Membership benefits of Asia trade body limited, Australia decides

Membership benefits of Asia trade body limited, Australia decides

SYDNEY (AFP): Australia and New Zealand would receive "positive but limited" benefits through a link with the embryonic Association of Southeast Asian nations Free Trade Area (AFTA), a government report said yesterday.

But the report, by the Department of Foreign Affairs and Trade, suggests the benefits would be greater if AFTA's scope was expanded to include commodities and services of interest to Australia.

It also concludes that AFTA could have negative trade and investment diversion effects on Australia, but argues these were likely to be small and would be neutralized by improved market access.

The 180-page report was launched here by Trade Minister Bob McMullan, who told journalists such a link would have advantages for both sides by creating enhanced trade opportunities.

He said it would boost the flow of foreign investment into the region and contribute positively to efforts to advance regional economic integration through the Asia Pacific Economic Cooperation (APEC) group.

But he said a link could not be achieved overnight and there would need to be extensive consultation.

Australia and New Zealand, partners in a trading arrangement known as CER, or Closer Economic Relations, were invited to consider membership for the CER of AFTA by Thailand's deputy prime minister, Supachai Panitchpakdi, in Melbourne last November.

AFTA aims to lower tariffs and other trade barriers on manufactured goods between ASEAN members -- Indonesia, Malaysia, Singapore, Thailand, Brunei and the Philippines.

It was relaunched last October after the ASEAN countries agreed in early 1992 to promote closer economic co-operation in a market of some 320 million people.

Australian Prime Minister Paul Keating said during his visit to Thailand last month that Canberra would be exploring the proposal.