Work begins on building ASEAN-China Free Trade
Work begins on building ASEAN-China Free Trade
SINGAPORE (AFP): A study has begun into the possibility of
establishing a mega ASEAN-China free trade zone, covering 1.7
billion people, Singapore Prime Minister Goh Chok Tong said.
Similar investigations were also under way with Japan and
South Korea which join China under an ASEAN plus three umbrella.
"If East Asia gets its politics right it will regain its
former dynamism," Goh told high-powered central bankers at a
dinner Sunday night opening the 2001 International Monetary
Conference.
"A study is under way on the feasibility of an ASEAN-China
free trade area. Also under study is how East Asia could
gradually evolve into an East Asia community," he said.
China was seen as offering both challenges and opportunities
for the Association of Southeast Asian Nations (ASEAN) as they
competed for trade and investment dollars.
"In the short to medium term, investments may be diverted from
Southeast Asia to China. But in the longer term, Southeast Asia
will benefit from greater economic exchanges with China," Goh
said.
"Southeast Asia will thrive alongside a prosperous China," he
told delegates including European Central Bank president Wim
Duisenberg and the Bank of England's Sir Edward George.
US Federal Reserve chairman Alan Greenspan was to address the
conference Monday by video-link from the United States.
The likelihood of a China-ASEAN free trade zone was first
raised last November by Chinese Premier Zhu Rongji during the
ASEAN plus three summit in Singapore.
It would cover a market area of 1.7 billion people, comprising
China's 1.2 billion population and the 500 million inhabitants of
ASEAN's 10 member countries.
"It might be advisable in the long run for China and ASEAN
countries to explore the establishment of a free trade
relationship between them," Zhu said.
"With China's membership in the WTO (World Trade Organisation)
in sight and the ASEAN free trade area by-and-large established
in 2002, there is a good opportunity for us to enhance our
cooperation."
ASEAN -- which groups Brunei, Cambodia, Indonesia, Laos,
Malaysia, Myanmar, the Philippines, Singapore, Thailand and
Vietnam -- was described by the London-based International
Institute for Strategic Studies as having seriously diminished
international relevance.
But closer economic co-operation with its plus-three partners
would inject new dynamism into the region.
At a conference in Cambodia last month, ASEAN economic
ministers said boosting trade ties with economies outside
Southeast Asia, as well as forging greater economic integration
within ASEAN itself, were crucial to reducing risks from global
developments such as the current US-led economic slowdown.
Within ASEAN, affluent Singapore is the prime advocate of free
trade pacts, having signed one with New Zealand and negotiating
others with Japan, the United States, Australia and Mexico.
But critics, particularly neighboring Malaysia, warn that
Singapore may be giving its free trade agreement partners a back
door into the region's own free trade zone.