ASEAN free trade adventures

The ASEAN Economic Ministers meeting this weekend in Jakarta has produced a rash of new proposals for ‘free trade agreements’ with Japan (by 2012), Korea and (probably) with Australia and New Zealand. Parts of the proposed “agreement with China”:http://www.inquit.com/article/320/china-fta-how-they-do-it-in-the-philippines were also approved by the Ministers. But, as is usually the case with ASEAN, there are questions over what will really emerge from this diplomatic mis en scène The Economic Ministers also promised to pursue deeper liberalization among the 10 ASEAN countries: bq. “… Ministers agreed to liberalize trade in 10 key sectors as part of a plan to forge a European Union-like economic community by 2020. The specific sectors are expected to be approved at the Laos summit, economic ministers said” (“Forbes”:http://www.forbes.com/home_asia/feeds/ap/2004/09/04/ap1530822.html) Of course, merchandise trade among the original ASEAN six was supposed to be free last year. The record suggests this announcement that the 10 ASEAN members now intend to remove remaining tariff and non-tariff barriers in 10 merchandise sectors such as electronics and textiles (and, possibly, in aviation) cannot be taken at face value.  Indeed, the host of the Economic Ministers’ meeting, Indonesian President Megawati let the cat out of the bag, according to this “Reuters’ report”:http://www.cnn.com/2004/BUSINESS/09/04/asean.meeting.reut/index.html bq. However, enthusiasm about moving fast to establish FTAs varies within ASEAN. Not all members feel ready to compete on level playing fields in manufacturing or agriculture. Megawati warned against too high expectations and comparing ASEAN with the EU or North American Free Trade Area. “Their experience also demonstrates that, even up to the present, not all their problems have been resolved,” she said. h4. Update The Economic Ministers did, as expected, agree with the Australian and NZ Trade Ministers to propose a regional free trade link between ASEAN and—it appears—the Australia-NZ CER (‘Closer Economic Relations&#8217)region. Heads of Government are expected to give the proposal a tick at their summit next November.

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