By Martin Abbugao
Agence France-Presse
Sunday, November 18th, 2012
PHNOM PENH, Cambodia—Southeast Asian nations will launch talks this
week for a giant free trade pact with China, Japan, India and other
neighbors aimed at easing the region’s reliance on the struggling West.
The planned zone would span across 16 countries of the
Asia-Pacific that currently account for a third of global trade and
economic output, making it the biggest free trade area outside the World
Trade Organization.
Rajiv Biswas, Asia-Pacific chief economist at IHS Global Insight,
described the initiative as strategically very important to the
Asia-Pacific as it would help offset weaknesses in the United States and
the European Union.
“Fast growth in trade within the Asia-Pacific region could
significantly mitigate the weak growth prospects in Asia’s traditional
growth markets in the EU and US,” he told AFP.
“The (pact) could provide the framework for accelerating regional
trade and investment flows, reducing the dependence of East Asia on the
traditional EU and US export markets and boosting trade among Asian
developing countries.”
Cambodian Prime Minister Hun Sen will launch the start of
negotiations for the Regional Comprehensive Economic Partnership (RCEP)
on Tuesday in Phnom Penh on the final day of a regional summit.
The RCEP would bring together the 10 members of the Association
of Southeast Asian Nations with China, India, Japan, South Korea,
Australia and New Zealand.
Asean secretary-general Surin Pitsuwan said a successful RCEP
would further cement a shift in global economic power from the West
toward Asia.
“The trend is already here. It’s how to consolidate. This one is
going to be a big leap forward if we can make it,” he told AFP in an
interview on Sunday on the sidelines of an Asean leaders’ summit.
Diplomats and analysts said the RCEP could also serve as a
“counterbalance” to the Trans-Pacific Partnership (TPP), another planned
free-trade grouping currently being negotiated by the United States and
10 other countries.
US officials hope that the TPP will eventually snowball into a
free trade area of the Asia-Pacific that will link economies spanning
Latin America and Asia via the United States.
But in one significant difference, the TPP excludes China while
the world’s second-biggest economy is foreseen as being a major player
in the RCEP.
China has been reluctant to join the TPP, preferring to focus on a
free-trade arrangement centred in Asia where it has a bigger influence.
“You can read between the lines,” a Southeast Asian diplomat told
AFP in regards to China focusing on a free trade pact that does not
include the United States.
Indonesia, Southeast Asia’s biggest economy, said it was only interested at this point in the China-dominated pact.
“We’re only going to be focused on the RCEP,” Indonesian Trade Minister Gita Wirjawan told reporters in Phnom Penh.
There are some concerns that a raft of maritime territorial
disputes between the major players in the proposed RCEP could hinder the
negotiations.
Diplomatic and trade between Japan and China have been severely
shaken this year amid an escalating dispute over islands in the East
China Sea.
Japan and South Korea have been locked in a similar dispute over
different islands, while China and some Asean members have also seen
tensions soar over competing claims to the South China Sea, which
Filipinos call West Philippine Sea.
But Surin said the disputes could be managed separately, and that
the trend toward closer economic and trade ties could not be stopped.
“The effort is to try to isolate the two issues… economic
cooperation, community building in East Asia will have to go forward
because everybody is going to benefit from this new architecture,” he
said.
Surin said the RCEP had a head start compared with the TPP
because Asean already had existing free trade pacts with China, India,
Japan, South Korea Australia and New Zealand to build on.
Nevertheless, there has been no timeframe set for when the pact should be finalized.
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