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EU must push FTA with Asean, Merkel says

German Chancellor Angela Merkel addresses the audience during a visit to the Meteorology and Geophysics Agency in Jakarta on Wednesday.

German Chancellor Angela Merkel addresses the audience during a visit to the Meteorology and Geophysics Agency in Jakarta on Wednesday.

The European Union must move quickly to liberalise trade with Asean if it is to hold its own in the midst of the euro zone crisis, German Chancellor Angela Merkel said yesterday.



"I am deeply convinced that Europe has to hurry up in setting up a free trade agreement [FTA] with this region if it wants to be able to compete," she said at the end of her two-day visit to Jakarta.

She was speaking a day after Germany and Indonesia - the largest economies in the EU and Asean respectively - signed a wide-ranging agreement to boost bilateral relations. But her remarks indicate a sense of urgency, widely acknowledged by businessmen on both sides, that Southeast Asia's young and upwardly mobile population of 600 million offers huge long-term opportunities for European industry - from pharmaceuticals to planes - amid the ongoing economic gloom.

Germany must also hurry if it does not want to miss out on the region's enormous economic development, Deutsche Presse-Agentur quoted the chancellor as saying.

"If we do not join forces as Europeans, we will not be able to influence the development of the world," she said. Her remarks also come as political reforms in Myanmar over the past year removed a key obstacle to closer ties between Asean and the EU. Both sides discussed reviving trade talks in April.

Trade between the two totalled US$235 billion (Bt7.5 trillion) last year, according to the Asean Secretariat.

Both the EU and Asean are among each other's top three trading partners, but negotiations for a comprehensive trade pact stalled in 2009, two years after they began, partly over the slow pace of change in Myanmar.

The EU instead chose to negotiate free trade agreements with individual Asean members as a stepping stone towards a broader deal between both regions.

Negotiations for a free trade agreement with Singapore are close to completion.

The EU is working on pacts with Malaysia, Thailand and Vietnam, as well as a comprehensive economic partnership agreement with Indonesia, where growth is tipped to remain steady at over 6 per cent over the next five years.

European Commission president Jose Manuel Barroso is scheduled to visit Indonesia in September.

German businessmen are already taking advantage of opportunities here. Last week, a group of German and Singaporean business chiefs from small and medium-sized enterprises went on a joint trip to explore opportunities in Indonesia.

Yesterday, Merkel also visited a tsunami early warning centre in Jakarta, built with help from German experts to the tune of ¤53 million (Bt2.05 billion).

She also addressed German and Indonesian businessmen at a lunch.

Indonesian President Susilo Bambang Yudhoyono acknowledged that his country had its fair share of problems, but said it would continue to improve the business climate and related policies and regulations.

He said he hoped German businesses would continue to do more in Indonesia, adding: "For businesses, crisis creates opportunities."




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