Thailand and Singapore
leading the way in terms of Free Trade in Asia
Singapore, a small nation of just under 4 million people dependent on
trade
and more surprisingly, Thailand, a nation of over 66 million and one of
the
world’s few net food exporting countries with rapidly developing
medical and
technology sectors, lead Asia in terms of the number of completed
free-trade
agreements, according to recent reports from the Asia News Network
(ANN), an
alliance of 14 newspapers in 12 Asian countries. Japan,
China
and India
are attempting to move up fast, but both SE Asian countries have a
substantial
lead. In terms of Free Trade Agreements
(FTA) currently in process of negotiation, again Thailand,
Singapore
and
also India
and Sri Lanka
lead the list.
The number of FTAs around the world has risen rapidly from 79 in
1995 to 208
in 2004. Regionally Asia
has 80 FTA FTAs completed, under negotiation or in the study phase.
This emerging interest in FTAs can be
attributed to the following:
Disillusionment and impatience with the slow process of
multilateral trade
talks following the near collapse of the Uruguay Round of global trade
talks.
Targeted external market opening - For example, Malaysia which was
slower
than Singapore and Thailand in taking up FTAs now views its lack of an
FTA with
the U.S as putting the country at a major disadvantage in terms of
access to the
important U.S. market.
Promotion of structural reform and deregulation – For example
until April, South Korea
was the only member of the World Trade
Organization, other than Mongolia,
without an FTA. Now the country is hurrying to catch up. Observers say
the
Korean government is using arguments that the lack of FTAs hamper
exports to
try to secure deregulation which seemed overly difficult internally.
Geopolitical reasons – Australia
has actively promoted FTAs to tie it into Asia. China
has entered into FTAs with Thailand
and with ASEAN in large part for geopolitical considerations. Japan
has agreed to start negotiating FTAs with Thailand
and others in the region in response to concerns that China
was gaining an advantage on it through its active diplomacy in
negotiating FTAs.
As with all international agreements, the devil is in the details.
Also, no
two FTAs are created equal. Lots of them
exempt major export or internal industries. Further,
FTAs these days have a much broader scope than simply
granting
duty-free privileges. Business-related issues such as protection of
intellectual property, concerns over human rights, environmental and
labor
issues all have become part of negotiations.
Although
Asians have not been known to be active participants in the
development of FTAs and the ASEAN Free Trade Area, established in 1992,
was the
only major regional FTA until Japan and Singapore signed an
agreement two years ago. Over the past few years, Asia has perhaps
become one of the world’s busiest FTA
areas
Reported by: Christopher W. Runckel,
a former senior US diplomat who served in many counties in Asia, is a
graduate of the University of Oregon and Lewis and Clark Law School. He
served as Deputy General Counsel of President Gerald Ford’s
Presidential Clemency
Board. Mr. Runckel is the principal and founder of Runckel &
Associates, a Portland, Oregon based consulting company that
assists businesses expand business opportunities in Asia.
Until April of 1999, Mr. Runckel was
Minister-Counselor of the US Embassy in Beijing, China. Mr. Runckel
lived and worked in Thailand for over six years. He was the first
permanently assigned U.S. diplomat to return to Vietnam after the
Vietnam War. In 1997, he was awarded the U.S. Department of States
highest award for service, the Distinguished Honor Award, for his
contribution to improving U.S.-Vietnam relations. Mr. Runckel is one of
only two non-Ambassadors to receive this award in the 200-year history
of the U.S. diplomatic service.
