Southeast Asian plans huge free trade zone

Southeast Asian plans huge free trade zone

Cindy Sui, Agence France-Presse, Bandar Seri Begawan

Southeast Asian leaders and their major dialogue partners
China, Japan and South Korea agreed Monday to work towards closer
economic integration, including the prospect of a giant East
Asian free trade area.

The zone, covering a market of more than two billion people,
was "bold yet feasible", Brunei's Sultan Hassanal Bolkiah said at
the end of a regional summit here involving the Association of
Southeast Asian Nations (ASEAN) and its three dialogue partners.

An East Asia free trade bloc, which would swallow a China-
ASEAN zone already under consideration, was contained in a list
of proposals from the East Asia Vision Group, an initiative by
South Korean President Kim Dae-Jung set up in 1999.

The proposal involves liberalizing trade "well ahead of APEC's
goals", the sultan said.

The Asia-Pacific Economic Cooperation (APEC) forum has set a
2010 target to free up trade in developed nations and 2020 for
developing economies.

A study group will report back to the next ASEAN summit in
Cambodia in 2002 on the East Asia free trade zone, he said.

ASEAN secretary general Rudolfo Severino said no final
decision had been made on China's plan, first mooted at last
year's ASEAN summit, but the leaders of the 10-nation body found
it "interesting and worth pursuing".

The annual ASEAN plus three meeting has been held as an
adjunct to the Association of Southeast Asian Nations (ASEAN)
summit since 1997.

China, whose separate free trade zone with ASEAN will be
presented during an ASEAN-China summit Tuesday, gave tentative
support for South Korea's plans.

"I think so. We are supportive," a Chinese official told AFP.

A Chinese foreign ministry spokesman, Lu Wenxiang, on Sunday
said China was confident its own proposal would be adopted.

Chinese economist Shen Jiru said it would be more complicated
for South Korea or Japan to set up free trade zones with ASEAN,
because the two countries would face difficulties lifting
restrictions on agricultural imports and cut tariffs due to
pressure to protect domestic producers.

"China's tariffs on agricultural products are also high, but
China and ASEAN do not trade much in agricultural products," said
Shen, a political and economic analyst of the Chinese Academy of
Social Sciences in Beijing.

Lu told AFP the "ASEAN plus three" leaders also discussed
boosting regional cooperation in other areas, including in the
financial and information technology fields as well as by jointly
developing transportation and tourism along the Mekong River
area.

"We all agreed we should increase cooperation," Lu said.

In the area of finance, China hopes to implement the Chiang
Mai Initiative, which involves currency swap arrangements among
the region's countries to counter negative impacts from any
future Asian financial crisis.

Lu said Thailand and China have basically reached an agreement
to conduct the swaps. China is currently holding discussions with
other countries.

ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia,
Myanmar, the Philippines, Singapore, Thailand and Vietnam.