SINGAPORE (AFP) — The ASEAN regional bloc concluded free trade pacts with India and Pacific neighbours Australia and New Zealand on Thursday, setting the stage for broader Asian economic integration, officials said.
They hailed the agreements as important steps in Asia's efforts to link its diverse markets more closely, but also said they hope the regional deals will give impetus to the stalled Doha Round of global trade negotiations.
India and the 10-member Association of Southeast Asian Nations (ASEAN) announced they had concluded a deal for free trade in goods. The accord covers billions of dollars in trade and a market of 1.7 billion people.
"This is an important milestone for our region," said Indian Commerce Minister Kamal Nath.
The pact follows six years of difficult talks.
Ministers later also announced that ASEAN had concluded a wide-ranging free-trade agreement with Australia and New Zealand.
"This is the most comprehensive free trade agreement that ASEAN has ever entered. It is the largest free trade agreement that Australia has ever negotiated," Australian Trade Minister Simon Crean told reporters.
The accord covers not only merchandise trade but also services, investment, financial services, telecoms, electronic commerce, movement of people, intellectual property, competition policy and economic cooperation.
"The ministers see the agreement as paving the way to enhancing the region's economic integration and acting as an impetus to deepen and broaden the trade and investment among the 12 participating countries," a joint statement said.
Talks began in March 2005. ASEAN, Australia and New Zealand hope to sign the deal in December once it receives domestic approval from the individual countries.
ASEAN's total trade in goods with Australia and New Zealand increased from 41.0 billion US dollars in 2006 to 47.8 billion last year, the statement said.
With the new agreements, the Southeast Asian bloc of about 550 million people has forged free trade links with all major economies in the region. It earlier inked deals with China, Japan and South Korea.
ASEAN's deal with Japan covers goods, services and investments. The bloc is broadening its trade and services pacts with China and South Korea to also cover investments.
"We treat these (agreements) as platforms to build upon," Singapore Trade Minister Lim Hng Kiang told a news conference.
Beyond 2009 when ASEAN hopes to complete comprehensive free trade agreements (FTAs) with all of its key trading partners, the grouping can start harmonising many of the differing provisions of the pacts.
It can also move to integrate the agreements, which all have ASEAN playing a central role, said Lim.
"We hope to build on that. At the same time, our dialogue partners are negotiating FTAs among themselves and so this is going to be a network of FTAs and it will be ideal if we can put this all together in the next stage," he said.
Studies are underway on how to handle the tangle of FTAs in the future, he said.
ASEAN's members have already cut tariffs to between zero and five percent on 90 percent of goods and are moving to remove non-tariff barriers.
This is part of ASEAN's plan to establish a single market and manufacturing base by 2015 in a bid to remain competitive, especially with the rise of India and China.
ASEAN Secretary General Surin Pitsuwan said the bloc's agreements should also "give some impetus, some encouragement, to the stalled Doha Round" of global trade negotiations.
The so-called Doha Round broke down in July because of a dispute between India and the United States over agricultural tariffs.
With the prospects for a global trading regime in limbo, some officials said, negotiations for regional FTAs such as those pursued by ASEAN could gain momentum and lead to a massive Asia-wide free-trade zone.
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