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Megawati urges SE Asia to embrace FTA

Sydney Morning Herald, Australia

Megawati urges SE Asia to embrace FTA

3 September 2004

(AP)Indonesian President Megawati Sukarnoputri has urged ASEAN to move ahead in forging free-trade agreements with non-members, including Australia.

Megawati economic ministers from the region that the 10-member Association of South-East Asian Nations should be working towards FTAs with China, South Korea, the European Union, New Zealand and Australia.

"I support free-trade agreements concluded with important economic players, since their main objective is to widen the market for goods produced in ASEAN and enable us to gain access to cheaper sources of capital goods and products," she said.

The ministerial talks have focused on moving toward the group’s goal of liberalising key sectors by 2008, convincing member countries to reduce import tariffs, simplifying customs procedures and adopting shared product standards.

Over the weekend, the ministers are set to agree on dates for starting negotiations on free-trade agreements with South Korea, China, Japan, Australia and New Zealand.

Talks on such deals between ASEAN and Canada and the EU are just getting off the ground.

ASEAN and China have already agreed to establish by 2010 a free-trade area that would combine their huge markets. Chinese Premier Wen Jiabao enthusiastically promoted closer ties during his visit to Bali last year.

ASEAN’s members are Brunei, Cambodia, Indonesia, Laos, Malaysia, Burma, the Philippines, Singapore, Thailand and Vietnam.

Megawati urged economic ministers from the region to put aside their differences and work toward economic integration akin to the European Union’s.

She said such a step would help draw crucial foreign investment into the region.

Last year, ASEAN plead by 2020 an EU-like economic community that would permit the free flow of investment, trade and labor in Southeast Asia, which has annual trade worth more than 700 billion euro ($A1.23 trillion).

In her speech to ASEAN economic ministers who have been meeting in Jakarta, Megawati expressed wholehearted support for the plan and said ASEAN’s decision to integrate 11 sectors - from agriculture to the automotive industry - within the next few years is a good start.

"The whole Asia Pacific region, and nearly the whole world, is watching us," Megawati said .

"Let us not allow economic development to grow into sharp differences and hinder integration growth," she said, noting that the wide disparities in economic strength among ASEAN members should not cause disunity.

"Let us show the world our real strength by becoming the economic community that we aspire to," she said.

She said ASEAN countries must prepare for integration by better training their work forces, standardising education and, in some cases, improving infrastructure.

ASEAN must also strengthen internal mechanisms for settling trade disputes and standardising investment rules, she said.

© 2004 AP