Regional trade

A year ago at their last summit, ASEAN leaders spoke of creating a large East Asian free trade area that would also encompass South Korea, Japan and China.

An expert group that looked at the practicalities of creating such a free trade area has now come back with ways in which it can be created in the context of a larger East Asian Community.

If ever there was a time to seriously look at lowering trade barriers in East Asia, it is now. The United States economy, which has been the motor driving prosperity in the ASEAN region, has slowed down.

The potential of such a trading bloc, which would stretch from China all the way to Indonesia, is not difficult to imagine. It will encompass a third of the world's population and would include the world's fastest growing economy, China.

In earlier years, there had been a reluctance in the region to consider such an extended trade bloc. Countries like Singapore feared that such a move might decouple the U.S. from the economies of Southeast Asia. Other ASEAN members feared that Japan would dominate the trade bloc.

These worries have largely been overtaken by events, namely the downturn in the U.S. economy. The long slowdown in Japan makes it less of a concern than before.

The real threat to ASEAN exports will come from China once it joins the World Trade Organization. One way out is an East Asian free trade area that will open the Chinese market to ASEAN goods and vice versa. Hopefully, regional leaders meeting in Brunei will take this idea a step further.

-- South China Morning Post, Hong Kong