February 28, 2009
The ASEAN countries’ annual summit meeting starts today in Thailand amid calls for more economic integration between its members. Its main objective is the creation of a common market in the region by 2015.
The urgency of finalising agreements leading to the creation of a common market in Southeast Asia is understandable. The economic crisis sweeping the US and Europe has provoked a sharp fall in exports for all the 10 members of ASEAN. With more than 4 trillion US dollars in combined forex reserves, the leaders of these countries feel confident that they could bolster intra-ASEAN trade and investment instead (source:Chosun Ilbo, South Korea).
Beside aiming to increase intra-ASEAN trade by up to 40 per cent in the next six years, the bloc’s business and political leaders have been pushing for years for better access and the conclusion of free trade agreements with Northeast Asian countries like Japan, South Korea and Taiwan.
A similar approach to trade and market integration is mirrored by Taiwan’s President Ma. In a bid to reassure his pro-independence critics, he took pains to explain that the signing of a Comprehensive Economic Cooperation Agreement (CECA) with mainland China would not affect the island’s sovereignty, being instead aimed at improving the Taiwanese industries’ competitiveness.
The failure to sign such an agreement would lead to the imposition of a 6.5 % duty on Taiwanese goods like textiles, electronics, petrochemicals and machine tools. This in turn could spell the loss of 114,000 jobs and of a full percentage point in the country’s GDP (source: China Post).
The billions in foreign currency reserves amassed by Taiwan have recently determined Britain to extend visa-free status to Taiwanese passport holders, as of March this year. The measure is aimed at increasing the number of tourists and attracting foreign investors to the UK, one of the EU’s hardest hit economies.Spotlight on Geopolitics