EU Services Trade with ASEAN:Towards Policy Coherence for Development?

Abstract

In bilateral free trade agreement (FTA) negotiations with members of the Association of Southeast Asian Nations (ASEAN), the European Union (EU) must demonstrate that its policy on services trade is coherent with its development policy. This will be a major challenge for the EU, since its coherence review of services trade policy merely confirmed the status quo. Policy coherence may be improved by granting concessions on temporary migration of ASEAN workers to the EU and by providing Aid for Trade to ASEAN countries to increase their capacity to export services. But at the World Trade Organization (WTO), the EU has already refused to grant concessions on temporary migration, and it is unlikely to be in a position to provide the right amount and type of Aid for Trade to ASEAN countries.

Key Words:

• EU
• ASEAN
• FTA
• services trade
• policy coherence for development

Notes

1. ASEAN members are Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. Cambodia, Laos and Vietnam were not WTO members and did not participate in the Doha Round. Cambodia, Laos and Myanmar are least developed countries and did not participate in the ASEAN-EU FTA negotiations.

2. GATS identifies four modes of services trade. In Mode 1 (cross-border supply), neither the service supplier nor the consumer moves physically. In Mode 2 (consumption abroad), the consumer moves to the supplier’s country. In Mode 3 (commercial presence), a firm moves to the consumer’s country. In Mode 4 (temporary movement of natural persons), the individual supplier moves to the consumer’s country (Drake and Nicolaidis 1992, 71). In this article, the expressions ‘temporary migration’ and ‘Mode 4’ are used interchangeably.

3. The distinction between temporary and permanent migration is based on the length of stay. Migration is deemed temporary if a worker stays in the host country for less than one year (Winters 2008, 480).

4. Trade, environment, climate change, security, agriculture, fisheries, social dimension of globalization, migration, research and innovation, the information society, transport and energy.

5. The EU schedule is available at http://tsdb.wto.org/default.aspx (accessed 28 November 2011).

6. A recent report highlighted that the need for foreign workers in Europe has declined even in sectors where 10 years ago, there was a shortage of workers (medical and computer services) (Limburg 2010).

7. The 2000 Cotonou Partnership Agreement between the EU and the ACP mandated the negotiation of EPAs between the EU and ACP sub-regions by 2008. A final EPA has been signed with Cariforum (Caribbean Community and the Dominican Republic); interim EPAs (excluding services) have been signed with the SADC (Southern African Development Community), Eastern and Southern Africa, the East African Community, Cameroon, Côte d’Ivoire, Ghana, Fiji and Papua New Guinea.