ASEAN summits highlight FTA, financial co-op

(Xinhua)
Updated: 2009-04-10 13:35

PATTAYA, Thailand -- Free trade area, financial cooperation and regional integration are three main topics for leaders from ASEAN and its dialogue partners who will gather in Thailand's central seaside resort of Pattaya for talks scheduled on April 10-12.

ASEAN+CHINA SUMMIT HIGHLIGHTS FTA

China and ASEAN launched cooperation dialogue in 1991 and signed the China-ASEAN Framework Agreement on Comprehensive Economic Cooperation in 2002, envisaging the establishment of the ASEAN-China free trade area (ACFTA) by 2010.

In November 2004, China and ASEAN signed an agreement on goods trade and a similar agreement on services was inked in 2007. At the upcoming ASEAN+China summit, China and the ten-nation bloc are expected to sign the ASEAN-China Investment Agreement, which, together with the goods and services agreements, will formally complete the FTA negotiation process between the two sides.

In 2008, bilateral trade volume between China and ASEAN increased 14 percent to reach 231 billion U.S. dollars year-on- year. By 2010 when the FTA is established, bilateral trade volume would amount to 1.2 trillion U.S. dollars, transforming the area into the world's third largest FTA after the its counterparts in North America and Europe.

Analysts said pushing forward the China-ASEAN FTA showed the two parties' political will of consolidating neighborly friendship and deepening economic and trade cooperation. This will help the two sides promote further cooperation in other areas.

ASEAN+3 CENTERS ON FINANCIAL CRISIS

Amid a severe financial crisis and the ensuing global economic slowdown, cooperation in financial and economic areas assumes ever more significance and urgency.

Highly dependent on exports, ASEAN countries have been hard hit by foreign demand slump as the United States, the European Union and Japan have successively entered recessions. In January, Indonesian exports posted a record low in 22 years; the Philippines registered only 0.3 percent growth of exports in 2008. ASEAN's latest report depicted a grimmer picture for its five members, Malaysia, Indonesia, the Philippines, Thailand and Vietnam, forecasting their DGP in 2009 to merely grow 6.7 percent.

Given such a scenario, ASEAN plus China, Japan and South Korea will center their talks on efforts to jointly tackle the crisis at the 12th ASEAN+3 summit. The ASEAN+3 countries have scored a major achievement by introducing the Chiang Mai initiative, a bilateral currency swap arrangement to help countries tackle a possible foreign capital flow shortage. The initiative was later upgraded to the Chiang Mai Initiative Multilateralization (CMIM), a regional foreign reserve pool. Now ASEAN and China, Japan and South Korea have agreed to inject 120 billion dollars into the reserve pool, or the CMIM, in case of a financial crisis.

At the summit, the concerned countries are expected to spell out the contribution ratio of the projected reserve pool.

The ten ASEAN countries and China, Japan and South Korea have a combined GDP of 9 trillion dollars, accounting for 16 percent of the world's overall GDP. Their foreign reserves totaled at 3.6 trillion dollars, about half the world's foreign reserves.

Analysts said given the magnitude of the overall economic volume, any joint moves by ASEAN and China, Japan and South Korea will send a positive message to the world in the global fight against crisis and slowdown.

EAST ASIAN SUMMIT CONCENTRATES ON REGIONAL INTEGRATION

The East Asian Summit entered its fourth edition this April. The summit, bringing together leaders of ASEAN, China, Japan, South Korea, India, Australia and New Zealand, provides a platform for regional integration by sustaining economic development, streamlining investment environment, creating a single market and ensuring energy and food security.

Dedicated to promoting regional integration, the summit will discuss the way forward for the region and more concrete cooperation in finance, education and bird flu prevention. Analysts said East Asian countries share the common aspiration of regional integration despite their differences in some areas. The current financial crisis gave another impetus to achieve that goal.