ASEAN & Japan should settle free-trade deal dispute

24 Aug '06

3 min read

The Association of Southeast Asian Nations and Japan agreed to investigate establishing a giant 16-nation Asian trade bloc, but the two sides must first overcome a wrangle over their own free-trade deal.

Japan has proposed a massive new trade zone embracing half the world's population, from the 10-member Association of Southeast Asian Nations (ASEAN) plus China, Japan, South Korea, Australia, India and New Zealand.

Despite the lofty goal, Japan and Southeast Asia are embroiled in a row over the shape of an ASEAN-Japan free-trade deal, with the region resisting efforts to bundle together a series of individual agreements, officials said. Japan is also reluctant to cave in to ASEAN demands to invest in sensitive sectors such as forestry and fisheries.

But despite the dispute, ASEAN economic ministers meeting agreed to Japan's plan to carry out a study conducted by academics from the 16 nations into the prospects of an East Asia trade bloc.

They also welcomed Japan's proposal to put 10 billion yen (86 million dollars) into setting up the Economic Research Institute, a regional trade thinktank. Japan's Minister of Economy, Trade and Industry Toshihiro Nikai said the new European-style trade zone would benefit from a population of 3.0 billion people and current economic activity of 9.0 trillion dollars.

"We are certain it will be to the benefit of all the countries in this region," he said. But with many observers saying such a trade bloc is decades away from reality, he added there was "no need to make any haste" in pushing the integration of the 16 nations which last year formed the East Asia Summit.

The talks Wednesday also covered the split in opinion over the ASEAN-Japan free-trade agreement (FTA) which Malaysian Trade Minister Rafidah Aziz said was the top priority.

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