Asean will not delay free trade with China

13/01/2010
Reuters

Asean Secretary General Surin Pitsuwan arrives at a hotel in Vietnam's central Danang resort city on Jan 13, 2010. – Reuters pic

CORRECTED

DANANG, Vietnam, Jan 13 – Southeast Asian countries will not delay implementing a free-trade zone with China that has drawn fire from some industry groups, a senior regional official said on Wednesday.

The Asian Wall Street Journal reported that Indonesia wanted to renegotiate the trade agreement that took effect on Jan 1 and had sent a letter to the Association of Southeast Asian Nations (Asean) asking for a one-year delay in imposing zero tariffs on a range of goods due to concerns about low-cost Chinese imports.

Surin Pitsuwan, Asean Secretary General, said he was not aware of such a letter.

“My impression is all capitals are adjusting very well and are very, very committed,” he told Reuters in the Vietnamese city of Danang, where Asean’s 10 Foreign Ministers were meeting.

“From what I heard, some private sectors are complaining, but the governments are not going to do anything to delay.”

A spokesman for Indonesia’s Industry Ministry, Muhdori, said that his department had sent a letter to the Coordinating Minister for the Economy, Hatta Rajasa, on Dec. 20 asking for scheduled tariff reductions on 146 product lines to be delayed by one year.

The letter also asked for scheduled tariff reductions for a further 60 items to be delayed by two years and for 22 items to be delayed until 2018.

Muhdori told Reuters by phone that a final decision on whether Indonesia would forward those requests to Asean rested with Rajasa but a spokesman for his office declined to comment.

The China-Asean free trade zone will be the third biggest in the world by volume after the European Economic Area and the North American Free Trade Area. It includes 1.9 billion people.

Tariffs on 90 per cent of goods traded with China are to be eliminated by this year for Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand.

Asean’s poorer members, Cambodia, Laos, Vietnam and Myanmar, will have to drop tariffs by 2015 under the agreement.

China-Asean trade was expected to hit $200 billion by this year, up from $192.6 billion in 2008 and $113 billion in 2005.