Trade and Aid

Trade Agreements – Regional

Not all trade agreements are between two countries; some agreements cover many different economies. For example, you might know that Europe has developed a trading block known as the European Union. Over many years, the countries involved in this agreement have moved towards a common currency (the Euro), and greater access to other countries covered by the agreement. As a result, a person on a European passport can now travel all over the continent with very few restrictions. This has resulted in greater mobility of labour – a person looking for work in Poland needn’t stay in that country, and so they don’t.

Clearly this is not a bilateral trade agreement. We refer to these as regional trade agreements – an agreement that covers several countries in the same area, rather than just two countries (which may or may not be geographically close).

Australia is part of one very important regional trade agreement, and is working diligently to gain access to another.

APEC – the Asia Pacific Economic Co-operation forum

APEC is arguably Australia’s most important trade agreement. It was started with a meeting in Australia in 1989, with the first “real” meeting following in 1993 (Blake Island – United States). In 1994, just one year later, a meeting in Bogor (Indonesia) set out the goals for free trade in the region by 2020 (and ten years earlier for developed countries). While it seems that these goals are unlikely to be met, the commitment to the idea has not wavered – a meeting in 2001 in Shanghai (China) re-affirmed the group’s commitment. And despite the fact that “free” trade might not exist, even critics would agree that costs (in the form of tariffs and quotas) have fallen dramatically in the thirteen years since the Bogor meeting.

Today, APEC is made up of twenty one “economies”. After a relatively tense period, the word “countries” was dropped from the APEC lexicon, and in this way Chinese Taipei and Hong Kong were able to be admitted as members without upsetting China. A full list of the membership is as follows:

APEC Members	Date of Joining
Australia	6-7 Nov 1989
Brunei Darussalam	6-7 Nov 1989
Canada	6-7 Nov 1989
Indonesia	6-7 Nov 1989
Japan	6-7 Nov 1989
Republic of Korea	6-7 Nov 1989
Malaysia	6-7 Nov 1989
New Zealand	6-7 Nov 1989
Philippines	6-7 Nov 1989
Singapore	6-7 Nov 1989
Thailand	6-7 Nov 1989
United States	6-7 Nov 1989
People's Republic of China	12-14 Nov 1991
Hong Kong, China	12-14 Nov 1991
Chinese Taipei	12-14 Nov 1991
Mexico	17-19 Nov 1993
Papua New Guinea	17-19 Nov 1993
Chile	11-12 Nov 1994
Viet Nam	14-15 Nov 1998
Peru	14-15 Nov 1998
Russia	14-15 Nov 1998

ASEAN – the Association of South East Asian Nations

At this stage, Australia is not a member of ASEAN, and we are unlikely to become one. There are ten member countries: Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam. These countries represent a significant proportion of Australian trade, and so better access for our products would certainly add to our wealth.

For many years, relations between Australia and ASEAN had been cool. This stemmed from the fact that Prime Minister Bob Hawke said that the hanging of two Australians convicted of drug trafficking in Malaysia in 1986 was “barbaric”, and Paul Keating, who was the Australian Prime Minister at the time (1993), once referred to his Malaysian counterpart (Dr Mahathir) as a “recalcitrant”. It has taken some time for the government of Malaysia to recover from these events, and in return they have consistently vetoed any attempt by Australia to form a closer bond with the ASEAN community.

Then, on November 30th, 2004, former Australian Prime Minister John Howard, along with the ten leaders of the ASEAN countries and also the Prime Minister of New Zealand announced that the twelve countries would work towards a regional free trade agreement. This was a significant step forward; it now remains to be seen how negotiations will progress.

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