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Economy

Asian FTA can build confidence

By Qin Jize and Ai Yang (China Daily)
Updated: 2010-10-30 11:10
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Hanoi - Premier Wen Jiabao on Friday called for the early establishment of an Asian free trade area (FTA).

Wen said that the main vehicle of cooperation in East Asia should be the ASEAN nations plus China, Japan and the Republic of Korea, otherwise known as "10+3".

The premier also announced that China would contribute another $1 million to the ASEAN Plus Three Cooperation Fund. "We hope the money will be used to facilitate the building of the East Asia FTA," he said at the 13th ASEAN Plus Three Summit.

Wen said the acceleration of the building of the FTA will not only help shore up confidence and cement the momentum of regional economic growth, but is also of strategic significance in raising the economic competitiveness of the region as a whole and sustaining the dynamism of growth.

He said China is going to intensify "10+3" cooperation in trade facilitation within the next five years and that the central role ASEAN plays should be respected in advancing the FTA and the principle of building consensus through consultation should be followed.

Wen also said that China stands ready to work with all parties to build an APT Emergency Rice Reserve, noting that China will donate $1 million on top of the 300,000 tons of rice it pledged last year.

He also urged intensified communication and coordination on major international issues, such as the upcoming G20 summit, the first G20 summit held in an Asian country.

"Nowadays there are many formats of cooperation and formulations in East Asia," Luo Yongkun,a researcher with the China Institute of Contemporary International Relations, told China Daily.

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But Luo said China regards the "10+3" as the major channel of communication, as these countries geographically represent East Asia.

"Although politically and strategically it is difficult to please all 13 countries at the same time, the economy functions here as an effective tool," he said.

Cooperation on trade and finance will help strengthen the region as a whole, Luo added, explaining that the logic is first to "see the operation of the FTA in East Asia, then follow with the promotion of talks in security and politics".

The ASEAN plus China, Japan, Republic of Korea (ROK) framework was established in the late 1990s, when ASEAN countries decided to increase cooperation with other major economies of Asia.

Later on Friday, Wen also attended the China-Japan-ROK summit meeting to get the building of the China-Japan-ROK FTA to move faster and to get the joint FTA study involving the government, industry and academia finished by 2012.

The three neighbors already had good results from a similar meeting in Seoul in May.

"But this time it's going to be quite hard for the three to achieve anything new," Feng Zhaokui,former deputy chief of the Institute of Japan Studies at the Chinese Academy of Social Sciences, told China Daily.

Feng said the current political climate among the three countries, which is very defensive, makes cooperation difficult. "It'd be good news if there aren't any setbacks." Feng added.

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