News Room - Business/Economics

Posted on 26 Aug 2008

Asean FTAs to be concluded

Asean hopes to announce the conclusion of several free trade agreements (FTAs) and sign three mutual recognition agreements (MRA) in Singapore this week.

 

Asean economic ministers (AEM) have converged in the republic for the five-day 40th AEM meeting which kicked off yesterday. Top of the list of FTAs that are expected to be concluded (in terms of negotiations) are those of Asean-India and Asean-Australia-New Zealand.

 

The FTA with India is solely on goods while the one with Australia and New Zealand is a single undertaking covering products, services and investment.

 

The MRAs would cover accountancy services, dental and medical practitioners, said International Trade & Industry Ministry (Miti) deputy secretary general (trade) Datuk Dr Rebecca Fatima Sta Maria.

 

While Singapore remains confident that the Asean-India FTA will be signedat this meeting, some Asean members believe a lot more work is required before that can take place. Many in Asean expect the agreement to be signed at the 14th Asean Summit in Bangkok in December.

 

An issue that would be raised at this year’s AEM meeting is Thailand’s readiness to sign the FTAs as it has its own internal problems and has changed its legislation.

 

“Asean is targeting to sign the Asean-India FTA in December and hopes to start the FTA with India by Jan 1, 2009,” Sta Maria said.

 

She said the approach Asean took on the FTA with India was a gradual process of firstly negotiating goods FTA before moving on to services.

 

Also expected at this meeting are the completion of the 6th package of services commitments (air travel, healthcare, e-Asean, IT services, telecommunications and tourism) under the Asean framework agreement on services and the completion of the 7th package for signing in December.

 

The ministers were also expected to announce the conclusion of negotiations for the Asean trade in goods agreement and the Asean comprehensive investment agreement, with the signing also targeted in December, said Sta Maria.

 

Malaysia is represented at the AEM meeting by International Trade and Industry Minister Tan Sri Muhyiddin Yassin.

 

Data released at the meeting revealed that total Asean trade (both intra and extra Asean) rose 15% in 2007 to US$1.6 trillion. Of this, intra-Asean trade was US$404bil while extra-Asean totalled US$1.2 trillion.

 

In terms of foreign direct investments in Asean last year, the European Union ranked highest with US$14.3bil, which represented a 55% growth over 2006.Japan was second with US$8.9bil, followed by the United States (US$5.1bil), South Korea (US$2.7bil) and Australia (US$1bil).