Major obstacles block Asia's prospects of becoming a common market, but a region-wide free-trade area is a realistic goal, an Asian Development Bank (ADB) official said yesterday.
The Philippines-based lender said 183 free trade agreements have been signed or are being proposed or negotiated across Asia, where the share of intra-regional trade rose to about 55 percent last year from about 40 percent in the early 1990s.
"Given the stalled Doha round of the World Trade Organization talks, it is vital for all Asian countries to continue their efforts to pursue further market opening and structural reforms," said Masahiro Kawai, head of the ADB's regional economic integration office.
He said the ultimate goal should capitalize on free trade agreements (FTA) by "consolidating the [various inter-Asian] FTAs into a single Asia-wide, best practices FTA," ensuring the expansion of free trade within the region.
Kawai said the political will to take this step exists with many Asian leaders having expressed support toward a vision of an integrated Asian economy.
Closing the development gap, however, between the relatively developed and the less-developed countries is very important and regional cooperation in the areas of infrastructure, trade or investment could all contribute to narrowing such a gap, he said.
Kawai said the stated goal of the 10 members of the Association of Southeast Asian Nations to develop a common-market type "ASEAN economic community" by 2015 falls short of the European Union standard because "free mobility of labor may not be completely there and free movement of capital and money may not be in place."
In addition to free trade in goods, the agreement also calls for free trade in services.
A European-type common market is "perhaps still further in the future, beyond even after 2020," he added.
Kawai said domestic economic issues make up a key impediment to a common Asian market and thus it would be "very difficult for them to fully open up their markets."
He said countries such as China, Laos, Cambodia and Vietnam must resolve their domestic problems before a common market could be developed.
The leaders of the Philippines,Brunei, Cambodia, Indonesia, Malaysia, Laos, Myanmar, Singapore, Thailand and Vietnam are set to meet in the Philippines in December to launch an ASEAN Economic Community by 2015.
These nations have "crucial issues they need to address and resolve for this vision to materially move forward," Kawai said.
"They need to clearly define what they mean by an ASEAN economic community and what constitutes the ASEAN economic community," he said.