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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