Nov 5, 2012

ASEAN - Asean to launch a new regional FTA with its partners

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Asean and its six dialogue partners of Australia, New Zealand, Japan, India, South Korea and China are set to launch a regional free trade agreement (FTA) later this month, an official said Sunday.

Asean Secretary-General Surin Pitsuwan said the so-called Regional Comprehensive Economic Partnership (RCEP) was part of the grouping’s architecture of economic partnership.

“I talked about the five FTAs that we have with the six countries. We are now putting the five together into one agreement that will be launched later this month in Phnom Penh,” Surin told some 350 participants of the 13th Asia-Europe Business Forum in Vientiane, the capital of Laos.

The two-day forum has been organised back to back with the 9th Asia-Europe Meeting (Asem) Summit to be held in same city on Monday and Tuesday.

Surin was referring to the five FTAs that Asean had previously made with Australia and New Zealand under one agreement, and with four other countries, namely India, Japan, South Korea and China, in four different agreements.

Once this is done, he added, he was certain that they would be in an even more dynamic region for all East Asia through Asean.

Asean has a combined GDP of US$2.4 trillion, which is larger than that of India alone, of Australia and New Zealand combined, and of South Korea. Yet, he said, Asean still needed support from its dialogue partners, especially as it is pledged to become a single community by 2015.

Surin said that FTAs within Asean dated back to 2005 and at that time, they also started to explore the possibility of an Asean-EU free trade agreement. Yet, as the EU has 27 members, such an agreement was considered too complicated.

“Eventually, we will come back to that Asean-EU free trade agreement. This will be good for both sides,” Surin said.

Surin also highlighted the significance of EU countries in the trade and investment sectors within the Asean region, which places EU as the grouping’s third largest trading partner.

Trade between Asean and the EU grew by 6 per cent in 2011, amounting to about $240 billion between the 27 EU countries and 10 Asean countries.

Exports to the EU from Asean had also increased by 8.3 per cent, amounting to about $444 billion, while imports from the EU improved by 17.8 per cent. “This means that while we are maintaining our dynamism, we are importing more services from Europe,” he said.

In a separate development, President Susilo Bambang Yudhoyono and First Lady Ani Yudhoyono made an official visit to Lao President Choummaly Sayasone at the Ho Kham Palace in Vientiane on Sunday afternoon.

Also in the President’s entourage were Trade Minister Gita Wirjawan, Industry Minister MS Hidayat, Education and Culture Minister Mohammad Nuh, Youth and Sports Minister Andi Mallarangeng and Cabinet Secretary Dipo Alam.

Gita said Indonesia expects its bilateral trade with Laos to double to $60 million next year. “This year, our bilateral trade can settle at $30 million, and that will be excellent if trade doubles by next year,” he said.

According to Gita, the current level of trade still does not reflect the potential, and Indonesia may become the biggest trading partner for Laos in Asean, considering the size of its economy.

Indonesia is currently the second biggest export destination for Laos in Asean, and the fourth largest source of imports.

In January-July this year, overall bilateral trade increased by 283.3 per cent to $21.9 million compared to the same period last year.

This was particularly attributed to exports that jumped by 314.9 per cent to $18.9 million, along with imports that surged by 160 per cent to $3 million.

Sri Wahyuni and Linda Yulisman


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