Regional trade

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