ASEAN targets free trade and human rights, talks green

ASEAN will sign a charter on November 20, giving its 10 member states a legal identity, a first step towards its aim of a free trade area by 2015 and a possible European-style union. But as a multinational organization, ASEAN could hardly be more different from the highly integrated and interventionist EU.

"If you are talking about completely free investment flows and financial integration, it would be a lot more difficult," said Chua Hak Bin, an economist at Citigroup. "There is natural suspicion about investments in strategic sectors."

A final draft of the charter, obtained by Reuters, shows the 40-year old group intends to hold on to its principles of non-interference and decision-making by consensus, both of which have made it hard to act on Myanmar, despite's ASEAN unusually stern expression of "revulsion" against September's bloody crackdown.

The charter does call for the creation of a human rights body, but with no details or punitive measures for rogue members.

"When you have that principle of non-interference, you can put a lot down in words, but it's so vacant you could drive a truck through it," said Song Seng Wun, economist at CIMB.

ASEAN's 10 members span the political and economic spectrum: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. But jointly their $1 trillion economy is slightly bigger than India's.

Economic deals are still likely to be bilateral between individual member states, such as Malaysia's free trade pact with Pakistan, signed on Monday to cut import tariffs for palm oil. Diplomats say the charter will also make the current option of excluding Myanmar from group deals impossible.

Negotiations on an India-ASEAN free trade agreement are unlikely to witness any progress next week, with India wanting to keep tariffs on Southeast Asian exports of petroleum and certain agricultural goods, despite ASEAN's target of a deal by mid-2008.

China is hoping for a free trade agreement with ASEAN by 2010, while ASEAN is also negotiating free trade deals with the European Union, Australia, New Zealand and Japan.