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| ASEAN and China launch first stage of free trade plan
NUSA DUA, Indonesia, Oct 6 (AFP) - Southeast Asian nations and China agreed Monday on a special tariff-busting programme to kickstart their grand plan to set up the world's largest free trade area (FTA), officials said. Trade ministers from the Association of Southeast Asian Nations (ASEAN) and the world's most populous nation adopted a protocol paving the way for the implementation from January 1, 2004 of a so-called "early harvest programme" under the FTA. BizVantage – Beyond the news: when knowing counts. The three-year programme is largely a concession by China to give early benefits to the ASEAN states through tariff reductions on a host of agricultural and manufactured goods while the actual implementation of the FTA begins on January 1, 2005, officials said. "The protocol today fleshed out an early harvest programme which provides specific benefits for ASEAN countries pending the adoption of an actual tariff-reduction agreement for the FTA," ASEAN Secretary-General Ong Keng Yong told AFP. The meeting on Indonesia's Bali resort island precedes a summit between ASEAN leaders and their counterparts from China, Japan and South Korea. Ong said the early harvest programme "allows ASEAN products to be exported to China at a very concessionary rate so that ASEAN countries can actually get benefits of a free trade arrangement even before the agreement is finalised." China and ASEAN states Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam agreed last year to create a FTA covering 1.7 billion consumers with a combined gross domestic product of two trillion dollars. It would be the biggest FTA in the world in terms of population, providing huge opportunities for economies of scale and scope for ASEAN and Chinese commerce and industry, Ong said. The FTA in goods will be established by 2010 for the six original members of ASEAN -- Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand -- and 2015 for the four other members. Although China offered the early harvest plan, the ASEAN states reciprocated by giving tariff concessions to their giant neighbour under a so-called tariff harmonised system for agricultural products like meat, fish, fruit, vegetables and milk, officials said. "This is economic confidence-building measure by ASEAN and China prior to the eventual implementation of their free trade area," ASEAN spokesman M.C. Abad said. "You can say that it is the opening salvo to achieve the FTA." Malaysia's international trade minister Rafidah Aziz said the early harvest programme covered agriculture products under the tariff harmonised system and specific products to be agreed through bilateral consultations between an ASEAN member country and China. She said under the programme, Malaysia had concluded with China a package of 590 products for tariff elimination, including unprocessed agricultural products as well as vegetable oils, cocoa products, detergents and glass envelopes. The Philippines, which has lately been cautious over opening up its market, expects to be the last ASEAN state to finalise its early harvest programme with China, its trade and industry secretary Manuel Roxas said. He said although Manila adopted the protocol and was keen on arriving at a mutually satisfactory list with China, "if the bottom line positions are unsatisfactory for us, then we will not avail of an early harvest programme." "The beauty of the ASEAN process is that there is a structure allowing for differences while we move forward," Roxas said. The Southeast Asian nations, which are in the midst of establishing their own free trade area, will also sign a FTA pact with India, the world's second most populous nation, as well as an agreement with Japan with provisions for a FTA. pp/sm/dv/ds ASEAN-economy
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