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Key to join free trade talks with Asean nations

NZPA | Thursday October 22 2009

Key to join free trade talks with Asean nations

Prime Minister John Key will be asked this weekend to sign up to an ambitious bid to create what could become the largest multi-national free trade agreement in the world.

The East Asia Summit brings together 10 south east Asian nations under the Asean (Association of South East Asian Nations) banner and six others — China, Japan, India, Australia, South Korea and New Zealand — to discuss moves to create a pan-Asia trading bloc to rival and eventually eclipse the European Union.

Asean has already signed trade deals with New Zealand, Australia and other countries in the proposed bloc, but it wants to go further still to form a Comprehensive Economic Partnership in East Asia, known as Cepea.

This would cover 50 percent of the world’s population, including one of world’s richest nations, Japan, and some of the poorest such as Laos, as well as the expanding economic powerhouses of China and India.

It is estimated that tariff elimination and the reduction of other trade barriers in Cepea would lift New Zealand’s GDP by $500 million, or 2 percent.

East Asia Summit countries currently make up 52 percent of New Zealand’s exports, worth $28 billion in 2008.

Asean countries are driving the move and all the so-called "plus six countries" are interested as well.

Asian countries have been stung by the world-wide recession and are rethinking their strategy to boost economic growth through increasing exports to developed nations, and are looking to build regional markets.

Asean members believe progress can be made faster in the bloc they are organising than through the glacial process of Apec or the World Trade Organisation’s trade liberalisation negotiations.

It is Thailand’s third attempt to host the summit and more than 18,000 soldiers and police are being deployed at the seaside resort of Hua Hin, south of Bangkok, to ensure the event is not disrupted.

Thailand’s government and army were embarrassed when protests disrupted the last attempt to host the summit in April.

Security forces seemed unable or unwilling to stop opponents of the current Thai government from smashing their way into venue and forcing many Asian leaders to be airlifted out of the area.

Mr Key arrived in Thailand to attend that summit but did not make it out of Bangkok Airport.

This time the army is pledging to enforce newly-enacted security regulations which essentially ban protests and create curfews in the area where the summit is being held.

The first summit was cancelled after protesters occupied Bangkok Airport, bringing air travel to a virtual standstill.

After attending the summit over the weekend, Mr Key travels to Malaysia for the signing of a trade deal with that country and then on to Japan for talks with the new government there and a series of business and tourism promotions.

He returns to New Zealand on November 2 after attending the Bledisloe Cup rugby match against Australia, which is being played in Tokyo.

 source: National Business Review