AFTA, Australia-NZ link needs time, says Malaysia

AFTA, Australia-NZ link needs time, says Malaysia

SINGAPORE (AFP): A formal link between a proposed free trade area in ASEAN and the Australia-New Zealand economic forum is premature, Malaysian Deputy Prime Minister Anwar Ibrahim says.

Anwar, reacting to the suggestion by New Zealand Prime Minister Jim Bolger, said Friday that the Association of Southeast Asian Nations (ASEAN) needed to first improve its planned free trade area before seeking ties with other groups.

"The ASEAN free trade area (AFTA) is still in the offing. It is a very slow program, not rendered competitive with the times," he told a news conference at the end of a two-day visit here.

Under the AFTA scheme, launched in January, the six ASEAN countries will gradually reduce tariffs on imports to no more than five percent over the next 10 to 15 years.

But regional diplomats say that the 15-year time frame for ASEAN to emerge as a full-blown free trade area has been superseded by the recent Uruguay Round accord which aims to liberalize global tariffs in 10 years.

"ASEAN countries must agree on a faster track (tariff cuts) before seeking synergies with other groupings," Anwar said.

ASEAN economic ministers who met in Malaysia last month agreed on the need to quicken tariff cuts but put off a final decision to later this year.

Sensible

Bolger, speaking in Kuala Lumpur Thursday, said a link between AFTA and Australia-New Zealand Closer Economic Relations (CER) forum would be "sensible and worthwhile."

He said that ASEAN should also consider an Australian proposal to merge AFTA and the CER.

Australia won approval from ASEAN, grouping Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand, early this month for a closer study of a tie-up between AFTA and CER.

Officials said an AFTA-CER free trade area would link ASEAN's US$350-billion economies with the similarly sized Australian and New Zealand economies and become a major trading force in the Pacific.

"We recognize that before new frontiers are explored, ASEAN will want to consider the issue fully," Bolger said.

Anwar said he discussed a Singapore suggestion that the North American Free Trade Area (NAFTA) be extended to include Asian countries at a meeting here Thursday with Singapore Prime Minister Goh Chok Tong.

"He passed on some documents on the subject and I will certainly bring it up with the (Malaysian) prime minister and my cabinet colleagues to see if the issue warrants serious attention on our part," he said.

Singapore Senior Minister Lee Kuan Yew told a business conference here on Thursday that NAFTA's extension to include Asian countries would prevent the Asia-Pacific from being split down the middle.

Lee said that until an Asia-Pacific community emerged, Asian countries ready to join NAFTA should be allowed to proceed.