File photo taken on May 19, 2003 shows a container vessel berthing in Singapore's Tanjong Pagar port. The US and seven partners will launch talks next week on a relatively modest trade pact that could expand into a broad deal stretching from China to Chile, diplomats and analysts said March 9, 2010. The talks starting in Melbourne will focus on a proposed Trans-Pacific Partnership (TPP) agreement linking the US market with Australia, Brunei, Chile, New Zealand, Peru, Singapore and Vietnam. AFP

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Talks opening Monday in Melbourne will focus on a proposed Trans-Pacific Partnership agreement linking the US 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 US focus in the region has enabled the ascendance of Chinese power," Bower said, adding that it could slowly undermine US business interests and eventually degrade US 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 US 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 US Trade Representative Demetrios Marantis warned that Washington "faces the daunting prospect of getting locked out" by Asia-specific trade pacts.

A study by the US-based Peterson Institute for International Economics showed that discriminatory policies under an East Asia free trade zone could cost the US economy at least 25 billion dollars of annual exports and lead to the loss of "about 200,000 high-paying jobs".

The United States has free-trade accords with Australia and Singapore and has also negotiated a trade pact with South Korea, but this has yet to be implemented due to fierce disputes over cars and beef.

China has been more aggressive in wooing regional partners.

An agreement between China and the Association of Southeast Asian Nations (ASEAN) covering nearly two billion consumers went into effect this year, creating the world's biggest free-trade area in terms of population.

There are also efforts to form a larger, all-Asian free-trade zone spanning China, Japan, South Korea and the 10 ASEAN states.

C. Fred Bergsten and Jeffrey Schott of the Peterson Institute hailed Washington's decision to join the trans-Pacific talks in Australia.

"Deepening US engagement with countries in the Asia-Pacific region is crucial for the advancement of both US economic and foreign policy interests," Bergsten and Schott said in a recent paper.

"Within the next few years, it is likely that the East Asian countries will deepen their economic ties and conclude both a regional trade agreement and a monetary agreement," the authors said.

Such a bloc would "draw a line" in the middle of the Pacific Ocean by discriminating against US exporters and investors, and excluding the United States from major regional economic and security forums, they said.

Marantis acknowledged that overcoming crisis-hit Americans' opposition to free-trade agreements is a key challenge.

Surveys suggest that only about one in 10 Americans think that trade pacts create jobs, while more than half believe the accords lead to job losses at home, he said.

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© 1994-2010 Agence France-Presse

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