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| Thursday, 9 October 2003 |
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India, Japan to sign trade deals with SE Asia BALI, Indonesia, Wednesday (Reuters) Japan, still Asia's sole economic superpower, and tomorrow's giants China and India jostled for influence in Southeast Asia as they fleshed out plans on Wednesday for free trade agreements with the region. Leaders of the 10-member Association of South East Nations (ASEAN) a day earlier at their annual summit endorsed a plan to transform their region into a giant free trade zone by 2020, although several urged a faster pace if they are to keep up with the rest of the world. India and Japan are sealing agreements with ASEAN that closely resemble the one China reached with it a year ago and which set frameworks for negotiating free trade blocs that could eventually result in a huge East Asian common market. Chinese Premier Wen Jiabao and ASEAN leaders signed security agreements to foster trust and urge the peaceful resolution of simmering territorial disputes between several Southeast Asian countries and the north Asian giant. "This strategic partnership is non-aligned, non-military and non-exclusive," the agreement said, adding that it aimed to give a security umbrella to faster economic growth and cooperation. The failure of world trade talks in Cancun has highlighted the urgency for a trading bloc. ASEAN's relatively small economies want more influence to compete with China and at the same time already have an agreement in the works on setting up a free trade zone with the world's most populous country. In a sign of growing investor confidence in Southeast Asia, S&P raised its credit ratings for Malaysia, Thailand and Indonesia on Wednesday. India is looking east to expand its trade, and its eagerness to counter the resurgence of China was underscored in a proposal by Prime Minister Atal Behari Vajpayee on Tuesday to accelerate tariff cuts to some of ASEAN's less developed members. "India is today a country on the move," Vajpayee told a meeting of business leaders. "It is this India that seeks to partner ASEAN in this era of globalisation." Trade between India and ASEAN had grown 25 percent from less than $10 billion a year ago and the aim of the agreement would be to push trade to $30 billion by 2007 and create a free trade area within 10 years, he said. ASEAN's trade with China accounted for 8.1 percent of its total of about $700 billion in 2001, compared with just 1.4 percent for India. ASEAN is already considering advancing its own 2020 deadline as it works on free trade agreements to be completed with China in 2010, India in 2011 and Japan in 2012, and is considering a mechanism for as few as two countries within the group to proceed on liberalisation if they are ready ahead of the rest. In the strategic partnership agreement, China and ASEAN aim for $100 million in bilateral trade by 2005. "The China-ASEAN Free Trade Area is a win-win arrangement," Wen told the business leaders. Meanwhile Thailand and India will slash tariffs to zero on 83 products under a free-trade agreement to be signed during Indian Prime Minister Atal Behari Vajpayee's visit this week, officials said. |
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