Weekly Business Roundup (October 24, 2009)

Tariff Hurdles Waiting to be Jumped by Asean

China is expected to provide more details this weekend of its aims for increased trade with the 10 countries of the Association of Southeast Asian Nations (Asean).

A senior delegation from Beijing will be at the Asean leaders’ conference in the Thai resort town of Cha-am, along with representatives from Japan, South Korea, India, Australia and New Zealand.

China will soon complete a free trade agreement with the Southeast Asian bloc which includes a major investment program.

All the outsiders will also be eager to hear more about Asean aims for achieving a European Union-style open economic community by 2015.

“The issue of tariff barriers will be a rigorous test of the group’s seriousness in emulating the EU,” said an economics expert from a Western embassy in Bangkok.

“There remains enormous disparity in the ten countries’ economies between, say, Laos and Burma on the one hand and Singapore and Malaysia on the other,” the economist said, on condition of anonymity because of the sensitivity of the subject.

Asean includes Cambodia, Indonesia, Laos, Malaysia, Burma, the Philippines, Singapore, Thailand, Vietnam and Brunei.

China’s rapidly growing economic influence in Asean may be challenged soon by India, which has just completed a free trade agreement with the group—minus Vietnam.

India and Vietnam are in disagreement over the latter’s status as a free market economy.

Another Asian Country Pursues Junta Gemstones

Yet another Asian country is demonstrating its readiness to ignore US and European Union sanctions against Burma’s gems trade.

Sri Lanka says it wants to import Burmese gems as part of plans for extended business links between the two countries.

The sale of jade and rubies to Sri Lanka’s nascent jewelry industry is to be part of a package discussed during meetings between business leaders hosted by the Myanmar Federation of Chambers of Commerce and Industry.

Earlier this month a report by the US Congress watchdog, the Government Accountability Office (GAO), admitted that 2008 legislation to cut off profits to the Burmese junta from precious stones has not worked.

The report said Washington government agencies have not stopped reworked stones of Burmese origin seeping into the US and had also failed to persuade other countries to halt the Burmese junta-linked gems trade.

The GAO named Thailand a main culprit for continuing to process Burmese gems for world distribution, and said China also supported the junta-controlled precious stones business.

Qantas Rejects Pressure to Pull Jetstar Service to Rangoon

Major Australian airline Qantas says it will not pressure its subsidiary Jetstar Asia to stop flying into Burma.

Sydney-based Jetstar is one of several Australian firms named in a campaign by the human rights group Burma Campaign Australia as providing support to the military junta ruling Burma.

But Qantas chief executive Alan Joyce rejected their arguments at the company’s annual general meeting in Perth this week.

He told shareholders that Jetstar had a “policy of constructive engagement” and helped ordinary Burmese by providing charities with access to Burma.

The budget carrier flies three times a week between Singapore and Rangoon.

Burma Campaign Australia claims the airline makes payments to the junta, but Jetstar insists it makes only the normal aviation and airport charges that apply in all countries.

Thai-Burma Business Bridge Mooted in Trade Talks

Thailand is negotiating with Burmese authorities to build a second road bridge across the joint border at Mae Sot.

The new bridge would likely cost at least US $12 million and is intended to improve two-way trade.

Plans for it were discussed at recent talks between officials of Thailand’s Ministry of Commerce and Burma’s junta-linked business association, the Union of Myanmar Chambers of Commerce and Industry.

The new bridge would be specifically linked to a “special economic zone,” said the official Chinese news agency Xinhua, quoting unnamed Burmese association sources for the report.