NZ, Australia poised to make Asia breakthrough

SINGAPORE - New Zealand and Australia may finally strike a free-trade deal with the Association of Southeast Asian Nations (Asean).

After years of courting the 10-member grouping and being stymied by Malaysian leader Mahathir Mohamed, Asean economic ministers plan to invite Prime Minister Helen Clark and her Australian counterpart, John Howard, to a leaders' meeting in Laos in November to discuss the plan.

Such a move would link Australia and New Zealand, who have shared a free-trade agreement for two decades, with countries such as Indonesia, the Philippines and Brunei.

And with Asean already discussing free-trade deals with China, India and Japan, the move could lock Australia and New Zealand into an Asian free-trading bloc.

A spokeswoman for Trade Negotiations Minister Jim Sutton said the minister had yet to be told the outcome of the meeting through diplomatic channels but if the reports were correct, it was good news.

The concept had been worked on for some time, and was part of the reason why New Zealand had pursued a free-trade agreement with Singapore in the first place.

Mr Sutton was looking forward to exploring the issue further, the spokeswoman said.

Australian Foreign Affairs Minister Alexander Downer and Trade Minister Mark Vaile welcomed the Asean announcement, saying it would build on the already strong links between the group and Australia.

"A trade agreement would complement the two free-trade agreements Australia has recently negotiated with Asean members."

The Australia-Singapore free-trade pact came into force last year and an Australia-Thailand deal should start operating next year.

New Zealand is also talking to Singapore and Thailand about possible free-trade links.

What is Asean

* Asean was set up in 1967 to accelerate economic growth, social progress and cultural development.

* Its members are Indonesia, Malaysia, Philippines, Singapore, Thailand, Brunei Darussalam, Vietnam, Laos, Myanmar and Cambodia.

* It has a combined gross domestic product of US$737 billion and total trade of US$720 billion.

- NZPA