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FTA to top Asean talks at retreat with Japan and EU

Bernama, Malaysia

FTA To Top Asean Talks At Retreat With Japan And EU

From Umi Hani Sharani

2 May 2007

BANDAR SERI BEGAWAN, May 2 (Bernama) — After signing a free trade agreement with South Korea, negotiations are underway at the 13th Asean Economic Ministers (AEM) Retreat, for Japan to be next on the list to sign the deal with the South East Asian Nations grouping.

The retreat, to be held here from May 3-4, will see both parties speeding up FTA discussions and possible taking it to the next level, under the Asean-Japan Closer Economic Partnership Framework, in efforts to boost bilateral trade.

Minister of International Trade and Industry, Datuk Seri Rafidah Aziz will arrive here later to attend the retreat.

But Asean diplomats also say that Japan, led by Minister of Economy, Trade and Industry (METI) Akira Amari to the retreat, was keen to solidify a deal with Asean as soon as possible, out of growing concern for the recently signed Asean-Korea FTA.

The first round of discussion on the FTA between Japan and Asean kicked off in Tokyo in 2005 with the aim of completing the talks within two years.

While the focus will be on the FTA, Japan is also expected to bring up the subject of its ambitious East Asia Free Trade Area (EAFTA) at the retreat, a powerful bloc of 16 countries — Asean, China, Japan, Korea, New Zealand, Australia and India — that is expected to rival the North American Free Trade Area (Nafta) and European Union.

To show its seriousness and enthusiasm for the EAFTA, Japan had even dangled a 10 billion yen carrot via the Nikai initiative to entice Asean to accept a study on the proposal at the last Economic Ministers Meeting in Kuala Lumpur.

Although Asean had given tacit approval for a study on it, hard work remains ahead to realise the East Asia economic union.

On top of that, diplomats said the new bloc was a tool to counter China’s growing influence in the region, although Japan has denied it.

At the Brunei retreat, Asean ministers are also expected to hold consultations with European Trade Commissioner, Peter Mandelson on enhancing Asean-EU economic cooperation and the possibility of establishing an Asean-EU FTA.

However, some are less than sure that an FTA between the two groupings will actually take place as the issue of Myanmar sticks out like a thorn in the absence of democratic reforms and continued detention of Nobel Peace Prize laureate Aung San Suu Kyi.

The idea of an EU-Asean FTA has been mulled for several years, and has gathered momentum after the failure of World Trade Organisation talks.

Diplomats said that EU might likely pursue clinching FTAs with individual Asean countries, except Myanmar.

Other than FTAs, ministers will also deliberate on the blueprint on the Asean Economic Community, which outlines the action plan and measures for its realisation by 2015.

In a statement to Bernama, the Ministry of International Trade and Industry (MITI) said the ministers too are expected to discuss economic inputs and issues on the establishment of the Asean charter, including the future direction of Asean economic integration.