ASEAN rejects idea of expanding free trade area

Ulhas Joglekar ulhasj at
Thu Oct 12 10:45:37 MDT 2000

7 October 2000

ASEAN rejects idea of expanding free trade area
By Matthew Pennington
CHIANG MAI, Thailand: The Association of Southeast Asian Nations on Friday
rejected a proposal for establishing a dlrs 1 trillion free trade zone with
Australia and New Zealand.
The economic ministers of the 10-member ASEAN, holding an annual meeting,
instead agreed on a weaker proposal for a "closer economic partnership," a
joint press statement said.
"We can't be over-ambitious. It's not an easy thing to merge the two regions
together," Thai Deputy Prime Minister Supachai Panitchpakdi told a news
The press statement said the economic partnership between the two regions
would be defined further by senior officials who would make recommendations
in 2001.
It marks a second setback for ASEAN's ambitions to expand free trade after
Malaysia backtracked on a commitment to cut tariffs on its auto industry
under the ASEAN Free Trade Area, or AFTA.
ASEAN economic ministers met Friday with their counterparts from the Closer
Economic Relations pact, or Australia and New Zealand, to discuss a report
by a joint task force that recommended setting up a tariff-free zone "at the
earliest possible time."
The report said such a free trade area was "not only feasible but advisable"
as it would create a market of about 560 million people and bring a benefit
of dlrs 48 billion in additional gross domestic product by 2020.
Hiding his disappointment, Australian Trade Minister Mark Vaile described
the agreement to develop closer economic relations as a "significant step
New Zealand and Australia had been pushing for the move, but Malaysia,
Indonesia and Philippines had voiced reservations. The other members of
ASEAN are Thailand, Singapore, Brunei, Cambodia, Vietnam, Laos and Myanmar.
"At this point in time, the environment is just not right as far as Malaysia
is concerned. Even within AFTA we are still evolving," Malaysia's
International Trade and Industry Minister Rafidah Aziz said.
"we are so preoccupied. We want to make sure the AFTA works," she said. "We
are not about being political heroes. We are talking about something that
benefits the people."
On Thursday, Rafidah had said that there is already an AFTA-CER linkage and
to expand it to a formal organization needs political decisions.
Indonesian Minister of Industry and Trade Luhut Pandjaitan said Friday that
ASEAN has to be pragmatic and realistic.
"We are not ready yet from the Indonesian side to set up a free trade area
between AFTA and CER," he said.
It had been originally hoped to begin negotiations between ASEAN and CER
early next year and complete them within the year with a view to full
integration by 2010. (AP)
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