ASEAN agrees on scheme to boost electronics trade
The Jakarta Post, Jakarta
Economics ministers of the Association of South East Asian Nations (ASEAN) signed on Friday a Mutual Recognition Agreement (MRA) for electronics and electrical equipment, which is expected to significantly reduce the cost of intraregional trade in these two categories of goods.
ASEAN said in a press statement that the MRA agreement would enable member countries to recognize the testing and certification of imported electronics and electrical equipment conducted in another member country or the country of origin.
"With this agreement, the entry of electronics and electrical equipment manufactured in one ASEAN country will no longer be subject to testing and certification in the country of importation, which can be technical barriers to trade. It will mean lower costs for ASEAN traders
"Electrical and electronic equipment assembly plants are expected to greatly benefit from this trade facilitation scheme," the statement said.
The agreement was made in Bangkok during a gathering aimed at seeking ways of boosting intraregional trade.
Electrical and electronic equipment account for a very significant share of intra-ASEAN trade, up from 30 percent of intraregional exports in 1993 to almost 40 percent now.
The grouping also said that the introduction of MRA would be accompanied by adequate consumer protection measures by ensuring that only products that met safety requirements and were labeled in accordance with the exporting country's regulations could be imported.
ASEAN consists of Indonesia, Brunei Darussalam, Cambodia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.
Meanwhile, Reuters reported that the ASEAN ministers and U.S. Trade Representative Robert Zoellick agreed in Bangkok to explore closer economic cooperation, but conceded that a free trade pact was far in the future.
The regional grouping said in a statement it had "agreed to adopt an ambitious work program designed to expand further the close trade and investment relationship between ASEAN and the United States".
The statement said ministers "noted" calls for a free trade pact between ASEAN and the United States. But Zoellick cautioned against expecting much progress on free trade any time soon.
"We noted proposals for a free trade area," he told a news conference. "That's a far cry from entering into negotiations."
ASEAN has pledged to create a regional free trade zone by slashing tariffs in coming years, and is also in talks about a trade deal with China to take advantage of that country's vast domestic market.
But the reality of ASEAN free trade falls short of the rhetoric. Efforts to set up the ASEAN Free Trade Area (AFTA) have taken a blow from Malaysia's refusal to remove protective tariffs for its auto industry.
Malaysia is widely seen as the main barrier to faster ASEAN progress on trade liberalization.
Another problem is that the bloc's countries are at widely different stages of development, varying from market-friendly Singapore to military-ruled Myanmar and communist Vietnam and Laos. Cambodia, Vietnam and Laos have yet to join the World Trade Organization (WTO) and view trade liberalization with suspicion.