Peter Mandelson, EU trade commissioner, hinted to members of the European Parliament on Tuesday that Europe would be reviewing its trade priorities once multilateral trade talks had been completed at the end of this year to include bilateral free trade agreements with Asian countries.

"Securing effective market access for European goods and services to emerging economies such as those in Asia is high in our list of priorities," said Mandelson.

Mandelson hastened to add that no recommendations had been made, but that a working group with ASEAN and a high-level task force with India had been launched to expand bilateral and bi-regional trade deals. He also said that bilateral trade agreements launched by other trading partners -- alluding to the United States -- were being closely watched to assess the impact on EU interests in Asia.

"We are also exploring the willingness of possible future FTA partners to make serious commitments," said Mandelson. "FTAs are no 'quick fixes.' There would be no reason to start FTA negotiations unless we know they can be concluded within a reasonable time-period and with a high level of ambition that makes them commercially meaningful."

Mandelson's announcement comes at the heels of a less-than productive meeting in London earlier this month, where trade negotiators from the "Group of Six" nations failed to reach consensus on formulas in two highly disputed areas of trade talks. Ministers from the United States, EU, Brazil, India, Australia and Japan met hoping to narrow difference on formula cuts in agriculture subsidies and non-agricultural market access to break the logjam in the current round of talks.

After failing to bridge gaps, the EU trade chief called on negotiators to work through all areas simultaneously and to make "real trade offs" across the board.

"There are a limited number of cards left on the table -- and they are big ones. They cannot be played in isolation. The overall conclusion of the London meeting is that the time of incremental steps, small moves and small concessions, is over," said Mandelson.

Mandelson also criticized India and Brazil for their reticence towards making substantial cuts in their industrial tariffs. The EU has maintained its unwillingness to further reduce its agricultural subsidies without any movement on the part of emerging developing countries to make cuts in industrial tariffs.

With doubts that Doha talks will be less ambitious than originally expected, Brussels has signaled a revision of its trade strategy. Meanwhile, the United States continues to make Southeast Asia a number one economic priority.

The European Union, unlike the United States, has refrained from pursuing any new bilateral free trade agreements while still working through Doha negotiations.

Since the renewal of U.S. legislation in 2002, which offer the administration wide powers to quickly get trade agreements through Congress, the United States has been aggressively seeking to complete and launch bilateral trade talks with partners in Asia.

In 2002, following the renewal of Trade Promotion Authority, it completed negotiations with Singapore. In the last several months it has also launched trade talks with Thailand, South Korea and most recently, Malaysia. The Bush administration has also supported World Trade Organization accession talks with Vietnam, Laos and Cambodia.

Despite the administration's commitment to strengthening economic ties in the region, it has faced an onslaught of criticism from members of Congress who have threatened to close U.S. borders to Chinese products.

Amid rising tensions and an upcoming visit by Chinese President Hu Jintao, deputy U.S. Trade Representative Karan Bhatia has been on a Southeast Asian tour hoping to solidify economic relations and resolve trade frictions.

While the administration has agreed that China must do more to open its markets, reform regulatory policies and abide by its WTO commitments -- particularly in areas such as intellectual property -- it has made the case that protectionist measures from either side of the Pacific will do little to benefit either trading partner.

"There are numerous voices calling for new policies and regulations to restrict market access by foreign firms, particularly in high technology and service sectors. There are growing calls to provide protections, and other forms of government support to domestic companies," said Bhatia, in remarks at the Shanghai Institute of Foreign Trade in China.

"This is a mistake. Not only will these efforts generate trade frictions, but they will also prevent the market from selecting optimal technologies, reducing the efficiency and raising the cost structure of the entire Chinese economy."

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