ASEAN-China pact more diplomacy than detail for now

ASEAN-China pact more diplomacy than detail for now

Patrick Chalmers, Kuala Lumpur, Reuters

A plan by China and Southeast Asian nations to unite a quarter
of the world's population in a free trade area is progressing at
a relaxed pace, buoying critics who say the idea is more
grandiose politics than practical.

A meeting last month of senior officials, the first in a
process meant to build a free trade zone between China and the
10-country Association of South East Asian Nations (ASEAN) within
a decade, touched only on the generalities of removing barriers
to trade exceeding $1 trillion.

While negotiators say they are only at the stage of discussing
parameters rather than details, detractors wonder at officials'
capacity to handle new talks at a time when China is buried by
work on its recent deal to join the World Trade Organization
(WTO).

Critics also question the value of any new pact as China faces
the challenge of liberalizations brought by WTO membership.

A Western diplomat in Kuala Lumpur said ASEAN officials
already had their work cut out with issues on an internal trade
zone -- the ASEAN Free Trade Area (AFTA) -- and a new round of
WTO talks.

"They are trying to go in a lot of directions at one time.
Look at how long it took China to go into the WTO.

"Even looking at Malaysia, which has a significant trade
negotiating body, they physically do not have the people," said
the diplomat, who asked not to be identified.

A bigger headache still could be whether ASEAN can agree on
what it wants from China, with members' record on AFTA not
offering promising precedents.

"They agreed to all sorts of things on motor vehicles and
agriculture then backed off. I can see a lot of people signing on
for a lot things that have no actual teeth to them," said the
diplomat.

ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia,
Myanmar, the Philippines, Singapore, Thailand, and Vietnam,
countries spanning the range of wealth and poverty.

A report prepared last year by officials from ASEAN and China
identified trade in oil and gas, food, natural-resource based
products, electronics, electrical goods and tourism as among the
sectors offering most opportunity for expansion.

"We believe that the removal of trade barriers between ASEAN
and China will lower costs, increase intra-regional trade and
increase economic efficiency," it said.

In 2000, ASEAN-China trade hit just $39.5 billion but promised
much more to come based on annual average growth rates of 20
percent throughout the 1990s.

ASEAN Secretary-General Rodolfo Severino defended the speed of
proceedings when questioned during a visit to Kuala Lumpur this
week from his Jakarta-based secretariat.

"We are not negotiating the details of anything. That will
take some time. We are identifying the parameters, the limits,
the coverage," he told Reuters.

But Severino, who said officials would report to November's
ASEAN summit in Cambodia, accepted negotiators may be stretched.

"That is a concern -- the pressures on the time -- but that's
true of trade officials everywhere," he said.

Vincent Lim, a consultant to Malaysia's Institute of
International Studies, said talk of details missed the point.

Overtures between ASEAN and its gigantic northern neighbor
were less to do with the nuts and bolts of trade and more to do
with diplomatic mood music.

"It's more a political engagement process, it's more talking,
getting to know each other, more cooperation on the macro
economic side," he said.

"What's important is to look beyond declarations," he said,
adding that ASEAN's founder members spent years talking before
getting anything done.

Lim said ASEAN states, while rightly concerned about China's
record in drawing foreign investment away from them, should not
forget that Beijing had plenty to play for too.

"If they look around north, east, west and south, I think
their southern flank will give them the best opportunity. It will
be the least hostile," Lim said of China's options.

"They think a prosperous ASEAN would be a benefit for China
because it is a center for resources for China's development."

He said the outcome of China's engagement with ASEAN, which
stole a march on stumbling regional rival Japan in seeking a tie-
up, was impossible to predict given experiences of the last 10
years.

"Before 1990, China was seen as a military threat and all
that. Ten or 12 years is a very short time in world history, yet
now people are talking about an FTA with China," he said.

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