Asian powers reach tentative agreement on plans for economic

Asian powers reach tentative agreement on plans for economic community

Vijay Joshi Associated Press/Kuala Lumpur

Diplomats preparing for the inaugural East Asia Summit reached a tenuous agreement on Thursday on a grand plan to eventually create a cohesive economic community across the disparate region.

At issue was how deeply integrated the community should be and how fast it should be created, and whether it should be driven by the summit's sponsor, the 10-nation Association of Southeast Asian Nations.

India's insistence on firm commitments to integrate in a pan- Asian economic community had for months held up finalization of a declaration diplomats were preparing for leaders at Wednesday's 16-nation summit.

But hectic negotiations late on Thursday resolved the problems at the senior officials' level, both sides said. But the declaration remains open for debate and alterations by foreign ministers who will meet before the summit, and even by leaders, said diplomats.

"We're very happy everyone agreed to the Kuala Lumpur declaration on East Asia summit including India. India is in the process, so there is no more problem," Malaysian Foreign Minister Syed Hamid Albar told reporters.

An Indian diplomat, speaking on condition of anonymity because he was not authorized to speak to the media, confirmed Syed Hamid's comments. "Everything has been sorted out. Just some finishing touches have to be given here and there," he said.

He said India also has no objection to ASEAN being "in the driving seat" to lead the initiative.

The East Asia Summit comprises ASEAN, Australia, China, India, Japan, New Zealand and South Korea.

The 16 countries account for about three billion people, or half the world's population, and a fifth of global trade. Any partnership to form a trading community would rival Europe or North America.

But large questions remain about how European-style integration can take shape in a region ranging from communist Laos -- one of the world's poorest economies -- to democratic Japan -- the world's second-largest.

The Indian diplomat said that India had asked for "deepening economic integration and community building" in East Asia, in other words a free trade area in a European style community.

"We had articulated our views and both find reflection in the document," he said.

Thursday's agreement is only a first step toward a regional economic community, which could be years away. The East Asia Summit must create a mechanism for the vision to take shape. How that is done is something for the leaders to decide at the summit, diplomats said.

So far, the region's free trade agreements generally are between a single large country and a small country or a bloc of small ones -- without any comprehensive accords among heavyweights such as China, Japan and South Korea and India.

China's enormous size and growing economy have given it increasing influence with ASEAN and it is reluctant to share top billing with India, which is pushing for faster integration in part to better export its expertise in software development.

China's traditional tensions with Japan also represent a hurdle, said Takashi Terada, an international relations expert at the National University of Singapore.