ASEAN in race with China for economic survival: Arroyo

ASEAN in race with China for economic survival: Arroyo

Agence France-Presse, Manila

Association of South East Asian Nations (ASEAN) must resist
the urge to stall closer regional integration, Philippines
President Gloria Arroyo said.

"For our diverse countries to survive and prosper, we need
closer integration. We need to think regionally and deepen
regional ties. Our national and economic interests lie in the
destiny of the region and our linkage with the rest of the
world," she wrote in the Asian Wall Street Journal's Tuesday
edition.

Arroyo said the ASEAN Free Trade Area (AFTA) which has slashed
import tariffs on almost all goods traded among the Philippines
and five of the nine other members "has some way to go before it
will become an effective means of strengthening the region's
competitive economic position."

The accord brought down tariff levels on intra-ASEAN trade
from this year to between zero and five percent.

"Underlying AFTA is the realization that small, protected
markets will no longer work in the face of the competitive
challenge confronting us," she said.

"China embodies that challenge most starkly in terms of its
power and its proximity. ASEAN views the rise of China and other
regional groups as both a competitive spur and a market
opportunity."

However, ASEAN boasts that its combined gross domestic product
is now equal to that of China with only half the latter's
population would "remain an empty boast if the integration of the
ASEAN economy lags behind China's integration with the global
economy."

"ASEAN nations must think hard about their national economies
and ASEAN's regional economic framework to determine how best to
position themselves to ensure their continued competitiveness and
to capitalize on the opportunities presented by a more open
China."

Arroyo said a proposed ASEAN-China free trade area would
expand ASEAN exports to the rapidly growing Chinese market as
well as "strengthen ASEAN as a platform for investors to sell to
China."

"It is projected that the deal would boost ASEAN's sales to
China by 48 percent," she added.