[Shadow_Group] Fw: China adds its might to ASEAN

[shadowgroup-l at lists.resist.ca]

http://www.atimes.com/atimes/China/FL01Ad08.html<http://www.atimes.com/atimes/China/FL01Ad08.html>

China adds its might to ASEAN
By Alan Boyd, Asia Times, 12/01/04 

SYDNEY - In the 1960s it was "All the way with LBJ", as Australia put its US loyalties on the line and went hunting communists in Indochina. Thirty years later, Asia's booming Tigers were the flavor of the month; Canberra was sending corn instead of cannons and then-prime minister Paul Keating was talking of watering down the most enduring postwar Pacific security alliance. 

Now the conservative government of Prime Minister John Howard, which began dismantling Keating's new regionalism almost as soon as it won office in 1996, wants it both ways. Howard is lobbying for inclusion in an expanded East Asian free-trade zone, but only if it doesn't prejudice Australia's vital defense relationship with Washington. 

The crunch is that not all of Australia's prospective Asian partners are prepared to divorce the two issues of trade and diplomacy, especially as China's hulking presence is forcing just about everyone to reassess where their strategic interests lie. 

Welcome China 
On Monday the 10-member Association of Southeast Asian Nations (ASEAN) signed an accord with China that will create an open market of 2 billion people by 2010 to compete with Europe and the United States. The pact aims to drop most tariffs over the next five years in a move some analysts have said is a sign Beijing may be moving to undercut America's vast economic influence over the region. 

The pacts include an agreement to liberalize tariff and non-tariff barriers on traded goods and one to set up a mechanism to resolve trade disputes. The pact will form the first component of a comprehensive accord planned for completion by 2010 that will include the full liberalization of the services sector. If completed on time, the overall ASEAN-China deal will result in the creation of the world's biggest free-trade zone, covering nearly 2 billion people. 

And on Tuesday, leaders of the ASEAN group agreed with Japanese Prime Minister Junichiro Koizumi to start trade talks in April, with the aim of wrapping them up in two years. The talks will center on how to cut tariffs between the world's second-largest economy and ASEAN nations. 

Also attending the 10th ASEAN summit in Laos are the leaders of China, Japan, South Korea, India, Australia and New Zealand. It is the first time Australia and New Zealand have been invited to the event. 

India was due on Tuesday to sign "a landmark partnership document" with ASEAN. The agreement is significant not just because it allows India to forge strong economic relations with the group that could catalyze trade between the two sides from the current US$13 billion to $30 billion by 2007, but also because it brings India closer to the region's economic powers, such as Japan, China and South Korea, as the deal involves a new ASEAN grouping that includes these three countries. 

Australasia connection
Australia and New Zealand, grouped together through their own Closer Economic Relations (CER) trade agreement, are the only non-Asian states being considered for a free-trade agreement (FTA) centered on ASEAN. 

China, India, South Korea and Japan are the other likely players in an ambitious push to establish the world's third major trading bloc, with the objective of matching the North American Free Trade Area (NAFTA) and the European Union by 2020. 

Preparatory discussions currently are under way at an ASEAN summit in the Laotian capital, Vientiane, that began on the weekend. For the first time the annual gathering includes the Australian and New Zealand prime ministers. 

But how far should integration go? ASEAN advocates at least a confluence of political views, and expects its friends to ratify the 1976 Treaty of Amity and Cooperation, a largely symbolic non-aggression pact that commits signatories to resolve security issues peacefully. 

China, India, Japan, Pakistan, South Korea, Russia and New Zealand all will have signed by the end of the summit, if only to remove an inconsequential obstacle to a more critical economic relationship. But Howard, worried about sending the wrong signal to the United States, has refused. 

Canberra and Washington have security commitments under the Australia-New Zealand-US (ANZUS) Treaty, reduced to only two parties since New Zealand in effect opted out a decade ago over its hardline stance on nuclear proliferation. 

But Japan and South Korea are also close allies of the US, while Singapore and Thailand have logistical and training arrangements. All six countries are full participants in the annual ASEAN Regional Forum (ARF) security talks and cooperate at various levels in the anti-terrorism offensive. 

So why the reticence about ratifying a treaty that has never been activated and is couched in such generalized terms that it probably could never be enforced in the unlikely event that it were ever put to the test? A likely reason is that Canberra fears being backed into a corner over ASEAN's blinkered policy of refraining from making judgments on individual members, which has ensured that the bloc will struggle to evolve beyond a limited consultative role. 

