Asia-Pacific to launch talks on giant free trade zone
Asia-Pacific to launch talks on giant free trade zone
The planned zone would would span across 16 countries of the Asia-Pacific that currently account for a third of global trade and economic output, making it the biggest free trade area outside the World Trade Organization.
Rajiv Biswas, Asia-Pacific chief economist at IHS Global Insight, described the initiative as strategically very important to the Asia-Pacific as it would help offset weaknesses in the United States and the European Union.
"Fast growth in trade within the Asia Pacific region could significantly mitigate the weak growth prospects in Asia's traditional growth markets in the EU and US," he told AFP.
"The (pact) could provide the framework for accelerating regional trade and investment flows, reducing the dependence of East Asia on the traditional EU and US export markets and boosting trade amongst Asian developing countries."
Cambodian Prime Minister Hun Sen will launch the start of negotiations for the Regional Comprehensive Economic Partnership (RCEP) on Tuesday in Phnom Penh on the final day of a regional summit.
The RCEP would bring together the 10 members of the Association of Southeast Asian Nations with China, India, Japan, South Korea, Australia and New Zealand.
ASEAN secretary-general Surin Pitsuwan said a successful RCEP would further cement a shift in global economic power from the West towards Asia.
"The trend is already here. It's how to consolidate. This one is going to be a big leap forward if we can make it," he told AFP in an interview on Sunday on the sidelines of an ASEAN leaders' summit.
Diplomats and analysts said the RCEP could also serve as a "counterbalance" to the Trans-Pacific Partnership (TPP), another planned free-trade grouping currently being negotiated by the United States and 10 other countries.
US officials hope that the TPP will eventually snowball into a free trade area of the Asia-Pacific that will link economies spanning Latin America and Asia via the United States.
But in one significant difference, the TPP excludes China while the world's second-biggest economy is foreseen as being a major player in the RCEP.
China has been reluctant to join the TPP, preferring to focus on a free-trade arrangement centered in Asia where it has a bigger influence.
"You can read between the lines," a Southeast Asian diplomat told AFP in regards to China focusing on a free trade pact that does not include the United States.
Indonesia, Southeast Asia's biggest economy, said it was only interested at this point in the China-dominated pact.
"We're only going to be focused on the RCEP," Indonesian Trade Minister Gita Wirjawan told reporters in Phnom Penh.
There are some concerns that a raft of maritime territorial disputes between the major players in the proposed RCEP could hinder the negotiations.
Diplomatic and trade between Japan and China have been severely shaken this year amid an escalating dispute over islands in the East China Sea.
Japan and South Korea have been locked in a similar dispute over different islands, while China and some ASEAN members have also seen tensions soar over competing claims to the South China Sea.
But Surin said the disputes could be managed separately, and that the trend toward closer economic and trade ties could not be stopped.
"The effort is to try to isolate the two issues... economic cooperation, community building in East Asia will have to go forward because everybody is going to benefit from this new architecture," he said.
Surin said the RCEP had a head start compared with the TPP because ASEAN already had existing free trade pacts with China, India, Japan, South Korea Australia and New Zealand to build on.
Nevertheless, there has been no timeframe set for when the pact should be finalized.
On former battlefield, Kuwaiti investor plans date palm groves, ostrich and deer reserve
SOUTHERN BADIA, Iraq: On a former battlefield of the 1991 Gulf War, deep in Iraq’s southern desert, a Kuwaiti investor is looking to grow 100,000 date palms and build a nature reserve complete with ostriches and deer.
Few Kuwaiti firms have returned to do business in Iraq since Saddam Hussein’s 1990 invasion of its smaller neighbor and its UN-led liberation a year later.
But businessman Abdul-Aziz Al-Babtain is pouring $58 million into a date farm project in southern Badia, some 150 km from the port city of Basra, officials said.
“We hope to have 100,000 (trees) in the next five to six years,” said Diyah Sharadeh, Babtain’s representative in Iraq, adding that the dates would first be sold in Iraq and later exported.
So far 5,000 date trees have been planted.
Iraq once produced three-quarters of the world’s output of dates but now accounts for 5 percent after decades of conflict, despite being home to around 350 types of date tree.
Babtain had begun the farm in the 1980s, a sign at his office shows.
But Iraq seized it after the 1990 invasion, and due to its proximity to the Kuwaiti border it turned the area into a military zone, digging trenches for heavy guns.
These were then bombed in air strikes as part of Kuwait’s liberation campaign, but authorities never cleaned up the trenches, leaving bullets and parts of tank turrets rusting away just outside the field.
In a bid to turn a new leaf, Iraq returned the farm to Babtain and granted his business tax exemptions.
“This will be the first private (date) investment project in Iraq,” said Ali Ghasseb, head of the Basra Investment Commission. “It was a farm, then became a battlefield and is now again a farm.”
The farm has created some 50 jobs in this desolate area and will need up to 500 workers once the trees begin producing.
In a second step, Babtain plans to set up a natural reserve for which ostriches and deer will be imported, Sharadeh said.
Ties between Kuwait and Iraq remained strained, but they have improved since the US-led invasion in 2003 that toppled Saddam Hussein, with the Gulf state hosting in February a donor conference to rebuild Iraq.
But Kuwaiti firms have been reluctant to return, demanding guarantees that their business will not be taken away again. There is only one other Kuwaiti investor in Basra, involved in a shopping mall, Ghasseb said.
But trade has picked up in recent years as foreign firms use Kuwait’s port to ship goods to Iraq due to its better security. Up to 200 vehicles cross the border at the Safwan post every day, an Iraqi officer said.
Kuwaiti visitors are also trickling back to the Shiite Muslim holy cities of Najaf and Kerbela. A third of Kuwaitis are Shiites.
In the other direction there is little private traffic as Kuwait rarely grants visitor visas for Iraqis for security reasons.
“I come twice a year. There are no problems for Kuwaitis now,” said a Kuwaiti who gave his name as Mohamed after crossing the border to make a pilgrimage to Nawaf.