Proliferation of FTAs in ASEAN may impede business activities
Channel NewsAsia, Singapore
Proliferation of FTAs in ASEAN may impede business activities
By Victoria Jen, Channel NewsAsia
04 September 2008
SINGAPORE : Asian economic integration is facing some of its toughest challenges in the form of regional diversity and gaps in modernisation.
But analysts said one of the obstacles are the numerous free trade agreements (FTAs) signed by groupings such as ASEAN and individual Asian nations.
Academics and regional observers at a symposium on economic integration in Asia said the many overlapping free trade agreements between individual countries actually impede business activities in the region.
This is because these agreements create a messy web that can cause difficulties for companies, such as small- and medium-sized firms, trying to expand regionally.
Masahiro Kawai, dean of the Asian Development Bank Institute Japan, said: "We have a multitude of overlapping FTAs which we call Asian noodle ball - it can be quite messy.
"So it’s important for Asians to streamline this Asian noodle ball, ideally to come up with a single common FTA for the region as a whole, going beyond ASEAN."
He recommends a wider FTA that covers the entire Asian region along the lines of the North American Free Trade Agreement (NAFTA).
Regional blocks like ASEAN also face integration challenges of their own.
"There’s obviously the usual problem of envy, lack of political will or some political changes we see in the respective countries. But these are things which are manageable, as long as they don’t boil over," said former ASEAN secretary general Ong Keng Yong.
He is confident that the target to build an ASEAN economic community by 2015 can be achieved as member states start to feel competitive pressures from emerging markets like China and India. - CNA
