Indonesia to Lead Talks on Forming Big Trade Bloc

By webadmin on 11:32 am Nov 18, 2012
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Dion Bisara

Phnom Penh. Indonesia will lead the negotiation between the Association of Southeast Asian Nations and six of its dialogue partners early next year on a proposed economic partnership that will form the world’s largest economic bloc.

Negotiations on the Asean Regional Comprehensive Economic Partnership (Arcep), an initiative involving the 10 Asean members and its partners — Australia, China, India, Japan, New Zealand and South Korea — are expected to start in April.

“Indonesia has been elected as the lead negotiator in Arcep,” Trade Minister Gita Wirjawan told reporters on Saturday, following the Asean economic ministers’ preparatory meeting in Phnom Penh, Cambodia.

Arcep would likely establish a single market with more than three billion people and a combined gross domestic product of more than $15 trillion, he said. That is in comparison to 390 million people and $13 trillion GDP of the European Union.

“This is huge,” Gita said.

Surin Pitsuwan, Asean secretary-general, said that Arcep would expand on the five existing free trade agreements between Asean and the dialogue partners — Australia and New Zealand serve as one agreement — with cooperation beyond trade such as investment and improving infrastructure and the transfer of technology.

“We want to bring all five under one umbrella agreement,” Surin said, adding that Asean leaders are set to declare the start of the process on Tuesday.

Gita said he hoped that the Arcep negotiation would be completed before the formation of the Asean Economic Community in 2015, even though there are competing trade agreements in progress.

The United States, for example, promoted its Trans-Pacific Partnership a regional trade cooperation among Asia-Pacific countries, in which some Asean countries are also members.

“We have to be very careful to allocate resources, lest we would lose focus,” Gita said, adding that Indonesia’s focus would be on Arcep.

Here, the leaders will also look at the deadline for the formation of AEC by 2015 when the single market — in the mold of the European Union — will allow the free flow of goods, services, investment, skilled labor and capital.

Asean may set a deadline for the economic community at the end of 2015, providing more time for member countries to prepare in terms of readiness when it comes to legal and policy frameworks, Gita said,

“Our interest is to consolidate understanding that AEC would not be effective at the beginning or in the middle of 2015,” he said.

Separately, Southeast Asian foreign ministers sought on Saturday to heal a rift over territorial rows involving China, aiming to build unity ahead of a leaders’ summit in which rights and trade will also dominate.

The hot-button South China Sea issue was one of the top items for the ministers as they held a day of talks in the Cambodian capital, following months of acrimony over how to tackle China’s claims to nearly all the waters.

“We wish that we would be able to solve this problem together,” Surin said. “We hope that if there is anything we can do to help to build this new culture of norms … of new habits of working together we would like to help.”

The foreign ministers’ meeting is to pave the way for the annual Asean leaders’ summit in Phnom Penh today, which the bloc is hoping will push forward policies on human rights and free trade.

US President Barack Obama, Chinese Premier Wen Jiabao and leaders from six other nations are scheduled to then join their Asean counterparts for the two-day East Asia Summit starting on Monday.

Some of the countries involved in the talks have seen diplomatic relations plummet this year because of a raft of maritime territorial rows, and analysts said those disputes would likely overshadow proceedings in Phnom Penh.

Asean members Vietnam, the Philippines, Malaysia and Brunei, as well as Taiwan, have claims to parts of the South China Sea, home of some of the world’s most important shipping lanes and believed to be rich in fossil fuels. China insists it has sovereign rights to virtually all of the sea, and the Philippines and Vietnam have expressed concerns that their giant Asian neighbor has become increasingly aggressive this year in staking its claim.

An Asean foreign ministers’ meeting in Phnom Penh ended in July without issuing a joint communique for the first time in the bloc’s 45-year history because of divisions over how to handle the South China Sea issue.

[Editors note: Originally, the piece read: Negotiations on the Asean Regional Comprehensive Economic Partnership
(Arcep), an initiative involving the 10 Asean members and its partners —
Australia, China, India, Japan, New Zealand and South Korea — are
expected to start in February. They are actually to begin in April.
]

Additional reporting from AFP