A fledgling forum of 27 East Asian and Latin American countries will get down to business early next month on drafting a package of specific proposals to shore up nascent trans-Pacific cooperation in economic and social areas.
According to government sources, the Forum for East Asia-Latin America Cooperation’s working group on economic and social issues will hold its first meeting March 7-8 in Tokyo to analyze the two regions’ current economic and social conditions and common challenges they face.
The sources said that delegates will focus on four specific themes: institution-building and governance, fostering entrepreneurship and developing small and medium-size enterprises, eradicating poverty through economic development and bringing information technology to developing countries.
The working group, jointly chaired by Japan and Peru, will compile a preliminary report on its findings next month for submission this summer to the forum’s fourth senior officials’ meeting.
The economic and social panel, which comprises government and private-sector experts, including Akio Hosono, professor at Kobe University, will meet again either in Japan or Peru, probably early next year, to compile a final report containing the specific policy-oriented proposals. The final report will be submitted to the forum’s second ministerial meeting scheduled for the autumn of 2003 in the Philippines, the sources said.
The forum was originally called the East Asia-Latin America Forum, or EALAF, but was renamed FEALAC at the first ministerial meeting in Santiago at the end of March last year.
It was originally proposed by Singaporean Prime Minister Goh Chok Tong during a visit to Chile in September 1998. The inaugural meeting took place in Singapore in September 1999 at the senior working level.
In Santiago, FEALAC ministers agreed to set up three working groups — one on economic and social issues, a second on political and cultural issues and a third on education, science and technology — to strengthen dialogue and cooperation between two regions that in the early 1990s were pillars of economic growth.
The two regions still have huge long-term growth potential despite economic and social ills that have plagued them since the Mexican Peso crash in 1994 and the 1997-1998 Asian financial and economic crisis.
The 27 FEALAC members include the Association of Southeast Asian Nations, Japan, China, South Korea, Australia, New Zealand, Mexico, Chile, Peru, Brazil and Argentina. The 10-member ASEAN comprises Thailand, Singapore, Indonesia, the Philippines, Malaysia, Brunei, Vietnam, Laos, Cambodia and Myanmar.
FEALAC may have significant implications for the economies of East Asia and Latin America — and even for the entire global economy.
FEALAC is an Asian-Latin American version of the 25-nation Asia-Europe Meeting, or ASEM, which was inaugurated in 1996. As in the case of ASEM, FEALAC’s birth was motivated by strategic economic reasons, including an apparent bid by East Asia and Latin America to jointly prevent themselves from falling further under the sway of the United States.
Unlike the 21-member Asia-Pacific Economic Cooperation forum, or APEC, which was launched in 1989, both FEALAC and ASEM exclude the U.S. Although Mexico, Chile and Peru are APEC members, the other Latin American countries, including such regional powers as Brazil and Argentina, are not.
All 34 countries in the Western Hemisphere but Cuba agreed at a summit last year to conclude negotiations on forming a Free Trade Area of the Americas, or FTAA, by the end of 2004 and to actually launch the free-trade zone by the end of 2005.
But some Latin American countries, especially Brazil, remain highly alarmed by the prospect of the FTAA negotiations proceeding at the will of their giant northern neighbor, the U.S., at the expense of their economic interests.
The U.S. has often characterized the FTAA as a result of expanding the North American Free Trade Agreement, or NAFTA, which includes the U.S., Canada and Mexico. Meanwhile, Brazil is a leading member of the Mercosur customs union that also includes Argentina, Uruguay and Paraguay. Chile and Bolivia are associate Mercosur members.
With talks progressing toward the FTAA and the 15-nation European Union expanding eastward — its membership is widely expected to reach 25 as early as 2004 — a concern is growing in East Asia that the region might be put at a competitive disadvantage in the global trade and economic arena.
This worry apparently lies beneath a recent wave of moves toward regional or bilateral free-trade agreements or other types of economic integration among East Asian countries. Among those recent moves are an agreement between China and ASEAN in November to conclude an FTA within a decade and Japan’s proposal for a “comprehensive economic partnership” agreement with ASEAN.
The Japanese proposal was made last month by Prime Minister Junichiro Koizumi, apparently with the primary aim of keeping its hitherto unrivaled economic influence in East Asia. The government had been taken by surprise in November when China, a rapidly ascending global economic power, floated its FTA idea.
China, the world’s most populous country with nearly 1.3 billion people, is now the world’s seventh-leading economy in terms of gross domestic product, a status that is likely to be further boosted by the country’s accession to the World Trade Organization in December.
The Japanese proposal is quite vague, however. Because of strong political pressure at home against further liberalization of farm markets, Koizumi was careful not to commit himself to including an FTA in the proposed partnership, disappointing many ASEAN officials who want to sell more of their agricultural products in the lucrative Japanese market.
Although it may be rather coincidental, the current target date for WTO nations to complete the recently-launched new round of trade liberalization negotiations — the end of 2004 — coincides with the deadline for concluding FTAA negotiations.
With the next U.S. presidential election also being held in late 2004, George W. Bush is widely expected to seek diplomatic victories to sell voters — by extracting as many trade concessions as possible from other countries in both the FTAA and WTO negotiations.
If the WTO round of negotiations fail to make as much progress as the Bush administration wants, the FTAA could become a top priority for the administration. As a result, strengthening the global trade system could be pushed to the back burner — something East Asian countries fear most.