Investment tops Asia talks

Date: 18/07/1996

By Elizabeth Wise

INVESTORS interested in Asia will be looking to Brussels next week for encouraging signals from a meeting of top-level foreign trade ministry officials from ten Asian nations and the EU.

Keeping the promise their leaders made at the Asia-Europe summit (ASEM) in Bangkok last March, EU officials will meet their counterparts from China, Japan, Korea and the seven nations of the Association of Southeast Asian Nations (ASEAN): Philippines, Brunei, Indonesia, Malaysia, Singapore, Thailand and Vietnam.

Horst Krenzler, the European Commission's director-general for external economic relations, will chair the 24-26 July 'senior officials' meeting on trade and investment' (SOMTI).

Organisers hope that participants will be able to solidify initiatives enumerated so far in a draft investment promotion action plan.

The action plan, which contains ideas such as staging exhibitions similar to export promotion fairs, is being drawn up by a separate 'working group on investment promotion' (WGIP) chaired by Thailand. The plan had its first review this month during a three-day meeting in Bangkok, and officials hope that it will be ready for endorsement next year by Asian and European finance ministers.

Officials want SOMTI participants to suggest guidelines for the regulatory aspects of promoting investment, such as standards, customs cooperation and export promotion.

Commission officials also hope the meeting could be the birthplace of a trade facilitation action plan, but admit that this could be wishful thinking given the hesitant reactions from their Asian counterparts thus far.

Prospective investors should not hold their breath in anticipation of impending market openings. There will be discussion of bilateral liberalisation, but this will probably take a back seat to talks on issues currently being discussed at the World Trade Organisation (WTO).

The meeting's organisers say the main focus will be on getting partners to fulfil the trade obligations they made in the 1994 Uruguay Round agreement and on making progress in the three sectors that were left unfinished at the end of the round: financial services, telecoms and shipping.

Commission officials also want the participants to discuss areas proposed for future WTO agreements: investment, competition and - less popular with Asian governments - labour laws and environmental standards.

The meeting fulfils one pledge in the ASEM declaration, which calls for “an informal senior officials' meeting on ways to promote economic cooperation between the two regions and, in particular, liberalisation and facilitation of trade and investment with an initial emphasis on WTO issues”.

European and Asian governments are increasingly preoccupied with the approaching first ministerial meeting of the WTO's nearly 120 member nations, scheduled for Singapore in December.

“We have to synchronise our positions as much as we can,” said an aide to Trade Commissioner Sir Leon Brittan.

Asian participants, led by Singapore and Japan, will spend next Wednesday morning (24 July) on their own to coordinate Asian positions. Officials expect similar, segregated Asian and European huddles on the following day as both sides hammer out ideas in the full session.

On the final day of the meeting, Union officials will fulfil an Asian request for a briefing on EU progress in areas such as economic and monetary union.

Again in keeping with the ASEM declaration, the two sides are considering creating a working group to explore means of cooperating outside of regulation by, for example, encouraging joint ventures or training professionals on technical aspects of business deals such as the drawing up of contracts.

Participants may also hear a report on progress towards liberalising trade and investment following a meeting on customs cooperation held in Shenzen, China, last month.

The next scheduled gathering is an Asia-Europe business forum in France in October. While business should not expect immediate results from the new, multi-track Asia-Europe relations, Commission officials describe next week's meeting as “a key staging post in a long-term process”.

“We are talking about removing barriers to investment between the world's most mature economy and the world's most dynamic economy,” said one.

“The potential is enormous, but there will not be results overnight.”