News

ASEAN Seeks to Boost Exports with Free Trade Agreements

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 29th 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, the chief economist for the Asian Development Bank, a non-profit lending institution in Manila, 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," he said. "I look at it more as a win-win rather than a zero-sum game."

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 FTAs, 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, a trade analyst with the Lowy independent Institute on International Policy in Australia, warns the biggest risk may be that FTAs could undermine the global benefits of the World Trade Organization's structure. He says dozens of overlapping FTAs may put conflicting and overly complex trade rules in force.

"And there's a risk there that it sort of gums up world trade. 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," explained Mr. Thirlwell.

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

Teofilo Aquila, who studies Southeast Asian economic development at the National University of Singapore and says many small ASEAN companies may lose the struggle when the FTA with China starts phasing in next year, 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 FTA 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.
Astronauts Train Underwater for Deep Space Missionsi
|| 0:00:00
...    
🔇
X
George Putic
July 30, 2015 8:59 PM
Manned deep space missions are still a long way off, but space agencies are already testing procedures, equipment and human stamina for operations in extreme environment conditions. Small groups of astronauts take turns in spending days in an underwater lab, off Florida’s southern coast, simulating future missions to some remote world. VOA’s George Putic reports.
Video

Video Astronauts Train Underwater for Deep Space Missions

Manned deep space missions are still a long way off, but space agencies are already testing procedures, equipment and human stamina for operations in extreme environment conditions. Small groups of astronauts take turns in spending days in an underwater lab, off Florida’s southern coast, simulating future missions to some remote world. VOA’s George Putic reports.
Video

Video Civil Rights Leaders Struggled to Achieve Voting Rights Act

Fifty years ago, lawmakers approved, and U.S. President Lyndon Johnson signed, the Voting Rights Act of 1965. The measure outlawed racial discrimination in voting, giving millions of blacks in many parts of the southern United States federal enforcement of the right to vote. Correspondent Chris Simkins introduces us to some civil rights leaders who were on the front lines in the struggle for voting rights.
Video

Video Booming London Property a ‘Haven for Dirty Money’

Billions of dollars of so-called ‘dirty money’ from the proceeds of crime - especially from Russia - are being laundered through the London property market, according to anti-corruption activists. As Henry Ridgwell reports from the British capital, the government has pledged to crack down on the practice.
Video

Video Hometown of Boy Scouts of America Founder Reacts to Gay Leader Decision

Ottawa, Illinois, is the hometown of W.D. Boyce, who founded the Boy Scouts of America in 1910. In Ottawa, where Scouting remains an important part of the legacy of the community, the end of the organization's ban on openly gay adult leaders was seen as inevitable. VOA's Kane Farabaugh reports.
Video

Video 'Metal Muscles' Flex a New Bionic Hand

Artificial limbs, including the most complex of them – the human hand – are getting more life-like and useful due to constant advances in tiny hydraulic, pneumatic and electric motors called actuators. But now, as VOA’s George Putic reports, scientists in Germany say the future of the prosthetic hand may lie not in motors but in wires that can ‘remember’ their shape.
Video

Video Russia Accused of Abusing Interpol to Pursue Opponents

A British pro-democracy group has accused Russia of abusing the global law enforcement agency Interpol by requesting the arrest and extradition of political opponents. A new report by the group notes such requests can mean the accused are unable to travel and are often unable to open bank accounts. VOA's Henry Ridgwell reports.
Video

Video 'Positive Atmosphere' Points Toward TPP Trade Deal in Hawaii

Talks on a major new trade agreement among 12 Pacific Rim nations are said to be nearing completion in Hawaii. Some trade experts say the "positive atmosphere" at the discussions could mean a deal is within reach, but there is still hard bargaining to be done over many issues and products, including U.S. drugs and Japanese rice. VOA's Jim Randle reports.
Video

Video Genome Initiative Urgently Moves to Freeze DNA Before Species Go Extinct

Earth is in the midst of its sixth mass extinction. The last such event was caused by an asteroid 66 million years ago. It killed off the dinosaurs and practically everything else. So scientists are in a race against time to classify the estimated 11 million species alive today. So far only 2 million are described by science, and researchers are worried many will disappear before they even have a name. VOA’s Rosanne Skirble reports.
Video

Video Scientists: One-Dose Malaria Cure is Possible

Scientists have long been trying to develop an effective protection and cure for malaria - one of the deadliest diseases that affects people in tropical areas, especially children. As the World Health Organization announces plans to begin clinical trials of a promising new vaccine, scientists in South Africa report that they too are at an important threshold. George Putic reports, they are testing a compound that could be a single-dose cure for malaria.
Video

Video 'New York' Magazine Features 35 Cosby Accusers

The latest issue of 'New York' magazine features 35 women who say they were drugged and raped by film and television celebrity Bill Cosby. The women are aged from 44 to 80 and come from different walks of life and races. The magazine interviewed each of them separately, but Zlatica Hoke reports their stories are similar.
Video

Video US Calls Fight Against Human Trafficking a Must Win

The United States is promising not to give up its fight against what Secretary of State John Kerry calls the “scourge” of modern slavery. Officials released the country’s annual human trafficking report Monday – a report that’s being met with some criticism. VOA’s National Security correspondent Jeff Seldin has more from the State Department.
Video

Video Washington DC Underground Streetcar Station to Become Arts Venue

Abandoned more than 50 years ago, the underground streetcar station in Washington D.C.’s historic DuPont Circle district is about to be reborn. The plan calls for turning the spacious underground platforms - once meant to be a transportation hub, - into a unique space for art exhibitions, presentations, concerts and even a film set. Roman Mamonov has more from beneath the streets of the U.S. capital. Joy Wagner narrates his report.
Video

Video Europe’s Twin Crises Collide in Greece as Migrant Numbers Soar

Greece has replaced Italy as the main gateway for migrants into Europe, with more than 100,000 arrivals in the first six months of 2015. Many want to move further into Europe and escape Greece’s economic crisis, but they face widespread dangers on the journey overland through the Balkans. VOA's Henry Ridgwell reports.
Video

Video Stink Intensifies as Lebanon’s Trash Crisis Continues

After the closure of a major rubbish dump a week ago, the streets of Beirut are filling up with trash. Having failed to draw up a plan B, politicians are struggling to deal with the problem. John Owens has more for VOA from Beirut.
Video

Video Paris Rolls Out Blueprint to Fight Climate Change

A U.N. climate conference in December aims to produce an ambitious agreement to fight heat-trapping greenhouse gases. But many local governments are not waiting, and have drafted their own climate action plans. That’s the case with Paris — which is getting special attention, since it’s hosting the climate summit. Lisa Bryant takes a look for VOA at the transformation of the French capital into an eco-city.

VOA Blogs