http://news.xinhuanet.com/english/2009-12/31/content_12734278.htm
BEIJING, Dec. 31 -- A giant Free Trade Area (FTA) including China and
the member states of Association of Southeast Asia Nations (ASEAN)
will be established Friday. The new China-ASEAN FTA was initiated
seven years ago on Nov 4, when China and ASEAN signed a framework
agreement in Phnom Penh. It will definitely impact the prospect of
economic development in Asia and even the world profoundly.
Against the background of the founding of the largest FTA in Asia,
it is high time to think about envisioning an Asian-wide trade
community.
Regional integration, a trend across the globe in the last two
decades, usually starts from trade integration: FTA or common market
first, then integration in the financial and monetary fields, and
finally in the high political areas such as security. The best path of
integration in Asia should begin in the economic front, too.
The current state of Asian economies urges us to consider an FTA
covering the whole region. First, the export structure requires the
Asian economies to cooperate. The exports of East Asian countries,
especially ASEAN member countries, heavily depend on intermediate
products such as spare parts and raw materials, which are traditional
labor-intensive goods. If the export markets stumble, the homogeneous
export structure would make ASEAN economies overproduce and force them
to fiercely compete with each other in a shrunk international market.
Consequently, exports would plunge. Hence, it is imperative that Asian
economies develop division of labor and build up complementarities
among themselves.
At the same time, a chain of production and trade has connected
the Asian economies, which now resembles a colossal assembly line.
When the economy of a country booms, others will benefit; if economic
crisis hit one country, it will soon spread to other Asian countries.
In the age of economic inter-dependence, cooperation is inevitable.
A strong consumer goods market is in absence in Asia, too.
Dependence on US and European markets has taken a heavy toll on Asian
economies during the global financial crisis. The current trade
policies can hardly facilitate Asian countries to foster a substantial
end-use market and rid themselves of the reliance on the Western
market.
And, there is still great potential to promote trade among Asian
countries. Though the trade volume among East Asian countries has
risen in a fast speed, the proportion of intra-regional trade in the
total trade volume is still low due to similar export structure. In
recent years, we have observed rapid growth of trade in East Asia. For
example, trade between China and ASEAN has surged to $231.1 billion in
2008, almost triple the figure in 2003. Now China is the third largest
trade partner of ASEAN, while ASEAN ranks the fourth among China's
major trade partners. Compared with EU and NAFTA, however, Sino-ASEAN
bilateral trade still accounts for a much smaller share in their total
trade volume. Within the ASEAN, the intra-regional trade has
maintained at around 25 to 30 percent of the total trade, and no
significant change has happened in the past two decades. Other trading
titans like Japan and the Republic of Korea (ROK) have not mainly
traded with Asian economies, too.
In order to cushion the impact of market wobbling at other parts
of the world, and secure a stable development, Asian countries need an
institution to coordinate their economic and trade policies. The US,
the largest export market for many Asian economies, was not favorable
for a regional integration regime in Asia. The financial crisis,
however, has shattered the US dominance on world economy, especially
the status of the dollar as the sole global currency. It offers an
unprecedented opportunity for the Asian countries to promote regional
economic integration. Whether the Asian countries could make good use
of the great opportunity is a key for them to be unfettered from the
economic neo-colonialism and walk on a path of free and sustainable
development. The unfair treatment towards Asian countries in the
current world economic system can only be surmounted by the
cooperation among themselves.
Since it may be the best chance to advance economic integration in
Asia, we should seize it and actively promote substantial progress. In
order to make up for the losses caused by the declining consumption in
the US and European markets, China should boost its domestic
consumption and build up a gigantic end-use market for the whole Asia.
Only if a colossal and open consumers-goods market is established, the
export and even the economic development of Asian countries could be
secured. Only on this basis can Asian countries implement the existing
FTA agreements, promote trade cooperation, negotiate on an FTA
covering all or most of the Asian economies, and eventually build up
an Asian-wide FTA.
Along with an Asian FTA, Asian countries should invite the Mideast
countries to invest their petrol-dollar in the infrastructure and
industries in Asia, and enhance economic cooperation between them. The
final target will be a free trade regime across the whole Asia, and
every country, large or small, can benefit from the comparative
advantage brought by free trade.
An Asian FTA will facilitate the trade growth in the continent,
promote division of labor among Asian economies and ensure the stable
economic development and financial security in Asia. It could also be
a cornerstone for the regional integration in other fronts, such as
food security, energy security, environmental protection, and the
measures to curb greenhouse gas emissions. Finally, the FTA may extend
to a comprehensive economic union.
An Asian-wide FTA will not only facilitate the economic growth of
Asia in the long run, but also help shape a fair, rational and
harmonious new international economic order. It will not only benefit
the Asian people, but also other parts of the world.
The author is a researcher at the Central Party School of the
Communist Party of China.
--
You received this message because you are subscribed to the Google Groups
"World-thread" group.
To post to this group, send email to [email protected].
To unsubscribe from this group, send email to
[email protected].
For more options, visit this group at
http://groups.google.com/group/world-thread?hl=en.
