[asia-apec 1845] ASEAN ft

[Aaron James]

Reuters

Business Group Urges ASEAN Free Trade Deal 

February 22, 2002 

By Jim Wolf 

WASHINGTON - A prominent U.S. business group urged the Bush 
administration on Friday to beat China to the punch in creating a 
free-trade area with the 10-member Association of Southeast Asian 
Nations (ASEAN). 

China is seeking to boost its economic and political clout in Southeast 
Asia, possibly in a way that could freeze out U.S. investors and 
undercut World Trade Organization rules, the U.S.-ASEAN Business Council 
said in a series of policy recommendations. 
The challenge is to make sure that any future Chinese linkup with 
Southeast Asian nations "does not undermine U.S. interests in the 
region, to include those of the private sector, and ensure it is 
consistent with the WTO," the council said. 

To do so, U.S. officials should work toward creating a U.S.-ASEAN free 
trade area in as little as five years "to beat the Chinese," Ernest 
Bower, the council president, told reporters. 

The council called for a "Wise Men's Group" made up of academics, 
business leaders and former U.S. officials to explore the benefits of 
such a deal. As appropriate, the "wise men" should develop a road map 
leading to negotiations, it said. 

The council said the expanded scope of ASEAN's interactions with China, 
South Korea (news - web sites) and Japan through a process dubbed ASEAN 
+ 3 posed "some of the same challenges that China does." 

Central to China's effort is its proposal, floated in 2000, to form a 
free-trade area with ASEAN within 10 years, the group said in a paper 
tied to the start of President Bush (news - web sites)'s second year in 
office. 

Beijing's overture is making "rapid" progress, said the council, made up 
of 150 corporate members comprising the leading U.S. investors in ASEAN. 


For much of the past two decades, ASEAN's early members -- Singapore, 
Malaysia, Indonesia, Thailand, the Philippines and Brunei -- functioned 
as a U.S.-oriented bulwark of regional stability. 

Changes began with the buckling of Asian economies in 1997 and the rush 
to absorb communist-ruled Vietnam and Laos, military-ruled Myanmar and 
Cambodia, recovering from decades of civil war, revolution and more war. 


A U.S. free trade zone with ASEAN would be designed to eliminate tariffs 
and other trade barriers across a wide range of industries, along the 
lines of a comprehensive bilateral deal the United States is moving to 
wind up this year with Singapore. 

"It's not a brand new idea, but an idea whose time has come," Bower 
said. He held out the hope of simultaneous progress toward ending the 
political deadlock in Myanmar, formerly Burma, that has led to U.S. 
economic sanctions against an ASEAN member. 

The U.S. Trade Representative's Office had no immediate comment. 
The proposal for a China-ASEAN free-trade area was endorsed at an ASEAN 
summit meeting in Brunei in November. It would create a market of 1.7 
billion people with a combined gross domestic product of $2 trillion and 
total two-way trade of $1.2 trillion, the council said. 
U.S. exports to ASEAN members totaled $47 billion in 2000, three times 
U.S. exports to China. But the U.S. economic slowdown last year had 
taken a toll on the regional bloc, prompting several ASEAN leaders to 
call for greater self-reliance and less dependence on the U.S. market. 

"While it is clear that there is an evolving regionalism in Asia, it is 
not possible to predict whether Asian will adopt an open or more 
exclusive, closed trading posture," the council said. 

Separately, the U.S. International Trade Commission called for comments 
for a newly initiated investigation into the probable economic effect of 
a U.S.-Singapore free trade agreement. 

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Aaron James
26 Bluebell Avenue
Winnipeg, Manitoba R2V 2M3
Phone: 204-339-4484
Email: aaronj at interchange.ubc.ca
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