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Monday, 5 November, 2001, 11:49 GMT
Asean leaders' trade hopes
Prime Minister Zhu Rongji
ASEAN leaders are mulling Chinese integration
South east Asian leaders are meeting in Brunei for a two-day summit, with the economic focus of the talks centred on the creation of a free-trade area.

At issue is the question of how best to expand trade with China, amid fears by many members of Asean (Association of South East Asian Nations) that their markets will be flooded with cheap Chinese goods.

Many of the region's export-led economies have been hit hard by the drop in demand in the United States and Japan.

This global slowdown is expected to increase pressure for stronger trade ties within the region, though observers say it will be some time before a free-trade bloc will exist.

Non-members join in

Leaders of China, Japan and Korea also met in Brunei, and were expected to meet with their Asean counterparts later on Monday.

The Asean Free Trade Area (AFTA) is expected to come into effect next year.

"The main subject for discussion (at the Asean-China summit) is a report and recommendations by an experts group. One of the recommendations is the possibility of working towards a free trade area," ASEAN secretary general Rodolfo Severino said.

Many Asian states fear being inundated with cheap Chinese goods, such as textiles, electronics and agricultural produce.

Some observers say this makes it more likely that ASEAN members will strike bilateral deals with China.

East asia trade block a non-starter

Some observers believe that the creation of an east Asian trading area, like that of the European Union, is unlikely.

The regions' economies are too varied and at different stages of development, says Hank Morris of Industrial research and Consulting in Seoul.

The industrial north east Asian economies of Japan, Korea and China differ greatly from the south east asian economies of countries like Indonesia and Malaysia which are dependent on commodities.

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 ON THIS STORY
The BBC's Jonathan Head
"Nobody is really expecting a free trade zone on anything like the model of the European Union"
Hank Morris, Industrial Research and Consulting
"It would be as difficult to include these countries in one framework as to include India in the EU"
See also:

05 Nov 01 | Asia-Pacific
Asean stumbles over war on terror
02 Nov 01 | Asia-Pacific
Asean faces trade and terror challenge
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