ASEAN ministers note progress in FTAs

ASEAN ministers note progress in FTAs

Jason Gutierrez, Agence France-Presse, Phnom Penh

Southeast Asian nations reported on Wednesday progress in free trade talks with key economic partners China and Japan, but enthusiasm was tempered by concerns over agricultural tariffs.

Economic ministers from the 10-member Association of Southeast Asian Nations (ASEAN) said they "expressed satisfaction" over talks with China to create the world's biggest free trade area by 2010.

"Negotiations for the ASEAN-China Free Trade Area (FTA) have been progressing well, especially on the modalities for trade in services, goods and investment," the ministers said in a joint statement after consultations with China and Japan in Phnom Penh.

There was also positive developments on an "early harvest" of mostly agricultural goods whose tariffs would be dismantled way ahead of the planned free trade zone, they said.

The ASEAN-China FTA is to create a market of 1.7 billion consumers with a combined gross domestic product of US$2.0 trillion and total trade of $1.23 trillion.

China had earlier said it was confident ASEAN tariffs would be brought down ahead of the FTA, with Beijing agreeing to cut tariffs on agricultural imports from the region to zero by 2004.

A similar FTA with Japan is also being negotiated by ASEAN and on Wednesday the ministers said they would endorse a "draft framework" for approval of ASEAN leaders next month in their summit in Bali, Indonesia.

They said the draft is comprehensive and calls for the immediate implementation and facilitation of trade in goods, services and investments between ASEAN and Japan.

The ministers said they would recommend leaders of ASEAN and Japan "proceed with the implementation" of the FTA "as soon as possible by 2012."

But while China said the FTA would boost two-way trade and make the region its top supplier of goods, the Philippines said it may opt out of the "early harvest" plan.

"The Philippines expressed its continuing concern over the elements of the early harvest program," Roxas told AFP.

"We acknowledge China's desire to be helpful to provide the early harvest as an inducement (for trade) for ASEAN countries. However, our current analysis is that it is not very helpful to the Philippines because of (certain) circumstances or particulars."

He noted the plan covered mostly agricultural goods, but the Philippines "does not have a very large central plain" or a river system similar to the Mekong Delta that helps in boosting agricultural production.

While most Philippine tariffs on Chinese goods have also been trimmed to between zero and five percent, China has only granted the same level of tariffs for less than 10 percent of goods from the Philippines, he said.

"If that is our starting point for the early years of the reduction program, they would always have a tariff regime higher than ours,"he said.

Chinese commerce minister Lu Fuyuan said concerns raised were understandable, but noted ASEAN was receptive to "accelerating the process" of the free-trade zone.

"If we go quickly, we can reach the agreement as soon possible. I noticed all the members liked this idea," Lu said.

The ASEAN ministers also met with their counterparts from India as well as South Korea to push for stronger economic cooperation.

Cambodian Secretary of State for Commerce Sok Siphana said his government was optimistic the ASEAN-China FTA could lead to benefits to smaller agricultural countries around the Mekong delta.

China, he said, has agreed to allow Cambodia, Laos, Vietnam and Myanmar to export 297 kinds of agricultural goods there duty free beginning January next year.