JAKARTA: German Chancellor Angela Merkel said Europe must step up its efforts to establish a free trade pact with booming South-East Asia.

“I am deeply convinced that Europe has to hurry up in setting up a free trade agreement with this region if it wants to be able to compete,” she said yesterday in Jakarta.

As European nations are struggling to climb out of debt, South-East Asian nations are experiencing strong growth. Indonesia grew 6.5% in 2011 and is forecast to grow at the same pace this year.

On Tuesday, Merkel and Indonesian President Susilo Bambang Yudhoyono pledged to boost trade, which now stands at around US$7bil, and Indonesian officials forecast it to reach US$12bil by 2014.

The 10-member Asean and the European Union in May 2007 agreed to start free trade agreement talks after years of wrangling over human rights abuses in Myanmar.

The EU has begun negotiating agreements with individual Asean states, including Malaysia and Singapore. Myanmar in April pushed for an EU-Asean agreement, citing major reforms in the country.

Asean as a whole represents the EU's third-largest trading partner outside Europe, with more than 206 billion euros (US$253bil) of trade in goods and services in 2011, according to the European Commission.

The EU is Asean's second-largest trading partner after China, accounting for around 11% of Asean trade.

Asean groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

Merkel, who arrived for her first official visit to South-East Asia's largest economy on Tuesday, departed for Berlin later yesterday.

She also visited a tsunami early warning centre in Jakarta, built with help from German experts and 53 million euros of German funding after a tsunami in 2004 killed 170,000 people in Indonesia's Aceh province

The system consists of a network of tidal gauges, buoys and seismic monitors. - AFP

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