China, Southeast Asia sign landmark free trade accord

Southeast Asia (SEA) and China created the world's largest Free Trade Zone Agreement by removing tariffs for their 2 billion people by decade's end — a key step in their vision of a trade bloc to rival Europe and North America.

This is great due to a variety of reasons:

- Countries can mutually develop with each other.
- China is more integrated in SEA, and engaged in the overall economic development. May be the perception of a threat from China - economically and may be even militarily can be diminished
- A free flow of talents across borders could be initiated, which is great in view of the beginning evolution of an aging society, and the upcoming brain drains and talent wars in certain countries. Countries with labour constraints could benefit from surplus labour in other regions
- There is a Vision going forward. The vision to create an ASEAN Community along the lines of a unified Europe by 2020. As such, the FTA can be seen as a first step towards this long journey. However it took Europe nearly 50 years or so to develop into what they are today. As such, I foresee plenty of future challenges for Asia, due to its much more diverse nature.

What is problematic is the overall proliferation of FTA agreements across the region and the globe. Isn't it possible that many times, one FTA is in conflict with the next one? This might rise the specter of bureaucracy and delay. Overall, hwoever, and if implemented correctly, it cold be a huge boon for the economic integration of Asia.

(By Asia Business Consulting)