Asia-Pacific tariff cut to boost tade

Asia-Pacific tariff cut to boost tade

SINGAPORE (Reuter): Removing tariff barriers between Southeast Asia, Australia and New Zealand would boost intra-regional trade by at least US$16 billion a year, the author of a new study told Reuters yesterday.

"The absolute minimum that would be gained by the removal of tariffs on goods is a $16 billion increase in real consumption," said Andrew Stoeckel, executive director of the Center for International Economics in Canberra.

Stoeckel, author of what is thought to be the first cost- benefit analysis of a free trade zone between nations of ASEAN and Australia and New Zealand, was confident gains would be much greater.

"It could be double that, easily. These findings are based on very conservative assumptions," he said.

Stoeckel said it would double the value of trade between ASEAN (the Association of Southeast Asian Nations) and Australia and New Zealand, which stood at $16 billion in 1995.

Stoeckel was in Singapore to present his findings to a meeting of academics, industrialists and government officials from around the region.

Addressing the meeting earlier, Singapore Trade and Industry Minister Lee Yock Suan said a free trade agreement could be a long-term target for the region.

Lee said trade, transport links and developments in key industries such as food and tourism could be enhanced between the ASEAN Free Trade Area (AFTA) and the Closer Economic Relations (CER) group of Australia and New Zealand.

"An AFTA-CER free trade area could be a long-term target. Meanwhile AFTA-CER should push for the removal of non-tariff barriers and implement other initiatives to facilitate greater trade and investment flows," Lee said.

ASEAN, grouping Brunei, Myanmar, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand and Vietnam, offered a vast market for CER, with 400 million consumers and total gross domestic product of almost $500 billion, he added.

ASEAN is the second most important destination for Australian exports and its fourth-largest source of imports. Two-way trade between ASEAN and New Zealand is relatively small.

Supachai Panitchpakdi, chairman of Thailand's parliamentary economics committee and a long-time advocate of closer ASEAN-CER trade links, called for the relationship to be discussed at the ministerial level.

Former New Zealand trade minister Philip Burdon, now chairman of the Asia 2000 Foundation think-tank, told Reuters he backed adding a higher ministerial profile to the talks.

"It's very difficult to get public attention focused on something like this. A study showing $16 billion of benefits, though, is exactly what will grab public and government attention," he said.