New Asia bloc ‘may become free trade by 2020’

An embryonic Asian regional bloc could develop by 2020 into a “free trade area” stretching from India to New Zealand, according to the Australian government.

The 16-member East Asian community, designed to foster closer links among countries in Asia and the Pacific, will hold its inaugural summit meeting in Malaysia in December.

Alexander Downer, the Australian foreign minister who successfully lobbied for his country’s inclusion, said it was possible that the community could develop over the long term into a trade area stretching “from Mumbai to Christchurch”.

The community will consist of the 10 Association of South East Asian Nations members plus Japan, China, South Korea, India, Australia and New Zealand and cover about half of the world’s population.

Speaking to the Financial Times in London this week, Mr Downer said: “The countries have a lot do with each other and increased co-operation can build practical outcomes on issues such as counter terrorism and avian flu. Over the longer term it could become a large free trade area.”

While a trade area is not a policy goal for Canberra, it is known to be frustrated by the lack of progress on the reduction of global trade barriers in areas such as agriculture.

Australia has signed a number of bilateral trade agreements with neighbouring countries and has opened negotiations with China for a wide-ranging trade deal. Officials in Canberra are pessimistic that progress can be made on the Doha trade round at a ministerial meeting in Hong Kong in December. This week Australia rebuked the European Union for planning to offload 2m tonnes of surplus sugar on to the world market, in spite of a WTO ruling that such exports are illegal.

Separately, Peter Mandelson, EU trade commissioner, said yesterday the EU was prepared to cut import tariffs on its highly protected farm sector if the US reformed its agricultural subsidies. Speaking during a joint visit to Washington with Mariann Fischer Boel, agriculture commissioner, he said a transatlantic agreement was vital in pushing forward the Doha round.

By Sundeep Tucker in London and Alan Beattie in Washington
(Financial Times, 14 September 2005)

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