China, ASEAN sign trade pact
By William Foreman
Associated Press
VIENTIANE, Laos — Rising power China moved yesterday to expand its influence in a region long dominated by the United States, signing an accord with Southeast Asian nations aimed at creating the world's largest free trade area by 2010 — a sprawling market of nearly 2 billion people.
David Longstreath • Associated Press
China's concerns about securing vital sea lanes and feeding its booming economy's ravenous appetite for oil and raw materials were seen as key motivations for the trade pact with the 10-nation Association of Southeast Asian Nations at the group's annual summit in Laos.
Vientiane police search vehicles entering the site for the 10th annual ASEAN summit. Southeast Asian and Chinese officials yesterday signed a free-trade agreement during the meeting in the Laotian capital.
But some analysts believe the agreement shows how an increasingly bold China is forging new alliances that would reduce, and possibly eventually challenge, America's influence in Asia.
"China is using its huge market as a bait to lure ASEAN countries away from U.S. and Japan and build closer relations," said Chao Chien-min, a China watcher and political science professor at Taiwan's National Chengchi University.
"I think what Beijing has in mind is to forge good economic and trade relations now, and then increase exchanges in other areas, particularly in the military and security arena," Chao said.
The agreements signed yesterday removed tariffs on goods and created a mechanism to resolve ASEAN-China trade disputes. The accord aims to end all tariffs by 2010, drawing ASEAN's combined economies — worth $1 trillion — closer to China's $1.4 trillion economy.
Ong Keng Yong, ASEAN's secretary-general, said trade with China would speed up with the free trade agreement.
"So by the time this whole FTA (free trade agreement) is done, as we want to by 2010, it should become quite substantial: $130 or $140 billion, perhaps," he told reporters.
In comparison, the annual ASEAN-U.S. trade is $120 billion and ASEAN-EU trade is $110 billion per year, he said.
Ong said it would be a long time before China surpassed the United States because the Americans are bigger investors in the region.
China's deal with the Association of Southeast Asian Nations was sealed as the 10-nation group agreed to another pact that would build an ASEAN community, much like the European Union, by 2020.
The run-up to the ASEAN summit in the Laotian capital was clouded by concerns that Thailand's crackdown last month on a protest that left 85 Muslims dead could inflame militants, and over Myanmar's failure to deliver on pledges to move toward democracy.
Some member countries indicated they might call those two ASEAN colleagues to task — in a break with the group's tradition of keeping out of domestic affairs. But both issues were kept off the table during the summit's ASEAN-only agenda yesterday, Thai government spokesman Jakrapob Penkair said.
Thai Prime Minister Thaksin Shinawatra had threatened to walk out if the crackdown was raised at the summit of ASEAN members Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.
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