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Chile wants study of RTAs and FTAs within Asia-Pacific

Malaysia Star

13 November 2004

Chile wants study of RTAs and FTAs within Asia-Pacific

CHILE wants a study of regional trading arrangements (RTAs) and free trade agreements (FTAs) within the Asia Pacific region, and this is likely to be discussed by the leaders at the forthcoming APEC Summit in Santiago.

Patricio Torres, Chile’s ambassador to Malaysia, said there was no basic contradiction between RTAs and FTAs and deals within the World Trade Organisation’s multilateral trade negotiations “obviously have benefits.”

He made these remarks in response to suggestions that there has been a proliferation of RTAs and FTAs and that these could contradict APEC goals since the WTO talks collapsed in Cancun last year as many economies had opted for the bilateral or regional modes to expand trade and investment amid grim prospects on the multilateral front.

Some quarters had said that RTAs and FTAs could hinge on exclusivity, thus jeopardising global trade talks and marginalising outside economies, especially the smaller ones.

In an interview, Torres said: “But in so far they are open and consistent with WTO regulations, they are definitely beneficial (and) we believe FTAs and RTAs can still contribute to global trade.”

The APEC Business Advisory Council (ABAC), in highlighting its concerns on RTAs and FTAs, said they fell short of the Bogor goal commitments of Apec member economies in terms of timeliness and comprehensiveness.

These agreements, while enhancing trade relations and opening up economies, may also have the potential to impose additional transaction costs on business due to the challenges of navigating the multiplicity of RTAs and FTAs, it said.

To claims that economic interdependence within APEC was more of a perception than a fact of life as opposed to the European Union, which has a tangible single market, Torres said: “We have no mandatory or legally binding commitments. APEC has a complete different structure which is one of the reasons it is successful as we have worked on a voluntary basis and countries offer commitments towards liberalisation and cooperation and then we work with peer reviews.”

Torres said there had been some movements within APEC to go for some binding agreements but this had generally been resisted by some member economies as they felt that the voluntary element was crucial.

To a suggestion by the region’s business community for APEC leaders to consider studies into establishing a Free Trade Area of the Asia Pacific (FTAAP), he said leaders should “address this possibility within the region,” but no decision had been made to this end.

ABAC, in making the call in its report to the upcoming leaders’ meeting in Santiago, recommended that APEC expand on the proposal for “an integrated regional market.”- Bernama

 source: Malaysia Star