Mr President, a parallel process of regional integration has almost always accompanied the multilateral liberalisation of trade in the post-war period. In particular, the 1990's witnessed an exponential increase in the number of regional trade agreements being negotiated. Regionalism refers to the reaction by governments to liberalise or facilitate trade on a regional basis, sometimes through free trade areas or customs unions. In a double WTO context, regional trade agreements have both a broader meaning and a more specific one. Article 24 of GATT allows for the exceptional establishment of preferential regional trade initiatives, granted that they meet the following criteria: firstly, double WTO members should be notified of the details; secondly, duties and other trade barriers should be reduced or removed substantially on all sectors of trade in the group; and thirdly, barriers of trade to non-signatories should not be higher than they were previously. Regional trade agreements are not uniform. The coverage and depth of preferential treatment varies from one agreement to the other. One may involve only a few products or sectors, while the other may extend well beyond traditional tariffs to areas such as intellectual property and standards. In fact, a number of RTAs currently being negotiated seem to be anticipating an evolution of the multi-lateral trading system by seeking to cover subjects that have thus far been excluded from or not sufficiently discussed at a multilateral level, such as government procurement, child labour and human rights. In recent years RTAs have developed into a more complex configuration and there is a growing number of overlapping RTA networks that span across continents at regional and sub-regional level. Being a part of an RTA has its positive political benefits. On a most important level, RTAs have great strategic value and play a role in maintaining geopolitical balance in regions. RTAs are useful signals of a major power interest in the region, and maintaining strong economic and trade ties with all major powers may yet prove to be an effective means of maintaining regional stability. FTAs should be based on the rule of reciprocity. Having said that, one should bear in mind that trade facilitation and globalisation is highly influenced by the relative development of participating countries. Differences in negotiating skills, technology, financing and quality of infrastructure are just a few of the impediments to the successful conclusion of an agreement involving at least one developing country. Yet the developing world cannot be left out of multilateral trade liberalisation. Regional integration is the backbone of the European Union. The trade aspect has been an essential component of what has ultimately evolved into a comprehensive political union. It has further served to maintain the EU's external relations with third countries. The Presidency Conclusions of the Amsterdam European Council of June 1997 outline the basis of the EU's policy on FTAs. This was supplemented by the report to the European Council on the development of trade policy and the preferential agreements of the Community, which sets out the EU's objective of reflecting the nature of the relations with the partners concerned and a broader geopolitical environment. In the same document, the Commission goes on to state that the trade policy – particularly the FTA aspect – allows for the simultaneous development of a relevant regulatory framework in a more comprehensive manner than that currently allowed by the relevant multilateral framework and timeframe of the WTO. The EU is slowly moving away from the establishment of traditional FTAs with its main trading partners. It is seeking deep integration and looks for convergence on regulatory regimes. The European Parliament and the report by the Committee on Industry, External Trade, Research and Energy support this approach by the Commission. The Commission puts the multilateral approach first, which is also supported by the committee. However, despite strong economic relations, the EU does not have a single FTA in Asia. An FTA with an Asian country will anchor the presence of the EU in that region. Regional leaders in ASEAN have indicated that agreements such as that proposed by Singapore to the EU would not endanger regional relations. Rather, as long as the agreement offers scope for extension within the ASEAN region, it could boost momentum. From a strategical viewpoint, the commercial presence of the EU would also counterbalance the influence and dominance of China and the United States. I hope that in the vote tomorrow my colleagues will support an agreement with Singapore, which I hope we could sign in the near future. I know the Commission has some reservations on this. However, it has already signed an extensive political agreement with the ASEAN region. Therefore I am convinced that in the near future there will be a mutual understanding between at least the ITRE Committee, the Commission and hopefully Parliament in its vote tomorrow. IN THE CHAIR: MR DAVID MARTINVice-President

Political group: PSE