I. Introduction On 4 May 2007, at a meeting held in Brunei Darussalam, ASEAN and the EU agreed to launch negotiations for a Free Trade Area (FTA) (ASEAN Economic Ministers and the European Union Trade Commissioner 2007). If the negotiations are successful, the FTA agreement will replace the 1980 ASEAN-EC Cooperation Agreement, revision of which had foundered in the 1990s on issues pertaining to human rights. The negotiations themselves will require a change in attitude on the part of ASEAN. For the first time, ASEAN will find itself in a situation where it will have to offer tangible concessions, such as tariff reductions, to the EU in return for access to the EU market. ASEAN is not the first group of developing countries to engage in FTA negotiations with the EU. Regional sub-groups of the African, Caribbean and Pacific (ACP) countries negotiated Economic Partnership Agreements with the EU between 2002 and 2007. However, the ACP states' negotiating experience may not be all that instructive for ASEAN, as most ACP countries are least developed countries. For most of them, the EU and its members are the most important sources of official development assistance (ODA) and their main trade partners. They are thus vulnerable to economic and political pressure from the EU. In contrast, only four of ASEAN's ten members are least developed countries. For the other six, the EU is not the most important source of ODA (if at all), although the EU is one of the main trading partners for most of them. This paper argues that ASEAN would do well to learn from the experience of the failed EU-Mercosur negotiations for an Interregional Association Agreement. These were formally launched in November 1999, although gradual and reciprocal liberalization of trade between the two regions had been declared as an objective of the two organizations as early as the 1995 EU-Mercosur Interregional Framework Cooperation Agreement (Klom 2003, p. 361). The negotiations were suspended in October 2004 as a result of disagreements over the free trade provisions of the proposed Association Agreement. Mercosur, comprising Argentina, Brazil, Paraguay, Uruguay and Venezuela, is another group of developing countries that is a priority for EU FTA negotiations. It might be objected that Mercosur's experience of dealing with the EU is not necessarily useful for ASEAN. As former colonies of Iberian countries and as more or less functioning democracies, they share a heritage with the EU that could conceivably facilitate negotiations with the latter. Moreover, most Mercosur members export agricultural commodities to the EU, whereas the ASEAN countries have been successful in diversifying their exports to the EU away from agricultural products to manufactured goods. That said, several circumstances justify the effort to understand Mercosur's experience with the EU. First of all, the reason for the EU's interest in Mercosur and ASEAN is identical: both constitute sizeable markets for the EU (European Commission SEC (2006) 1230). The ASEAN region has a population of about 560 million, a combined GDP of almost US$1,100 billion, and a total trade of about US$1,400 billion (ASEAN Secretariat, n.d.). The total population of the five Mercosur countries is approximately 234.5 million, with a combined GDP of over US$900 billion, and total trade of about US$260 billion (Inter-American Development Bank, n.d.). Second, in both cases, one of the EU's motivations for pursuing FTA negotiations is defensive. In Mercosur, the EU feared that the U.S.-sponsored project for a Free Trade Area of the Americas (FTAA) might adversely affect its market share in Mercosur and in Latin America (Chaire Mercosur de Sciences Po 2005, p. 18). In Southeast Asia, the threat to EU interests has materialized in the form of bilateral FTAs of individual ASEAN members with Japan and/or the United States. Negotiations with the EU will undoubtedly pose a challenge of a different nature to ASEAN. …