VZCZCXRO1479
RR RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHGP #0931/01 2420911
ZNR UUUUU ZZH
R 290911Z AUG 08
FM AMEMBASSY SINGAPORE
TO RUEHC/SECSTATE WASHDC 5687
RUCNASE/ASEAN MEMBER COLLECTIVE
RUEHNE/AMEMBASSY NEW DELHI 2087
RUEHUL/AMEMBASSY SEOUL 4235
RUEHKO/AMEMBASSY TOKYO 5925
RUEHBJ/AMEMBASSY BEIJING 2837
RUEHBY/AMEMBASSY CANBERRA 2166
RUEHWL/AMEMBASSY WELLINGTON 1450

UNCLAS SECTION 01 OF 02 SINGAPORE 000931 
 
SENSITIVE 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ETRD ECON ASEAN
 
SUBJECT:  ASEAN CONCLUDES FTA'S WITH INDIA, AUSTRALIA/NZ 
 
¶1.  (SBU) Summary:  ASEAN member nations concluded this week a 
limited Free Trade Agreement (FTA) covering trade in goods with 
India and a separate, more comprehensive agreement with Australia 
and New Zealand.  Both are scheduled to be signed at the Bangkok 
ASEAN Summit in December.  The agreements add to previously signed 
ASEAN trade agreements with China, Korea, and Japan.  End Summary. 
 
¶2.  (U) On the margins of the 40th annual meeting of ASEAN Economic 
Ministers (AEM) held August 25-29 in Singapore, ASEAN member nations 
concluded a joint FTA with Australia and New Zealand, and a limited 
trade agreement with India.  ASEAN announced on August 28 that 
negotiations on both agreements had been concluded, but scheduled 
signings for later this year to allow for legal reviews and other 
domestic approval processes.  ASEAN plans to sign both agreements at 
the ASEAN Summit in Bangkok in December and hopes to have investment 
pacts with China and Korea ready by that date as well. 
 
Australia/NZ - ASEAN's first comprehensive FTA 
--------------------------------------------- - 
 
¶3.  (U) After more than three years and 16 rounds of negotiations, 
ASEAN concluded a comprehensive FTA with Australia and New Zealand, 
the first FTA that ASEAN has pursued that included negotiations on 
goods, services and investment simultaneously.  The agreement covers 
trade in goods, services, investment, financial services, 
telecommunications, electronic commerce, movement of natural 
persons, intellectual property, competition policy and economic 
cooperation.  Implementation time frames are staggered, with 
Australia and New Zealand typically having the shortest 
implementation times and Burma, Cambodia and Laos the longest. 
 
¶4.  (SBU) Agreement was reached after last-minute wrangling over a 
number of issues that threatened to delay approval until later in 
the year.  Martin Harvey, New Zealand's High Commissioner in 
Singapore, told Econoff that last minute negotiations focused on 
market access for key agricultural exports in Indonesia and the 
Philippines.  New Zealand is also continuing negotiations on 
separate bilateral side agreements on labor and the environment with 
Indonesia and the Philippines. 
 
¶5.  (U) ASEAN's trade with Australia and New Zealand hit USD 47.8 
billion in 2007, with ASEAN netting a trade surplus of 14.2 billion. 
 Flows of Australian and New Zealand investment in ASEAN were USD 
1.1 billion in 2007. 
 
India FTA limited, services and investment to follow 
--------------------------------------------- ------- 
 
¶6.  (SBU) ASEAN also announced conclusion of a limited trade 
agreement with India after six years of negotiations.  The agreement 
covers only trade in goods, with 489 items excluded from tariff 
reduction.  Negotiations had focused on reducing India's proposed 
list of excluded items down from an initial 1414 products.  Ms. Tan 
Mey Ling, senior assistant director at Singapore's Ministry of Trade 
and Industry, told Econoff the two sides agreed on the 489 figure 
nearly two years ago, but negotiations had hung up over tariff 
treatment for crude and refined palm oil, coffee, pepper and tea. 
ASEAN and India also agreed to launch negotiations on services and 
investment as a single undertaking.  Negotiations are set to begin 
soon with a goal of completion by the end of 2009. 
 
¶7.  (U) India is the 7th largest trading partner for ASEAN countries 
collectively and accounts for only two percent of ASEAN's external 
trade.  However, it is also one of ASEAN's fastest growing markets 
with exports growing at an average of 31 percent annually since 
¶2005.  ASEAN and India have targeted trade to hit USD 50 billion by 
2010, up from the current USD 38 billion. 
 
ASEAN's other regional FTAs 
--------------------------- 
 
¶8.  (U) The FTAs concluded with India and Australia/New Zealand join 
a network of other FTAs that ASEAN economies have completed with 
regional countries, including Korea, Japan and China.  At the ASEAN 
Economic Ministers (AEM) meetings this week, ASEAN and China 
announced progress toward a bilateral investment pact that they 
expected would be signed in December.  The pact would build on 
agreements in trade in goods and services completed in 2004 and 2006 
respectively.  Korea is also pursuing an investment agreement with 
ASEAN that AEM Ministers hoped would be concluded by December as 
well.  In a joint statement, Japan and AEM Ministers noted the 
signing of the ASEAN-Japan Comprehensive Economic Partnership 
Agreement in April and said they looked forward to implementation of 
 
SINGAPORE 00000931  002 OF 002 
 
 
the agreement during 2008.  In an August 29 statement, ASEAN 
Secretary General Surin Pitsuwan said ASEAN had agreed on a schedule 
of discussions for an FTA with the European Union, but called it 
"one of the most challenging" FTAs ASEAN had pursued.  Press reports 
cited Burma's membership in ASEAN as a complicating factor. 
HERBOLD