AFTA-CER trade bloc can advance: Australia

AFTA-CER trade bloc can advance: Australia

CANBERRA (Dow Jones): Despite major hurdles, Australian Trade Minister Mark Vaile is confident a meeting later this week can advance plans to liberalize trade between Australia, New Zealand and the Association of South East Asian Nations, he said Wednesday.

He was commenting ahead of an economics ministerial meeting and after ASEAN officials Monday recommended ASEAN complete formal talks with Australia and New Zealand by the end of 2001.

ASEAN officials will formally present their report at the ministerial meeting, scheduled Oct. 4-7 at Chiang Mai, Thailand.

The 10 members of ASEAN are already working toward free trade for the group and have formed the ASEAN Free Trade Area. Members of ASEAN include Brunei, Myanmar, Cambodia, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand and Vietnam.

New Zealand and Australia are pushing for a free trade agreement and are tied through a similar pact known as Closer Economic Relations. An AFTA-CER free trade area would cover a market of about 560 million people.

Vaile noted the agreement among officials to pursue the notion of a regional free trade area in further talks. "Hopefully that will translate into a positive disposition by ministers on Friday in Chiang Mai," he told reporters.

"Certainly the ministers from Australia and New Zealand are enthusiastic about the prospects of moving forward with this agreement," he said.

The minister said the decision to advance was supported by an Australian study issued in July that found major economic gains for all countries were likely if the plan went ahead.

The study said an AFTA-CER free trade area would generate total gains of US$48.1 billion over the period 2000 to 2020.

Gains to Australia would be in the order of $19.1 billion, New Zealand would gain $3.4 billion and ASEAN nations $25.6 billion, it said. The study was prepared by Canberra-based Center for International Economics.

Vaile said a major challenge to establishing an AFTA-CER trade bloc would be each nation successfully answering the question "what's in it for us."

Any decision, he said, will be taken in each country's national interest.

"They're going to need to be assured that there is a benefit for all, which we believe there is," he said.

He warned against underestimating negative perceptions and concerns in the region about quarantine processes in Australia, which he defended as legitimate under existing World Trade Organization rules.

Australia and Malaysia also have suffered prickly relations at times over the past decade, but Vaile noted that Malaysian officials have taken part in the talks this week.

"It certainly gives us hope, I don't underestimate the concerns that have been raised from time to time by Malaysia and the Malaysian minister," he said.

Australia has managed with a number of countries and "particularly with Malaysia to strengthen the trade and investment growth...in spite of other issues," he said.

For Australia, Vaile said any AFTA-CER pact won't "undermine or diminish our commitment to achieving faster and deeper liberalization through the multilateral system of the WTO."

After the Chiang Mai meeting, he travels to Banff, Canada, for a meeting of the Cairns group of agricultural exporting nations, the first meeting of the group since the failure of the WTO ministerial meeting at Seattle late in 1999.

Cairns Group ministers will examine progress in WTO talks on agriculture since then, he said in a statement.

The Cairns Group is pushing for an end to trade-distorting domestic production and export subsidies, he said.

"Ministers will discuss how to take the negotiations forward in the period before a new comprehensive trade round is launched," Vaile said in a statement.

Cairns group members include Australia, South Africa, Indonesia, Brazil, Argentina, Canada, Malaysia, Thailand, Paraguay and Uruguay, among others.

The Banff meeting also will be attended by European Union Agricultural Commissioner Franz Fischler and Egypt's Minister for Economy and Foreign Trade Youssef Boutros-Ghalia.

Preceding the Cairns Group's Banff meeting will be a meeting of the Global Alliance for Sugar Trade Reform, a group pushing to liberalize the sugar trade. Member nations include Australia, Thailand, Brazil and major importing nations.

Cairns Group farm leaders also will meet in Banff ahead of the Cairns Group meeting as will Canadian Agri-Food Exporters, Vaile said.