China Trade Deal Offers Much To ASEAN Countries: ASEAN Chief

http://www.bernama.com/bernama/v5/newsworld.php?id=475927

JAKARTA, Feb 17 (Bernama) — The Association of Southeast Asian Nations (Asean) Secretary General Dr. Surin Pitsuwan said that the ASEAN-China Free Trade Agreement will benefit member countries on trade and investment pact, China’s Xinhua news agency cited a local daily as saying on Wednesday.

Surin said that the ASEAN member countries would benefit from more trade and investment under the pact, and could gain even more if they can insert themselves into “supply lines”to Chinese factories.

Surin did, however, acknowledge that some countries would likely encounter “difficulties” in implementing the agreement, which was signed in 2004 and took effect on Jan 1 this year.

“Every member state has its own way of managing the transition because the agreement is going to involve some adjustments, responsibilities and cooperation,” he said.

“China is a large market that everybody wants to get into, and I think the line that the ASEAN should be thinking, as China grows, ASEAN grows with it.

“So we have to be on the supply lines into the factories of China, into the production base of China,” Surin said.

With its economy growing by a huge 8.7 percent last year, China is now the world’s third-largest economy after the United States and Japan, and is expected to lead the global economic recovery.

According to a report by DBS Bank last year, China will continue to inject strong demand into global trade, thus boosting the economies of its export-dependent Asian neighbors, including Indonesia.

The ASEAN-China trade pact creates the world’s third-largest free-trade area after the European Union and the North American Free Trade Agreement.

Rural banks decry ASEAN free trade pact

February 17, 2010 – http://www.bworldonline.com/main/content.php?id=6454

RURAL BANKS said they stand to lose as tariffs on agricultural imports fall in line with a regional trade pact, since the agriculture sector is a primary market.

In a telephone interview on Tuesday, Rural Bankers Association of the Philippines (RBAP) President Joseph Omar O. Andaya said the agriculture sector would suffer greatly as tariffs on farm goods fall in line with the implementation of a free trade agreement among members of the Association of Southeast Asian Nations (ASEAN).

“It will affect us because 50% of the rural banking sector’s loan portfolio is lent to the agriculture sector,” he said.

“The rest is lent out mostly to micro and small enterprises in the countryside, which are largely linked to or dependent on agriculture.”

He added that around 90% of rural bank head offices and branches are in the countryside where the economy is agriculture-based.

In January, tariffs on several goods such as petroleum, chemicals, iron and steel, cars and parts, rubber, leather goods, textiles and garments, and glass were scrapped under the ASEAN Free Trade Area (AFTA).

Duties on certain farm goods — corn, cassava, poultry and pork — were reduced to 0-5%. The Philippines’ proposal to keep rice tariffs at 40% before lowering it to 35% in 2015 is being negotiated.

Mr. Andaya said the agriculture sector, which lacks support from the government, would suffer against competition from Thailand, Vietnam, Indonesia and Malaysia.

“Don’t implement [this agreement] for now. Give the agri sector support first because we would die if this sector dies,” he said.

Agriculture officials were not available for comment.

The RBAP chief said the government, to boost the agriculture sector, should shift the focus of the agrarian reform program to improving the education of and support for beneficiaries from just land redistribution.

He noted that most of the beneficiaries have been left to fend for themselves by the government.

Mr. Andaya said the RBAP, which has 650 members, has over six million depositors and a million borrowers, has commissioned a study on the impact of AFTA on the rural banking industry. The results will be released in two months.

Overseeing the study is Rolando T. Dy, executive director of the Center for Food and Agribusiness and dean of the School of Management at the University of Asia and the Pacific.

In a text message, Mr. Dy said the immediate sectors that are affected by the AFTA implementation are corn farmers and chicken and hog producers.

Tariffs on imported chicken and livestock were reduced last month to zero and 5% respectively, from 40% and 35% before. — Don Gil K. Carreon