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.