Southeast Asian nations and China signed an accord yesterday to create the world's biggest free-trade area by removing tariffs for their 2 billion people by decade's end -- a key step in their vision of a trade bloc to rival Europe and North America.
Leaders in the 10-member ASEAN also signed a pact to flesh out their agreement last year to create an ASEAN Community along the lines of a unified Europe by 2020. It aims to create a common market with common security goals.
"China's initiative has put both the US and Japan on the defensive," said Chao Chien-min (
The run-up to the ASEAN summit in the Laotian capital was clouded by concerns that Thailand's crackdown last month on a protest that left 85 Muslims dead could inflame regional militants, and by Myanmar's failure to deliver on pledges to go from military rule to democracy.
Some countries indicated they might call those two ASEAN members to task -- in a break with the group's tradition of keeping out of domestic affairs. But both issues were kept off the table during the summit's ASEAN-only agenda yesterday, Thai government spokesman Jakrapob Penkair said.
Thai Prime Minister Thaksin Shinawatra had threatened to walk out if the village crackdown was raised.
On the summit sidelines, South Korea and Singapore concluded negotiations on a two-way free-trade agreement (FTA).
Chinese Premier Wen Jiabao (
"It's a very good agreement," Chinese Commerce Minister Bo Xilai (
ASEAN also plans free trade areas with Japan and South Korea -- and was to sign a blueprint for economic cooperation with India during the two-day summit ending today. An FTA with India is still many years away.
ASEAN's agreements with China and India reflect the group's desire to latch on to two booming econo-mies that are drawing foreign investment away from the region.
The summit consists of closed-door meetings among leaders: The 10 Southeast Asian countries alone, and in various permutations with partners China, Japan, South Korea and India. This year, Australia and New Zealand also received a one-time invitation to boost trade ties -- their first appearance at the summit in more than a quarter-century -- but Australia resisted ASEAN's calls to sign the group's non-aggression pact.
New Zealand Prime Minister Helen Clark was expected to join her Australian counterpart John Howard in signing an agreement today to start free-trade talks with ASEAN.
"If ASEAN is looking to bulk up its economic weight as an economic counter to the emerging strength of China and India, then a relationship in trade terms with New Zealand and Australia makes the most sense," Clark said.