AFTA needs to exist with other groups<\/p>\n
By Faisal Harahap<\/p>\n
JAKARTA (JP): ASEAN ministers and senior officials have been
\nworking hard in finding ways and means to keep the ASEAN Free
\nTrade Area (AFTA) relevant to their group of nations. They have
\nbeen successful in at least designing an AFTA scheme workable
\nwithin the world trade accord (GATT) and the Asia Pacific
\nEconomic Cooperation (APEC) timetable.<\/p>\n
While their efforts to liberalize trade and investment among
\nthemselves need time to become fruitful, there exist, elsewhere
\nin the globe, inward-looking regional groupings and non-tariff
\nbarriers in the form of labor rights and environmental and
\ndumping issues enforced by certain developed countries.<\/p>\n
It is interesting to note that in a situation where trade
\nliberalization is being enhanced through world trade accords and
\nglobalization, people are busy in establishing regional
\ncooperation. Regional cooperation can easily slip to become
\neconomic integration and one may wonder how a group of integrated
\neconomies would not be indiscriminative in nature.<\/p>\n
To complete the scenario, AFTA and the Malaysia-initiated East
\nAsia Economic Caucus (EAEC) have been submerged into the bigger
\nregional grouping, APEC.<\/p>\n
There is nothing wrong in forming regional groupings, such as
\nAFTA and APEC, or a Europe-Asia-Pacific Cooperation, if a group
\nof countries wish to do so, as long as it promotes the welfare of
\nthe people of those countries and does not go against the GATT
\nrules.<\/p>\n
It has been less than a year since the Common Effective
\nPreferential Tariff (CEPT) of AFTA was made operational. A period
\nof time too short for the expected results to materialize for
\nASEAN countries to have to take into account the wishes of other
\ncountries on how to rearrange their economic policies together
\nwith their trade and investment liberalization schemes.<\/p>\n
At this stage, ASEAN ministers and senior officials cannot
\nthink of AFTA without having APEC in their minds. Issuing
\nstatements and expressing opinions on AFTA are sure to have
\nimplications on APEC. ASEAN countries at the moment are facing
\nthree arenas: GATT, APEC and AFTA, but the need to look into the
\nproblem of maintaining the existence of AFTA in the framework of
\nAPEC seems more pressing.<\/p>\n
Cynics may keep saying that the most spectacular achievement
\nof ASEAN countries is their success in hiding differences among
\nthemselves, but the ASEAN ministers and senior officials have
\nonce again proven their capabilities and willingness to solve
\nproblems when confronted with them.<\/p>\n
Aside from the economic factor, AFTA has social and emotional
\nvalues to the ASEAN countries and it would be unthinkable that
\nthese countries could abandon AFTA for the sake of anything.<\/p>\n
The fact is that ASEAN countries are in different stages of
\ntheir economic growth and a trade liberalizing scheme, though
\npainful to the slow member countries, should be worked out to an
\nagreeable extent that would not disrupt the economies of these
\nslower member countries.<\/p>\n
If AFTA and APEC are to be simultaneously effective in
\nenhancing their economies, ASEAN countries should shape,
\ninstitutionalize and program these regional groupings in a way
\nthat enables the two to co-exist in harmony and not in
\ncontradiction to the GATT rules. These countries must find room
\nto maneuver within the world trade accord in making AFTA and APEC
\nof some use to their countries.<\/p>\n
A workable formula would be to design AFTA and APEC schemes
\nsuperseding the GATT guidelines and to have the AFTA scheme a bit
\nmore progressive than that of APEC.<\/p>\n
The Marrakesh agreement allows member countries four years to
\nadjust their trade regulations to GATT principles. If the
\nduration proved to be insufficient, developed and developing
\ncountries would be given another four and six years,
\nrespectively, to finish the job. Developing countries are allowed
\nto impose a maximum import tariff of 40 percent. Indonesian Trade
\nMinistry officials have confirmed that this country's import
\nduties of more than 40 percent cover only 505 out of 8,000 items
\nand these happen to be commodities that are very sensitive to
\nworld market price fluctuations.<\/p>\n
APEC drafted a tariff reduction timetable in their meeting in
\nTokyo last July. They recommended 10, 15 and 20 year time
\nschedules for the developed, newly industrialized and developing
\nmember countries, respectively, to reduce their tariff barriers
\nto a maximum of 5 percent. The timetable would have to be
\ndiscussed in a ministerial meeting in November this year.
\nDeliberations of the APEC summit later in the same month, among
\nother matters, would surely focus on this subject.<\/p>\n
Members of the AFTA Council agreed in their meeting in Chiang
\nMai, late September, to progressively change AFTA's
\nliberalization scheme by shortening their import tariff reduction
\ntimetable from 15 years to 10 and a phasing out of their list of
\nexcluded items in five years, thus incorporating the scheme
\nsuitably within the GATT and APEC arrangement.<\/p>\n
In facing the Jan. 1, 1995, deadline, about one-fifth of the
\n123 signatories of the Marrakesh agreement were reported to have
\nratified the trade accord. The United States and the European
\nUnion are not without difficulties in the ratification of the
\naccord, and discussions have been going on between the United
\nStates, the European Union, Canada and Japan to pledge their
\ncommitment not to miss the approaching deadline. None of the
\nASEAN countries have ratified the accord and they might encounter
\nsimilar internal problems in the ratification process.<\/p>\n
But apart from the ratification problems of the world trade
\naccord, ASEAN leaders seemed to be more than ready to sit in on
\nthe APEC summit this coming November because they have nothing to
\nworry about on AFTA.<\/p>\n
The writer is a civil servant based in Jakarta.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/afta-needs-to-exist-with-other-groups-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }