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US senator urges ASEAN free trade

Oct 14, 2009 (DVB), Restrictions on US trade with Burma should not hinder the establishment of a Free Trade Agreement between Washington and Southeast Asian nations, a top US senator has said.

Legislation is set to be introduced this week by Dick Lugar, US senator for Indiana, that will encourage Free Trade Agreement (FTA) negotiations between the US and the Association of Southeast Asian Nations (ASEAN), a statement on the senator's website said.

"The United States should proceed to develop a comprehensive strategy toward engaging ASEAN in serious FTA discussions," Lugar said.

The US is already party to the North American Free Trade Agreement (NAFTA) and Central America-Dominican Republic Free Trade Agreement (CAFTA-DR). An FTA is an agreement between countries to eliminate tariffs and preferences on goods and service traded.

According to the International Monetary Fund (IMF), six ASEAN countries, Indonesia, Thailand, Philippines, Malaysia, Vietnam and Singapore, are expected to grow at around four percent next year, more than many of the world's advanced economies.

Lugar said however that access to ASEAN markets by China, India, Australia, New Zealand and South Korea are giving these countries "a competitive edge over the US in Southeast Asia".

An FTA agreement between ASEAN nations, New Zealand and Australia is due to come into force on 1 January next year. Australia's trade minister, Simon Crean, said today that the agreement will cover 600 million people and a combined Gross Domestic Product (GDP) of around $AUS3 trillion.

Lugar's comment comes a month before US president Barrack Obama is due to make his first address at an ASEAN summit, scheduled for mid-November.

It also comes shortly after the US announced it would begin dialogue with the ruling junta in Burma, whilst maintaining sanctions, after years of isolation.

Lugar said that ongoing restrictions on trade with Burma "should not deter US efforts to reach an FTA with the rest of ASEAN".

"President Obama's possible meeting with ASEAN leaders while in Singapore will reflect the significance of the US-ASEAN relationship," he said.

Observers say the US policy shift is being done in part to counter China's growing influence over Burma, and the ASEAN region. ASEAN nations are also said to be concerned about China's political, economic and military dominance in the region.

It was Lugar who in 2006 introduced legislation to establish the first US ambassador to ASEAN.

Reporting by Francis Wade


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