Article 2 of the treaty guarantees "non-interference in the internal affairs of one another", and the right of every state to "lead its national existence free from external interference, subversion or coercion". 

Given that the Vientiane summit has broached such sensitive topics as continuing human-rights setbacks in Myanmar and the alleged suppression of Thailand's Muslim minority, the caution is probably justified. Canberra has not been as forthright as Washington on such issues as the nuclear standoff in North Korea and the ponderous pace of democracy in Myanmar. Australia is one of few Western countries that maintain complete consular links with both pariah states. But it has nonetheless been branded a US puppet because of an unguarded moment by Howard - later reinforced by comments from President George W Bush - that Washington saw Canberra as its "deputy sheriff" for security within the region. 

Although Howard insists that his comments were taken out of context, he did not help his cause by later announcing a preemptive-strike counter-terrorism policy, under which Canberra reserved the right to take military action in Asia against perceived security threats. 

Realistically, this is never likely to happen. Canberra lacks the offensive capability to mount anti-terrorist operations in Asia involving military units and is unlikely to risk a damaging loss of economic markets. Yet some ASEAN leaders, mostly notably Malaysian Prime Minister Abdullah Badawi, see the treaty as a test of Canberra's deeper commitment to Asia after decades of alternately riding the sheep's back to Europe and the resources trail to North America. 

The 10 ASEAN member countries account for a modest 13.7% of Australia's overall merchandise trade and 11.3% of its export earnings. Only 3.8% of the bloc's combined export transactions and 2.6% of its imports are with Australia. But the picture alters radically if data for other Asian states are included. Seven of Australia's top 10 export markets are in Asia, eight if New Zealand is included. The US is No 2 on the list, but is rapidly being overtaken by India and China. 

While Canberra makes much of its recently concluded FTA with the US, it has other such agreements with Singapore and Thailand. A feasibility study is under way for a similar agreement with China, and there is speculation of a future deal with Malaysia. A Closer Economic Partnership (CEP) signed by ASEAN with Australia and New Zealand in 2002 set a target of doubling both two-way merchandise trade and investment by 2010. 

So far the outlook has not been promising for Canberra: while Australia is progressively buying more goods, ASEAN imports have fallen steadily since 2001, contributing to a widening trade deficit in ASEAN's favor that could become a diplomatic irritant. 

For all of Canberra's economic commitment to the region, none of its four key trade-development policies in 2004 has focused directly on ASEAN. Rather, it is the Asia-Pacific Economic Cooperation (APEC) forum, dominated by the US, that takes center stage, though it must be noted that most ASEAN members are also APEC partners. 

In purely economic terms, Canberra doesn't have a lot to offer ASEAN. Australia accounted for a negligible 1% of global trade last year and its domestic market is only about the same size as Malaysia's. As an investor, it lags behind such "regional" heavyweights as Sweden, the Netherlands and Finland. 

All this has convinced many observers that ASEAN might want to get Australia on board precisely because of its close US ties, which might give Asia an ear in Washington as the three big blocs look for an edge in the next multilateral trade round. 

There has already been a convergence in the farm lobby, with the Australian-led Cairns group of agricultural exporters providing a buffer between the hostile US and Western European camps. Several ASEAN states are Cairns members. 

The proposed FTA with ASEAN will probably proceed whether or not Canberra accedes to the Treaty of Amity. But in failing to conform to Asian expectations, Australia will leave itself exposed to a far greater set of diplomatic pressures once the serious talk starts on a broader East Asian agreement. 

ASEAN leaders will find it difficult to justify Canberra's involvement in future diplomatic summits if it lacks a full commitment to the bloc's ideals - and its treaty symbols, how matter how vacuous they may be. Ominously for Australia, its most vocal Asian critics are Malaysia and Indonesia, arguably the most influential voices in ASEAN. 

As Indonesian spokesman Marty Natalegawa noted: "There can be no more efficient and effective way for Australia to dispel misperceptions some quarters may have of its intentions in Southeast Asia than to simply accede to the [treaty]." 

Alan Boyd, now based in Sydney, has reported from Asia for more than two decades. 


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"The practice of discernment is part of higher consciousness. Discernment is not just a step up from judgement. In life's curriculum, it is the opposite of judgement. Through judgement a man reveals what he needs to confront and learn. Through discernment, one reveals what he has mastered."   Quote from: Love Without End, by Glenda Green
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