East Asian gov'ts mull China-Japan joint proposal for region-wide FTA

MANADO (Kyodo) -- Economic ministers or their deputies from 13 East Asian nations met on Indonesia's Sulawesi island Friday and discussed a joint proposal by Japan and China to set up one of the world's biggest free trade areas in the region.

Malaysia's trade minister Mustapa Mohamed told reporters after the meeting that representatives of the 10 members of the Association of Southeast Asian Nations, plus Japan, China and South Korea discussed the proposal in Manado, the capital of North Sulawesi province, and the ASEAN side was "supportive."

"We all agreed that we need this FTA in the longer term but we have to move in stages, we have got to strengthen our position first, and it should be gradual and inclusive," Mustapa said.

Mustapa said a priority for ASEAN -- which groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam -- is to ensure that it will continue to play a central role in deciding the region's future economic architecture.

"We said we recognize the centrality of ASEAN and we will review it (the Japan-China proposal) further at the ASEAN summit in November," he said.

To that end, ASEAN is forging its own concept paper on the proposed FTA, which officials here call a "template."

The joint Chinese and Japanese proposal for a regional FTA initially calls for setting up working groups on trade in goods, trade in services and investment.

An ASEAN source said the ASEAN ministers felt the three working groups "could be convenient, but there is no formal go-signal yet."

"We must wait for the ASEAN paper, and we reassured the partners that the ASEAN paper will consider the proposals of China and Japan."

ASEAN has already set up four working groups related to the proposed FTA -- on rules of origin, tariff nomenclature, customs procedures and economic cooperation

ASEAN sources said not all ASEAN members were willing to accept the proposal of China and Japan for three more working groups, as it could be a burden for some of the group's less-developed members.

China and Japan has been suggesting different concepts for a regional FTA, with China eyeing an "East Asian Free Trade Area" consisting of the 13 ASEAN-plus-three member countries, and Japan opting for a "Comprehensive Economic Partnership for East Asia" for 16 Asian-Pacific countries, including Australia, New Zealand and India.

The two countries only recently agreed to submit a joint proposal, ASEAN officials said.

The joint proposal is expected to be discussed further Saturday in a forum of the 16-member East Asia Summit member countries, which are being expanded to 18 with the addition of the United States and Russia as members.