AFTA on auto sector moving slowly<\/p>\n
Zakki P. Hakim, The Jakarta Post, Jakarta<\/p>\n
Little progress has been made to accelerate the liberalization of
\nthe automotive sector through the ASEAN Free Trade Area (AFTA),
\nwith member countries still involved in protracted negotiations,
\nan official says.<\/p>\n
\"There have been no concrete developments so far, as each
\ncountry has its own interests,\" Ministry of Industry director
\ngeneral for transportation Budhi Darmadhi said last week.<\/p>\n
ASEAN leaders agreed late last year to accelerate tariff
\nreductions in 11 priority sectors, including the automotive
\nindustry, by 2007 in a move to boost regional trade. The 10 other
\nsectors are agriculture, electronics, fisheries, rubber,
\ntextiles, timber, air travel, e-commerce, health care and
\ntourism.<\/p>\n
The acceleration it is hoped would boost trade between ASEAN
\ncountries from 23 percent of the region's total trade in 2003 to
\n27 percent by the end of 2005.<\/p>\n
Less than two years into the schedule however, no significant
\nprogress on the automotive industry has been made. Differences
\nremain among member nations about tariff and non-tariff issues,
\nincluding regulations about suppliers, human resources and goods'
\nrules of origin.<\/p>\n
Budhi said Indonesia was best-placed to become the biggest
\nauto component supplier in the region given the huge potential of
\nthe local automotive industry.<\/p>\n
Car sales in the country were expected to reach 750,000 by
\n2009, 32 percent of the predicted 2.3 million units sold across
\nASEAN in the same year, he said. For this year, the industry
\nassociation estimates national car sales will reach 500,000 from
\nlast year's 483,169.<\/p>\n
The group, however, has yet to streamline customs procedures
\nbetween members and to adopt shared product standards.<\/p>\n
Despite the slow pace, Indonesia would keep pursuing the
\nliberalization drive to try to meet the deadline, he said.<\/p>\n
\"It is an ongoing process,\" he said.<\/p>\n
Earlier, Indonesia decided to delay liberalizing the country's
\nautomotive industry until 2010, by excluding HOW MANY ROUGHLY
\nautomotive products and their components.<\/p>\n
As of last December's ASEAN summit in Vientiane, Laos, each
\nmember country is allowed to exclude no more than 641 groups of
\ngoods, or 15 percent of the total 4,273 tariff lines traded in
\nthe 11 priority sectors.<\/p>\n
Budhi said the FTA would strengthen ASEAN as a single market.<\/p>\n
The absence of tariff barriers between ASEAN countries by 2007
\nwould encourage them to outsource from each other and synergize
\nto form a regional production center, he said. However, member
\ncountries were cautious about implementing the AFTA, wary of
\ntougher competition.<\/p>\n
Intra-ASEAN trade has been consistently low since AFTA was
\nfirst formulated more than a decade ago, unlike regional trade in
\nEuropean Union and the Mercosur, which had grown up to 75 percent
\nand 35 percent respectively in the years leading up to 2003.<\/p>\n
Mercosur, a South American economic group, consists of Brazil,
\nParaguay, Uruguay, Chile and Bolivia.<\/p>",
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"sponsor": "Okusi Associates",
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