Leaders of 10 Southeast Asian nations ranging from fledgling democracies to an absolute monarchy signed a landmark accord yesterday aimed at wrestling their disparate region into a European-style economic community by 2020.
The blueprint, dubbed the Bali Concord II, envisions a single market eliminating tariff and non-tariff barriers within an economic grouping encompassing 500 million people and annual trade totaling US$720 billion.
PHOTO: AP
"We have just witnessed a watershed in the history of ASEAN," Indonesian President Megawati Sukarnoputri said.
The ASEAN wants to band together to counter the burgeoning economic might of India and China, Asian powerhouses that are siphoning off investment and trade seen as essential for Southeast Asia's development.
Leaders who gathered for a two-day ASEAN summit on Bali acknowledged that the diversity of governance will complicate efforts to emulate European integration.
Talks leading up to the annual summit were soured by Myanmar's detention of democracy campaigner Aung San Suu Kyi.
Despite ASEAN's tradition of staying out of domestic affairs, member countries pushed for Suu Kyi's pre-summit release from house arrest as a goodwill gesture -- but without success.
Once the summit began, the leaders wanted to focus on economics, rather than politics, and backed away from criticizing Myanmar about Suu Kyi.
Some Asian leaders, however, are calling for a re-examination of the bloc's noninterference principle, saying flagrant human rights violations hurt integration efforts.
Speaking at a parallel business summit yesterday, Japanese Prime Minister Junichiro Koizumi said the region should not shy away from discussing political issues.
"A sound political environment is indispensable to ... expand trade and investment. The countries of this region should offer each other advice and assistance to resolve any difficulties that they face in the political realm," Koizumi said.
The Bali summit statements promise to set up a network of free trade zones across Southeast Asia and set deadlines for lowering tariffs and travel restrictions. They aim to create by 2020 the ASEAN Economic Community, modeled on European integration of the 1960s and 1970s -- before the advent of the EU.
At the ASEAN business summit, delegates noted that Southeast Asia, a star performer of the global economy until the 1997 to 1998 Asian financial crisis, is now attracting only a fifth of what China is receiving in foreign investment.
During their two-day summit, the ASEAN leaders also were expected to move closer to signing a free-trade agreement with China that will eventually create a market of 1.7 billion consumers with a combined GDP of US$2 trillion -- the biggest free-trade zone in the world in terms of population.
India and Japan also were hoping to sign free-trade agreements with ASEAN within the next decade. The Chinese premier, as well as the leaders of India, Japan and South Korea, were attending the summit on Bali.
ASEAN leaders also are discussing setting up a security community alongside the economic one, though without any formal military alliance like NATO.
Terrorism, along with SARS and the Asian financial crisis, has been a large drag on regional economies.
During the business summit yesterday, Chinese Premier Wen Jiabao (溫家寶) said his country is "a good neighbor and a good partner."
"A more developed and a stronger China will bring about development opportunities and tangible benefits to other Asian countries," he said.
Wen and Indian Prime Minister Atal Bihari Vajpayee were expected to sign ASEAN's 1976 Treaty of Amity and Cooperation, a pact to promote regional stability.
South Korean President Roh Moo-hyun told the business summit that his country, too, is interested in a free-trade agreement with ASEAN.
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