Bilateral Mania: Antipodes Strike FTA with ASEAN

I almost forgot to mention this news closer to home: A few months ago, I mentioned that the ten-member Association of Southeast Asian Nations (ASEAN) was engaging in several bilateral trade negotiations--with China, Japan, South Korea, India, Australia and New Zealand. There are a number of reasons for this deal frenzy after a long history of ASEAN being little more than a talk shop, including stalled WTO negotiations leaving these countries hungering for more elsewhere and lingering fear of China leaving them far behind economically. Because negotiations seemed more advanced, I expected the ASEAN-India deal to be inked as scheduled in December 2008. For a number of reasons, it's been delayed. This means the rather mouthful ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA) came to fruition sooner.

The press blurb on the ASEAN Secretariat's website dating from February 27 of this year is informative, including this nugget on how ASEAN countries are significant trade partners for the Antipodean pairing:

Through the AANZFTA Agreement, ASEAN, Australia and New Zealand effectively create a free trade area of over 600 million people with a combined GDP of US$ 2.3 trillion (based on IMF 2007 figures), which is expected to have reached US$ 2.7 trillion, according to the IMF forecast for 2008. Intra-regional (ASEAN, Australia and New Zealand) trade has been growing an average of about 16 per cent per annum since the start of the FTA negotiations in 2005. The Ministers noted the increase in Australian and New Zealand investments to ASEAN which reached US$ 1.1 billion in 2007. With the liberalization of barriers to trade and investment under the AANZFTA Agreement, the Ministers expressed confidence regarding the further growth and expansion of intra-regional trade and investment. Taken together, Australia and New Zealand comprise ASEAN’s sixth largest trading partner. ASEAN as a group is the second and the third largest trading partner of Australia and New Zealand, respectively.

Unfortunately for Jagdish Bhagwati, regional trade deals certainly look like the wave of the (near) future. Few doubt that ANZ's economic fortunes going forward are tied to Asia. Look east, young man, look east.