NZ urges expansion of ASEAN free trade area

NZ urges expansion of ASEAN free trade area

KUALA LUMPUR (AFP): A further expansion of the planned ASEAN Free Trade Agreement (AFTA) to cover New Zealand and Australia would benefit both sides, New Zealand Trade Negotiations Minister Jim Sutton said Monday.

A task force set up last year between the 10 ASEAN nations and the Closer Economic Relations (CER) pact which links Australia and New Zealand found "considerable merit" in the proposal, Sutton said.

"The Australian Center for International Economics has estimated that an AFTA/CER (free trade arrangement) would be a win-win proposition for both groupings of countries," he told a business lunch here.

"The overall gains from forming such a free trade area could be in the region of US$50 billion over the period 2000-2020... We hope it will come to fruition in the not too far distant future."

AFTA is due to come into force in 2003 in most sectors.

Sutton, who arrived late Sunday for a regional tour that will also take him to Indonesia and Singapore, earlier met Malaysian International Trade and Industry Minister Rafidah Aziz.

The national news agency Bernama quoted Rafidah as saying that ASEAN and CER should first focus on removing non-trade barriers between them.

"We are more concerned on the removal of non-trade barriers which hinder the smooth flow of goods and services between the two groupings such as standards, recognition of standards for goods and services and sanitary (processes)," she said.

Sutton told reporters Rafidah's view would be discussed at the ASEAN economic ministers' meeting in Chiang Mai next month.

In his speech, Sutton called for the "rule of international law" to be strengthened to remove technical barriers in world trade.

He said New Zealand's agriculture and resource-based industries suffered from "huge distorting interventions" by its trading partners.

"Last year, developed countries gave away $361 billion to their farmers. That's enough money to pay for every one of the 56 million cows in the OECD to fly around the world first class with $1,500 spending money thrown in," he said.

New Zealand's exports face tariffs of well over 100 percent in many markets but 95 percent by value of its imports enter duty- free, he said.

Although it was difficult to get large developed economies to agree to dismantle trade barriers, Sutton said developing nations must "keep the maximum pressure on."