Saturday, August 25, 2007

Japan and ASEAN Agree on Free-Trade Pact

VOA reports that economic ministers from the Association of Southeast Asian Nations and Japan have put the final touches on a free-trade deal, one of the largest in Asia. The officials also have agreed on a blueprint that would create a seamless regional economy by 2015.

Under the deal reached Saturday, Japan will lift import tariffs on 90 percent of goods from the 10 members of the Association of Southeast Asian Nations (ASEAN). That percentage will rise over the next decade to 93 percent.

In return, ASEAN's wealthier six nations will cut tariffs on 90 percent of Japanese goods. The four smaller, impoverished members--Burma, Cambodia, Laos and Vietnam--will make cuts later and more slowly.

Trade ministers gathered in Manila for a three-day meeting say the deal will sharply increase trade between ASEAN and Japan, which already tops 160 billion dollars.

While ASEAN is making progress on trade deals with Japan, China and other countries, it is also making progress in expanding internal trade. On Friday, the ASEAN ministers approved a blueprint for creating a free-trade zone by 2015.

The ASEAN Economic Community, or AEC, hopes to form an integrated group like the European Union, which can stand up to trade giants such as China and India.

But some experts say the blueprint may not be enough to lure investors to the region. Key components such as infrastructure and product standards will have to be addressed more rigorously.

Discussion over trade in the agriculture sector has been sidelined due to a stalemate over farm subsidies and trade barriers.

ASEAN is made up of 10 countries--Brunei, Burma, Cambodia, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand and Vietnam--with a combined gross domestic product of over a trillion dollars.

The group has been hammering out trade deals with six countries, including Japan and China, which are supposed to be finalized this year.

The guidelines for the ASEAN Economic Community are expected to be signed during the group's summit in Singapore this November.