Thai Prime Minister Thaksin Shinawatra is expected to arrive for his first visit to Australia this week, clutching the blueprint for a free-trade pact as Asia Pacific nations increasingly embrace bilateral deals.
Thaksin and Australian Prime Minister John Howard are likely to signal the start of talks for a free trade agreement (FTA) during his visit to Canberra and Sydney on Thursday and Friday.
This would be the latest in a growing list of bilateral free trade talks under way in the Asia-Pacific region where almost every government is talking to at least one other government, slowly creating a patchwork of overlapping trade deals.
Australian Trade Minister Mark Vaile, who was in Thailand last week to make final preparations for the leaders' meeting, said he was optimistic that talks would start, adding impetus to the drive to open up markets in the region.
"Hopefully [they'll] announce that we are going to begin engagement in a negotiation ... the indications are quite favourable," Vaile told reporters during a teleconference.
Thaksin arrives in Canberra on Thursday morning where he will hold a joint news conference with Howard and attend an official lunch in the national parliament before heading to Sydney.
Over the past three years the Asia-Pacific region, which accounts for almost 50 percent of world trade and output, has started heading towards a large free trade area in a different way to Europe and North America, with a bilateral focus.
"These things were born out of frustration after Seattle and they are all focused on achieving an outcome which is moving faster towards integrating economies of the world," Vaile said. WTO free trade talks in Seattle collapsed three years ago.
HSBC's chief economist John Edwards said there were many deals on the table but no one in charge, no single model, and no co-ordination of the discussion -- although collectively these small, bilateral agreements could be significant.
"Despite the lack of coordination, there is unquestionably something happening but without fanfare and it would be unwise to underestimate its potential," Edwards said.
"Once it gets going a regional Asia Pacific trade negotiation could acquire its own momentum which is why unheralded accumulation of agreements could well mark the beginning of a third great trade bloc to match Europe and the Americas."
The number of deals on the table was growing, with the Institute of International Economics last year counting 23. Japan, after dropping its refusal to negotiate free trade pacts three years ago, has sealed a deal with Singapore, initiated talks with South Korea and is looking Thailand's way.
China is discussing a bilateral free trade agreement with the Association of Southeast Asian Nations' Free Trade Area (AFTA) that eliminates tariffs on goods flowing between 10 nations.
Australia, excluded by Malaysia and Indonesia from negotiating with AFTA as a whole, is talking to several nations, seeking to add to its 19-year-old FTA with New Zealand.
Vaile said Australia hoped to seal an FTA with Singapore at an APEC summit in October and is seeking a pact with the US -- as is New Zealand, which has an FTA with Singapore.
Analysts said if this pattern continued, within four or five years every Asia Pacific economy was likely to be a member of several free trade agreements with regional partners.
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