ASEAN mull outright elimination of tariffs in 2003<\/p>\n
HANOI (AFP): Southeast Asian nations are discussing plans to
\ndo away with import tariffs by 2003 for early implementation of a
\nfree-trade area despite a sharp economic downturn in the region,
\naccording to a top ASEAN official.<\/p>\n
Under the current free-trade plan, the Association of
\nSoutheast Asian Nations (ASEAN) aims to bring down tariffs to a
\nmaximum five percent by January 2003 for its six original members
\n-- Malaysia, Thailand, Indonesia, Brunei, the Philippines and
\nSingapore.<\/p>\n
Newer entries Laos, Cambodia, Myanmar and Vietnam have been
\ngiven longer.<\/p>\n
ASEAN Secretary General Rodolfo Severino said several member
\neconomies were discussing eliminating tariffs outright by 2003
\nalthough they had an option of keeping duties of up to five
\npercent under the ASEAN Free Trade (AFTA) timetable.<\/p>\n
"Now we are working, not formally, to speed up some more, for
\nthe outright elimination of tariffs in ASEAN trade," he told AFP
\nas ASEAN foreign ministers prepared to open annual talks in Hanoi
\non Monday.<\/p>\n
"Different countries have different ways of achieving it but
\nthe important thing is some kind of decision" for legislation
\ncalling for an abolition of tariffs, he said.<\/p>\n
Severino said if export-led ASEAN members were willing to drop
\ntariffs to five percent, "why not do away with it altogether?"<\/p>\n
"This is because what you gain in terms of protection is not
\nworth the administrative cost of customs -- might as well do away
\nwith it.<\/p>\n
"My own view of that is that it makes sense to do away with
\nthese tariffs instead of keeping this five percent," he said.<\/p>\n
Severino said the proposal had been discussed within ASEAN but
\nsome countries were wary for political reasons.<\/p>\n
Asked whether the current economic difficulties in the region,
\nstemming from a drop in exports due to the US slowdown, could
\nallow ASEAN members to go ahead with such tariff elimination, he
\nsaid: "What can protection of five percent buy you?<\/p>\n
"The idea here is to integrate the markets -- you bring in
\ninvestments. The answer to an economic downturn is not protection
\n(of markets)," he said.<\/p>\n
Latest statistics show ASEAN trade surged 23 percent in the
\nfirst half of 2000 to US$348 billion from $283 billion in the
\nsame period of 1999.<\/p>\n
Exports in the region grew by 22 percent to $189 billion in
\nthe January-June period in 2000 from the previous year.<\/p>\n
ASEAN trade with all major trading partners has increased
\nexcept with the United States, which may fall into recession.<\/p>\n
Intra-ASEAN exports grew by 41 percent to $44.32 billion in
\nthe first half of 2000.<\/p>\n
Officials say that AFTA may lose its competitiveness with the
\nimpending entry of China into the World Trade Organization and
\nwith more attractive free-trade plans in other regions.<\/p>\n
About 60 percent of foreign investment in Asia now goes to
\nChina compared to 16 percent into ASEAN -- a reverse of the
\npicture eight years ago.<\/p>\n
S. Pushpanathan, assistant director of external relations in
\nthe ASEAN secretariat, said Southeast Asian nations could not
\nignore the growth of free-trade areas around the world,
\nespecially in the Americas, and the impending expansion of the
\nEuropean Union.<\/p>\n
"ASEAN should be cognizant of these developments," he said.<\/p>\n
The ASEAN foreign ministers, minus Indonesia's Alwi Shihab who
\nhas canceled his attendance to confront political turmoil at
\nhome, are expected to adopt a resolution calling for another
\nround of talks among member states to free trade in the key
\nservices sector.<\/p>\n
ASEAN has endorsed a set of broad guidelines to drive long-
\nterm liberalization in services.<\/p>",
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