Downer: Asia must embrace free trade

Australian Foreign Minister Alexander Downer

By Andrew Demaria
CNN.com writer

HONG KONG (CNN) -- Asian nations that refuse to seek new regional trade arrangements run the risk of being left behind, according to Australia's Foreign Affairs Minister, Alexander Downer.

"Those countries that decide to stay behind will find that increasingly world trade will start to pass them by," Downer told CNN.com.

"In my view (they) will ultimately be left with no alternative but to change track and get on the fast track of liberalization."

His comments follow an APEC summit in Brunei which concluded on Thursday with calls for a new round of global trade negotiations in 2001.

Some nations including Australia and New Zealand have already signaled their intention to create new bilateral and regional trade agreements that fall within the WTO guidelines and APEC goals.

On Thursday, the Australian Prime Minister, John Howard, reversed an anti-bilateral agreement stance to announce negotiations will begin with Singapore for a new bilateral trade arrangement to cover goods, services and a recognition of standards.

Earlier in the week, the New Zealand Prime Minister, Helen Clark, signed a free trade agreement with the Singapore Prime Minister, Goh Chok Tong, and said she would try to expand New Zealand trade markets by seeking similar deals with Hong Kong, South Korea and Chile.

Downer sees this trend continuing in the Asian region with trade developing at both the multilateral and bilateral levels. He urged further negotiations between nations.

"I think there will be an increasing web of these bilateral trade agreements over the next two or three years and I think that's very much to be encouraged because ultimately they are going to be a catalyst for further region-wide and global liberalization," he said.

With Asia-Pacific nations accounting for eight of Australia's top 10 export destinations in 1998-99, Downer says Australia has benefited greatly from an increasingly liberal trading environment.

But several other Asian nations, led by Malaysia, continue to balk at further bilateral and multilateral trade agreements and only supported the call for another set of World Trade Organization negotiations in 2001 provided an agenda outlining their interests be established prior to trade talks.

Downer criticized the closed-economy policy adapted by Malaysia and its reluctance to embrace globalization.

"One of the reasons Australia's economy has now grown for 13 consecutive quarters at an annual basis of more than 4 percent is that it's basically a pretty open economy," he said.

"I've never heard of a closed economy being a rich economy."

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Asia-Pacific Economic Cooperation
International Monetary Fund
World Trade Organization
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