EU-style Asian economic community not feasible – ADB

MANILA (AFP) —Trying to set up a grand European Union-style economic community for Asia “does not appear feasible” the president of the Asian Development Bank (ADB) said Thursday.

The focus should be shifted towards setting up sub-regional groups, ADB president Haruhiko Kuroda told a conference in Manila.

“Reaching a broad political and social consensus needed to develop a far-reaching pan-Asian grand plan of regional economic integration does not appear feasible at this stage,” he said.

“We should rely on a pragmatic step-by-step bottom-up approach rather than on conceiving and implementing a comprehensive pan-Asian vision as was done in Europe,” Kuroda said in a speech at an conference of the Asian Institute of Management.

“The key challenge is how to consolidate and streamline the 192 bilateral or subregional FTAs (free trade agreements) at various stages of negotiation or implementation,” in Asia, he said.

He told the gathering of AIM graduates that Asia should instead “adopt a multi-speed approach to cooperation whereby a few countries can start working together on selected common issues, leaving the option for other countries to join later.”

The Association of Southeast Asian Nations (ASEAN), has set 2015 as a target for establishing such an economic community but Kuroda warned this must be preceded by a “harmonization of domestic systems” and business processes.

He said that ASEAN could be “regional hub” for Asia, pulling together “the fragmented national markets into an East Asia-wide FTA.”

Francis Estrada, AIM president, said there were differences that would delay the implementation of an EU-style ASEAN community.

He said the economies of ASEAN, which includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam, were more “disparate,” than those of Europe.

“The complimentarities (of the ASEAN economies) are not quite as evident,” as those of the European countries,” he said.

But he said ASEAN economic integration was still possible, remarking that “we can see major changes by 2015.” –The Philippine STAR