Asean+6 to create world’s biggest economic bloc
The Nation, Bangkok
Asean+6 to create world’s biggest economic bloc
By Achara Pongvutitham, Petchanet Pratruangkrai
17 August 2009
Asean and its six major trading partners yesterday reaffirmed their resolve to create the world’s largest economic bloc through the "East Asia Free Trade Agreement" and "Comprehen-sive Economic Partnership in East Asia" within 15 years.
The consensus to move forward with economic integration was a successful climax to the four-day Asean Economic Ministers (AEM) meeting under Asean+3 (China, Japan and South Korea) and Asean+6 (Asean+3 and India, Australia and New Zealand).
The 16 member countries will lead the region to pass the US and European Union in becoming independent economic zones. The achievement in the future will not only strengthen their regional trade relations but also wean them from imports from outside the region.
A senior trade negotiator said Asean’s integration with East Asian countries will force the European Union to rush to clinch bilateral pacts with individual Asean members for fear of losing benefits after the world’s largest free trade agreement in East Asia was established.
During the AEM meeting, three other milestones were achieved - the Asean-India Free Trade Agreement, Asean-China Investment Agreement, and the completion of the Asean-South Korea Free Trade Agreement after both sides reached an understanding on rules of origin for trade in goods.
As chairwoman of the AEM meeting, Commerce Minister Porntiva Nakasai said it was a significant step for Asean to move forward with "economic integration in the East Asia region".
The outcome of this meeting will be forwarded to the October summit of Asean leaders in Prachuap Khiri Khan’s beach resort town of Cha-Am, she said.
The CEPEA will form the largest economic region with 3 billion people, accounting for 49.6 per cent of the world’s population, and sharing 26 per cent of the world’s GDP.
According to a study by the Economic Research Institute for Asean and East Asia, liberalising trade in the 16 countries will increase their GDP by 1.3 percentage points. For Asean alone, GDP will soar by 3.83 percentage points, while Thailand will welcome a boost of 4.78 percentage points.
For EAFTA, the GDP of members would increase by 1.2 percentage points. Asean would benefit more than Asean+3 with even higher GDP growth of 3.6 percentage points while China, South Korea and Japan will rise by 0.9 percentage point on the average. Thailand’s GDP would get a lift of 4.5 percentage points.
Commerce Ministry spokesman Krisda Piampon-gsant said Asean has been taking a step-by-step approach to opening trade with those major partners. So far, it has completed the priority task of free trade agreements, called Asean+1, namely Asean-Japan, Asean-China, Asean-South Korea, Asean-Australia-New Zealand, and Asean-India.
The second priority is to aggressively move toward Asean’s goal of stitching together an Asean Economic Community by 2015. Then it will cement economic cooperation with China, South Korea and Japan before moving toward becoming the largest world’s free trade area through CEPEA.
"What we are doing, the economic integration and free trade agreement with those major trading partners will boost the economy of the members and we expect their economies will recover by next year," he said.
New Zealand Trade Minister Tim Groser told the joint press conference on Saturday that this AEM meeting had provided for a very constructive dialogue.
"All members should work toward the goal. We’re now moving forward in the right direction," Groser said.
