- The Washington Times - Wednesday, November 7, 2001

BANDAR SERI BEGAWAN, Brunei Leaders from Southeast Asia and China said yesterday they would pursue plans to create the world's biggest free-trade area within 10 years.
The free-trade area would have a combined market of 1.7 billion people and a gross domestic product of $2 trillion, said Brunei's Sultan Hassanal Bolkiah.
After talks with Chinese Prime Minister Zhu Rongji, the 10-nation Association of Southeast Asian Nations meeting said it would try to work out the details. Analysts say such a plan faces many hurdles that could block the arrangement.
Southeast Asia was the world's fastest-growing region before its financial crisis hit in 1997. Its export-driven economies have struggled to attract foreign investment since the crash, and Its governments believe they can resuscitate the region through their own free-trade area and the deal with China.
But some leaders warned the plan should be carefully negotiated to avoid cheap Chinese goods flooding Southeast Asia and harming their economies.
"We don't want ourselves to be just a market for China," Malaysian Prime Minister Mahathir Mohamed said.
Chinese Vice Foreign Minister Wang Yi said the free-trade agreement would bring about a 50 percent increase in exports on both sides.
"Of course, we will be faced with big problems and challenges because there is a need for both sides to open their markets to each other," Mr. Wang told reporters. "What is more important is that the leaders have shown the political will."
ASEAN's plans for its own separate free-trade area, in which barriers on a wide range of products would be dropped by 2003, are struggling because of disagreements over Malaysia's car market and Thai petrochemicals.
Analysts say that with ASEAN nations seemingly unable to complete their own free-trade area, talk of a China union is even more far-fetched.
"Domestic pressures to protect local industries will be a huge barrier to an ASEAN-China free-trade area," said Song Seng Wun, GK Goh Research's Singapore-based economist.
ASEAN groups include Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.


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