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Most speakers at a trade seminar agreed that the regional
trade agreements (RTAs) and free trade areas (FTAs) that Indonesia and
other ASEAN members are intensively seeking to establish, jointly and
individually, should not be seen as a replacement for the unilateral
goal within the WTO context.
On the same time however, it needed to be fully understood that there
was no way of stopping the chain reaction triggered by the slowdown of
the WTO's Doha development talks, which has prompted a race among
nations in forming bilateral and multilateral trade agreements,
participants concluded.
Therefore, speakers said that the world would see more RTAs and FTAs,
leading to more rules and raising more questions than answers.
At last week's seminar on "A possible scenario to the East Asia Free
Trade Area (EAFTA) and its basic framework", Thomas G. Aquino, senior
undersecretary for international trade at the Philippines Department of
Trade and Industry posed a question to decision-makers.
"Will RTAs serve as building blocks that will eventually lead to more
efficient processes at the multilateral level? Or are they only leading
to a 'spaghetti-bowl' effect, where rules are becoming more complex and
difficult to harmonize?" he said.
The EAFTA consists of ASEAN's members plus the three Asian economic
giants -- China, Japan and South Korea, who are already taking steps
towards bilateral trade deals with ASEAN through the ASEAN+1
initiative, such as the ASEAN-China FTA on goods.
On top of that, most members of ASEAN are also racing toward
establishing individual trade agreements with each of the three giants,
such as the Japan-Malaysia Economic Partnership Agreement (EPA), the
Japan-Singapore EPA, the Japan-Philippines EPA and one that has
recently been reached the initial agreement stage, the Japan-Indonesia
EPA.
An EPA is in principal a wider version of an FTA, where the deal
revolves not only around cutting tariff barriers, but also include
trading goods, trading services and investment as well as technical
economic cooperation.
The commencement of various free trade arrangements between nations or
regions raised the issue of overlapping provisions, said Jayasiri,
senior director of bilateral and regional relations at Malaysia's
Ministry of International Trade and Industry.
"The reason why ASEAN-Japan negotiations have taken so long is because
of this mismatch between bilateral provisions and regional provisions.
And finding coherent a solution through the ASEAN-Japan agreement is
not an easy task."
"And I believe this is going to be repeated in all the other RTAs
(ASEAN+1 or +3) where individual ASEAN members already have bilateral
agreements," Jayasiri added.
Jayasiri also raised the issue that for EPAs, commitments in elements
such as cutting tariffs and opening up the services market were
binding, but not for economic and technical cooperation that were
supposed to benefit parties with weaker economies.
Djisman S. Simandjuntak, chairman of the Center for Strategic and
International Studies, said that governments in East Asia should agree
on some binding parameters while negotiating sub-regional FTAs.
"By doing so, the perplexity of the spaghetti bowl is reduced," he said.
"People can only benefit from freer trade, freer investment, if they
master a certain level of competence. When it comes to competency, I
think we all agree that people in our part of the world differ in great
deal.
"Because of this, any RTA in East Asia should pay a great deal of
attention to development cooperation," he said, highlighting what he
called the "mechanism of equalization'.
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