East Asia’s expanding global role

John Edwards(brief bio of JE)”:http://www.hsbc.com.au/information/executives/ cam­paigns for his view that Aus­tralia will miss out on growth oppor­tu­ni­ties if it does not win an invi­ta­tion to join the grow­ing rounds of ‘free trade agree­ments’ being nego­ti­at­ed in East Asia. I agree. From JKE’s piece in the “Finan­cial Times”:http://search.ft.com/search/article.html?id=040106001008 bq. The cre­ation of an east Asian trade bloc dis­ad­van­tages the US and Europe com­pared with a glob­al reduc­tion in bar­ri­ers, but also presents oppor­tu­ni­ties. Because it is dri­ven by strate­gic com­pe­ti­tion between Chi­na and Japan for region­al dom­i­nance, the reduc­tion in trade bar­ri­ers may be big­ger than would occur for trade rea­sons alone. It may pro­ceed far­ther and faster than lib­er­al­i­sa­tion with­in the now-stalled Doha Round of glob­al trade nego­ti­a­tions, and it may include agri­cul­ture. Here’s his contribution—along sim­i­lar lines—to the “Syd­ney Morn­ing Herald”:http://www.onlineopinion.com.au/view.asp?article=1074. An inter­est­ing fac­toid from the FT arti­cle: Edwards reminds us that the East Asian economies are trav­el­ling a route already tak­en by Japan in the 1970s and 1980s. bq. Offi­cial pur­chas­es of US dol­lar assets keep the east Asian coun­tries’ exchange rates low­er and the US dol­lar and cur­rent account deficit high­er than they would oth­er­wise be, at the same time as they add to east Asia’s already vast reserves. In the past five years, the for­eign exchange reserves of east Asia includ­ing Japan have tre­bled to a total of more than $1,500bn (”840bn), about two-thirds of the world’s offi­cial for­eign exchange reserves. Read­ers inter­est­ed in cur­rent busi­ness and offi­cial efforts to devel­op a free trade agree­ment between Aus­tralia and Chi­na might like to review the report of the “first meeting(link to Chi­na Forum)”:http://www.petergallagher.com.au/chinaforum/Dec03/ of the Busi­ness Forum on Eco­nom­ic Rela­tions with Chi­na (‘Chi­na Forum’ in the menu at the top of this page).

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