Jun 1, 2012

ASEAN - Southeast Asian Currency ‘Long-Term Goal’: Trade Body

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Despite the recent turbulence in the euro zone, the leader of the World Trade Organisation believes that a single currency should be a “long-term goal” for the countries in the ASEAN economic area.

“With a single economic goal, a single market without trade obstacles, with harmonized tariff and non-tariff measures, at some stage the issue of the currency will be there,” Pascal Lamy, Director-General of the WTO, told CNBC Thursday.

He added that the European model for currency union – which has been attacked by some as partly responsible for the current crisis in the euro zone - would not necessarily be followed for the ASEAN nations. The group includes Southeast Asian countries like Singapore, Thailand, and Cambodia, which have a much wider economic divergence than Germany and Greece.

At the most recent ASEAN-EU Summit, the Secretary-General of ASEAN told Europe to “put your house in order.”

“Whether it comes through exchange rate agreements that create a reasonably fixed system or the European way, this clearly entails a level of political integration which is not yet on the horizon,” Lamy said.

Protectionist measures brought in the wake of the financial upheaval of 2008 should now be rolled back, he added.

“For the first time since 2008, I’m getting worried. We’ve had so far trade protectionist rhetoric, but little action. That’s happening now,” Lamy said.

“It’s more pernicious than one visible trade dispute. It’s an accumulation of little measures, tariff increases, administrative controls, government protection, the purpose of which is to slow trade.”

Around 3 percent of world trade is affected by protectionist measures, according to the WTO.

Reported by Sri Jegarajah, written by Catherine Boyle



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