- The Washington Times - Tuesday, November 5, 2002

China is pushing for closer economic ties with Southeast Asian nations through a free-trade agreement, a move that some say is likely to hurt smaller countries in the region.
China and the Association of Southeast Asian Nations yesterday signed a framework agreement to start free-trade talks next year.
A China-ASEAN free-trade agreement (FTA) would create a market with 1.7 billion consumers and $1.2 trillion in two-way trade, according to ASEAN estimates. But some analysts say that China's goal is grow at the expense of its smaller neighbors.
"The only way China becomes an economic power is to suck the oxygen out of the rest of the region," said John Tkacik, a senior fellow at the Heritage Foundation. China has been successful in attracting investment, often at the expense of the less-integrated ASEAN markets, he explained.
Separately, the United States also is moving toward closer economic ties with the region, but plans to talk with individual countries about trade agreements.
Late in October, President Bush announced the Enterprise for ASEAN Initiative, a vehicle to move the United States and ASEAN members toward bilateral free-trade agreements. The White House said that closer U.S. ties with the region will open up markets, especially to American agricultural goods, and help redirect investment into the ASEAN region.
Taken as a whole, ASEAN is the United States' third-largest overseas market, the White House said.
The United States and Singapore are close to completing free-trade negotiations. The Bush administration said that other trade agreements in the region would be based on the "high standards" set in the U.S.-Singaporean FTA.
The Bush administration in August won authority to negotiate trade agreements and submit them to Congress for an up or down vote.
ASEAN was founded in 1967 to promote economic growth, peace and stability in the region. The new trade framework between ASEAN members and China will look to lower trade barriers between the two sides.
Political pressure from China pushed the members toward signing the free-trade framework, rather than focusing on internal integration, Mr. Tkacik said. "All of the ASEAN nations were browbeaten into this [by China]," he said.
But the immediate political and economic effect of the trade talks is likely to be limited because the 10 ASEAN members have such disparate economies and there is limited economic integration among them, according to some analysts.
The economies of the 10 ASEAN members vary widely, from Laos' tiny, developing economy, with a gross domestic product of only $1.76 billion in 2001, to Indonesia's more robust market, where GDP reached $145.9 billion last year, according to ASEAN figures.
The Framework Agreement on Comprehensive Economic Cooperation targets 2010 for a free-trade agreement with more-developed ASEAN nations and 2015 for newer members, such as Cambodia, Laos, Vietnam and Burma. The agreement came during an ASEAN summit in Phnom Penh, Cambodia's capital.
Despite concerns over China forcing the FTA issue on smaller countries, the result could be positive.
"If this stimulates growth, then it is good for everybody," said Anthony Albrecht, a senior adviser at the U.S.-ASEAN Business Council, which is made up of American companies doing business in Southeast Asia. He characterized the agreement as an effort by ASEAN members to have good relations with neighboring countries.
ASEAN members are Brunei, Cambodia, Indonesia, Laos, Malaysia, Burma, Philippines, Singapore, Thailand and Vietnam.

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