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Last Updated: Wednesday, 8 October, 2003, 07:02 GMT 08:02 UK
Asia aims for 'common market'
Leaders of Asean countries gather under summit banner
Leaders announced bold plans for Asean's future
India, China and Japan are backing plans to extend the free-trade area agreed by 10 South-East Asian nations.

Of the three regional economic powerhouses, China agreed to a framework free trade deal with the Association of South-East Asian Nations (Asean) in 2002.

Now - as the Asean summit wraps up on Wednesday in Bali - Indonesia, India and Japan are negotiating their own versions to cut back on both tariffs and other barriers to trade.

And China extended its own involvement by signing up to Asean's 1976 Treaty of Amity and Co-operation on Wednesday, which calls for dialogue-based solutions to both political and economic disputes.

Varied agendas

Under the deals signed by China and Asean, a vast free-trade area of 1.7 billion people is envisaged by 2010.

Adding India and Japan to the grouping would expand it to cover almost half the world's population.

"It's going to be a vibrant market and India wants to be a part of it," Indian industrialist Jamshed Godrej told BBC World Business Report.

Asean leaders have already committed - in the Bali Concord II signed on Tuesday - to convert their free-trade area into a full-blown economic community by 2020.

Asean member countries
Unsurprisingly, the agendas of the various players differ.

For Asean, which includes nations as diverse as tiny trading economy Singapore, shunned dictatorship Burma and regional giant Indonesia, it is vital to get Asia's three powerhouses on side rather than in opposition.

For India, Asean is playing an increasingly important economic role, with trade up 25% in the past year to about $12.5bn.

India is also keen to make more of a mark on the world stage, and is willing to cut tariffs fast to achieve that aim, as Prime Minister Atal Behari Vajpayee explained to business leaders on Tuesday.

"India today is a country on the move," he said.

Japan, meanwhile, has always sold huge amounts to South-East Asia, but is seeing growth in exports tailing off as China's export industries kick into high gear.

Almost 15% of Asean's external trade in 2001, or $99.2bn, was with Japan, but that is some way off a peak of $121.2bn in 1995.

Conversely, China's trade with Asean - while rather smaller at $55.4bn in 2001 - has been rising by 25% a year.

Indian industrialist Jamshed Godrej
"it's going to be a vibrant market and India wants to be a part of it."

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