News

    ASEAN Seeking Boost Exports With Free Trade Agreements

    Multimedia

    Audio

    The Association of Southeast Asian Nations has gone from its origins as a small grouping of relatively impoverished nations to one of the world's major trading blocs. At its annual summit on November 29 and 30, ASEAN will sign a deal with China that ultimately will create the world's largest free trade area.

    Within five years, a new free trade agreement between the Association of Southeast Asian Nations, ASEAN, and China will cover more than 1.7 billion people. Already trade between the two is worth $100 billion annually.

    The deal makes it easier for all 10 ASEAN nations to export goods to China, and to import Chinese products. Some ASEAN businesses are concerned they will be overpowered by China's giant, low cost manufacturers. But many economists see the deal as good for Southeast Asia, and a harbinger of things to come.

    Ifzal Ali is the chief economist for the Asian Development Bank, a non-profit lending institution in Manila. He says that as China's economy grows and its wages increase, some of its manufacturing will shift to ASEAN's poorer members.

    "So what you will see is that as China rushes ahead, some of the things that it is doing now will be transferred to countries like Vietnam, other countries in the Mekong area…. I look at it more as a win-win rather than a zero sum game," he said.

    The deal with China will not be the last. ASEAN already is in talks with South Korea, Japan and India on creating trading alliances. And several ASEAN nations have signed bilateral trade agreements with other countries - Singapore and Thailand both have deals with the United States.

    Trade is the lifeblood of Asia. Starting with Japan and South Korea, which built economic dynamos from the ashes of war in the last century, every country in the region has sought to build wealth by exporting everything from lumber to computer chips.

    ASEAN, which includes some of the world's poorest countries - Cambodia, Burma, Laos and Vietnam - already is a major trading entity. It exports more than $400 billion worth of goods a year, and its imports top $360 billion.

    With the World Trade Organization making slow progress on global trade liberalization, ASEAN leaders have made it clear they will look to free trade agreements to ensure growth.

    However, analysts warn these deals, known as F.T.A.s, have risks. One problem for small nations is that leaders - eager to sign a deal with large, wealthy countries - may grant too many concessions, harming their own interests.

    Mark Thirlwell is a trade analyst with the Lowy independent Institute on International Policy in Australia. He warns the biggest risk may be that F.T.A.s could undermine the global benefits of the World Trade Organization's structure. He says dozens of overlapping F.T.A.s may put conflicting and overly complex trade rules in force.

    "And there's a risk there that it sort of gums up world trade," he said. "I mean, the whole point of the multilateral system is that if you do it at one central global level, you can sort of try to overcome these distortions that you get by doing it regionally or bilaterally."

    Even when trade agreements are balanced and do not impede WTO efforts, they can leave many businesses struggling to compete.

    Teofilo Aquila studies Southeast Asian economic development at the National University of Singapore and says many small ASEAN companies may lose the struggle when the F.T.A. with China starts phasing in next year. He says ASEAN governments and businesses can reduce the disruption, if they work together.

    "By pulling together the industries in ASEAN including both physical and human resources, so that ASEAN can come up with much bigger … companies, that would enable smaller and medium enterprises to minimize the risks," he said.

    ASEAN governments, and many economists, think free trade agreements offer far more benefits than disadvantages. Mr. Ali at the Asian Development Bank notes that the deals can push governments to improve their banking and legal systems to facilitate trade, and to develop fiscally sound budgets.

    "Markets will punish countries that do not follow appropriate macro-economic policies both on the fiscal and the monetary side, do not follow appropriate microeconomic polices in terms of ensuring an even playing field," he said.

    Ultimately, Mr. Ali says, if it signs an F.T.A. with India in the next few years, on top of this year's deal with China, ASEAN is likely to have a pivotal role in an unprecedented economic expansion in Asia.

    This forum has been closed.
    Comments
         
    There are no comments in this forum. Be first and add one

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Slow Rebuilding Amid Boko Haram Destruction in Nigeria’s Northeasti
    X
    June 29, 2016 6:15 PM
    Military operations have chased Boko Haram out of towns and cities in Nigeria’s northeast since early last year. But it is only recently that people have begun returning to their homes in Adamawa state, near the border with Cameroon, to try to rebuild their lives. For VOA, Chris Stein traveled to the area and has this report.
    Video

    Video Slow Rebuilding Amid Boko Haram Destruction in Nigeria’s Northeast

    Military operations have chased Boko Haram out of towns and cities in Nigeria’s northeast since early last year. But it is only recently that people have begun returning to their homes in Adamawa state, near the border with Cameroon, to try to rebuild their lives. For VOA, Chris Stein traveled to the area and has this report.
    Video

