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Tue, 08 Nov 1994

JP/NAFTA is not a trade bloc, Barry says

NAFTA is not a trade bloc, Barry says

JAKARTA (JP): The North American Free Trade Agreement (NAFTA) is not a trade bloc but rather a complement of the new General Agreement on Tariffs and Trade (GATT), American Ambassador to Indonesia Robert L. Barry said yesterday.

Speaking at the 11th general meeting and seminar of the Asian Bankers Association, Barry noted that the new GATT recognizes the formation of trade regional grouping as long as it does not create new barriers for the non-member countries.

"NAFTA is not a bloc, but the U.S. commitment for unilateral trade principles," Barry addressed the two-day meeting, attended by some 140 bankers from 14 Asian and 7 non-Asian countries.

Barry assured that the U.S. market will remain widely open for any GATT member country and it will not create new restrictions or trade barriers for non-NAFTA countries.

He also affirmed that his government's national treatment policy guarantees equal competition opportunities for every single company which enters the United States.

However, Governor of Bank Indonesia (the central bank) J. Soedradjad Djiwandono argued that regional groupings like NAFTA, the European Union (EA) and Asean Free Trade Area (AFTA) for countries in South East Asia are nothing else than trade blocs.

"Although the formation of these arrangements is still consistent with the GATT framework, it could cause some disadvantages for non-member countries, especially in the form of trade or investment diversion.

"As a consequence, this development could ignite protests from non-member countries," Governor Soedradjad said in commentary on the seminar's theme of Global Economic Transformation: Impact on Asian Financial Markets.

Mari Elka Pangestu who also spoke at yesterday's meeting, noted that AFTA differs with NAFTA and EU.

"AFTA is just a concrete acceleration of time frameworks for a 10-year transition period of GATT," Mari said, referring to the 10-year consideration given to all GATT's signatories to adjust their import tariffs and trade regulations in line with GATT principles. (rid)