S'pore warns against ASEAN protectionism<\/p>\n
SINGAPORE (AFP): Singapore urged fellow Southeast Asian
\nnations Thursday to step up economic reforms despite the easing
\nof a severe crisis, warning that a slide into protectionism would
\nbe ineffective and costly.<\/p>\n
As signs of resistance to short-term tariff reduction emerged
\nin the region, Prime Minister Goh Chok Tong stressed the need for
\nmore aggressive liberalization efforts by the Association of
\nSoutheast Asian Nations (ASEAN).<\/p>\n
Opening annual talks of trade ministers from the 10-member
\ngroup, Goh said the political transition in Indonesia, a slowdown
\nin major export markets and geopolitical factors posed challenges
\nto Southeast Asia's economic rebound.<\/p>\n
\"Positive signs of recovery in the region have raised hopes
\nthat things will get better. But to conclude that we can now slow
\ndown the pace of liberalization is to draw the wrong lessons from
\nthe crisis,\" he said.<\/p>\n
Two years after regional economies were shaken by currency
\nturmoil, output growth has returned, exchange rates have largely
\nstabilized, inflation has been tamed, and exports are growing
\nstrongly. The International Monetary Fund estimates growth in
\nASEAN countries this year to average 2.6 percent.<\/p>\n
\"Despite these improvements, I would caution against any hasty
\nconclusion that things would only get better,\" Goh said.<\/p>\n
\"ASEAN faces both internal and external challenges,\" he added,
\nnoting that foreign investment and bank lending activities
\nremained weak.<\/p>\n
He said regional political stability \"will be a crucial
\nfactor\" and that developments in Indonesia, the largest ASEAN
\nmember with two-fifths of its population, will be closely watched
\nby investors.<\/p>\n
ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia,
\nMyanmar, the Philippines, Singapore, Thailand and Vietnam.
\nTogether they have some 500 million consumers and a gross
\ndomestic product of US$700 billion.<\/p>\n
Goh said the health of the US, Japanese and Chinese economies
\nwould affect ASEAN's prospects, and stressed the importance of a
\nstable relationship among the three Asia-Pacific powers.<\/p>\n
\"An unstable one will snuff out economic recovery in the
\nregion,\" he said.<\/p>\n
Goh brought up the challenge posed by other regions also
\nopening up their markets, and the danger of protectionism within
\nASEAN.<\/p>\n
\"We could risk being sidelined in the next wave of economic
\ngrowth, or worse, hollowed out as foreign trade and investments
\nflow to those economies,\" he said.<\/p>\n
\"Protectionist policies aimed at stemming foreign competition
\nhave not been viable in the past, and such a response in ASEAN
\nwill be counter-productive to our efforts to grow our economies,\"
\nGoh said.<\/p>\n
Goh did not single out any country but on Wednesday, Malaysia
\nconfirmed it would shield its vital automotive industry from a
\ntariff-reduction scheme aimed at creating an ASEAN Free Trade
\nArea.<\/p>\n
Malaysia's Trade and Industry Minister Rafidah Aziz said her
\ncountry was unlikely to include cars in the tariff-slashing plan
\nthat was to become operational on January 1, 2000. Malaysia slaps
\nheavy duties on imported cars to protect its national car Proton.<\/p>\n
Indonesia, the worst hit by the economic crisis in the region,
\nalso indicated it could defer opening up its car market.<\/p>\n
Goh reiterated his call for a joint ASEAN marketing campaign
\nin industrial countries in the form of investment roadshows.<\/p>\n
\"This specific proposal is aimed at showing that ASEAN is back
\nin business,\" he said.<\/p>\n
Despite the car tariff-slashing snag, ASEAN members have
\nreiterated their long-term goals.<\/p>\n
They agreed Wednesday to expand a cross-investment scheme and
\nto turn the region into a completely free trade area by 2018, two
\nyears earlier than the deadline set by the broader Asia-Pacific
\nEconomic Cooperation (APEC) grouping.<\/p>\n
ASEAN leaders decided at a summit in Hanoi last December to
\nput 90 percent of all intra-ASEAN trade within the zero to five
\npercent tariff range by next year.<\/p>",
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