guardian.co.uk
Economic superpower rises in the east
Leaders plan world's largest free trade zone
John Aglionby in Jakarta
Wednesday October 8, 2003
The Guardian
Ten south-east Asian nations yesterday signed a landmark
accord to turn their vastly disparate states into an integrated,
tariff-free trading and economic community by 2020 that would
resemble the early embodiment of the European Union.
At a summit on the Indonesian resort island of Bali, the
Association of South-East Asian Nations also agreed to
complete deals with China, India and Japan by 2012. The pact
with Beijing would create by far the world's largest free trade
zone.
The Asean vision, dubbed the Bali Concord II, would eliminate
tariff and non-tariff barriers, standardise customs procedures,
gradually reduce capital controls and abolish visas in a region
that is home to 500 million people.
"We have just witnessed a watershed in the history of Asean,"
said the host, Indonesian president Megawati Sukarnoputri. "It
will make it possible for our children and their children to live in
enduring peace, stability and shared prosperity."
The leaders acknowledged that the diversity of the grouping's
economies has and will continue to hamper integration.
Asean's members range from the oil-rich autocratic monarchy
Brunei, through relatively democratic nations such as Indonesia,
Thailand, the Philippines, Malaysia, Singapore and Cambodia to
the military dictatorship of Burma and the communist states
Laos and Vietnam.
Eleven sectors, including electronics, tourism and air travel will
be on a fast-track integration by 2010 and some nations,
particularly Singapore and Thailand, are keen to liberalise
everything as quickly as possible.
"We will take to the dancefloor first to tango," said the
Singaporean prime minister, Goh Chok Tong, after meeting his
Thai counterpart Thaksin Shinawatra. "When other Asean
members join us, we will have a livelier party."
Analysts say the sense of urgency is driven by the very real fear
that the region will lose out even more to China. Asean attracts
only a fifth of the foreign investment going into China while data
from the US-Asean business council states that, of all the
American investment into east Asia, only 10% is going to
Asean, compared with 75% a decade ago.
The Chinese premier, Wen Jiabao, yesterday sought to play up
the benefits for Asia rather than the threats from a strong
Chinese economy.
"A more developed and a stronger China will bring about
development opportunities and tangible benefits to other Asian
countries," he said at the business conference being held
alongside the leaders' summit. "The China-Asean free trade area
is a win-win arrangement."
If implemented, it would create a free trade area with nearly two
billion people and total gross domestic product of almost $3
trillion (£1.9 trillion).
Tokyo appears to be equally concerned by China's progress.
The Japanese prime minister, Junichiro Koizumi, is hoping to
sign deals on the second day of the summit today to prevent
Japan being marginalised. "There is understandable and genuine
concern in the Japanese delegation about being left behind," one
Asean diplomat said.
The South Korean president, Roh Moo-hyun, appeared equally
keen to muscle into the show. "If we join forces, Korea and
Asean members and by extension, all of east Asia, will become
the engine of growth for the world economy, and the 21st
century will be the age of east Asia," he said.
Asean leaders decided to hold their summit in Bali to show their
determination to stand up to terrorism. This Sunday marks the
first anniversary of the Bali nightclub bombings, the world's most
deadly terrorist attack since the September 11 strike on
America.
The one issue the leaders chose to sidestep was Burma.
Human rights activists had expected open criticism of the
military junta for its treatment of the pro-democracy icon Aung
San Suu Kyi but the summit communique instead praised
Rangoon for its "constructive steps" towards establishing
democracy. |
