ASEM business forum opens

VIENTIANE (VNS)— The 13th Asia Europe Business Forum has begun in Laos, with participants agreeing that stable political, social and environmental environment is needed to facilitate smooth trade and investment, and the best way to achieve this is by embracing the multilateral trade regime.

The outcomes of the three-day forum, which is being held in the capital Vientiane, will be submitted to the heads of states and governments at the 9th Asia-Europe Meeting (ASEM) summit which convenes today.

Both Asia and Europe are experiencing problems that are affecting business confidence and therefore growth and stability. In Europe, it is the ongoing sovereign debt crisis, while in Asia problems are being caused by a failure to tackle corruption, environmental degradation, and the growing gap between rich and poor, according to the Asia Development Bank.

The forum is a place for business leaders from the two continents to have their say in constructing the best path forward for economic and investment co-operation between Asia and Europe, as well as deciding common measures to tackle global challenges such as environmental and food security issues.

Other recommendations discussed include the removal of discriminatory rules and a stable regulatory environment to ensure fair competition for all, with particular attention needed for small and medium size enterprises (SMEs).

During the plenary session yesterday, Professor Jacques Gravereau, President of the Paris-based Haute Etude Commerciale Eurasia Institute, said when it came to the Europe-Asia relationship, the former had more to benefit than to lose "because the reservoir for growth of Europe is in this part of the world."

He said the way to improve the relationship is another matter, especially in the current environment where long-term perspectives are rare due to a lowering of growth prospects.

"When the time frames are strained like that, what all of us need desperately is the predictability and the stability of the common rule of the game," he said. "The problem is not the level of taxes and regulations but their foreseeability."

Gravereau, who is also the chairman of the forum's core group, cited the lack of a common rule for all as a reason behind the high level of intellectual property theft in Asia, which remains one of the largest continuing areas of contention between Europe and Asia.

The forum suggested that intellectual property rights and mutually determined rules and regulations must be seriously pursued.

Jae-Ha Park, deputy dean of the Tokyo-based Asian Development Bank Institute, said the eurozone crisis has heightened the awareness in both continents of their mutual economic interdependence. He said that Europe needs Asia's growing markets to boost their flagging growth while Asia has recognized its vulnerability to woes in the eurozone.

Park recommended that the two sides co-operate closely to ease the eurozone crisis and to secure a global economic recovery. He called for them to further develop bilateral and investment ties through the negotiation of Free Trade Agreements (FTAs).

ASEAN Secretary General Surin Pitsuwan, whose 10 Southeast Asian countries are all members of ASEM, said his association has signed five FTAs with six partners – China, Japan, India, South Korea, Australia and New Zealand – but they have yet to secure a similar agreement with the EU because, "there is a tremendous diversity between the 27 of you and the 10 of us."

"We have adopted the negotiations on a bilateral basis, with each member country working to put the whole thing together. That is the approach we have been using to secure the ASEAN-Japan FTA," he added.

"Along the way we have worked on issues we think we have a problem with, such as intellectual property, labour standards and governance. All the things are being addressed through the co-operation between the EU and ASEAN in a systematic and pragmatic way."

Singapore is likely to be the first ASEAN country to sign an FTA with the EU, with an announcement expected by the end of this year, while negotiations continue between the EU, Viet Nam and Malaysia.

Professor Gravereau called for caution when judging the effectiveness of FTAs. "They are complicated, as while they may cause no problem to big companies empowered with legal departments and all that, they can become a real headache for SME enterprises, which in fact account for 80 per cent of trade activities."

"More often than not, SME enterprises do their business without taking advantage of the FTAs. They are just too complex," he told Viet Nam News.

He suggested that to take full advantage of FTAs it is crucial for small-size producers to be part of a bigger union which can represent them in negotiation, allowing them to trade with access to better legal tools. He gave the example of farmers participating in co-operatives or SMEs participating in chambers of commerce.

Last year, ASEM partners provided 34 per cent of EU imports and 38 per cent of exports which makes Asia the largest trading partner of the EU. — VNS

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