Fri, 17 Nov 2000

ASEAN: Advancing APEC's core purposes

By Rodolfo C. Severino, Jr.

BANDAR SERI BEGAWAN (JP): In a real sense, the ASEAN Free Trade Area can be said to be a building block for the fulfillment of the goal the Asia Pacific Economic Cooperation set for itself in Bogor in 1994 -- eventual free trade among its members, which in turn is part of the global effort to bring down barriers to international trade.

In Ha Noi in November 1998, ASEAN's leaders decided that, to go faster still on the AFTA road, the original six signatories of the AFTA treaty would drop their tariffs on one another's products to 0-to-5 percent at an accelerated pace -- on at least 85 percent of the products on their Inclusion Lists by 2000, on 90 percent by 2001, and on all such products by 2002.

In November 1999, the leaders agreed to eliminate all import duties among the original signatories by 2010, and by 2015 in the case of ASEAN's newer members.

Some flexibility is built into the process. Part of that flexibility is the protocol to be soon formally adopted to allow members to modify its concessions in a particular sector.

Based on Article XXVIII of GATT, the protocol lays down stringent conditions for such modifications of concessions. It ensures that decisions on them are rules-based, transparent, limited in time, and fair to all concerned, and that resort to the protocol would be extremely rare.

The growing integration of ASEAN's economy is manifested in the expansion of intra-ASEAN trade.

After declining considerably in the aftermath of the financial crisis, intra-ASEAN exports rose 7.6 percent from US$68.8 billion in 1998 to US$74.4 billion in 1999, although this is still lower than the level before the crisis.

In 1999, the total exports of the six older members of ASEAN increased 7.7 percent from US$316.6 billion in 1998 to US$341.1 billion in 1999.

With the regional economy growing again, imports surged, too, also by 7.7 percent, from US$259.9 billion in 1998 to US$279.5 billion in 1999. Much of this increase is accounted for by imports from APEC members Korea, Russia and Canada.

In close accord with the APEC agenda, ASEAN has been stepping up the facilitation of trade. We begin with customs.

ASEAN is undertaking the joint training of customs officials covering many aspects of their work, including risk-management. It is streamlining customs procedures. It is implementing the WTO Valuation Agreement. It is adopting the post-audit clearance system.

ASEAN's customs agencies are making available to importers pre-clearance and pre-entry classification services. ASEAN is harmonizing its tariff nomenclatures at the eight-digit level, the harmonized nomenclatures to be implemented starting at the beginning of 2002.

In line with a framework agreement, ASEAN is developing mutual recognition arrangements for products traded within the region, beginning with cosmetics, pharmaceuticals, and electrical and electronic equipment.

ASEAN is harmonizing product regulations for cosmetics and pharmaceuticals, product standards for twenty product groups, and safety standards for seventy-two.

ASEAN is also moving on the liberalization of trade in services. In consultation with services suppliers and professional associations, member countries are now putting together a package of commitments for negotiations on the removal of restrictions on the cross-border supply of services and services consumption abroad.

Trade in services will be progressively liberalized with respect to commercial presence and the presence of natural persons.

ASEAN has decided to create an ASEAN Investment Area to allow and encourage the free flow of investments within the region. In a process similar to APEC practice, member countries have completed their individual action plans to liberalize, facilitate and promote investments among them and from outside the region.

To support the freer flow of goods, services and investments within the region, ASEAN is giving priority to the development and efficiency of land transportation.

An agreement on goods in transit has been concluded, and the seven implementing protocols are being finalized. Regional and national transit transport coordinating bodies are being set up.

Officials are now working on inter-state transport and multi- modal transport agreements.

ASEAN has identified twenty-three priority routes for the upgrading and development of the trans-ASEAN highway network over the next ten years.

The feasibility study for the Singapore-Kunming railway link has been completed and will be presented to ASEAN's leaders a week and a half from today. Certain segments of the envisioned railway network have, of course, been operating for a long time. The plan is to fill the gaps, so that it links the countries of mainland Southeast Asia among themselves and with China, an APEC member.

ASEAN is steadily liberalizing air transport, working on a multilateral air transport agreement to carry out ASEAN's competitive air services policy that is to lead eventually to a regional open-skies regime.

ASEAN has resolved to embrace information technology and help its members and the region as a whole move into the information age. The grouping's leaders are expected to sign the e-ASEAN framework agreement later this month.

The agreement was put together by the e-ASEAN Task Force, a high-level group of government specialists and representatives of the private sector strategically involved in information and communications technology.

e-ASEAN encompasses the ASEAN information infrastructure, the facilitation of e-commerce, the liberalization of trade in ICT goods and services and of investments in ICT, capacity-building, human resource development, and the promotion of the development and use of ICT in government and society as a whole.

The Task Force and the official-level e-ASEAN working group are developing short-term and long-term measures to carry out the agreement, including pilot projects for immediate implementation by governments and business enterprises. ASEAN is working closely with a number of APEC members on this.

ASEAN has always placed high priority on the ECOTECH pillar of APEC. Within itself, it views human resource development as an essential tool for narrowing the gap between the levels of development of its members.

Cooperation in HRD covers methods for the upgrading of workers' skills, the cultivation of entrepreneurship, the training of women and youth in productive skills, the promotion of science and technology, the acquisition of aptitude for information and communications technology, and the building of capacity for managing ASEAN economic integration.

Again, in this, ASEAN is benefiting from the cooperation of some APEC members.

ASEAN has been liberalizing and promoting trade in goods, trade in services, and the flow of investments, creating a free trade area and one investment area.

It is streamlining the administration of customs and tariffs and harmonizing product standards. It is developing and facilitating road and rail transport and opening up air services to increased competition. It is bent on developing information and communications technology and promoting its use. It is cooperating to upgrade its people's skills.

In all of this, ASEAN is doing its part to advance APEC's purposes. As a force behind the founding of APEC, ASEAN is committed to do so.

The author is the Secretary-General of ASEAN. This article is an excerpt from his statement at the Twelfth APEC Ministerial Meeting, Bandar Seri Begawan, Nov. 13, 2000.