Asian FTA would simplify trade rules
Bangkok Post
Asian FTA would simplify trade rules
But Japan needs to open agriculture trade
By Woranuj Maneerungsee
11 April 2006
Thai business leaders have welcomed a Japanese proposal to create an East Asian Free Trade zone to integrate economies in the region, but they were sceptical about whether Japan would liberalise its sensitive agricultural sector. If Japan’s idea comes true, they said, it would help countries in the region overcome the ’’spaghetti bowl’’ effect of proliferating bilateral free trade agreements with different trade rules.
Last week, Japan proposed the formation of a vast Asian economic free trade zone that would cover about half the global population and rival the European Union and North American Free Trade Agreement (NAFTA) markets.
The 16-nation zone would include China and India, the world’s two fastest growing major economies, along with the 10-member Association of Southeast Nations (ASEAN) and Australia, Japan, New Zealand and South Korea.
Japan proposed starting negotiations in 2008 and concluding the pact in 2010.
But Pornsilp Patcharintanakul, the deputy secretary-general of the Board of Trade, questioned whether Japan is ready to liberalise agricultural products, a politically sensitive topic in Japan.
’’Is Japan already to give, in particular, its farm sector,’’ he asked, noting that many Asian countries are large agricultural exporters.
Mr Pornsilp, who follows the country’s free trade agreement policies closely, referred to the negotiations for a closer Thai-Japan economic partnership, which excluded major Thai farm products such as rice, sugar and tapioca.
The agreement was suspended when the Thaksin government dissolved parliament in late February.
Mr Pornsilp added that it was unlikely that two years would be long enough for negotiations about the East Asian free-trade zone because the economic developments of member parties were different.
But he anticipated common regulations under a new zone would make trading easier for the 16 nations. East Asian countries, Australia and New Zealand have formed over a dozen free trade pacts.
But senior officials at the Commerce Ministry were unsure how Japan’s East Asian Economic Zone differed from an original proposal from Malaysia a few years ago, which comprised of 10 South East Asian nations and three far East Asian countries: China, Japan and South Korea.
’’Since the first East Asean Summit [late last year], we started talking about other countries joining the community such as India, Australia and New Zealand. So what’s Japan proposing and why,’’ the senior official asked.
An earlier report said the push stemmed from Japan’s tense relations with its biggest trading partner China and its worries that it is slipping behind in securing bilateral free-trade pacts with countries in Asia.
Meanwhile, the 25-country European Union has been supporting negotiations for a single South Eastern Europe free trade pact to replace the existing plethora of bilateral free trade agreements.
The negotiations will enlarge and modernise the existing Central European Free Trade Agreement between Bulgaria, Romania, Croatia and the former Yugoslav Republic of Macedonia in the future, to cover other countries of the Western Balkans and Moldova and conclude by 2006.
Thai business leaders have welcomed a Japanese proposal to create an East Asian Free Trade zone to integrate economies in the region, but they were sceptical about whether Japan would liberalise its sensitive agricultural sector. If Japan’s idea comes true, they said, it would help countries in the region overcome the ’’spaghetti bowl’’ effect of proliferating bilateral free trade agreements with different trade rules.
Last week, Japan proposed the formation of a vast Asian economic free trade zone that would cover about half the global population and rival the European Union and North American Free Trade Agreement (NAFTA) markets.
The 16-nation zone would include China and India, the world’s two fastest growing major economies, along with the 10-member Association of Southeast Nations (ASEAN) and Australia, Japan, New Zealand and South Korea.
Japan proposed starting negotiations in 2008 and concluding the pact in 2010.
But Pornsilp Patcharintanakul, the deputy secretary-general of the Board of Trade, questioned whether Japan is ready to liberalise agricultural products, a politically sensitive topic in Japan.
’’Is Japan already to give, in particular, its farm sector,’’ he asked, noting that many Asian countries are large agricultural exporters.
Mr Pornsilp, who follows the country’s free trade agreement policies closely, referred to the negotiations for a closer Thai-Japan economic partnership, which excluded major Thai farm products such as rice, sugar and tapioca.
The agreement was suspended when the Thaksin government dissolved parliament in late February.
Mr Pornsilp added that it was unlikely that two years would be long enough for negotiations about the East Asian free-trade zone because the economic developments of member parties were different.
But he anticipated common regulations under a new zone would make trading easier for the 16 nations. East Asian countries, Australia and New Zealand have formed over a dozen free trade pacts.
But senior officials at the Commerce Ministry were unsure how Japan’s East Asian Economic Zone differed from an original proposal from Malaysia a few years ago, which comprised of 10 South East Asian nations and three far East Asian countries: China, Japan and South Korea.
’’Since the first East Asean Summit [late last year], we started talking about other countries joining the community such as India, Australia and New Zealand. So what’s Japan proposing and why,’’ the senior official asked.
An earlier report said the push stemmed from Japan’s tense relations with its biggest trading partner China and its worries that it is slipping behind in securing bilateral free-trade pacts with countries in Asia.
Meanwhile, the 25-country European Union has been supporting negotiations for a single South Eastern Europe free trade pact to replace the existing plethora of bilateral free trade agreements.
The negotiations will enlarge and modernise the existing Central European Free Trade Agreement between Bulgaria, Romania, Croatia and the former Yugoslav Republic of Macedonia in the future, to cover other countries of the Western Balkans and Moldova and conclude by 2006.
