Only five years ago many observers wrote off ASEAN as an irrelevance, Malaysian
Prime Minister Mahathir Mohamad told a press conference on November
5.
ASEAN's leaders line up for a rare display of unity at the 8th ASEAN Summit. It was held at Phnom Penh's Inter-Continental Hotel on November 4 and 5. The leaders of China, Japan, India, South Korea and South Africa also attended. At the top of the agenda were trade, regional security and tourism.
"But now it is an entity that is wooed by many people," he
said.
The most substantial suitor was China, a fact that did not go
unnoticed by other economic heavyweights including Japan and India. Their
respective prime ministers both came to Phnom Penh for the summit looking to cut
their own trade deals.
Mahathir was speaking after one of the busiest
ASEAN meetings to date, a summit at which Cambodia managed to bask briefly in
the glory of the world stage.
Some 5,000 military and police were
deployed for the 8th ASEAN Summit. Streets were barricaded around the
Inter-Continental Hotel to protect the 1,000 delegates and keep protesters at
bay.
Prime Minister Hun Sen's government attracted both the sizable
benefit of a debt write-off from China, and the prestige of hosting a
smoothly-run event.
Hun Sen closed the meeting, of which he was also the
chair, by reaffirming ASEAN's commitment to speeding up the Initiative for ASEAN
Integration (IAI). It is a scheme designed to benefit the poorer members -
Cambodia, Myanmar, Laos and Vietnam - and is a top priority for the
Cambodians.
The IAI work plan includes 51 projects in infrastructure,
human resource development, information and communications technology, and
regional economic integration.
"We agreed to intensify actions to ensure
the integration of the broader Southeast Asian market, allowing Cambodia, Laos,
Myan-mar and Vietnam to gain tariff-free access to the more developed ASEAN
markets by 2003, seven years ahead of the agreed target of 2010," Hun Sen
said.
Dominating the agenda were the weighty topics of free trade
agreements, regional security, and tourism. ASEAN and China agreed to work
toward a Free Trade Area by 2010, which pundits reckoned would have a combined
Gross Domestic Product of $2 trillion.
India, Japan, and Australia also
made overtures to the regional grouping and paved the way for a potentially
gigantic trading bloc. The United States had earlier offered a trade deal dubbed
the 'Enterprise for ASEAN initiative (EAI)', during the Asia Pacific Economic
Cooperation (APEC) forum, which was held in Mexico late last month.
For
the US the stated goal of the series of bilateral trade deals it was offering
was regional "stability", but leaders at the ASEAN summit faced a barrage of
questions on China's growing influence in the region.
A study of ASEAN
integration released during the summit acknowledged the China
threat.
"Small, fragmented markets are not attractive to investors
compared to the large Chinese market and more integrated regions elsewhere in
the world," the study noted.
It prompted ASEAN's outgoing
Secretary-General Rodolfo Severino to call for "more commitment and direction"
on regional integration.
"Regional economic integration seems to have
become stuck in framework agreements, work programs and master plans," he said.
He also called on the group to move faster towards closer economic
integration.
China's aggressive move on free trade with ASEAN appears to
have galvanized the rest of the world into seeking closer ties with the regional
bloc - not that any of the leaders would say so publicly.
"Japanese
people tend to be pessimistic these days," said Japanese PM Junichiro Koizumi in
response to repeated questioning from the Japanese media. "People tend to think
of trying to catch up with China, or that China is going ahead."
For its
part, Japan began its free trade assault on ASEAN nations by entering talks with
Singapore, a mere two months after China and ASEAN agreed to work for an FTA
within ten years. The Singapore deal has been signed and the Philippines, South
Korea, and Thailand have all expressed interest in similar deals.
Unlike
China, Japan favors a "building block" approach whereby it will pursue stronger
trade agreements with individual ASEAN nations.
On the second day of the
summit, ASEAN and Japan signed a pledge to move ahead with free trade agreements
as soon as possible.
Under that pledge, trade concessions would be
available to Cambodia and the three other poorest ASEAN members - Laos, Vietnam
and Myanmar. A statement from ASEAN noted the deal could lift the bloc's exports
to Japan by 44 percent.
And at his press briefing on November 5, India's
Foreign Minister Yashwant Sinha faced a line of questioning similar to that
brushed off by Koizumi. His response was that India was "not in competition with
ASEAN or any countries within ASEAN".
India's trade with ASEAN has grown
to nearly $10 billion in recent years, but that is still only one quarter of the
bloc's trade with China. Sinha said current economic linkages between India and
Southeast Asia were inadequate, and outlined an agreement signed at the meeting
to study a free trade pact with ASEAN that would put it on an equal footing with
China in 2013.
Sinha recounted a labored metaphor used by Singaporean
Prime Minister Goh Chok Tong during the ASEAN plus India meeting. ASEAN was like
a jumbo jet in which China, Japan and South Korea form one wing. India, he said,
was now the second wing that would "allow ASEAN to fly in all
weather".
Malaysia's Mahathir said the agreement with ASEAN's newest
dialogue partner was "not an attempt to counter-balance China with India". He
also indicated that a giant free trade area taking in ASEAN, China, Japan and
India was unlikely for some time.
Mahathir said the agreement with India
was still in its infancy and, under the China agreement, there would be scope
for protection of some goods. In the past Malaysia had wrought concessions out
of ASEAN in other liberalization talks, and would maintain high tariffs on its
car industry.
"China is capable of producing high quality goods at very
low prices, [so] it was accepted that we may have exclusivity to take care of
sensitive products," he said.
Australia's bid to become a permanent
dialogue partner with ASEAN was reportedly shot down by Mahathir, a perennial
antagonist of Australia. And although Singapore and Cambodia backed the
proposal, Indonesian President Megawati Sukarnoputri also expressed reservations
about the deal.
"Some of the leaders of ASEAN feel that the ASEAN plus
Australian proposal should be studied more closely," Mahathir told journalists,
"so we will not make any decisions nor will we comment at this moment until we
have studied."
And he was not alone in taking a swipe at Western nations
for issuing travel warnings against Southeast Asian nations in the wake of the
Bali bombing.
"In fact at the moment, Australia is particularly unsafe
for Muslims, because they are likely to have their houses raided," he said. "And
I see pictures of doors being broken which I don't think is essential, so people
are today exposed to danger wherever they may be."
In a show of support
for Indonesia's President Megawati the summit agreed to convene in Bali for its
summit in 2003.
Other agreements:
- The Spratlys: China and ASEAN reached a non-binding agreement on conduct in
the Spratly Islands, claimed in whole or in part by China, Taiwan and ASEAN
members Malaysia, the Philippines, Brunei and Vietnam.
- ASEAN tourism: leaders of the ten countries signed an agreement to simplify
visa procedures for international travelers, and phase out travel levies for
ASEAN nationals.
- Terrorism declaration: ASEAN adopted the Declaration on Terrorism at the
pre-summit working dinner. "We resolve to intensify our efforts, collectively
and individually, to prevent, counter and suppress the activities of terrorist
groups in the region," the statement said.
- North Korea: ASEAN called for a non-nuclear Korean peninsula and peaceful
resolution of the issue.
