the ASEAN countries’ gross domestic product (GDP) by 2020.
The study suggested that one of the biggest growth areas for both ASEAN and EU would be in the area of business services. Services trade is expected to be an integral component of the EU-ASEAN FTA.
The Europeans are pushing for an economic partnership agreement with the 10-member strong ASEAN because it was identified by Global Europe as an ideal FTA partner.
The ASEAN region is the fifth largest trading partner of the EU. The EU-ASEAN FTA is expected to underscore areas not tackled by the World Trade Organization (WTO) rules such as investment, trade in certain services and the removal of non-tariff barriers.
In 2003 the EU and ASEAN launched the Trans-Regional EU-ASEAN Trade Initiative (TREATI) as a framework for dialogue and regulatory cooperation between the two regions.
The priority areas for cooperation under TREATI are closely linked to ASEAN’s own moves towards closer economic integration: sanitary standards agriculture and fisheries, industrial product standards and technical barriers to trade.