RECENT FTAs IN EAST ASIA

1

• RECENT FTAs IN EAST ASIA

Presented by Dr Hank Lim Director of
Research
2
Topic

• THE RECENT FTA MOVEMENTS
• IN THE EAST ASIA REGION
• AND FUTURE PROSPECTS
• TOWARDS AN INTEGRAL FTA
• IN THE REGION

3
Points of Discussion

• Korea-US FTA ( KORUS FTA)- The conclusion of this
  FTA between the US and South Korea may set off a
  chain reaction to further interest in reviving
  the stalled FTA initiative between Japan and
  South Korea and between China and South Korea.
  Such knock-on effect may herald the emergence of
  Northeast Asia FTA which is vital to link-up with
  ASEAN Economic Community
• FTAAP (Free Trade Area for Asia Pacific) which
  was discussed at the recent APEC Summit in Sydney
  in August 2007. It was agreed to further explore
  the initiative without further commitment from
  APEC major players such as China, Japan, Korea
  and ASEAN. These economies are not supportive to
  the US initiative supported by Australia

4
Points of Discussion

• ASEAN-Japan Comprehensive Economic Partnership
  Agreement which was completed in August 2007 in
  Manila, the framework agreement was signed in
  November 2007 in Singapore. It could be an
  important mechanism and impetus to the emerging
  EAFTA
• Indonesia-Japan has concluded bilateral FTA which
  is not important with respect to regional trade
  and investment scope and impact but having
  relevance in terms of trade facilitation and
  development assistance issues

5
Points of Discussion

• ASEAN-South Korea FTA, except Thailand. This
  agreement would have further implication to the
  ultimate convergence of Northeast Asia and ASEAN
  within the framework of EAFTA
• ASEAN-India FTA has been postponed until January
  2008 because some disagreement by both sides
• ASEAN-CER (Australia and New Zealand) FTA
  negotiation is still continued because CER would
  like to include, competition policy, intellectual
  property and investment which are generally
  sensitive issues for ASEAN. In addition,
  Australia and New Zealand prefer to have a single
  undertaking and comprehensive approach in
  negotiating FTA with ASEAN.

6
Points of Discussion

• Possible regional FTA framework
• ASEAN 3 EAFTA
• ASEAN 6 CEPEA which was initiated by Japan in
  last EAS summit in January 2007 in Cebu. It seems
  recently this initiative has lost some impetus
  from the Japanese side. At the recent Third East
  Asia Summit in Singapore, there was no further
  impetus for CEPEA as ASEAN-India FTA and
  ASEAN-CER (Australia and New Zealand) were
  stalled due to major negotiating differences
• FTAAP has no groundswell support from ASEAN,
  China, South Korea and Japan as indicated at the
  recent APEC Summit in Sydney in August 2007.

7
Points of Discussion

• Sequence of FTA development
• ASEAN 3 modality is feasible if ASEAN Economic
  Community can link-up with a possible Northeast
  Asian FTA consisting of China, Japan and South
  Korea. This development has been much activated
  due to the recent conclusion of South Korea and
  the US FTA
• East Asia Summit framework is currently
  conceptualized as the supporting mechanism to
  provide supplement and strategic platform and
  mechanism to APT on broad strategic issues vital
  to the East Asia region.

8
Topic

• HOW SHOULD WE DEAL WITH
• THE DIFFERENT PROPOSALS TOWARDS
• AN INTEGRAL FTA
• IN THE EAST ASIA REGION
• ON A WHOLE?

9
Points of Discussion

• Based on the Report submitted by the Joint Expert
  Group (JEG) in July 2006 for feasibility study on
  EAFTA, among other things, recommended that East
  Asia should strive for a high-quality FTA in
  terms of comprehensive in scope, removing trade
  and investment barriers, strengthening capacity
  and fostering open regionalism. This will lead to
  further deepening of economic integration,
  enhancing the competitiveness of production
  networks and progressively reduce development
  gaps among East Asian countries.
• To achieve a high quality regional FTA, it is
  necessary that EAFTA should be negotiated and
  implemented as a single package through a gradual
  and progressive approach.