East ASEAN moves for free trade zone<\/p>\n
By Mynardo Macaraig<\/p>\n
DAVAO, Philippines (AFP): After years out in the economic
\ncold, the less developed regions of the Philippines, Indonesia
\nand Malaysia along with wealthy Brunei, have laid the groundwork
\nfor what could become a mini free trade area.<\/p>\n
But the conference for the creation of the East ASEAN Growth
\nArea (EAGA), held this weekend in this southern Philippine city,
\nalso highlighted the difficulties faced in harmonizing these
\nareas into a trade zone.<\/p>\n
Representatives from Brunei, the Philippine region of
\nMindanao, the Indonesian provinces of Kalimantan and Sulawesi,
\nMalaysia's Maluku, Sabah, Sarawak and Labuan, showed off their
\nproducts and pinpointed areas for potential investment.<\/p>\n
The conference ended with a plan to create a private EAGA
\nbusiness council, which would work towards regional tie-ups in
\nsuch areas as tourism, fisheries and forestry.<\/p>\n
The council would also strive to secure commitments from all
\nconcerned parties to work towards the creation of an EAGA free
\ntrade area.<\/p>\n
Philippine President Fidel Ramos, who addressed the
\nconference, endorsed the creation of "a borderless economic
\nregion, a zone of free trade," free of distinctions between
\ndomestic and foreign investments and free movement of people,
\ngoods and services.<\/p>\n
Vicente Paterno, head of the convention's steering committee,
\nsaid such a free trade area could come about in three years, and
\nmay even serve as a pilot area for the ASEAN Free Trade Area
\n(AFTA) which is due to take effect in 2003.<\/p>\n
ASEAN, the Association of Southeast Asian Nations, composed of
\nBrunei, Indonesia, Malaysia, the Philippines, Singapore and
\nThailand, is one of the fastest-growing regions in the world, but
\nmost less developed areas have complained of being left out of
\nthe boom.<\/p>\n
Ramos first proposed the creation of EAGA at a 1992 meeting of
\nthe leaders of Brunei, Indonesia and Malaysia, envisioning it as
\na "growth polygon," similar to the Singapore-Johor-Batam growth
\ntriangle, or the one between Hong Kong, Taiwan and China.<\/p>\n
But Min Tang, an Asian Development Bank (ADB) economist who
\nhas studied such growth triangles, warns that "economic
\ncomplementarity in (EAGA) is not as strong as in the Singapore
\nand Hong Kong growth triangles."<\/p>\n
While in existing growth triangles, Singapore and Hong Kong
\nare able to transfer investment and technology to the less
\ndeveloped partners, most EAGA areas included are at similar
\nstages of development, he said.<\/p>\n
However, many of the 1,000 delegates to the conference eagerly
\nsought out areas in which EAGA regions could complement each
\nother.<\/p>\n
The Brunei delegation saw itself as a potential 'hub' of the
\nEAGA, serving as a transhipment point and a source of financing
\nin a partnership with Labuan.<\/p>\n
Mindanao envisioned itself sourcing fuel, wood and raw
\nmaterials from the Indonesian and Malaysian parts of the EAGA,
\nwhile it in turn supplied skilled manpower, financial services
\nand trading links with nations like South Korea and Hong Kong.<\/p>\n
The other EAGA areas mostly saw themselves as suppliers of
\nfuel, timber, fish, cattle as well as other agro-industrial
\nproducts.<\/p>\n
The biggest problem facing the EAGA is the lack of air and sea
\nlinks among its members, who are often geographically isolated.<\/p>\n
Shipments and travelers within the EAGA have to take indirect
\nroutes -- usually through respective national capitals -- to go
\nfrom say, Sarawak to Davao. Many delegates admitted they traded
\nmore with developed nations.<\/p>\n
The EAGA business council plans to ask the governments
\ninvolved for wider shipping and air links, with harmonization of
\ntravel and shipping procedures to facilitate greater interaction
\nwithin the polygon.<\/p>\n
Ramos has endorsed the plans and senior ASEAN officials will
\nreportedly discuss the issue during a meeting at the end of the
\nmonth, Philippine Trade Secretary Rizalino Navarro said.<\/p>",
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"sponsor": "Okusi Associates",
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