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US eyes free trade with ASEAN

WASHINGTON, Oct 10 – The United States is beginning to lay the initial groundwork for talks to forge a free trade agreement with Southeast Asia, ahead of President Barack Obama\’s maiden trip to the region.

A senior US senator will propose a resolution on Tuesday encouraging Obama administration officials to initiate the negotiations, warning about competition from China and other powers who have already sealed pacts with the Association of Southeast Asian Nations (ASEAN).

"The United States should proceed to develop a comprehensive strategy toward engaging ASEAN in serious FTA discussions," said Senator Dick Lugar, the Republican party leader in the powerful Senate foreign relations committee.

Lugar admitted that the free trade endeavor would be "complex and have possible challenges to negotiation given the varying levels of economic development and open markets among ASEAN countries."

But he pointed out that "China, India, Australia, New Zealand and South Korea have already finalized FTAs with ASEAN and are sharpening a competitive edge over the US in Southeast Asia."

Ongoing trade sanctions with military-ruled Myanmar, one of 10 ASEAN member states, should not deter US efforts to reach an FTA with the rest of the grouping, which also include Brunei, Cambodia, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand and Vietnam, Lugar said.

Lugar\’s resolution prodding the office of the United States Trade Representative (USTR) to pursue the free trade agreement is expected to attract support from Democratic party senators, congressional sources said.

Obama will hold his first-ever official summit between a US president and leaders of the 10 ASEAN member states when he is in Singapore for the Asia Pacific Economic Cooperation (APEC) forum in mid-November.

The United States has recently reversed policy on contacts with Myanmar, holding the highest-level talks with junta officials in nearly a decade, but has warned it will not lift sanctions until democracy is introduced.

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"Obama\’s possible meeting with ASEAN leaders while in Singapore will reflect the significance of the US-ASEAN relationship," Lugar said.

According to the resolution, a copy of which was made available to AFP, two-way US-ASEAN annual trade was a whopping 180 billion dollars.

In 2006, Lugar introduced and won approval of legislation establishing the position of US ambassador to ASEAN and Obama\’s predecessor George Bush appointed the envoy in 2008.

The United States at present has a Trade and Investment Framework Agreement (TIFA) with ASEAN, a precursor to a full free-trade pact.

Southeast Asia, with a population of 560 million, is America\’s fifth-largest trading partner behind only Canada, Mexico, China and the European Union.

American exports to the region have grown steadily to 68.4 billion dollars in 2008, about the same as US exports to China and three-times larger than American exports to India, according to figures from the US-ASEAN Business Council.

In economic terms, China\’s trade with the region saw a 20-fold increase between 2003 and 2008 to 179 billion dollars, while the US saw just a three-fold rise, according to ASEAN figures.

But the US maintained a slightly larger share of total ASEAN commerce than China.

The United States at present has a free trade agreement with Singapore and has been holding talks with Malaysia for a similar pact.

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