Brunei meet boost AFTA program<\/p>\n
By Anil Penna<\/p>\n
BANDAR SERI BEGAWAN (AFP): ASEAN's quest for closer economic
\nintegration into the next century has received a fresh boost
\nalthough members fail to see eye to eye on hurrying down the road
\nto regional free trade.<\/p>\n
Economic ministers from the Association of Southeast Asian
\nNations agreed in Brunei's capital to start talking next year on
\nopening up services and setting up mechanisms to settle economic
\ndisputes.<\/p>\n
A commitment to include \"sensitive\" unprocessed farm products
\nfor tariff reduction notched up another plus at their annual
\nmeeting which ended last Friday.<\/p>\n
\"We are moving ahead in the most practical way possible, and
\nwe have started making new initiatives which will indeed be
\nimplemented,\" Malaysia's Minister for International Trade and
\nIndustry Rafidah Aziz said last Saturday.<\/p>\n
She added that \"the ASEAN economic entity is now committed to
\nrealizing the economic potential of the region\" by looking beyond
\ntrade in products to encompass services as well.<\/p>\n
Negotiations on services sectors -- including aviation and
\ntransport, banking and financial services, construction and
\ncommunications -- will begin after ASEAN's December summit in
\nBangkok.<\/p>\n
But there was some disappointment in the Brunei and Singapore
\ncamps that Indonesia, Malaysia, the Philippines, Thailand and
\nVietnam did not endorse the creation of an ASEAN Free Trade Area
\n(AFTA) by 2000.<\/p>\n
The two countries pushed hard for AFTA, the centerpiece of
\nregional economic cooperation, to be put in place three years
\nahead of ASEAN's 2003 deadline.<\/p>\n
ASEAN, with 420 million people, is now the world's fourth-
\nlargest trader after the United States, the European Union and
\nJapan.<\/p>\n
Its trade with the rest of the world grew 21 percent over 1993
\nto US$543 billion in 1994, when intra-ASEAN trade reached $110
\nbillion.<\/p>\n
Foreign direct investment (FDI) flows to the region rose by
\n131 percent from $17.1 billion in 1993 to $39.5 billion in 1994.
\nASEAN's FDI stock is approaching $200 billion -- three times that
\nof China, the single largest recipient of investments in the
\ndeveloping world.<\/p>\n
Sultan Hassanal Bolkiah of Brunei, reiterating a call for
\n\"AFTA 2000,\" warned the ministers that ASEAN risks being
\novertaken by competing regional groupings as well as China and
\nIndia.<\/p>\n
He said AFTA was a \"visionary proposal\" when it was first
\nmooted in 1992 but free trade areas have become the global norm,
\nso ASEAN must move faster.<\/p>\n
Brunei and Singapore are the smallest and richest of ASEAN
\ncountries, have the most open markets, and virtually no
\nagricultural interests to speak of. They have little to lose in
\nquickening the tariff phase-out.<\/p>\n
Socialist Vietnam, which joined ASEAN in July, has been given
\nthree years' leeway after the 2003 deadline to catch up with the
\nrest.<\/p>\n
The other countries have bigger populations and strong
\ndomestic industrial and agricultural lobbies averse to a quicker
\nphase-out of tariffs, blocking a formal adoption of the 2000
\ndeadline, ASEAN sources said.<\/p>\n
ASEAN needed to take just a small step towards \"AFTA 2000,\"
\nwhich would have a tremendous political and psychological impact
\non efforts to tear down tariff barriers, said Singapore's
\nMinister of Trade and Industry Yeo Cheow Tong.<\/p>\n
\"It will be a pity if we could not take that small step,\" he
\nsaid.<\/p>\n
But a compromise was found, even while maintaining the 2003
\ndeadline.<\/p>\n
The ministers agreed to revise their tariff-reduction
\nschedules to expand the number of items with tariffs to be cut to
\nzero-to-five percent by 2000, paving the way for a more liberal
\nAFTA regime well before the 2003 deadline.<\/p>\n
There are a total of 40,960 tariff lines, representing nearly
\n90 percent of all tariff lines in ASEAN, in a list of progressive
\nreductions due to be implemented from next year. All are due to
\nhave their tariffs reduced to zero-to-five percent by 2003.<\/p>",
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