The Telegraph
Since 1st March, 1999
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Trade zone dreams fire rival ambitions

Phnom Penh, Nov. 5 (Reuters): Giants China, Japan and India showed up at a Southeast Asian summit that ended today, vying for influence in a region that could one day combine vast manufacturing power and natural resources in the world’s biggest free trade zone.

The 10 members of the Association for South East Asian Nations (Asean) basked in the limelight as their now-tamer tiger economies attracted the interest of world-ranking economies. They agreed that they must tackle militant violence to provide an environment in which foreign investment can blossom.

While the idea of a free trade zone embracing 1.7 billion people from the steppes of north China to the white-sand beaches of Indonesia remains a distant dream needing 10 years of negotiation to attain reality, the idea fired rival ambitions.

“We’ve entered a new age of partnership. We will walk together and advance together,” Japanese Prime Minister Junichiro Koizumi said as he signed a joint declaration on an economic partnership with Asean in the Cambodian capital, Phnom Penh.

Details of Japan’s agreement were sketchy and negotiations were likely to take years — just like China’s.

Koizumi dismissed the view Japan had been left in the dust by China’s planned free trade initiative signed a day earlier.

Koizumi, leader of an economy struggling to emerge from 10 years of recession while China revels in a decade of near 10 percent average annual growth, said he didn’t see China as a threat.

“I do not subscribe to this theory that China is a competitor,” Koizumi said, adding that China’s closer ties with Asean should be welcomed as an expression of the enthusiasm of the Vommunist giant for the market economy.

“I believe the China-Asean agreement is good for China, Asean and Japan,” Koizumi said. “It will be a stimulus for all of us.”

Beijing said it posed no threat, pre-empting a chorus of concern that the Chinese behemoth could swamp its neighbours.

“Some see this as competition betweeen China and Japan, but the point is confidence and economic cooperation,” concluded summit host, Cambodian Prime Minister Hun Sen.

But some analysts say Japan is now engaged in a game of catch-up with China in the region.

“China really wanted the free trade zone deal to leave Japan out in the cold and that's what they’ve got. It's purely political,” said one expert on Asean

Attending Asean on the sidelines for the first time, India joined the rush by announcing that it, too, was eager to negotiate a free trade zone with Asean.

The two-day summit aimed to promote economic integration, tackle terror and paper over the cracks that perennially open up among states that range from impoverished Laos to oil-rich Brunei and giant Indonesia, the world's most populous Muslim nation.

The attractions of Asean’s markets despite the threat of terror were sufficient to draw interest not only from China and Japan but to bring in two new visitors — Indian Prime Minister Atal Bihari Vajpayee and South Africa's Thabo Mbeki.

But critics said Asean was still far from its goal of being able to represent the common interests of its members and to attain the economic integration that is its stated goal.

“They (Asean) have to recognise the need for regional economic integration on an urgent basis...the sooner the better,” outgoing Asean Secretary General Rodolfo Severino told Reuters.

“It's not easy but they just have to do it, they just have to bite the bullet,” he said.

Even if the members are divided over economic issues, they found common ground in the war on terror, recognising that security was an essential ingredient of prosperity, and were united by fears of North Korea's nuclear weapons programme.

The leaders issued a declaration condemning militant violence as a threat not only to people but to prosperity, but urging the rest of the world not to punish their economies.

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