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November 21, 2012

Negotiations for a trade bloc with Australia, China, India, Japan, New Zealand and South Korea and ASEAN

1. NY Times - Ten Southeast Asian nations said Tuesday that they would begin negotiating a sweeping trade pact that would include China and five of the region’s other major trading partners, but not the United States.

The proposal for the new trade bloc, to be known as the Regional Comprehensive Economic Partnership, is enthusiastically embraced by China. The founding members, who belong to the Association of Southeast Asian Nations, said at the close of the association’s summit meeting here that the bloc would cover nearly half of the world’s population, starting in 2015.

The new grouping is seen as a rival to a trade initiative of the Obama administration, the 11-nation Trans-Pacific Partnership, which includes many of the same countries but excludes China.

China, on the other hand, has gone out of its way to express its support for the new proposed bloc. Its members would be the 10 countries that make up the Association of Southeast Asian Nations, plus 6 nations that have free-trade agreements with the association: Australia, China, India, Japan, New Zealand and South Korea.

2. Reuters - China has been throwing its weight around and buying the loyalties of some Asian states.


A prime example is Cambodia, whose prime minister, Hun Sen, helped China to notch up a succession of diplomatic victories at the summit. China stalled debate on a resolution of maritime disputes in the South China Sea, rebutted attempts by Southeast Asian nations to start formal talks on the issue and avoided any rebuke from Obama over territorial ambitions. Commentators declared China a clear summit winner.

A closing statement by Hun Sen, this year's chair of the 10-member Association of Southeast Asian Nations (ASEAN), made no mention of the South China Sea, another victory for China's attempts to prevent multilateral talks on the dispute.

China has poured investments and loans into Cambodia in recent years, becoming its biggest trade partner and bilateral creditor. Cambodia's debt to China now totals at least $4.7 billion, about a third of its economy.

The price of that largesse has become clear this year, say analysts, as Cambodia has used its powers as ASEAN chair to restrict debate over the vexed issue of China's maritime claims, dividing the group and infuriating U.S. ally the Philippines.

Beijing claims a vast U-shaped line around the South China Sea that brushes up against the coasts of the Philippines, Vietnam, Brunei and Malaysia. The area is thought to hold vast, untapped reserves of oil and natural gas, and naval flashpoints between Chinese vessels and the Philippine and Vietnamese navy have become increasingly common.

Hopes for a diplomatic resolution within the ASEAN-China framework look bleak in the next two years as tiny Brunei and then Myanmar take up the chairmanship of the group.

"China has ambitions to become the premier military power among its regional peers, and a serious threat to U.S. maritime primacy in the Asia Pacific," said Sam Roggeveen, an Asian defense analyst with the Lowy Institute in Sydney.

Roggeveen added that if China were to deploy more than one carrier and equip them with high-performance stealth fighters, "it would become the pre-eminent regional maritime power, with the ability to coerce neighbors in disputes in which the U.S. prefers not to get involved".


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