Japan, Australia ‘test’ Asia leaders with trade plans

October 27, 2009
Japan and Australia outlined competing visions for an East Asian trade bloc during a 16-nation summit in Thailand, offering plans that differ on what role the US will play.

Australian Prime Minister Kevin Rudd discussed his idea for an “Asia-Pacific Community” that would include the US and India. Japan’s Prime Minister Yukio Hatoyama, who took power last month, suggested an “East Asian Community” whose membership has yet to be determined, foreign ministry spokesman Kazuo Kodama said Sunday.

“Both Japan and Australia proposed bigger communities, which is a test for us,” Thai Prime Minister Abhisit Vejjajiva said Sunday in a weekly interview on a channel operated by state-controlled MCOT Pcl. The Association of Southeast Asian Nations “must be firmly integrated when we enter a bigger community.”

The proposals, which included few specifics, underscore different views within the region on US power and economic dominance. The model of relying on Western demand for local goods and services “will no longer serve us as we move into the future,” said Abhisit, the meeting’s host.

“Japan wants to stay a major player and keep China from dominating,” said Carlyle A. Thayer, a politics professor at the University of New South Wales in Canberra. “Australia is worried about American staying power in the region.”

China, Japan, South Korea, India, Australia, New Zealand and Asean, all of which met Sunday in the East Asia Summit, account for about half of the world’s population and a quarter of global gross domestic product.

‘Closely discuss’

Japan will “closely discuss and coordinate” with the US, Kodama said Sunday without elaborating. China is “positive and open” to the establishment of an “East Asian community,” Assistant Foreign Minister Hu Zhengyue said two days ago.

The US signed a friendship accord with Asean in July to bolster ties with an area that contains sea lanes vital to world trade, as well as coal, oil and other commodities. The treaty is a prerequisite for joining the East Asia Summit, which Asean will consider turning into a larger trade bloc, the Thai government said in a statement Sunday.

“It is now time to move on to a region-wide free-trade area,” Abhisit said in a speech Monday. “Not only are we expected to lead the recovery, but we are as a region also expected to be a significant growth center for the future global economy.”

In a bilateral meeting on the sidelines of the summit, Indian Prime Minister Manmohan Singh and Chinese Premier Wen Jiabao vowed to improve relations and work on “issues” such as border disputes. The two countries need to build “better understanding and trust” to keep relations “robust and strong,” Singh said, according to a statement from India’s Ministry of External Affairs.

Asean also set up its first human rights commission at the weekend’s meeting, one without any authorization to discuss country-specific violations.

Rice reserves

China, Japan, South Korea and Asean said they will expedite the development of permanent emergency rice reserves to ensure food security in times of crisis and disasters, according to a joint statement. China pledged 300,000 tons of rice.

Australia and New Zealand’s free-trade agreement with a group of Southeast Asian nations will take effect next year, Australia said Sunday. The deal, originally signed in February at an earlier Asean meeting, is designed to eliminate or lower tariffs on products such as coffee, dairy, minerals, cars and vegetables in the next 12 years.

Southeast Asian countries are “on track” to eliminate tariffs on most goods traded within the region by the beginning of 2010, Asean said in a statement Sunday. The group aims to form a free-trade area by Jan. 1 that would remove tariffs on more than 87 percent of imports, part of its efforts to create an economic zone modeled after the EU, without a common currency, by 2015.

Regional groups

The Japanese and Australian proposals would build on existing regional groupings. Those include the 10-member Asean, the 21-member Asia-Pacific Economic Cooperation bloc set to meet next month in Singapore and the 27-member Asean Regional Forum that US Secretary of State Hillary Clinton attended in July.

Rudd’s Asia-Pacific Community would include the US, Japan, China, India, Indonesia and “the other states of our region,” he said in a speech last year. Its purpose would be to cooperate on economic, political and security matters and dispel notions that a conflict in Asia may be inevitable, he said at the time.

Hatoyama, who came to office Sept. 16, said in a speech at the United Nations a week later that he would strive to create an East Asian community similar to the European Union. The goal was seen as potentially excluding the US after he published an opinion article in the New York Times in August arguing that “the era of US-led globalism is coming to an end.”

Besides Thailand, which holds Asean’s rotating chairmanship, the group includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore and Vietnam. A wider East Asian free trade area may emerge before a new regional community is formed, Abhisit said Sunday.

Source: Bloomberg

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