Bridges Weekly Trade News Digest • Volume 6 • Number 39 • 14th November 2002
FTAs Multiply In Asian Region
On 5 November, one day after Association of Southeast Asian Nations (ASEAN) members and China signed a framework agreement to begin negotiations next year to create what would be the world’s largest free trade agreement (FTA) (see BRIDGES Weekly, 7 November 2002), the group of 10 countries announced that it would also begin talks with India and Japan to achieve similar agreements. India and ASEAN issued a joint statement after the 3-5 November ASEAN Summit in Phnom Penh, Cambodia, saying that, "The leaders agreed on the importance of enhancing their close economic cooperation and to work towards India-FTA linkages." Japanese and ASEAN leaders signed a joint declaration incorporating their agreement to draw up a framework for a trade and investment agreement by the end of next year, and to create a Japan-ASEAN economic partnership as soon as possible within ten years.
Free trade agreements involving Asian countries have proliferated recently, as many in the region have indicated that these bilateral agreements can be seen as an addition to the Doha round that allows for faster results in trade liberalisation. Japan, on top of its partnership with ASEAN, has begun FTA negotiations with Mexico and to a lesser extent the Philippines, South Korea and Thailand. It has also been proposed by China that Japan and South Korea consider an FTA between the three countries in the coming years. Thailand and India announced on 8 November that they are very close to negotiating an agreement, while South Korea in October signed an FTQ with Chile.
At the same time, Thailand has signed an agreement with the United States (see BRIDGES Weekly, 31 October 2002), which is the country’s largest foreign investor. The US already has agreements with Indonesia and the Philippines and is very close to signing an FTA with Singapore. Two weeks ago, Singapore signed an FTA with Australia, adding to its existing agreements with Japan and New Zealand. Singapore is also close to a free trade agreement with the US. Even Malaysia, which has traditionally opposed FTAs, appears now to be opening to the idea of bilateral trade deals after the US proposed a trade and investment framework agreement at the end of October to increase US trade and investment in Malaysia.
"Analysis: Asian trade pacts proliferate," UPI Business Correspondent, 5 November 2002; "China and ASEAN to sign trade pact as AFTA falters," REUTERS, 4 November 2002; "India, ASEAN agree to create Free Trade Area," PRESS TRUST OF INDIA, 5 November 2002; "India, Thailand agree to create FTA," REDIFF, 8 November 2002.