ASEAN free trade<\/p>\n
The Association of Southeast Asian (ASEAN) trade
\nliberalization process took further steps forward last week when
\nthe seven-nation grouping's economic ministers agreed to include
\nall unprocessed farm commodities in the tariff-cut scheme by the
\nyear 2010 at the latest. The move on the farm commodities, which
\ndrew so much attention from the media, was only one of a series
\nof measures adopted by the ministers to facilitate the ASEAN Free
\nTrade Area (AFTA) process. In fact, the ministers advanced
\nfurther in laying stronger grounds for eventual economic
\nintegration in the region.<\/p>\n
That the agreement on farm commodities was preceded by
\nvigorous discourses and differences of views that spilled over
\ninto the media was simply natural. Each of the seven member
\ncountries always sees the common regional vision from a point of
\nview which reflects their own national interests. After all,
\nASEAN cohesion and resilience should be based on the stability
\nand national resilience of its individual member countries. The
\nmost important thing is that once they agree on something, they
\nabide by and implement it fully.<\/p>\n
However, the ministers also fully realized that trade
\nliberalization is not only a matter of tariff cuts. Tariff
\nreductions would be rendered meaningless if other trade-related
\nissues were not resolved. Hence, the ministers' efforts at trade
\nfacilitation measures such as the harmonization of customs
\nservices, which are crucial for trade flows, are no less
\nimportant. Their initiatives on investment promotion, industrial
\ncooperation and a dispute settlement mechanism are also essential
\nto enhance not only free trade, but also eventual economic
\nintegration in the region.<\/p>\n
The ASEAN Industrial Cooperation scheme, which the ministers
\nagreed would be implemented beginning in November, will serve to
\nstrengthen economic linkages between the member countries on the
\nbasis of their respective comparative advantages. The scheme will
\ncontribute to expanding intra-ASEAN trade, since industrial
\nproducts manufactured by companies set up under the scheme are
\nautomatically entitled to the 0 to 5 percent tariffs.<\/p>\n
The agreement on the ASEAN Investment Area currently being
\nprepared is another instrument which will enhance the
\ncomplimentary relationship of the member countries' economies.
\nThe idea of the common investment area, which was adopted by the
\nASEAN summit in Bangkok last December, is that investors looking
\nfor business ventures in ASEAN should no longer shop around from
\none member country to another. The investor needs only to analyze
\nthe comparative advantages offered by each member and then
\nchooses the country that best suits the needs of its investment
\nproject. The advantage is that the products of the investment
\nventure will be able to freely enter other countries under Afta.<\/p>\n
The dispute settlement mechanism is crucial for resolving any
\ndifferences of views or interpretations which may take place,
\nespecially in the initial implementation of the various
\nagreements already adopted. Disputes are unavoidable between
\ncountries, notably between members of such a regional grouping as
\nASEAN, in view of the high intensity of their relations and the
\nconvergence of their interests. Differences of views are not only
\nexpected, but are also part of the convergence process within
\nASEAN, especially when its membership expands to eventually
\ninclude Laos, Cambodia and Myanmar.<\/p>\n
On top of all those agreements and instruments already
\nadopted, there is another area of progress worthy of note within
\nthe accelerated process of economic cooperation in ASEAN: The
\nhigher frequency of meetings of the economic ministers. The
\nministers now gather at least twice a year, besides their annual
\nmeeting, at what they call a \"retreat\" and under the Afta
\nCouncil. Such a high number of discourses is warranted in the
\nrun-up to the 2003 launch of AFTA.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/asean-free-trade-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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