ASEAN agrees to speed up trade liberalization

ASEAN agrees to speed up trade liberalization

BANDAR SERI BEGAWAN, Brunei (Reuter): ASEAN trade and economic ministers agreed yesterday to expand a preferential trade scheme and speed up the start of a regional free-trade zone.

The ministers from the Association of Southeast Asian Nations (ASEAN) also endorsed an agreement to begin negotiations to liberalize their services sectors.

"Member countries have been asked to expand the number of items with tariff rates reduced to zero percent to five percent by the year 2000," a joint statement said at the end of the two- day meeting.

"This would then pave the way for a more liberal ASEAN Free Trade Area (AFTA) even before the target date of January 1, 2003," the statement said.

ASEAN groups Brunei, Indonesia, the Philippines, Malaysia, Singapore, Thailand and Vietnam.

The economic ministers were responding to a call by Brunei Sultan Hassanal Bolkiah in his opening address to speed up the AFTA timeframe to the year 2000.

"AFTA must move faster than other free-trade areas," the Sultan said. "I have therefore proposed at the ASEAN ministerial meeting last month that we advance the timeframe for the realization of AFTA to the year 2000," the Sultan said in his opening address.

With a combined population of 420 million people in the world's fastest developing region, AFTA would become the most populous free-trade zone in the world, surpassing the European Union and the North American Free Trade Area.

Intra-regional trade in ASEAN grew by nearly 41 percent between 1993 and 1994 to $44.44 billion in 1994.

Service

Malaysian International Trade and Industry Minister Rafidah Aziz told reporters the services agreement would include the financial services, maritime and air travel, tourism, construction and business.

"We have identified the areas of least resistance for each ASEAN country and will begin negotiations here," she said.

Indonesian Coordinating Minister for Industry and Trade Hartarto said the idea of a framework agreement was for ASEAN member countries to "be more open among ourselves" in sectors that each ASEAN country had already freed under the General Agreement on Tariffs and Trade (GATT).

In the two days of deliberations, the ASEAN members also agreed to support new member Vietnam's application to join APEC and the WTO, the joint press statement said.

An AFTA council meeting earlier this week endorsed a slower pace for Vietnam to move into the AFTA scheme. Vietnam will submit an initial package of tariff reduction starting in January 1996 through until 2006.

The ASEAN ministers also agreed on a mechanism to settle AFTA disputes and another umbrella system to cover disputes arising from all ASEAN agreements on cooperation. No further details were given.

The ministers said they also agreed that economic issues would be placed on the agenda of an ASEAN meeting with the European Union and said that ASEAN would coordinate closely with China, Japan and South Korea on the Asian position on various economic issues.