The economies of ASEAN’s ten member states are experiencing an invasion of Chinese goods and services. Many are concerns that any new free-trade zone will favour India but especially China. Participants agree to greater anti-terrorism cooperation. Today 2nd East Asia Summit opens.

Cebu (AsiaNews/Agencies) – ASEAN leaders last night agreed to an anti-terrorism deal and confirmed their goal of creating a free-trade zone. The ten-member Association of Southeast Asian Nations, which met yesterday in Cebu (Philippines), reconvened today for the 2nd East Asia Summit with China, India, Japan, South Korea, Australia and New Zealand joining the table. ASEAN leaders are keen to turn their grouping into a free-trade zone by 2015 but are under pressure to better compete against India, but especially China.

Although this year ASEAN celebrates its 40th anniversary, it is still far from economic integration, not the least because it includes political regimes that range from the democratic or semi-democratic (Philippines, Thailand, Indonesia, Malaysia, Cambodia and Singapore) and absolute monarchy (Brunei), to military dictatorship (Myanmar) and Communist states (Vietnam and Laos). And economic differences are as wide as political ones since two of its members, Laos and Cambodia, are amongst the poorest nations in the world. Still what concerns many experts is China.

Indeed many ASEAN members may have enjoyed good rates of economic growth but compared to the rapid take-off of the Chinese juggernaut their situation is stagnant. By contrast, Chinese goods are flooding the world and China’s economy is socking up raw materials from that same world. There are grave concerns among ASEAN’s 545 million people that they will end up playing a subordinate role to China’s 1.3 billion.

In spite of such fears, ASEAN and China signed an agreement to open up their respective service sector in about 60 areas like health care, real estate or energy. A similar one is expected to be signed with India.

Under this deal, which comes a year and half after the two sides agreed to lower tariffs on more than 7,000 products, South-East Asian companies will have greater access to rapidly growing Chinese sectors such as banking, information technology, real estate, health, engineering, education, transport and construction.

Chinese Premier Wen Jiabao noted that ASEAN-China trade was worth US$ 160.8 billion in 2006, up 23 per cent over the previous year and 17 times what it was 15 years ago.

ASEAN leaders also sealed a sweeping anti-terrorism convention, paving the way for smoother extradition of suspects, joint investigations and crackdowns on terrorists' funding. To come into effect, the pact however must still be ratified by each member state.

Many ASEAN countries are plagued by growing Muslim insurgencies and terror networks like Jemaah Islamiah, which was blamed for deadly bombings in Bali and Jakarta.

To underscore the dangers, last Wednesday, when the summit opened, three bombs killed seven people on the Filipino island of Mindanao, a region that serves as base to various Islamic separatist groups.

Terrorism is also active in southern Thailand and Bangkok was jolted by a blast at the beginning of the New Year.

ASEAN members also urged Myanmar to move towards democracy but did little else. Instead many took issue with the US for introducing a resolution in the United Nations Security Council to impose sanctions on Myanmar. Ultimately, Russia and China vetoed the US proposal. For them, Myanmar’s case should instead be brought to the attention of the Human Rights Council.

At the East Asia Summit, participants also signed on a declaration on East Asian energy security that lists a series of goals aimed at providing "reliable, adequate and affordable" energy supplies to a huge region from Australia to India, and lessening its dependence on oil from the Middle East.

Among the plans mentioned there is the construction of a regional electricity grid and a natural gas pipeline across South East Asia. (PB)

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