ASEAN may press APEC on Hanoi entry, free trade
ASEAN may press APEC on Hanoi entry, free trade
By Ajoy Sen
SINGAPORE (Reuter): ASEAN countries are likely to press the Asia-Pacific Economic Cooperation (APEC) group to admit Vietnam, liberalize trade and improve infrastructure in southeast Asia at the APEC summit this month, economists say.
"ASEAN (Association of Southeast Asian Nations) is expected to back Vietnam's case to become a member of (APEC) now that it is part of ASEAN," said Paul Schymyck, Canadian Imperial Bank of Commerce chief economist, Asia-Pacific.
ASEAN groups Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand, and, since last July, Vietnam.
There is a freeze on new members at least until next year, and APEC nations are divided over how the 18-member group should expand. Despite the freeze, the expansion topic is expected to come up at the summit in Osaka in Japan this month.
Other nations which have applied for membership include Russia, Panama and Colombia.
Another key goal for ASEAN would be further progress in opening trade between members, said Mukul Asher, associate professor of economics and public policy at the National University of Singapore (NUS).
"This is because of the ASEAN strategy of depending heavily on foreign markets, technology and manpower", he said.
APEC leaders agreed in principle at last year's summit at Bogor in Indonesia to aim for overall free trade and investment in the region by 2020, with developed economies aiming for free trade by 2010.
The blueprint, called an action agenda, for implementing the Bogor commitments will be debated in Osaka.
Reza Siregar, economist at the Institute of Southeast Asian Studies (ISAS), said ASEAN was likely to highlight the need to improve weak infrastructure in the region.
Asher said that as the two biggest economic powers in APEC, the United States and Japan, "have sharply different views on free trade in agriculture and services, this gives ASEAN potential leverage to play an intermediary role".
Japan, China, South Korea and Taiwan want agriculture excluded from the target of completely free trade within APEC by 2020.
Exporters like the United States and Australia oppose any such exemption and have said they will campaign at the summit for a free trade blueprint which includes agriculture.
Singapore Trade and Industry Minister Yeo Cheow Tong told the Australian Broadcasting Corporation in an interview last week that "one possible compromise would be to have agreement that, while we may not address the agriculture issue straightaway, we have a commitment to address it, say, next year or the year after, with the final agreement that, by the year 2010 or 2020, agriculture would be fully addressed".
ASEAN is the fastest-growing region within APEC with an average eight percent annual GDP growth, a population close to 400 million and total GDP of US$600 billion, Schymyck said.
Given the economic importance of ASEAN as a group, APEC will find it hard to ignore ASEAN's view, he said.
APEC groups Australia, Canada, Chile, China, Hong Kong, Japan, South Korea, Mexico, New Zealand, Papua New Guinea, Taiwan, the United States and ASEAN members save Vietnam.
APEC member economies account for more than 40 percent of the world's gross domestic product.
The only ASEAN member skeptical about APEC's achievements has been Malaysia, which has floated the idea of forming an East Asia Economic Caucus of east Asian countries only.
Malaysia fears APEC is becoming too institutionalized and too much under the sway of its more developed members.
Malaysia has also been ASEAN's odd man out when it comes to accelerating the push for completely free trade.
However, economists say there is little doubt ASEAN has been a prime beneficiary of trade liberalization that has already taken place.
Sanjoy Chowdhury, Merrill Lynch chief economist for the Asia- Pacific, said intra-ASEAN trade in 1994 was worth US$56.2 billion, up 33 percent from 1993.