While the Association of Southeast Asian Nations may be notching up successes in the free-trade arena, with an agreement signed on Thursday with India and one due to be signed with China on Saturday, the trade picture within the bloc itself may not be quite so rosy.
One of the key planks in Aseanâ€™s project is the establishment of the Asean Single Window. But, according to Trade Minister Mari Elka Pangestu, Singapore is refusing to play ball.
The ASW, which is supposed to take effect in 2012, is intended to reduce customs clearance for containerized shipments to 30 minutes. It requires each Asean member to establish a National Single Window, which would allow all formalities to be completed in a â€śone-stop shop,â€ť rather than having importers and exporters deal with a variety of different agencies, as is the case at present.
â€śSingapore is refusing to implement the ASW program as they say their trading system is better,â€ť Mari said from Bangkok on Friday.
In order for the ASW to be established, all ten Asean members would have to establish their own single window systems, which would then need to be linked up.
According to Mari, Indonesia has now completed 69.7 percent of the requirements for the ASW, compared with an average of 62 percent for the bloc as a whole.
â€śWe expect to soon launch a pilot project with Malaysia, which has already satisfied all of the requirements,â€ť Mari said.
She added that a ministerial meeting was expected to be held in the near future to discuss the Singapore issue.
This would not be the first time that trade-dependent Singapore has stood apart from Asean, having drawn the ire of Indonesia and Malaysia in the past by entering into bilateral free-trade deals instead of waiting for Asean to reach consensus.
Turning to the Asean-India free-trade agreement, which was inked after more than six years of difficult talks, Mari said in a news release sent late on Thursday that she expected Indonesiaâ€™s trade with India to now take off.
In 2008 trade, bilateral between the two countries was worth $10 billion.
â€śItâ€™s because we export a lot of palm oil and coal to India, as well as rubber,â€ť she said. â€śItâ€™s more resource-based, but it also includes some manufactured products, like glass.â€ť
Given traditionally high Indian tariffs, Mari said that â€śthis FTA will, I hope, improve market access in a very complimentary and win-win way.
â€śIf I were to set a target, I would say that we will at least double our bilateral trade with India over the next five years. That would be a reasonable target,â€ť she said.
The agreement, which goes into effect on Jan. 1, will eliminate tariffs on products like electronics, chemicals, machinery and textiles, which account for more than 80 percent of total trade in goods between the two sides.
Asean is also set to sign a full FTA with China in Bangkok on Saturday, based on a framework agreement reached between the two sides in 2002.
â€śThe investment component is particularly important as itâ€™s going to help increase promotion and facilitation efforts,â€ť Mari was quoted by Bloomberg as saying.
On Indonesiaâ€™s export outlook, Mari said that the government was adopting a relatively conservative stance.
The latest figures, she said, showed that the decline in exports had been stemmed. â€śSo, generally speaking, weâ€™re looking better.â€ť
She said the government was optimistic that the current contraction in exports would be contained at between 15 percent and 20 percent by the end of the year, with a 5 percent rebound in the cards for next year.