The meeting of EAS foreign ministers in Kuala Lumpur on July 26, 2006, identified energy, finance, education, avian flu and national disaster mitigation as the priority issues for the 2006 EAS.[4][5] The Philippines, the host of the 2006 (now 2007) EAS, also said the failure of the Doha Round would be on the agenda.[6]
EAS Free Trade Agreement/Comprehensive Economic Partnership for East Asia (CEPEA)
In April 2006 Japan announced a proposal for an East Asian Economic Partnership Agreement (also known as the Comprehensive Economic Partnership for East Asia (CEPEA) or the Nikai Initiative in reference to Toshihiro Nikai in reference to the then Japanese Economic Minister) consisting of the current members of the EAS.[7][8][9][10] Japan, the promoter of the concept, described it as an "East Asia OECD".[11] Initially this was linked with a timetable for discussions to commence in 2008 and to conclude in 2010, which met with some scepticism.[12][13]
By August 2006 this had been refined to a Japanese proposal[9] championed by Japanese Trade Minister Toshihiro Nikai consisting of:
- a fund of US$80 million to $100 million to initiate a comprehensive economic partnership (CEP) with East Asia, modelled on the OECD;[14][15] and
- an institution to be named the East Asia Economic Research Institute for ASEAN and East Asia (ERIA) in an ASEAN country to research the benefits of a proposed Free Trade Agreement between the 16-members of the EAS; and
- an East Asian Free Trade Agreement (EAFTA) between the EAS members.
Responses were mixed. Following the discussions of EAS Foreign Minister in Kuala Lumpur on July 26, 2006, to establish the agenda for the second EAS, it appeared that the proposal as it then stood did not have sufficient support to be included as an agenda item for the second EAS.[4] Although the Philippines, which was the host for the second EAS, said trade would be on the agenda but in terms of the then present difficulties with the Doha Round.[6]
Nevertheless, even after the meeting of the EAS Foreign Ministers Japan appeared keen to continue to discuss the idea in terms of a Free Trade Agreement between the members of the EAS.[16][17]
India came out publicly in support of a pan-Asia Free Trade Agreement.[18] New Zealand expressed its support.[19][20] As has Malaysia.[21] Australia described the proposal as "interesting".[22] Indonesia gave guarded support to the proposal,[23] linking it with the proposed East Asian Community and Asian Values.[24] ASEAN gave its support to the Japanese proposal to research the proposed EAFTA.[13][25][26]
Ong Keng Yong, the secretary-general of ASEAN has suggested that "it can be done", referring to an EAFTA, and estimated it would take 10 years.[27] ASEAN as a whole seemed to have a pessimistic view as to the feasibility of the idea at 2006.[28]
Japan nevertheless said it was delighted with the positive response to the proposal.[29]
Nevertheless, China, South Korea and ASEAN were also said to have indirectly expressed scepticism about the idea.[30] The difficulties with the ASEAN - India FTA does not augur well for a larger FTA.[30][31] Japan also had to defend itself from the allegation that the proposal was advanced as a mechanism to counter China[32]
The position of China was expected by some commentators[33] although not all agreed.[21] China appears to prefer the narrower grouping of ASEAN plus Three for a future Free Trade Agreement.[34] New Zealand has expressed confidence that China will support the proposal, especially if the research shows a benefit to East Asia from an EAFTA[35][36]
The United States of America has proposed an FTA within the members of APEC which may be in response to the suggestion of an FTA between the members of the EAS.[37] Japan has suggested that the EAFTA could be used as a building block for the larger APEC FTA.[38] The US is aggressively coming out against such a move concerned about a line down the middle of the Pacific while Asian economies are concerned about the US's ability to deliver a broad based FTA.[39]
In September 2006 Toshihiro Nikai was replaced as Minister of Economy, Trade and Industry (Japan) by Akira Amari. Nikai's successor has pursued the Nikai initiative - Comprehensive Economic Partnership for East Asia (CEPEA).
Growth in India and China ties and the Japanese thaw
In November 2006 India and China announced plans to double bilateral trade by 2010.[40] The growing relationship between the world's two most populous nations was seen as a potential source of stability and co-operation for the region.[41] The two countries joint declaration of November 21, 2006, agreed at paragraph 43 to "cooperate closely" in the context of the EAS.[42]
Further the change in leadership in Japan with Shinzo Abe's election to the Prime Ministership of Japan in September 2006 brought about some thawing in Japan's relationship with both China and South Korea.[43]
These changes suggested the potential for different dynamics in the second EAS to the tensions in the First EAS.
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