Latest remarks on EU’s FTA and foreign investment plans with developing countries in Asia, by José Ángel Rueda

The EU has been very active in the promotion of free trade and investment during the last two weeks.[1] Morocco, Peru, Ukraine or the United States of America have become or will become EU partners in those fields in the near future.

Now we would like to complete the scenario by pointing out the latest developments of EU initiatives with a further two developing countries: Myanmar and Vietnam. 

a) Myanmar

On the one hand, the EU has adopted a brand new strategy towards Myanmar. It was unveiled when President U Thein Sein of Myanmar paid his first official visit to the EU on 5 March 2013. In Brussels he met President Van Rompuy of the European Council and President Barroso of the European Commission.

At the end of their talks the three leaders issued a joint statement to sum up the outcome thereof.[2] They mainly focused on the transition towards democracy that Myanmar still has to make. As a result, the joint statement contains logic references to, for example, a lasting political settlement to achieve peace, the promotion of human rights and the rule of law for all people living in Myanmar as well as plans to build an independent, impartial and efficient judiciary in that country.

In addition, the statement includes a reference to the creation of “an EU-Myanmar partnership in trade and investment” as follows:

The foundations of growth and prosperity for all Myanmar citizens will be laid through economic reforms implementing the Government’s vision of people-centered economic and social development, a market economy and a level playing field for business. These reforms have already been initiated. In support of this comprehensive reform process, the EU has launched the process to reinstate as early as possible unhindered access to the EU market including preferential treatment under GSP/EBA. As a next step the EU and Myanmar will explore the feasibility of a bilateral Investment Agreement to increase investment flows. Both sides will promote best practices in Corporate Social Responsibility and responsible investment. Both sides have also agreed to take concrete steps to promote and deepen business partnerships and economic cooperation.”

It seems that the EU and Myanmar are far from entering into an FTA. The first step of the new EU strategy towards Myanmar is, therefore, to grant Myanmar products access to the EU market. The second step would be, as the joint statement reflects, the signature of a BIT for the promotion and the protection of investments pursuant to Article 207(1) of the TFEU. We have to recall that, according to UNCTAD’s website, Myanmar does not have any BIT in force with any of the current 27 EU Member States nor with Croatia.[3] It is interesting to underline that investments in Myanmar should, according to the joint statement, meet best international practices in this field.

Finally, in order to maintain the momentum of the partnership and to turn these commitments into reality, the joint statement also affirms that the EU and Myanmar will establish a joint Task Force that will meet in Myanmar in November 2013 “to assess progress and develop further cooperation in the future.”

b) Vietnam

On the other hand, the EU continues negotiating an FTA with Vietnam.

On 7 March 2013 EU Trade Commissioner Karel de Gucht travelled to Hanoi, Vietnam to attend the 19th. ASEAN Economic Ministers’ Retreat. He was also received by Vietnamese Prime Minister Nguyen Tan Dung. According to Vietnam’s Foreign Ministry,[4] during the meeting the Prime Minister said that “Viet Nam expects stronger trade ties with the EU and wants to speed up and conclude negotiations for the Viet Nam-EU Free Trade Agreement by the end of 2013.”

The EU and Vietnam commenced talks on an FTA in 2012. The EU is interested in entering into FTAs with ASEAN Member States (in particular Malaysia and Thailand) once it realized that an EU-ASEAN FTA was not possible. As indicated before, the EU and Myanmar, another ASEAN member state, are far from an FTA.

c) Final comment

The network of FTAs will dramatically expand in the near future to cover all parts of the world and involving both developed and developing countries.

It has been reported that the EU and Japan will launch FTA talks during the upcoming Japan-EU Summit meeting to be held in Tokyo on 25 March 2013.[5] Furthermore, rumors persist on Japan joining the Trans-Pacific Partnership,[6] a proposed FTA the negotiations of which currently involve Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States of America and Vietnam.


[2] “Building a Lasting EU-Myanmar Partnership. Joint statement by President of the European Council Herman Van Rompuy,  President of the European Commission José Manuel Barroso and President of the Republic of the Union of Myanmar U Thein Sein”, Brussels, 5 March 2013, available at http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/135830.pdf.

[4] “VN wants stronger trade ties with EU, says PM”, Ministry of Foreign Affairs of Vietnam, 7 March 2013, available at http://www.mofa.gov.vn/en/nr040807104143/nr040807105001/ns130308163624.

[5] “EU-Japan free trade talks in March”, 4 March 2013, available at http://euobserver.com/tickers/119265.

[6] “S’pore hosts Asia-Pacific free-trade talks”, 4 March 2013, available at http://www.mfa.gov.sg/content/mfa/media_centre/press_room/if/2013/201303/infocus_20130304.html.

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