U.S. support FTA deal with ASEAN

U.S. support FTA deal with ASEAN

Martin Abbugao, Agence France-Presse, Bandar Seri Begawan

U.S. business leaders on Wednesday offered support for a free trade agreement (FTA) with ASEAN to keep their country engaged with Southeast Asia as China's influence grows in the region.

During a dialogue with economic ministers from the Association of Southeast Asian Nations, they also urged the 10-member alliance to ensure member states did not delay their commitments to the ASEAN Free Trade Area.

ASEAN-U.S. Business Council president Ernest Bower said that strategically, a U.S.-ASEAN free trade deal "is a damn good bet".

The free-trade pact, first mooted in April, is the latest in a series of proposed free trade accords for ASEAN.

Leaders of ASEAN and China in 2000 agreed to work out an FTA covering nearly two billion people within 10 years, and talks are under way for a framework agreement to be finalized.

Japan earlier this year suggested a broader economic partnership with ASEAN, which could also include a free trade pact.

Singapore, a member of ASEAN, has signed free trade deals with New Zealand and Japan and may finalize one with the U.S. later this year.

Bower told reporters after the U.S. business leaders met the economic ministers that free trade talks were at an exploratory stage and he did not see an FTA emerging in the next two years.

A U.S.-ASEAN deal would have strategic importance, given China appears to have taken an increasing leadership role in the region which has traditionally focussed on Japan and the United States.

"Bear in mind that to us, ASEAN is a very significant market," he said, citing the region's combined population of over 500 million.

U.S. investments in ASEAN are about the same level as Japan and "we have five times as much invested in ASEAN currently as we do in China," he said.

"Strategically, we want to be engaged in helping to define the future environment for trade and investment in this region. And what we've seen happening is China has taken... a leadership role in terms of reforming its image in the region," he said.

Bower acknowledged the closure of the U.S. embassies in Indonesia and Malaysia because of security threats on the Sept.11 anniversary could dent investor sentiment towards Southeast Asia, where pockets of Muslim extremists operate.

But he said that he and a large group of business leaders from the U.S.-ASEAN Business Council would go ahead with a trip to three Indonesian cities next week.

On moves by some ASEAN countries to delay liberalization commitments under the ASEAN Free Trade Area (AFTA), Bower expressed concern over news reports that the Philippines was seeking protection of its petrochemicals industry.

He recalled that U.S. businessmen had criticized Malaysia for seeking to delay its commitments to cut tariffs in its auto sector by two years.

"We're more concerned (now) about these issues because part of our concerns expressed in previous meetings with the ASEAN economic ministers appears to be coming home to roost," he said.

"So this is what we said to the ministers today -- please do not go down this trap of undermining AFTA."

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