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ASEAN Aims To Conclude Trade Talks By 2013

Association of Southeast Asian Nations considers deals crucial to surviving economic might of China and India.

MANILA, Philippines (AP) — Southeast Asian countries hope to conclude free-trade talks with six major trading partners, including China, Japan and Australia, by 2013 but would avoid any new negotiations amid the frenzy of the work ahead, a top official said Sunday.
 
The Association of Southeast Asian Nations considers the deals crucial to surviving the economic might of China and India. But the bloc's free-trade efforts have overwhelmed members, with some falling short on obligations under existing pacts, and sanctions being proposed.
 
ASEAN economic ministers and their Japanese counterparts struck a breakthrough Saturday with an agreement on major elements of a proposed free-trade deal, which could be signed as early as November, officials said.
 
A free-trade deal with South Korea can be completed next year, followed by Australia and New Zealand in 2009. Negotiations with China could end in 2010, and India in 2011, ASEAN Secretary-General Ong Keng Yong said.
 
''Essentially by 2013, all these free-trade agreements ... should be completed,'' Ong said at a news conference, adding that the plethora of accords would complement ASEAN's plan to transform the region into a booming European Union-style economic community by 2015.
 
With its resources and a battery of negotiators strained by the flurry of talks, ASEAN would delay entering into new ones but was studying if it could squeeze in talks with Turkey, Ong said.
 
The negotiations have given ASEAN ''a very heavy burden,'' Ong said. ''What we believe we should do is to complete what we have on our table as soon as possible.''
 
ASEAN's worry appears to be about more than just logistical limits.
 
In a confidential report to ASEAN's economic ministers, Ong recommended a moratorium in new free-trade talks to allow the bloc to assess their impact on ASEAN.
 
Free-trade accords being pursued by Asian economic powerhouses, led by China, could overshadow ASEAN and shift economic benefits from the bloc, Ong said in the report, a copy of which was seen by The Associated Press on Saturday.
 
There has also been concern over the ability of some members of ASEAN, once a bastion of protectionism, to rapidly shift to freer trade. Ong has said some members were falling short of an obligation to slash tariffs for some products this year under an ASEAN pact.
 
ASEAN should learn to comply with free-trade obligations on time — and remove perceptions that it ''is prone to 'agree fast, act slow,''' Ong said in his confidential report.
 
In a bid to ensure compliance with free-trade arrangements, Ong recommended that the ASEAN economic ministers ''institute compensatory measures or denial of benefits for delay in implementation.''
 
Indonesian Trade Minister Mari Pangestu told The AP that ASEAN would have to discuss possible sanctions for noncompliance with free-trade obligations, but that it needed first to strengthen its Jakarta-based secretariat to strengthen compliance monitoring.
 
ASEAN has also established a dispute-settlement system for possible trade conflicts, she said.
While ASEAN's economy grew at an impressive rate of 6 percent last year and is forecast by the Asian Development Bank to register 5.6 percent growth this year, Ong said the bloc faces a slew of challenges, including competition from China and India and volatile financial markets.
 
A blueprint for the proposed ASEAN Economic Community, a draft of which was seen by the AP, allows flexibility in the enforcement of free-trade obligations — provided it's ''pre-agreed and (would) not delay the overall progress and implementation of the AEC.''
 
Under the deal, for example, import duties for all agreed products should be slashed by ASEAN's six more affluent members — Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand — by 2010.
 
The rest of the membership, comprising Cambodia, Laos, Myanmar and Vietnam, should do so by 2015, with flexibility for the deadline to be extended up to 2018 for some of the four developing countries' sensitive products.
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