Wed, 21 Jan 2009
From: The Jakarta Globe
By Teguh Prasetyo
The Association of Southeast Asian Nations, or Asean, is planning to set up a legal advisory institution to oversee the increasing number of disputes in bilateral trade relations among its 10 members and other nonmember countries.

“As an idea already stated in the Asean charter and its blueprint, we need an institution that can help the Asean secretariat in designing, deciding, defining and interpreting any dispute cases reported to us,” Surin Pitsuwan, secretary general of Asean, said on Tuesday.

The legal advisory institution is expected to strengthen Asean’s ability to enforce compliance among its members. In addition, it seeks to promote integration and is committed to bringing down barriers to Asean’s efforts to form one integrated market. “It is part of the power of the secretariat to monitor, advise and in some circumstances, also appeal the compliance of the Asean charter in solving any trade disputes,” Surin said.

The Asean charter, which is comprised of 12 chapters and 55 articles, specifies the need to establish a single integrated market based on competitive production and in compliance with the rules of the World Trade Organization.

According to Surin, the organization was facing many challenges, including solving trade disputes and trade problems, challenges that could not be dealt with by individual Asean countries, especially during times of financial crisis.

“Amid the financial turmoil, some countries tend to resort to protectionism and they are likely to be adopting protectionism as a short-term solution,” Surin said.

For such a scenario, the secretariat is anticipating tariffs and nontariff barriers, free movement of professionals, relaxed flow of capital and streamlined customs clearance procedures.

“The Asean needs a large industrial base, a larger economic market, to compete, negotiate and cooperate with other entities outside the region as a single market and production base that is highly competitive and fully integrated into the global community by 2015,” Surin said.

In addition to the free trade agreements already signed with China, Japan and South Korea, Asean is going to sign FTAs with India, Australia and New Zealand during the summit in February this year, he said.

“Our investors and dialogue partners will [see] the potential of Asean if we commit and deliver our commitment to the charter,” he said.

With connectivity expanding potential, bigger market size, greater purchasing power and an expanding middle class, Surin said that member countries could now bargain and compete with its dialogue partners such as Japan, China and South Korea.

Data from the organization’s secretariat show that the Asean economy is only a quarter of Japan’s, 40 percent of China’s and less than 10 percent of that of the United States or the European Union.

The data also show a sharp decline of the average GDP per capita of Asean member states due to the Asian financial crisis in 1998. However, the Asean GDP per capita bounced back to $2,227 in 2007 from $960 in 1998.



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