CER partners to advance Southeast Asia free trade talks

By FRAN O'SULLIVAN

Animosity towards Australia and New Zealand "joining Asia" has been swept away as a free-trade pact between the Asean nations and the CER partners inches closer.

Negotiations on an Asean-CER deal are expected to be launched at a special leaders' summit in November.

Trade Negotiations Minister Jim Sutton said some of the "old cultural issues" with New Zealand and Australia appeared to have softened.

The proposal for New Zealand and Australia to form a trade deal with Asean (Afta-CER) had been repeatedly blocked by Malaysia's former prime minister Mahathir Mohamed since it was first tabled in 1999.

But with Mahathir gone, and China taking a proactive role to negotiating free-trade deals with New Zealand and Australia, there has been a significant rerating of the Downunder nations.

"People are getting used to the idea of Australia and New Zealand as part of Asia," Sutton said.

Prospects that an FTA negotiation might be in the offing were firmed up last week at an Asean foreign ministers' meeting in Jakarta, which was attended by Foreign Affairs Minister Phil Goff and his Australian counterpart, Alexander Downer.

The foreign ministers welcomed "the proposal of Asean economic ministers to launch Asean-CER FTA negotiations this year".

Prime Minister Helen Clark and Australian Prime Minister John Howard have since received invitations to take part at a formal summit with the Asean leaders on November 30 in Laos.

"My belief is that they wouldn't invite Australian and New Zealand leaders up there and leave them twisting in the breeze without an invitation to negotiate," Sutton said.

He stressed the Asean region was hugely important for New Zealand. It has a combined population of more than 500 million and an estimated GDP of US$737 billion ($1130 billion).

Five Asean countries are among New Zealand's top 20 trading partners. Manufactured exports amount to $2.2 billion a year. Services trade in areas such as education and tourism is growing steadily.

Sutton said New Zealand was already working with Australia and Asean countries on ways to advance the FTA concept.

"I hope we will make further progress when Asean and CER economic ministers meet in Indonesia in September."

The Ministry of Foreign Affairs (MFAT) and the Australian Department of Foreign Affairs & Trade (DFAT) have yet to develop a joint negotiating position. Sutton suggests a standing committee will be formed after negotiations are launched.

The Afta-CER deal was among the topics up for discussion at a formal dinner Clark hosted for visiting Thai Prime Minister Thaksin Shinawatra in Wellington last night.

Clark said she was confident New Zealand could manage an Afta-CER negotiation on top of the raft of other bilateral deals currently in the pipeline.

MFAT has been given an extra budget commitment to cover existing negotiations with China, Thailand, Chile and a P3 grouping of Chile, New Zealand and Singapore.

Negotiations with Hong Kong are on hold until the China deal reaches the endgame.

The Asean bloc comprises: Burma, Brunei, Cambodia, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand and Vietnam.