ASEAN, China may miss deadline in free trade talks

ASEAN, China may miss deadline in free trade talks

Agence France-Presse, Singapore

China and Southeast Asian nations are likely to miss a June 30
deadline to conclude talks on which goods will be liberalized
under an ambitious free trade agreement, ASEAN chief Ong Keng
Yeong said here on Wednesday.

Ong, the secretary general of the Association of Southeast
Asian Nations (ASEAN), said the absence of a common position by
Southeast Asian countries on which products should be included in
a basket of goods to be liberalized could delay an agreement on
the chapter covering trade in goods.

The impasse highlights the difficulties in the planned ASEAN-
China accord, which aims to create the world's biggest free trade
zone of nearly two billion people with a combined gross domestic
product of US$2 trillion by 2010.

Liberalizing trade in goods comprises the first chapter in the
negotiation process leading to an overall agreement.

The other phases cover trade in services, facilitating
investment flows and establishing a dispute settlement mechanism.

"The first chapter must be concluded by the 30th of June and I
must confess that as of two days ago, our negotiators are not
very optimistic," Ong told a forum on the prospects of ASEAN-
China relations organized by the Institute of Southeast Asian
Studies here.

"China is accommodating and is prepared to go a long way but
some of our ASEAN countries still have a problem how to see
certain categorization of products and goods so we might not be
able to meet the deadline.

"We are trying to get it out there as much as we can. The 30th
of June is the first deadline and in China we have been told by
Chinese officials that they are anxious that we should not slip
(through) the first deadline."

Ong said, however, he remained confident the 2010 timeframe
for an overall pact could be met and urged ASEAN to take
advantage of the "rosy, positive and wonderful" ties with China
to push cooperation forward.

In November 2001, ASEAN and China agreed to start talks for a
free trade pact and launched a blueprint for the discussions the
following year.

It was agreed that an agreement between China and ASEAN's six
more developed members -- Brunei, Indonesia, Malaysia, the
Philippines, Singapore and Thailand -- be concluded by 2010.

By 2015, ASEAN's less developed members, namely Cambodia,
Laos, Myanmar and Vietnam, would become part of the pact.

Speaking to reporters after his speech, Ong said some of the
original six ASEAN countries wanted a longer timeframe to bring
down tariffs on sensitive farm products, similar to concessions
given by the poorer ASEAN members.

He did not mention any country but ASEAN sources said these
were Indonesia and the Philippines.

"China is ready because it has one common position. We (in
ASEAN) cannot offer one voice," Ong said.

"If you look at it, it's a long way to go but my negotiators
said we have to be optimistic.

"China is a bit concerned that a lot of the timetable will
fall back," he said, adding that the just finished and upcoming
elections in some Southeast Asian countries such as Indonesia and
the Philippines contributed to the delay.

Ong said one possible compromise would be to conclude an
agreement that would exclude the contentious products but this
would only hurt the proposed agreement's objective of freeing up
trade.