LIMA - Australia and Peru on Thursday joined the United States in a budding tariff-busting plan that could form the centerpiece of a proposed Asia-Pacific free trade area gaining traction amid financial turmoil.
Trade ministers from Australia and Peru announced their membership in the "Trans-Pacific Strategic Economic Partnership" ahead of a summit of the Asia-Pacific Economic Cooperation (APEC) forum in Lima, Peru.
The move came two months after the United States joined the group, previously confined to Singapore, New Zealand, Chile and Brunei, as the region tries to use trade as a tool to fuel economic growth at a time when countries are plunging into recession.
"There are now seven countries prepared to enter negotiations to try and sign a Trans-Pacific basis for moving forward on trade liberalization," Australian Trade Minister Simon Crean told reporters.
"There is commitment at many levels to pursue the path of trade liberalization and the reason for that is even more important in the current climate because one of the most important drivers of economic activity is trade," he said.
More countries in the APEC group could join the partnership by March, when the first round of negotiations on freeing up investment and financial services among the seven is held in Singapore, Peruvian Trade Minister Mercedes Araoz said.
Under the partnership, tariffs on all trade products would be eliminated within 12 years, with tariffs on 90 percent of trade in goods among the parties removed immediately, officials said.
Economies in the APEC group, which has a loose objective of achieving free trade and investment in the Pacific Rim by 2020, account for half of world trade and about 60 percent of production of goods and services.
The APEC forum first proposed a plan to forge the regional free trade area stretching from Chile to China two years ago but it has gained greater attention recently as nations become desperate to pursue growth and global trade talks deadlock.
Sixty-one percent of nearly 500 people surveyed in governments, businesses, media, civil societies and academia in the region said a free trade area for the Asia-Pacific region should be negotiated as soon as possible.
The free trade plan has now overtaken the longstanding effort to forge a global trade deal under the World Trade Organization "as a priority area of discussion," said the Pacific Economic Cooperation Council, a Singapore-based regional think tank, which undertook the survey.
APEC economies have been considering various approaches to forge the free trade area, including the partnership used by the seven nations to remove trade barriers.
"The Trans-Pacific partnership could form the basis for centrix circles, building out a Free Trade Area of the Asia Pacific," US Trade Representative Susan Schwab told reporters.
Another approach being considered was "marrying" the plethora of free trade arrangements already in place in the region into a mega FTA, she said.
Aside from the United States, Australia, Singapore, Chile, New Zealand, Brunei and Peru, APEC consists of economies such as China, Russia, Japan, Canada and other key Southeast Asian economies.
APEC foreign and trade ministers, preparing for a weekend leaders' summit, said they had made "significant progress" this year in examining the prospects for the regional free trade area "through a range of practical and incremental steps."
The plan to create a regional free trade area "should also help address the complexity created by the current array of free trade areas and regional trading arrangements in the region," they said in a joint statement.