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EU set to negotiate new trade pacts

The European Commission is due to launch plans for a "new generation" of free trade agreements on Wednesday by seeking mandates for talks with ASEAN, South Korea and India as well as Andean and Central American countries.

With the so-called Doha round of WTO negotiations stalled, the mandates highlight EU Trade Commissioner Peter Mandelson's new trade strategy, based on a "more rigorous" calculation of the possible economic gains from such deals.

EU foreign ministers are to pronounce on the package on Saturday, which would allow initial negotiations to get under way in the middle of next year if they give their approval.

The EU's executive arm hopes that by presenting its requests for mandates as a group it will be more difficult for member states to nit-pick over individual countries or regions, blocking the process.

The commission is eager to get to work on the accords because it estimates huge possible commercial gains that can be reaped by cutting trade barriers with the countries.

"Economic analysis we have done shows that there is an opportunity to increase our trade by 30 percent," said Simon Fraser, the head of Mandelson's office, in reference to the trade gains from a deal with South Korea.

Out in the cold

With Washington already in the midst of negotiations with Seoul, Brussels does not want to be left out in the cold.

The countries and regions targeted by the free trade agreements (FTAs), all developing or medium level income countries, are equally eager to forge such deals with the EU.

"India has been pushing very hard for such a deal," Fraser said.

Along with China, for which the EU has a separate trade strategy, ASEAN, India and South Korea make up the bulk of the emerging Asia region, where European trade interests are still weak.

With the 2001 launch of the current WTO free-trade talks in Doha, the EU chose to focus on a multilateral approach to trade at the expense of efforts to strike bilateral deals.

Bilateral talks underway at the time, such as with the Mercosur countries of South America and the Gulf states, later stalled in part because the focus shifted to the WTO negotiations.

However, since the WTO talks ground to a halt in July over EU and US intransigence on cutting agriculture subsidies, Brussels decided to give a new push to bilateral deals, a strategy already being pursued by the US and Japan.

Officially, concluding the Doha round remains the EU's main priority, but some of its main trade interests have been dropped from the negotiations, encouraging Brussels to seek other means to reach its ends.

"The Singapore issues are exactly the issues we want to tackle with India, ASEAN and South Korea," an EU official said in reference to WTO talks within the Doha round on investment, competition policy and public procurement, which were abandoned in 2003.

No easy task

Despite Brussels' eagerness to get a deal with ASEAN, the commission also recognizes that reaching an agreement with a grouping as diverse and relatively little integrated will not be easy.

"The one with [South] Korea is likely to be an easier one than ASEAN," the official said.

As in the case with India, South Korea does not have agriculture interests that will likely be a cause of concern for some of the EU's member states.

Meanwhile, the commission insists that it is not turning its back on poor African, Caribbean and Pacific countries that were the main beneficiaries of its "old generation" of free-trade agreements.

"We are negotiating six economic partnership agreements that are basically FTAs," Fraser said.
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