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News Analysis: ASEAN's lucrative market triggers FTA

Source:   Time:

JAKARTA, Nov. 19 (Xinhua) -- The Association of Southeast Asian Nations (ASEAN)'s lucrative market undoubtedly prompted conclusion of a series of free trade agreements (FTA) as the 10-member ASEAN is one of the fastest growing market with combined population of almost 590 million and gross domestic product (GDP) of 1.46 trillion U.S. dollars.

As of Jan. 1, 2010, there were four FTA coming into effect, namely the ASEAN-Australia-New Zealand Free Trade Agreement ( AANZFTA), South Korea-ASEAN Free Trade Area (KAFTA), ASEAN-China Free Trade Area (ACFTA) and ASEAN-India Free Trade Area (AIFTA).

However, as there is imbalance among ASEAN member countries, where some countries grow faster than others, the FTA partners need to wait, even to aid the bloc to prepare itself.

For example, Australia will provide 20 million Australian dollars (about 19.7 million U.S. dollars) over five years to assists ASEAN countries in implementing the agreement.

In 2007, the European Union (EU) and ASEAN agreed to start the EU-ASEAN FTA negotiations. However, they halted the negotiations in March 2009 due to several technical problems.

The EU then tries to reach bilateral FTA with several member countries.

Walter Van Hattum, first secretary of the Economic and Trade Section in the EU Delegation to Indonesia, said that the EU has ambition to create new opportunities in ASEAN by embracing bilateral FTA with countries who are willing and capable in sharing the ambition.

As the world economies become increasingly globalized, demand for free trade and investment is unavoidably rising.

According to Elly Lawson, economic counselor of the Australian Embassy in Indonesia, the AANZFTA paves the way for deeper economic integration between the bloc, Australia and New Zealand.

"It provides greater transparency and certainty for investors through a regime of investment protection," said Lawson.

Meanwhile, Yang Sooyoung, assistant director of FTA Division of South Korea's Ministry of Knowledge, said that the KAFTA has improved transparency of investment related measures and enhanced protection of investment, among others.

For South Korea, ASEAN is one of the country's most important economic partners and the third largest trading partner in 2009 with trade between both parties worth 75 billion dollars in 2009.

ASEAN is also the 5th largest investor in South Korea, with cumulative ASEAN investment worth 13 billion dollars or 8.3 percent of total foreign direct investment in the country.

For Australia, ASEAN is the third largest trading partner after China and European Union, with trade volume of 87 billion Australian dollars in 2009.

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