Asia urged to deepen economic integration

Export-dependent Asia should hasten regional economic integration to bolster trade and keep a crucial engine of growth running as it braces for fallout from the global financial crisis, officials and experts at an international trade forum urged Thursday.

Many of the region's nations have pursued export-led industrialization and growth to quickly lift living standards but are now facing a prolonged slowdown as demand from Europe and the US wanes as the credit crunch morphs into an economic meltdown.

Dozens of free trade agreements are being pursued in Asia but these should be unified under a regional umbrella to avoid overlapping pacts and to reap maximum benefit, experts at the forum said.

"In the current economic situation, the threat of much slower global trade appears to be real. It is important to convince the world that expanding trade through economic integration is one of the ways to restore global economic growth," said Malaysia's Trade Minister Muhyiddin Yassin.

More than 70 free trade agreements have been concluded by the ten-member Association of Southeast Asian Nations along with China, South Korea and Japan, with another 70 or more still being negotiated, he said.

ASEAN's members are Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.

But regional or multilateral pacts are preferred in order to maximize trade, minimize distortions and to relieve the administrative burden on smaller developing countries that have limited resources, Muhyiddin said.

Trade between ASEAN nations has grown from $82 billion in 1993 to $404 billion last year, representing an average annual growth of 12 percent and accounting for a quarter of the grouping's total trade, he said.

Nagesh Kumar, director-general of the Research and Information System for Developing Countries think-tank in India, said Asia must seek to boost trade within the region to reduce reliance on Western countries as demand slows and exports dwindle amid the global economic meltdown.

"To make up for the losses, Asia needs to find new sources of demand. Regional economic integration is the real option to pursue now with more vigor to enable it to overcome this crisis," he told The Associated Press on the sidelines of the forum.

ASEAN countries have set a 2015 deadline to turn into a European Union-style economic community in which goods, services, investments and skilled labor will flow freely.

At the same time, ASEAN and three major Asian economies _ China, Japan and South Korea _ are studying a wider proposed East Asian free trade agreement. There are also proposals to enlarge it to embrace India, Australia and New Zealand.

Despite concerns over a "noodle or spaghetti bowl" effect due to overlapping Asian trade agreements, Philippines senior trade undersecretary Thomas G. Aquino said the pacts are crucial as they allow countries to enter into dialogue on contentious trade issues.

"In these troubled times, the value of new and deeper FTA models is that they enlarge the menu to beyond spaghetti and noodles. They provide logical reasons, specific opportunties and productive occasions for parties to continue egaging in meaningful cooperation," he said.

India's Kumar said a wider free trade area incorporating both Asian giants China and India would be the best option even though negotiations become tougher when the number of participating nations increases.