ASEAN aims to double trade with Australia, NZ in 10 years
ASEAN aims to double trade with Australia, NZ in 10 years
Agence France-Presse, Kuala Lumpur
Southeast Asian nations moved Monday to deepen trade ties with Australia and New Zealand with the launch of a business council aimed at doubling trade over the next decade.
Australia and New Zealand, jointly known as the Close Economic Relations (CER), have long sought to boost ties with the Association of Southeast Asian Nations (ASEAN) to tap advantages of the ASEAN Free Trade Area (AFTA).
The AFTA-CER Business Council was a step towards cutting costs and "removing undue constraints" in doing business in the two areas, Malaysian Trade Minister Rafidah Aziz said when launching the council.
She said trade between the two regions was still small. In 2000, trade with Australia hit US$16.3 billion and with New Zealand $2.1 billion, or three percent and 0.3 percent of ASEAN's global trade respectively.
Rafidah said she hoped the council would be more than "just a flash in the pan" and urged them to work towards having a wider outreach to forge competitive linkages among their businessmen.
Delegates said the council would flesh out details of two Australian proposals to double trade between both regions over the next 10 years and reducing transaction costs in trade administration.
"The major reason for (the proposal) is that we believe by the sheer size of ASEAN and CER, we can do much more trade between ourselves," Australian delegate Peter Hanenberger told AFP.
"The trade we are doing is not bad, but by the world's standards it's tiny. And because initially when you are tiny, you must look for a paradigm shift."
Hanenberger said the proposal to cut trade costs was important as red-tape and bureaucracy were "blown out of proportion" in most countries.
He was optimistic that the council could come up with recommendations to be included in a declaration to boost AFTA-CER ties to be signed by ASEAN economic ministers at their annual meeting in Brunei in September.
Under AFTA launched in 1993, ASEAN's six senior members -- Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand -- have dropped tariffs on trade with one another to below five percent.
The six nations have until 2010 to remove all tariffs while newer members Cambodia, Myannmar, Laos and Vietnam have until 2015.
ASEAN economic ministers at their weekend retreat in Malaysia launched a fresh bid to become a powerful trading bloc by adopting a new policy to accelerate the AFTA timetable to cope with competition from China.
The ministers said a so-called "10 minus X" principle would be adopted in areas such as open-sky policy, telecommunications, financial services and equity investment.
Under the formula, member countries that are ready to open up their markets can move forward without having to wait for rest -- a departure from the normal procedure of moving together.
The move to hasten liberalization comes as the region battles to regain its investment charm amid rising competition for funds from China and other parts of the world.
Last year, much of the foreign direct investment in Asia went to China. A low cost base is seeing it displace Southeast Asia as the continent's preferred manufacturing hub, economists say.
A World Bank report in March said China attracted US$44 billion of Foreign Direct Investment last year, up 16 percent from 2000. Thailand's share fell 32 percent.
The ministers earlier met top executives from U.S. consulting firm McKinsey & Co. The firm is doing a nine-month study for ASEAN on how the region can boost its competitiveness. At the same time, ASEAN is also conducting its own study comparing its own trade and investment policies with those of China.