Monday, 26 October 2009

Asean Summit Turns to Widening Free Trade


From left, Prime Minister Lee Hsien Loong of Singapore, President Lee Myung-bak of South Korea, Prime Minister Manmohan Singh of India, Prime Minister Kevin Rudd of Australia, Prime Minister Abhisit Vejjajiva of Thailand, Premier Wen Jiabao of China and Prime Minister Yukio Hatoyama of Japan at the Association of Southeast Asian Nations summit in Cha-am, Thailand, on Sunday.


By THOMAS FULLER
Published: October 25, 2009
(Posted by CAAI News Media)

CHA-AM, THAILAND — After a year of uncertain economic prospects, a sense of cautious optimism appeared to have returned to Asia’s leaders here over the weekend, as they returned to the business of increasing trade within the region, lowering tariffs and discussing plans for a wider Asian free trade zone.

“Recovery has taken hold in Asia,” Kasit Piromya, the Thai foreign minister, said Saturday in a news conference summarizing the findings of a summit meeting of the 10 leaders of the Association of Southeast Asian Nations as well as China, Japan and South Korea.

The weekend meeting at this beachside town south of Bangkok also included meetings with leaders from Australia, India and New Zealand on Sunday. Leaders focused in large part on the nitty-gritty of expanding trade, especially one of the key impediments to regional commerce: the lack of good transportation in the less developed parts of the region.

The gathering appeared to serve as a coda to the economic crisis in Asia, during which many trade-dependent Asian economies suffered sharp contractions. Asia now appears to be bouncing back rapidly, especially when compared with the United States and Europe.

The Thai prime minister, Abhisit Vejjajiva, said a major concern raised by leaders Sunday was finding new avenues for economic growth that are not dependent on the markets of the United States and Europe. “The old growth model where, simply put, we have still to rely on consumption in the West for goods and services produced here, we feel will no longer serve us,” he said.

A statement issued after the final meetings Sunday said the leaders were “encouraged that the global economy had shown signs of recovery” but urged governments to remain vigilant.

Leaders discussed many other issues here, ranging from climate change and the formation of a human rights commission in Southeast Asia. But there were also reminders of the tensions accompanying Asia’s economic rise, especially jockeying by Japan and China for the top leadership role in the region.

The Japanese and Chinese governments have competing proposals to finance infrastructure projects in Southeast Asia, and the two nations appeared to disagree at the meeting about the future of an East Asian free trade zone. The Japanese delegation stressed the importance of the involvement of the United States, perhaps in part to appease concerns in Washington over possible shifts in Tokyo toward a more Asia-centered Japanese foreign policy.

“Japan places the U.S.-Japan alliance at the foundation of its diplomacy,” Yukio Hatoyama, the Japanese prime minister, told the leaders at the summit meeting, according to a Japanese government spokesman.

There are several proposals for a future East Asian free trade zone — the Japanese version is called the East Asian Community — but all remain vague and nascent concepts that leaders say are a long way from reality. The proposals are often compared to a European Union-style single market, but analysts say a pan-Asian economic bloc would be unlikely to have E.U.-style open borders, free movement of labor and common security policies.

China did not publicly offer its vision of an East Asian community, but a communiqué issued after a meeting of what is known as Asean plus three — the leaders of Asean, China, Japan and South Korea — said those 13 countries would form the “main vehicle towards the long-term goal of building an East Asian Community.” That would seem to exclude a role for the United States.

Asean leaders signed an agreement here for China to set up an Asean-China center in Beijing, financed by China. Asean leaders said they “commended” and supported China’s efforts to expand the use of its currency, the yuan, instead of the dollar in some regional trade transactions. And the leaders said they “welcomed” China’s initiatives to build roads in south-central Myanmar and western Cambodia and its financing of a bridge over the Mekong River between Laos and the Thai town of Chiang Khong, a project delayed in part by the economic crisis.

China told Asean leaders that they were eligible for a $15 billion Southeast Asian infrastructure loan program sponsored by the Chinese government.

During the summit meeting, Mr. Abhisit was asked whether Southeast Asian countries risked being caught between competing superpowers. “I see it as Asean providing balance,” he said.

The leaders said they were “well on track” for the Asean free-trade area by January. The agreement, long in the making, eliminates tariffs for 87 percent of imports within Asean countries.

Asean’s 10 member countries are Brunei, Cambodia, Laos, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

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