RP mulls shielding petrochemicals<\/p>\n
Martin Abbugao, Agence France-Presse, Bandar Seri Begawan<\/p>\n
The Philippines sent notice Wednesday it may delay the
\nliberalisation of its petrochemicals industry, raising concerns
\nit could undermine the ASEAN Free Trade Area (AFTA) and hit
\ninvestor confidence in the region.<\/p>\n
Philippine Trade Secretary Manuel Roxas informed AFTA's
\ncouncil of economic ministers about Manila's intention to defer
\nthe opening up of the nascent sector during a meeting in Brunei,
\na move that raised concerns of backsliding on market-opening
\ncommitments.<\/p>\n
The council, which monitors commitments by the 10-member
\nAssociation of Southeast Asian Nations (ASEAN) to the free-trade
\narea, met on the eve of the ministers' annual gathering.<\/p>\n
Under AFTA rules, countries may seek to temporarily opt out of
\ntheir commitments in sectors which they feel are not prepared to
\nface foreign competition.<\/p>\n
Malaysia was the first member to invoke the mechanism to allow
\nit to delay opening up of its auto market. Negotiations are
\nunderway with the most affected country, Thailand, on
\ncompensation for potential losses.<\/p>\n
In a statement issued after a meeting of the AFTA Council, the
\nministers said they \"noted the Philippines' intention to possibly
\ninvoke the protocol\" and added that \"no consensus was reached and
\nfurther discussions will be carried out.\"<\/p>\n
Roxas did not indicate when Manila would invoke the mechanism.<\/p>\n
Ernest Bower, the president of the U.S.-ASEAN Business Council
\nwhich seeks to promote ASEAN to U.S. investors, earlier Wednesday
\ncautioned against more countries invoking the opt-out mechanism
\nafter learning of Manila's intentions in press reports.<\/p>\n
\"We're more concerned (now) about these issues because part of
\nour concerns expressed in previous meetings with the ASEAN
\neconomic ministers appears to be coming home to roost,\" Bower
\ntold reporters.<\/p>\n
He said Malaysia's decision to shield its auto industry would
\n\"hinder world class investments\" in ASEAN. Auto executives in the
\nUnited States have said they would prefer to see ASEAN as an
\nintegral market, and not a market of 10 individual states.<\/p>\n
Bower said more countries seeking to delay their free-trade
\ncommitments would \"undercut investors' confidence to move forward
\nin all sectors.\"<\/p>\n
He said the message of U.S. business leaders to the economic
\nministers was: \"Please do not go down this trap of undermining
\nAFTA. Please hold the AFTA commitments and do not let countries
\ntry to slip.\"<\/p>\n
Singapore Trade Minister George Yeo said the ministers spent a
\nlot of time discussing the impact of the Philippines' move.<\/p>\n
Yeo said Singapore would seek consultations once Manila
\ninvokes the protocol because the city-state is the most important
\nSoutheast Asian supplier of petrochemical products to the
\nPhilippines.<\/p>\n
But \"our concern is not so much in the specific items involved
\nbut with the signalling effect it will have on ASEAN as a whole,\"
\nhe said in a joint news conference. \"And it is really the
\nsignalling effect which we spent a lot of time discussing today.\"<\/p>\n
Brunei Minister of Industry and Primary Resources Abdul Rahman
\nTaib dismissed the U.S. business leaders' concerns over possible
\nbackpedalling.<\/p>\n
\"There is no question of backsliding as far as we are
\nconcerned on AFTA. AFTA is on track,\" he said at the press
\nconference.<\/p>\n
\"There are problems that may arise from time to time and we
\nare dealing with the problems when they come,\" Taib added.<\/p>\n
Roxas also defended his country's move.<\/p>\n
\"The Philippines remains committed to AFTA and within AFTA
\ncertain protocols are available for countries such as the
\nPhilippines to defer the submission of certain tariff lines into
\nthe inclusion list,\" he said.<\/p>\n
The ministers also pointed out that 96.24 percent of products
\ncontained in an inclusion list for liberalisation have had their
\ntariffs cut to between zero and five percent this year among
\nASEAN's six senior members -- Brunei, Indonesia, Malaysia, the
\nPhilippines, Singapore and Thailand.<\/p>\n
\"So a particular country raising a concern or an issue does
\nnot necessarily indicate backsliding by any measure,\" Roxas said.<\/p>",
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