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SINGAPORE: Association of Southeast Asian Nations (Asean) is set
this week to finalize a free trade agreement with India and hold
talks with Australia and New Zealand, signaling the importance of
regional pacts amid fading hopes for a global trading regime.
Asean economic ministers, meeting in Singapore
from Monday to Friday, are expected to put the final touches on an
Asean-India trade in goods pact agreed on by senior officials
earlier this month.
The deal covering billions of dollars is
expected to be signed during the Asean-India Summit in December,
officials have said.
Asean economic ministers will also hold talks
with their counterparts from Australia and New Zealand in an effort
to have a trade agreement ready for signing by December, a Southeast
Asian diplomatic source said.
Australian Foreign Minister Stephen Smith said
recently Canberra hoped to conclude the talks with the 10-member
Asean in Singapore, but the source said this might not be possible
because certain issues still have to be resolved.
But the source added the issues, one of them
concerning the rights of New Zealand’s indigenous peoples, were
minor. He was confident a deal will be reached in time for the Asean
Summit in Bangkok in December.
Asean has agreed to gradually tear down barriers
to trade in goods and services with China and South Korea and has
signed a wide-ranging economic partnership deal with Japan, which
also covers investments.
Forging the trade links with India and the two
Pacific nations will complete the bloc’s ties with all its key
Asia-Pacific trading partners, and could be a catalyst for a
region-wide free-trade zone, officials said.
Asean has a combined population of about 550
million people. It is a diverse group, which ranges from high-tech
Singapore to poverty-stricken Myanmar, and the world’s most
populous Muslim nation, Indonesia.
Asean is already a free-trade area with 90
percent of goods traded having tariffs between zero and five
percent.
This week the ministers are expected to discuss
the impact of high oil and food prices and the escalating global
economic slowdown on their economies.
But officials said the overriding focus would be
on efforts to achieve a single market and manufacturing base by 2015
to raise Asean’s profile in the face of competition from China and
India.
“To stay in the game, Asean must become a
strong integrated region,” Singapore Prime Minister Lee Hsien
Loong said.
He warned that, individually, Asean states are
“only tiny blips on the radar screens of investors.”
Indonesian Trade Minister Mari Pangestu said
Asean is likely to focus more on implementing and strengthening its
free-trade agreements (FTAs) than on planning for a massive
16-nation pact including its key regional trading partners and
covering about half of the global population.
But she agreed the FTAs could evolve in the
future.
“What we are seeing is that Asean is at the
focal point of all these trade agreements,” Pangestu told Agence
Free-Presse, noting that all the Asean deals with individual
countries are similar in structure.
“Eventually, when you consolidate the FTAs, it
is possible that you could end up with something like that [an
Asia-wide FTA].”
Regional FTAs could gain fresh momentum after
the latest attempt to end a seven-year deadlock in the so-called
Doha Round of global trade talks broke down in July because of a
dispute between India and the United States over agricultural
tariffs.
The Asian Development Bank (ADB), in a recent
study on Asian regionalism, said, “substantial gains could be
realised from consolidating the many FTAs into a single, region-wide
one” and from adopting practices to guide future regional and
sub-regional FTAs.
But while Asia is forging ahead with trade
linkages, the region has a major task in integrating its financial
markets, which are now larger, deeper and more sophisticated than
they were a decade ago, it said.
The region also has to make sure the benefits of
economic progress reach a larger number of people, especially the
poor, the Manila-based ADB said.
“Governments need to connect the poor to the
thriving regional economy by eliminating labor market barriers,
investing in workers’ capabilities, and building infrastructure to
connect disadvantaged regions with economic centers,” said the
agency, which aims to reduce poverty.
The region was on the right track, however, the
ADB said.
“We are witnessing the beginnings of a strong,
prosperous, outward-looking Asian economic community, regionally
integrated yet connected with global markets, and with
responsibility and influence to match its economic weight,” the
ADB said.
-- AFP
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