ASEAN takes another baby step towards economic integration<\/p>\n
Dow Jones, Yangon<\/p>\n
Southeast Asia's finance ministers on Saturday signed an
\naccord to liberalize trade and investment in financial services,
\ntaking another small step towards their goal of closer regional
\neconomic integration.<\/p>\n
Many observers say the 10 members of the Association of
\nSoutheast Asian Nations (ASEAN), need to break down trade
\nbarriers and increase cooperation if they are to maintain strong
\neconomic growth. But the very location of the ministers' meeting
\n- poor, isolated and military-ruled Myanmar - highlights the
\ndifficulty of that project.<\/p>\n
\"Our overall message is: regional integration as fast as you
\ncan possibly handle it,\" said Ernest Bower, president of the
\nU.S.-ASEAN Business Council, a business lobby group that met with
\nASEAN finance ministers this week in Yangon.<\/p>\n
The deal signed Saturday formalizes the results of
\nnegotiations that ended in December 2001, when ASEAN members
\nagreed to extend each other slightly more favorable treatment in
\nfinancial services than they do to other countries in the World
\nTrade Organization.<\/p>\n
But the concessions granted so far are fairly minor, ASEAN
\nofficials said, and they will have to be built on in another
\nround of negotiations, whose launch was also announced Saturday.
\n\"It's very difficult, it's kind of sensitive,\" ASEAN Secretary-
\nGeneral Rodolfo Severino said of the financial services talks.<\/p>\n
Aside from financial services, ASEAN's economic integration is
\nproceeding on a number of different fronts, including trade in
\ngoods, due to be discussed at an upcoming meeting of ASEAN
\neconomic ministers.<\/p>\n
Along with the recent signs of a regional economic recovery,
\nthat's feeding a sense among ASEAN members that they can be
\nsuccessful economically by relying more on themselves and less on
\nthe U.S., historically their largest export market.<\/p>\n
\"I think right now ASEAN countries can stand on their own
\nstrength,\" Thailand's Finance Minister Somkid Jatusripitak said,
\nwhile acknowledging that a U.S. recovery would provide a much-
\nneeded boost to his country's economic growth.<\/p>\n
Indonesia's Finance Minister Boediono told reporters that
\nASEAN's recovery could be maintained \"by doing our homework, each
\nof us, and working to cooperate together as much as possible.\"<\/p>\n
ASEAN has also tried to bolster ties between its members and
\nthe strongest economies in the region: Japan, South Korea and
\nChina. Japan has signed a bilateral free-trade agreement with
\nASEAN member Singapore, and talks will start next month on a
\nChina-ASEAN free trade area.<\/p>\n
ASEAN finance ministers also said Saturday they would continue
\nto expand a program of bilateral currency swap agreements among
\nASEAN member countries and Japan, South Korea and China. Six
\ndeals involving total commitments of US$14 billion have been
\nsigned over the past year, and another eight are now under
\nnegotiation, they said.<\/p>\n
Such deals allow the central bank of one nation to borrow
\nforeign currency from another, but repay the loan in its own
\ndomestic currency. The added short-term liquidity the swaps
\nprovide is intended to deter speculation in the foreign exchange
\nmarket.<\/p>\n
ASEAN officials have said the swap agreements could eventually
\nbe expanded to form an Asian Monetary Fund, a local counterpart
\nto the International Monetary Fund that would support regional
\neconomies in the event of a crisis like the one in 1997-98.<\/p>\n
But Philippine Secretary of Finance Jose Isidro Camacho, who
\nhad said earlier this week that he would try to revive interest
\namong his colleagues in an Asian Monetary Fund, said Saturday the
\nministers' hadn't discussed the idea in Yangon.<\/p>\n
Nonetheless, expanding financial and monetary cooperation
\namong ASEAN members, and the larger grouping including Japan,
\nSouth Korea and China, is very much on people's minds.<\/p>\n
Secretary-General Severino said the idea of an Asian Monetary
\nFund is still being considered, and some researchers are working
\non even more ambitious schemes to coordinate policy in the
\nregion.<\/p>\n
\"Some kind of regional collaboration on exchange-rate policy
\nis the future,\" said Pradumna Rana, the manager of the Asian
\nDevelopment Bank's regional economic monitoring unit. He said the
\nADB is researching such arrangements and would eventually present
\nits findings to ASEAN.<\/p>\n
The Yangon meetings included finance ministers or deputy
\nfinance ministers from the 10 ASEAN member countries of Brunei,
\nCambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines,
\nSingapore, Thailand and Vietnam.<\/p>",
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