The Association of South East Asian Nations (ASEAN) today signed free trade agreements with Australia and New Zealand as the 10-nation economic bloc looked for ways to get out of the worsening slump.
The agreement was signed at the Thai resort town of Cha-Am, 200 km south of the capital Bangkok, at the grouping's 14th summit.
The agreement aims to progressively liberalise and facilitate trade in goods among the parties through, inter alia, progressive elimination of tariff and non-tariff barriers in substantially all trade in goods;
Through progressively liberalising trade in services among the parties, with substantial sectoral coverage;
Facilitating, promoting and enhancing investment opportunities among the parties through further development of favourable investment environments;
Establishing a co-operative framework for strengthening, diversifying and enhancing trade, investment and economic links among the parties; and
Providing special and differential treatment to ASEAN member states, especially to the newer ASEAN member states, to facilitate their more effective economic integration.
The free trade agreement could boost the combined gross domestic product of the 10+2 nations by more than $48 billion by 2020, although its role in easing the pains of the current economic downturn is yet to be assessed.
The ASEAN countries have a combined gross domestic product of about $1.2 trillion.
The deal will "facilitate business activities at a time of global slump," said Malaysia's trade and industry minister Tan Sri Muhyiddin Yassin. "Regional integration is essential to buoy export-dependent economies in ASEAN'', he added.
Thailand's economy shrank in the fourth quarter and others like Malaysia and Indonesia are facing rapidly slowing growth as exports crumble.
Thailand's deputy prime minister Korbsak Sabhavasu said the economic outlook remains uncertain. "We did agree that it's anybody's guess what is going to happen next.
ASEAN foreign ministers have agreed informally to expand a proposed emergency currency fund to $120 million from $80 billion, but nothing was likely to be finalised at the three-day summit.
Japan, South Korea and China are expected to provide 80 per cent of the fund.
Australia's $1 trillion economy almost equals ASEAN's combined GDP, and smaller neighbor New Zealand.
ASEAN clubs Indonesia, Malaysia, the Philippines, Singapore, Thailand, Brunei, Vietnam, Laos, Myanmar and Cambodia, and now Australia and New Zealand.