Two opposing views: from the Malaysian Prime Minister and from the EC Trade Commissioner who, almost alone this week, did not reach an agreement with ASEAN on the negotiation of a future ‘free trade’ agreement. The Malaysian press reported a speech by Prime Minister Badawi in which he referred obliquely to the “notorious”:http://www.inquit.com/article/288/free-trade-malaysian-style Malaysian protection of its automobile manufacturers in defiance of the ASEAN objective of zero tariffs on merchandise by 2003. Apparently referring, also, to a renewed ASEAN “determination”:http://www.inquit.com/article/338/asean-free-trade-adventures to accelerate the elimination of remaining tariff and non-tariff barriers to trade among members, he said: bq. Market liberalisation of the automotive sector will become a reality sooner than many of us realise, hence, it is imperative that our local manufacturers are fully prepared for the challenges ahead as opposed to being complacent or lulled by a false sense of security,” (“Bernama”:http://www.bernama.com/bernama/v3/news_business.php?id=90914) Pascal Lamy, the EC Trade Commissioner (for two months more), however, takes a more skeptical view of the prospect that the ASEAN agreements will lead to real market liberalization. Commenting on the absence of any EC-ASEAN agreement on future free trade bq. He … played down the importance of trade negotiations that have already started between Asean and both China and India, as well as similar talks Asean is scheduled to begin next year with Japan, South Korea, Australia, and New Zealand. Those countries, Mr Lamy said, had decided to launch “negotiations first and backload the more contentious regulatory barriers”. (“Financial Times”:http://www.ft.com/cms/s/40bd9e06-0023-11d9-ad31-00000e2511c8.html) Lamy added—with what I imagine to be a gallic sneer bq. “Most of what is on the table now is not very deep … There is a substantial difference between starting a free trade negotiation and finishing a free trade negotiation.” As it happens, I agree with him. But I would be failing my readers if I did not recall that the EC has “several other reasons(link to Thai newspaper story on shrimp exports to EC)”:http://www.nationmultimedia.com/page.news.php3?clid=6&id=120447&usrsess=1 to want to avoid getting into a comprehensive FTA with ASEAN.
Peter Gallagher is a leading Australian consultant on trade and public policy.[bio].
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