Southeast Asia trade deals on track for 2015

By Raju Gopalakrishnan, MANILA, Reuters

Southeast Asia will have completed free trade agreements with all major countries in the region within the next five years, ahead of forming its own EU-style economic community in 2015, the bloc said on Sunday.

The Association of South East Asian Nations (ASEAN) is also negotiating with the European Union on a free trade agreement, but no deadlines have been set, ASEAN Secretary-General Ong Keng Yong told reporters after a two-day meeting in Manila.

ASEAN comprises Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

Trade deals with China, Japan, India, Australia, New Zealand, and South Korea should be in place by 2012, Ong said. All six dialogue partners were also represented at the meeting.

“This will tie in with our leaders’ decision to have the ASEAN community established by 2015,” Ong said.

Unlike negotiations with China and S. Korea, which allowed ASEAN to agree on a free trade area in goods before tackling services and investments, New Zealand and Australia want a comprehensive deal which will cover everything in one go.

Indonesia’s trade minister said this all encompassing approach made it more difficult to reach agreement.

“On the goods side the gap is not so big, it’s just a question of balancing the level of ambition and flexibility,” Mari Pangestu told reporters.

“There are other chapters in the Australia-New Zealand-ASEAN agreement which are more difficult for us because we have not really negotiated on those sectors with other countries, like services, investment and other aspects.”

ASEAN has adopted free trade as the vehicle to faster growth and Pangestu said the organization, which wants to shed its hallmark consensus-style of agreement in favor of more formal rules, should have a regional group to monitor whether members were scrapping tariffs as agreed.

“Someone has to monitor whether we are meeting the deadlines on time,” she said.

Earlier on Sunday, China again defended itself against charges of substandard exports, saying the vast majority of its products were of good quality, but it would crack down on the tiny fraction of goods not up to standard.

“The pass rate, or the qualified rate, of Chinese products exported to the United States or Japan are all above 99 percent,” Chinese Commerce Minister Bo Xilai told reporters.

“In the past 29 years, the annual growth rate of Chinese exports is 17 percent and this itself shows the high degree of recognition by other countries of China’s product quality,” he added.

“However, even if only 0.1 percent of products are problematic, we will take it very seriously.”

The world’s largest toymaker, Mattel, last week recalled over 18 million Chinese-made toys because of hazards from small magnets that can cause injury if swallowed, just two weeks after it recalled 1.5 million toys due to fears over lead paint.

Other Chinese export scares have hit toothpaste, animal food ingredients, tires, eels and seafood. Deadly chemicals have found their way into cough medicine, killing patients in Panama.

A joint statement from China and the 10-member ASEAN said product quality and food safety “were common challenges faced by every country”.