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Updated Thursday, March 11, 2010 11:05 am TWN, By Martin Abbugao, AFP

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U.S., Europe eye free-trade pacts with fast-growing Asia

SINGAPORE -- The United States, fearful of being sidelined as China and other fast-growing Asian economies speed up their integration, is banking on a new trade pact to shore up its Pacific influence.

Talks opening Monday in Melbourne will focus on a proposed Trans-Pacific Partnership agreement linking the U.S. market with Australia, Brunei, Chile, New Zealand, Peru, Singapore and Vietnam.

Officials hope the TPP will form the nucleus of a wider Asia-Pacific trade zone that would eventually rope in China, Japan and South Korea as well as key Southeast Asian nations.

The talks will follow the launch of negotiations on a free-trade agreement between Singapore and the European Union, which is also keen on expanding trade ties with Southeast Asia.

The United States and Europe have been shut out of a growing web of Asia-centric trade pacts spurred by the region's 1997 financial crisis and by a lack of progress in the Doha round of global trade talks, analysts said.

While the United States is “unquestionably” a Pacific power, it “lacks a comprehensive Asia strategy”, said Ernest Bower, a Southeast Asia expert at the Center for Strategic and International Studies (CSIS) in Washington.

“The lack of consistent U.S. focus in the region has enabled the ascendance of Chinese power,” Bower said, adding that it could slowly undermine U.S. business interests and eventually degrade U.S. security capabilities.

The new trade attention from the West comes as Asian countries lead the rest of the world in recovering from the global economic downturn.

“That the U.S. and the EU are knocking on Asia's doors is a recognition that the centre of economic power is shifting, or has shifted, to our region,” an Asian diplomat closely involved in trade issues told AFP.

“They know very well that ignoring Asia will be at their own peril. China is already a major trade partner for many Asian countries and is leading efforts toward regional economic integration,” he said on condition of anonymity.

Deputy U.S. Trade Representative Demetrios Marantis warned that Washington “faces the daunting prospect of getting locked out” by Asia-specific trade pacts.

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