BBC News | BUSINESS | 'Common market and currency' for East Asia

BBC News Online: Business

Sunday, 28 November, 1999, 12:41 GMT

'Common market and currency' for East Asia

East Asia's richest countries have agreed to speed up trade liberalisation, and say a common market and a common currency are "distinct possibilities" for the 10 members of the Association of Southeast Asian Nations (Asean) plus China, Japan and South Korea.

An East Asian common market. One East Asian currency. And one East Asian community.
Joseph Estrada

As a first step, six of the 10 Asean countries agreed to eliminate import duties on most goods traded in the region by 2010, five years ahead of schedule. Asean leaders announced the deal at the end of an informal summit in the Philippine capital Manila.

The four newer and less developed Asean members - Cambodia, Laos, Burma and Vietnam - will join the customs deal by 2015, three years earlier than planned.

Only the region's staple food, rice, will be excluded from the trade deal.

The tariff-cuts are aimed at creating a free-trade zone for more than 500 million people, with a long-term goal of establishing a European-style economic and monetary union.

Asean also pledged to increase economic co-operation with China, Japan and South Korea, which would extend the trade area to encompass two billion people with a combined gross domestic product of $7.75 trillion.

The bold plan was boosted by the presence at the summit of Japan's prime minister Keizo Obuchi, China's premier Zhu Rongji and South Korea's president Kim Dae-jung. The three countries are official "dialogue partners" of Asean.

Asean facts

Founded: 1967
Members: Brunei, Indonesia, Malaysia, Philippines, Singapore, Thailand, Cambodia, Laos, Burma, Vietnam
Population: about 500 million
GDP: $737bn
Trade: $720bn

In his opening address, Philippine president Joseph Estrada outlined the organisation's long-range goals as the creation of economic, monetary and political union for East Asia.

In an official statement, the plans for a common market and currency were described as "distinct possibilities ... given the degree of economic integration (Asean) has realised".

Joseph Estrada making speech at Manila summit

Joseph Estrada making speech at Manila summit

Asean countries were among those who suffered most under the global economic turmoil of the past three years. During 1998, the Asean economy shrunk by 7%.

But in 1999 most Asean countries managed to stage a strong recovery, and the economies of all 10 members are expected to deliver growth again.

However, in a draft report obtained by the news agency AP, the Asean members acknowledged that the region remains economically vulnerable.

The report warns that bank and corporate restructuring in Asean countries has been slow, while investment did not recover sufficiently.

"If restructuring stalls, investment, which for long propelled growth within the region, would continue to languish", the report said.

The report was written by a "surveillance" group established by Asean to prevent a new economic crisis.

Internet Links: Opening speech of President Joseph Estrada Asean
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