Nov 21, 2012

Asia - Asia leaders announce regional FTA talks to spur growth

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Asian leaders launched their long-expected free trade area talks Tuesday, one step closer to broaden the economic reach of the Association of Southeast Asian Nations (ASEAN), and ease the bloc's reliance on the struggling West.

The official launch of Regional Comprehensive Economic Partnership (RCEP) was made by leaders from ten ASEAN nations and its six dialog partners, namely China, South Korea, Japan, India, Australia and New Zealand, after the conclusion of the 7th East Asia Summit (EAS).

Asia's economy, largely hinging on overseas shipment to the developed nations, has been jeopardized by the debt-laden Europe and the economically wobbling U.S., with even a slowdown in high- fly economies China and India.

"As the international financial crisis continues and trade and investment protectionism start to grow, regional economic integration has become the common choice of many countries," China 's Vice Foreign Minister Fu Ying said on Saturday in Beijing.


The talks on the ASEAN-led trade deal, which will create an area with more than 3 billion people accounting for about a quarter of the world's gross domestic product, is expected to go into effect by the end of 2015.

To tear down trade barriers and boost overall economy, the ASEAN nation leaders reached consensus in 2007 to achieve economic integration by the end of 2015. The economic ministers of the 16 countries have been working on the collective plan and submitted key recommendations to their leaders in the Phnom Penh summit warped up this afternoon.

"The ASEAN wants to play a leading role in promoting the RCEP to increase influence and give itself more say in the international arena. It will optimize the ASEAN to be a more coherent economic bloc with less fetters and better order," said Xu Ningning, executive vice secretary-general of the China-ASEAN Business Council.

Meanwhile, the much-vaunted Trans-Pacific partnership (TPP), aiming to wrest back U.S. initiative in the economically rich trade opportunities across the Pacific, made one step further on Monday as the United States launched an initiative with the ten ASEAN nations in Phnom Penh to smooth a path for Asian nations to link up with the TPP.


Skepticism towards ASEAN's dominating role in fostering the RCEP rises as the bloc is still in the midst of forming its regional economic unit, but observers remain optimistic on the final deal.

"The existing five separate free trade partnership between ASEAN and China, South Korea, Japan, India and Australia-New Zealand has laid down a good foundation. Moreover, consensus to cement economic alliance among China, Japan, South Korea and ASEAN will also contribute to closing the final deal," said Xu.

Leaders of the ASEAN and of Japan, China and South Korea confirmed economic and financial ties during their meeting on Monday.

The RCEP is easier to be accepted compared with TPP, which requires deeper extent of opening up, as it is likely to adopt a gradual way in opening up member nations' market given that development gap remains, according to Xu.

China, the ASEAN's biggest trade partner, saw their bilateral trade up 8.2 percent year on year to reach 288.9 billion U.S. dollars in the first nine months.

China's Premier Wen Jiabao said on Monday when attending the 15th ASEAN Plus Three Summit that China supports pushing forward an Asian free-trade area.

Cao Xiaofan, Feng Wuyong

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