S'pore trade pacts 'worrisome': Mahathir

S'pore trade pacts 'worrisome': Mahathir

KUALA LUMPUR (AFP): Malaysian Prime Minister Mahathir Mohamad on Monday described Singapore's attempts to negotiate separate free trade agreements as "worrisome."

Countries which secure such deals could gain a "backdoor entry" into the ASEAN Free Trade Area (AFTA), he told a press conference.

"This is a worrisome thing because you know, generally in the AFTA, we accept that anything that has a 40 percent local content, that must be regarded as national," Mahathir said.

"That means they can enter into the markets of other countries. It would be very easy for these other countries to bring in partly completed products and complete them in Singapore and regard that as Singapore products, which would have free access into the other countries.

"We have to watch this very carefully because this can be a backdoor entry into AFTA," Mahathir said.

Singapore and Australia last Friday ended a first round of talks on a free trade agreement and said they are committed to reach a deal this year.

The island republic also recently concluded a "Closer Economic Partnership" with New Zealand and is aggressively pursuing free trade deals with several countries including Japan, the United States, Canada, Mexico and the European Union.

It has drawn criticism from fellow members from the Association of Southeast Asian Nations (ASEAN).

Malaysia's International Trade Minister Rafidah Aziz, in an interview with an Australian magazine published last week, said her country would not stand for any attempt by Australia or New Zealand to use closer economic links to Singapore as a back door into AFTA.

AFTA aims to cut tariffs to between zero and five percent by 2003 for more developed members of the 10-nation grouping and a later date for poorer economies.

Investors have expressed concerns ASEAN is dragging its feet after Malaysia was allowed to delay the opening of its auto sector to full competition by two years to 2005.

Singapore's Prime Minister Goh Chok Tong, defending his republic's policy of separate deals, said recently that "those who can run faster should run faster" and "should not be restrained by those who don't want to run at all."

Globalization

Mahathir also called Monday for a kinder and gentler globalization and described unfettered capitalism as a "monster machine for misery and injustice."

Mahathir, opening a conference on the subject, also urged developing nations to reject a new round of world trade talks until "grave imbalances" are rectified.

The premier, a frequent critic of unregulated globalization, said he believes in the free market.

But "absolute capitalism inconsiderate of humanity and caring is a monster machine for misery and injustice, and absolute globalization unguided by rationality and sound judgment is perhaps the greatest danger to the world."

Mahathir called for a "kinder, gentler world order" of compassionate capitalism. He urged the developing world to strengthen solidarity and be pro-active in putting forward its own proposals.

"At the WTO (World Trade Organization) it is absolutely critical that we hold firmly to the firm position taken in Seattle that the present grave imbalances be rectified and that the implementation issues be resolved.

"We must not agree to a new round until these issues are satisfactorily settled and until we can all agree to the agenda for any new round," Mahathir said.

The premier said longstanding trade issues were still crucial.

"We must all fully examine the costs and the consequences of business cartelization and the escalation of mega business mergers and a lot more."

He called for a new globalization that is fair to poor nations, saying the current structure was driven by the "survival of the fittest," economic efficiency and profit-making.