ASEAN to finalize plan for world's largest trade zone<\/p>\n
Martin Abbugao, Agence France-Presse, Bandar Seri Begawan<\/p>\n
Southeast Asian economic ministers will meet here from
\nThursday to finalize a framework agreement with China on how to
\ncreate the world's biggest free trade area of nearly two billion
\npeople, officials said.<\/p>\n
They are expected to endorse the framework for signing by
\nleaders of the 10-member Association of Southeast Asian Nations
\n(ASEAN) and China during a summit in Cambodia in November.<\/p>\n
The ASEAN economic ministers are also expected to receive a
\nreport by an experts' group on a proposal for broader ASEAN-Japan
\nties as well as sign a declaration for closer economic relations
\nwith Australia and New Zealand.<\/p>\n
Japan proposed wideranging economic ties with ASEAN earlier
\nthis year, in what was seen as an attempt to counter China's
\nrising influence in the region.<\/p>\n
During their four-day meeting, the ASEAN ministers will also
\nhold discussions with business groups operating in the region,
\nand for the first time hold a dialogue with India, represented by
\nthe Minister of Commerce and Industry Murasoli Maran.<\/p>\n
They already hold annual dialogues with their counterparts
\nfrom China, Japan and South Korea, as well as Pacific neighbors
\nAustralia and New Zealand.<\/p>\n
But, the proposed ASEAN-China free trade agreement (FTA) \"will
\nbe one of the key agenda items\", a spokesman for the Singapore
\ntrade ministry said in a written reply to AFP.<\/p>\n
\"At their meeting in Brunei, ministers can be expected to give
\nguidance to progress the text, so that it may be ready in time
\nfor signing by the leaders at the ASEAN-China Summit in
\nNovember.\"<\/p>\n
While the FTA itself may sound straightforward, the
\npreparatory talks \"had been bloody,\" one official said of the
\nhardnosed bargaining during the five rounds of negotiations on a
\ndraft text of the framework agreement.<\/p>\n
When the leaders of ASEAN and China agreed in 2000 to work out
\nan FTA within 10 years, they left it to senior officials to
\nhammer out the details.<\/p>\n
Such a free trade zone would cover China's 1.2 billion people
\nand 500 million consumers in ASEAN. The economic region will also
\nhave a combined gross domestic product of US$2 trillion, with
\ntotal trade projected at $1.23 trillion.<\/p>\n
But preparatory talks have been marked by disputes, especially
\nover the so-called \"early harvest\" principle, officials familiar
\nwith the talks said.<\/p>\n
This calls for China to cut import tariffs on certain
\nSoutheast Asian products before the implementation of the FTA.<\/p>\n
ASEAN has already slashed tariffs on most products traded
\nwithin the region to a maximum five percent under the ASEAN Free
\nTrade Area, or AFTA, from this year.<\/p>\n
Any liberalization by China is viewed by ASEAN as a goodwill
\ngesture, but Beijing wants \"early harvest\" as part of the formal
\nagreement, the officials said.<\/p>\n
There have also been differences on the tariff rates and on
\nthe sectors to be liberalized.<\/p>\n
One proposal is for products with 15 percent tariffs to have
\nthe rates cut to 10 percent by July 2003, five percent by 2004
\nand zero by 2005.<\/p>\n
One ASEAN trade official said the regional bloc disagreed with
\na proposal by China to focus early tariff liberalization mostly
\non farm products and processed agricultural items as it would
\nfavor their giant neighbor.<\/p>\n
ASEAN wants coverage for non-farm products which form the bulk
\nof its exports.<\/p>\n
Officials also said there are varying interpretations on the
\nstarting point for the 10-year period when the FTA is to be
\ncompleted.<\/p>\n
The framework agreement now being prepared will define the
\nparameters for negotiations such as the product coverage, the
\ntiming and tariff cut rates.<\/p>\n
A senior ASEAN diplomat familiar with the preparatory talks
\nsaid the ministers may issue a declaration in Brunei on the
\nlaunching of free trade negotiations with China.<\/p>\n
ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia,
\nMyanmar, the Philippines, Singapore, Thailand and Vietnam.<\/p>",
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