The concept of "South-South" economic cooperation which came into vogue in the 1970s and then fell out of fashion will formally re-appear in Beijing in September when the Asia Pacific Trade Agreement is inaugurated. The agreement, which is being launched under the aegis of the UN's Economic and Social Commission for Asia and the Pacific (Escap) aims to get trade moving among Asia's less developed nations so that they can escape from poverty.
"Asia's problems in meeting the UN Millennium Development Goals (MDGs) are different from those of Africa and other less developed regions of the world," UN under secretary general and Escap executive secretary Kim Hak-Su told Emerging Markets yesterday. "What is needed in Asia is more trade rather than aid," he said.
The new initiative by Escap meshes very well with ADB president Haruhiko Kuroda's push for regional economic integration, Kim said. It should help to further cement trade and investment relations among both richer and poorer nations of the Asia region. The move also represents something of a diplomatic coup for China as an emerging regional power, observers noted.
The richer countries of the region - such as Japan, China and South Korea - have an obligation to help their neighbouring countries in this respect, said Kim. China is
taking a lead by pushing for a re-launching of South-South trade cooperation, joined by South Korea, India, Bangladesh, Sri Lanka and Laos. They will offer each other deep tariff cuts on some 1600 manufacture items initially.
The new agreement is in fact the former Bangkok Agreement, reached in 1974 among these countries, but under a different name. Very little intra-trade took place under the old agreement and it fell into virtual disuse until China began pushing its revival when Beijing joined the World Trade Organisation in 2001, Kim explained. The re-launched agreement is expected to be joined before long by Pakistan, Cambodia, Bhutan, Nepal, Kazakhstan and Mongolia, he said.
The new impetus for the agreement comes from the fact that a quite large group of Asian nations, such as Bangladesh, Laos, Cambodia, Bhutan, Nepal, the Central Asian republics and Pacific island nations are at present "off track" to meet the UN Millennium Development Goals, including halving by 2015 the numbers of their population living in absolute poverty.
Aided by a $1 million grant from the ADB, Escap has launched new statistical research to find out what are the real levels of poverty in Asia, said Kim. The finds are that while some countries such as Singapore, Malaysia and Thailand are on a "fast track" to eliminate or reduce poverty and others such as China and Vietnam are "on track," a much larger groups than generally appreciated are not on track to meet the goals by the target date, he added.