Asean to ink charter on free trade

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Southeast Asian nations plan to sign a charter in Singapore next week aiming for lofty goals in areas such as free trade and human rights even as the 40-year-old group wrestles with how to handle the divisive issue of Myanmar. The West has urged the Association of Southeast Nations (Asean) to put more pressure on Myanmar’s junta after its crackdown on pro-democracy protests, but the group’s principle of non-interference in each other’s internal affairs is likely to prevail.

Asean will sign a charter on November 20, giving its 10 member states a legal identity, a first step towards its aim of a free trade area by 2015 and a possible European-style union. But as a multinational organisation, Asean could hardly be more different from the highly integrated and interventionist EU.

“If you are talking about completely free investment flows and financial integration, it would be a lot more difficult,” said Chua Hak Bin, an economist at Citigroup. “There is natural suspicion about investments in strategic sectors.” A final draft of the charter, obtained by Reuters, shows the 40-year old group intends to hold on to its principles of non-interference and decision-making by consensus, both of which have made it hard to act on Myanmar, despite’s Asean unusually stern expression of “revulsion” against September’s bloody crackdown.

The charter does call for the creation of a human rights body, but with no details or punitive measures for rogue members.

“When you have that principle of non-interference, you can put a lot down in words, but it’s so vacant you could drive a truck through it,” said Song Seng Wun, economist at CIMB.

Asean’s 10 members span the political and economic spectrum: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. But jointly their $1 trillion economy is slightly bigger than India’s.

Economic deals are still likely to be bilateral between individual member states, such as Malaysia’s free trade pact with Pakistan, signed on Monday to cut import tariffs for palm oil. Diplomats say the charter will also make the current option of excluding Myanmar from group deals impossible.

Negotiations on an India-Asean free trade agreement are unlikely to witness any progress next week.

Negotiations on an India-Asean free trade agreement are unlikely to witness any progress next week, with India wanting to keep tariffs on Southeast Asian exports of petroleum and certain agricultural goods, despite Asean’s target of a deal by mid-2008.