PM backs trade free bloc, China resists

AUSTRALIA would join a free trade zone of 16 Asian and Pacific nations under a plan for a landmark East Asia economic bloc being pushed by Japan.The free trade area - stretching from Japan to China, India, Southeast Asia, Australia and New Zealand - would cover 3 billion people, or almost half of the world's population, with an economic output of $9 trillion. Speaking at the East Asia Summit in The Philippines yesterday, John Howard said the Japanese idea of an East Asia free trade bloc, which would rival the European Union and the North American Free Trade Agreement, was discussed at the meeting and that Australia "supports the feasibility study being carried out". In the past, China has opposed Australia, India and New Zealand's entry into a regional free trade bloc, preferring to champion the ASEAN Plus Three bloc of Southeast Asian nations plus China, Japan and South Korea. "There was a mixture of views," the Prime Minister said of the summit debate over the Japanese initiative. "Some want it (the free trade area) restricted and some want it broader. "We have reached the situation where we have almost a spaghetti-bowl of free trade proposals. There's APEC, ASEAN Plus Three, there's EAS (East Asia Summit) and in the meantime, most importantly, we are busily negotiating free trade agreements with our trading partners. "(But) I got the sense that the East Asia Summit has well and truly arrived. It's a done deal that we are going to have an East Asia Summit. People today were talking about what it should do and were no longer marvelling that it was happening." Australia signed an energy security pact yesterday with Asian and Pacific nations, committing to intense development of alternative fuels in the face of disappearing oil reserves and rising greenhouse gas emissions. Mr Howard signed with 15 other regional leaders at the East Asia Summit, after agreeing in bilateral talks with Chinese Premier Wen Jiabao to a joint clean coal initiative aimed at reducing emissions. The leaders also agreed to an eighth round of talks, in Beijing in March, over the proposed China-Australia free trade deal. Japanese Prime Minister Shinzo Abe also announced a $2.5 billion aid package to help Asian nations develop energy-saving technology and ease the region's dependence on oil. But Mr Howard insisted that "market solutions" be followed in the regional search for biofuels, while promoting the consideration of options such as nuclear power. He said the energy security pact was "just another reinforcement of the critical importance of energy security to all countries". "In my intervention on this issue, I described to my colleagues the need to have market solutions to energy matters (and that) we would continue to rely heavily on fossil fuels and increasingly, because of greenhouse gas concerns, clean coal technology would come to the fore," Mr Howard said. "I also argued in favour of nuclear power being maintained as an option, a view that was shared by the Prime Minister of Singapore as well as the Prime Minister of India. I pointed out that although renewables were part of the solution, you couldn't, in the Australian experience, run power stations with solar power." Australia has already accepted that it needs to play a role in solving the global pollution problems, and the importance of energy security across Asia. The country is a founding member of the Asia-Pacific Partnership on Clean Development and Climate with the US, China, India, South Korea and Japan. Peter Costello, aware of the link between energy supply and international security, put the issue on the G20 agenda in November last year to make sure individual countries could not hold other nations to ransom by cutting off supply. Last year, the Treasurer proposed an energy "super-highway" between energy-rich Australia and Southeast Asia as a mechanism for helping countries going through their industrialisation phase. At the G20 conference, he said pollution such as greenhouse gas emissions was a global problem. He expressed sympathy with arguments that the developing world - countries such as China, that pose a threat to global climate as they modernise - needed to be considered in a different light to countries that had already developed. "But I think eventually, globally, the world will have to deal with these issues, and we will have to deal with them with all of the big players as part of it," he said. The Southeast Asian manager for the Renewable Energy and Energy Efficiency Partnership, Amy Kean, said: "Investing in renewable energy and energy efficiency is the most effective and efficient way to reduce reliance on fossil fuel imports and improve energy security." She said the $2.5 billion aid package offered by Japan "provides significant opportunities for Australian companies to leverage off the growing carbon market, which is already large, deep and liquid, estimated to be worth $28.7 billion". Jenniy Gregory, the industry development manager at the Business Council for Sustainable Energy, said the Japanese aid package was substantial and in line with Japan's aid work in recent decades. Since the oil shock in the 1970s, Japan had made available significant funding for renewable energy projects in parts of the Pacific, Asia and Africa. The projects for which the Japanese provided funding included solar-powered home systems in remote and underdeveloped areas.