    Video Clinton Leads Trump, But Many Voters Don't Like Either

    In the U.S. presidential race, most recent polls show Democrat Hillary Clinton with a steady lead over Republican Donald Trump as both presumptive party nominees prepare for their party conventions next month. Trump’s disapproval ratings have risen in some recent surveys, but Clinton also suffers from high negative ratings, suggesting both candidates have a lot of work to do to improve their images before the November election. VOA National correspondent Jim Malone has more from Washington.
    Video

    Video New US Ambassador to Somalia Faces Heavy Challenges

    The new U.S. envoy to Somalia, who was sworn into office Monday, will be the first American ambassador to that nation in 25 years. He will take up his post as Somalia faces a number of crucial issues, including insecurity, an upcoming election, and the potential closure of the Dadaab refugee camp in Kenya. VOA’s Jill Craig asked Somalis living in Kenya’s capital city Nairobi how they feel about the U.S. finally installing a new ambassador.
    Video

    Video At National Zoo, Captivating Animal Sculptures Illustrate Tragedy of Ocean Pollution

    The National Zoo in Washington, D.C., is home to about 1,800 animals, representing 300 species. But throughout the summer, visitors can also see other kinds of creatures there. They are larger-than-life animal sculptures that speak volumes about a global issue — the massive plastic pollution in our oceans. VOA's June Soh takes us to the zoo's special exhibit, called Washed Ashore: Art to Save the Sea.
    Video

    Video Baghdad Bikers Defy War with a Roar

    Baghdad is a city of contradictions. War is a constant. Explosions and kidnappings are part of daily life. But the Iraqi capital remains a thriving city, even if a little beat up. VOA's Sharon Behn reports on how some in Baghdad are defying the stereotype of a nation at war by pursuing a lifestyle known for its iconic symbols of rebellion: motorbikes, leather jackets and roaring engines.
    Video

    Video Melting Pot of Immigrants Working to Restore US Capitol Dome

    The American Iron Works company is one of the firms working to renovate the iconic U.S. Capitol Dome. The company employs immigrants of many different cultural and national backgrounds. VOA’s Arman Tarjimanyan has more.
    Video

    Video Testing Bamboo as Building Material

    For thousands of years various species of bamboo - one of the world's most versatile plants - have been used for diverse purposes ranging from food and medicine to textiles and construction. But its use on a large scale is hampered because it's not manufactured to specific standards but grown in the ground. A University of Pittsburgh professor is on track to changing that. VOA’s George Putic reports.
    Video

    Video Orphanage in Iraqi City Houses Kids Who Lost their Parents to Attacks by IS

    An orphanage in Iraqi Kurdistan has become home to scores of Yazidi children who lost their parents after Islamic State militants took over Sinjar in Iraq’s Nineveh Province in 2014. Iraqi Kurdish forces backed by the U.S. airstrikes have since recaptured Sinjar but the need for the care provided by the orphanage continues. VOA’s Kawa Omar filed this report narrated by Rob Raffaele.
    Video

    Video Re-Opening Old Wounds in a Bullet-Riddled Cultural Landmark

    A cultural landmark before Lebanon’s civil war transformed it into a nest of snipers, Beirut’s ‘Yellow House’ is once again set to play a crucial role in the city.  Built in a neo-Ottoman style in the 1920s, in September it is set to be re-opened as a ‘memory museum’ - its bullet-riddled walls and bunkered positions overlooking the city’s notorious ‘Green Line’ maintained for posterity. John Owens reports from Beirut.
    Video

    Video Brexit Resounds in US Presidential Contest

    Britain’s decision to leave the European Union is resounding in America’s presidential race. As VOA’s Michael Bowman reports, Republican presumptive nominee Donald Trump sees Britain’s move as an affirmation of his campaign’s core messages, while Democrat Hillary Clinton sees the episode as further evidence that Trump is unfit to be president.
    Video

    Video NASA Juno Spacecraft, Nearing Jupiter, to Shed Light on Gas Giant

    After a five-year journey, the spacecraft Juno is nearing its destination, the giant planet Jupiter, where it will enter orbit and start sending data back July 4th. As Mike O'Sullivan reports from Pasadena, California, the craft will pierce the veil of Jupiter's dense cloud cover to reveal its mysteries.
    Video

    Video Orlando Shooting Changes Debate on Gun Control

    It’s been nearly two weeks since the largest mass shooting ever in the United States. Despite public calls for tighter gun control laws, Congress is at an impasse. Democratic lawmakers resorted to a 1960s civil rights tactic to portray their frustration. VOA’s Carolyn Presutti explains how the Orlando, Florida shooting is changing the debate.

    Special Report

    Adrift The Invisible African Diaspora