Spore and Thailand top lists of completed FTAs
Publication Date : 2004-12-06
Singapore and Thailand have emerged as the two Asian countries with the highest number of completed free trade agreements (FTA), according to Asia News Network reports.
Not far behind the two are three of Asia’s largest economies - Japan, China and India - with more FTAs signed.
India, Singapore, Sri Lanka, and Thailand are those countries which are conducting negotiations with most countries presently.
The progress of FTAs in separate reports by members of Asia News Network, an alliance of 14 newspapers in 12 Asian countries, put the total FTAs completed, under negotiations, and under study at more than 80.
The number FTAs around the world rose sharply from 79 in 1995 to 208 in 2004.
Compared with America or Europe, Asians were not known to be active in creating FTAs. Asean Free Trade Area, established in 1992, was the only major regional FTA until Japan and Singapore signed FTA ten years later. Over the past few years, however, Asia is perhaps the busiest region in working on FTA deals. A Singaporean trade envoy even described the government’s decision to enter more than 10 FTA talks at one time as “promiscuous.”
The emergence of FTA interest can be attributed to various factors. In the mid 1990s when the Uruguay Round almost collapsed, the number of new regional trade arrangements has risen considerably because the governments have been impatient with the slow process of multilateral trade talks.
Besides, the FTA can open up a few lucrative markets. The Malaysian government which has been slower than Singapore and Thailand in taking up the FTA initiative has now tried to catch up the bandwagon by negotiating trade deal with the key economic partners. The Malaysian government viewed that the lack of an FTA with the US has placed Malaysia at a disadvantage in terms of access to that most important market.
Some countries also see FTA as a means to promote structural reform and deregulation in the domestic market especially after the financial crisis in 1997. Until April, South Korea was the only member of the World Trade Organisation other than Mongolia without a free trade agreement. But now, it is in a hurry to catch up. External pressures such as the FTAs are considered effective in pursuing deregulation.
Political factor also attributed to the increased interest in FTA. In spite of its initial hesitation, Japan agreed to start FTA with Asean countries for geopolitical reasons. China also agreed to negotiate free trade deals with Asean partly to ward off the latter’s uneasiness about the rapid rise of China.
Nonetheless, the devil is in the details. Each FTA context depends on the negotiations. Besides, FTAs these days extend the coverage much larger than the duty-free privileges. The business-related issues such as the intellectual property protection, the movement of labour and the human right and environment protections have become part of the negotiations.
Indian Trade Minister Kamal Nath felt that FTAs would soon be just a term in the past. “Now there will be Economic Cooperation Agreement that includes investment. This is the course for the future,” he said.