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FREE TRADE ZONE TREND (part II)
March 12, 2002
Nowadays, technology or information/knowledge industries have branched out worldwide. However, one could say God is fair because via competition, the economic situation has been changing constantly. USA lead in manufacturing, after the world war II, rich in all kinds of consumer goods; then Japan came up; then in Asia, other small dragons appeared. At present, PRC looms large in economic strength. Believe it or not, Latin American or African countries, sooner or later, may come up to compete with their cheap labor.
For those countries that had already occupied certain positions of economic prominence, their preoccupation is to keep their superior status. Therefore, they must find new ways to play - and thus the advent of FREE TRADE AREAS (FTA). Some economists have termed it a WIN-WIN STRATEGY, because they believe that utilization of such arrangements will give the greatest latitude for each country to develop their economic merits, whether geographical, labor, raw materials, or fianancial convenience..
At present, we have seen the results of such developments in the rise of the European Economic Community, NAFTA (USA and Canada, USA and Mexico, etc). In the case of Southeast Asia's ASEAN, it has grown not only to include other countries in the region but external as well, i.e., ASEAN + 3 (Japan, Republic of Korea and PRC). In it's present form, this nascent trade zone could be the world largest economic bloc. The most important and bold action taken by Asean members is a practically ZERO customs duty among member countries, effective Jan 1, 2002. As a result, it is now a PARTIAL FREE TRADE AREA.
The current Japanese Prime Minister, after his last January trip to Southeast Asia, has suggested a even more extensive economic allied group. Among the putative members, he has emphasized "competition, not in opposition, leading to prosperity".
Within such a loosely united bloc, individual countries has also been trying to have BILATERAL free trade agreements. Japan has signed one with Singapore, which had also signed such an agreement with New Zealand in 2001. This island country also continues to negotiate to have FTA with USA, Canada and Mexico.
Thailand proposed, in a New Delhi economic conference with Sri Lanka, Bengla Deshi, and Burma (Jan 17, 2002), to establish an FTA in the next 10 years. One can see that the FTA is an idea whose time has come and is being embraced by many countries an economic panacea.
to be continued.
E-mail: VJCHANG@hotmail.com
Tel/Fax USA : (301) 438-7439
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