ASEAN concluded: Multiplying Free Trade Areas; Geopolitics of Southeast Asia
I spent most of the Monday hour talking about the evolution of the ASEAN free trade
agreement from a weapon against China to a group that will cooperate with China to build the
largest free trade area in the world. But there are many more free trade areas being inaugurated.
While the US Congress dithers about the Colombian trade pact and worries about whether trade
with Honduras will hurt American workers, bilateral (two-country) free trade pacts, regional
pacts such as AFTA-China and transregional pacts are crisscrossing East Asia.
New Free Trade Agreements
. Historically, Japan has not entered into many bilateral
free trade agreements. However, in the last few years, Japan did sign three such agreements, first
with Mexico, a move designed to keep Japan’s access to Mexico open after the passage of
NAFTA, and more recently with Singapore and Malaysia, deals again designed to preserve
Japan’s access to those countries open after the signing of the China-ASEAN pact. At the end of
March, Japan signed a free trade pact with ASEAN itself, which will become effective in 2012.
The Japan-ASEAN and China-ASEAN deals are two of a growing proliferation of trade
deals, both regional and bilateral, in the East Asian region. Others include a China-Thailand FTA
for agricultural products, already in effect in 2003, and a Korea-ASEAN free trade pact, which
began in 2006. Australia and New Zealand have a free trade agreement with each other, and New
Zealand signed a free trade pact with China earlier this week.
Of course, this is not all smooth sailing. Japan has tried to negotiate pacts with India and
Australia, but both negotiations have bogged down because Japan wants to continue closing itself
to agricultural imports. Negotiations between India and ASEAN and India and Australia have
also taken longer to complete than was originally contemplated, apparently more out of
bureaucratic caution on the Indian side that because of unresolvable substantive problems.
But, regardless of slowdowns, a new pattern is emerging in Asia. The leading trading
blocs are each becoming the hubs of networks of trade agreements. Thus, ASEAN is connected
with China, Korea, and Japan, and individual members of ASEAN are connected with Australia
and New Zealand. China for its part is connected with ASEAN and is in negotiations with India,
Peru and Chile. In the next few years, the China-ASEAN free trade area, big as it is, will acquire
even more heft through the adhesion of other countries in Asia and across the Pacific to one or