ASEAN claims greater unity with trade zone in 2003

ASEAN claims greater unity with trade zone in 2003

CHIANG MAI, Thailand (Reuter): Southeast Asian economic ministers said they took big steps toward greater unity in annual two-day talks ended yesterday by agreeing to make their planned free trade zone a reality faster.

They also agreed that when it came to the wider Asia-Pacific Economic Cooperation forum -- a 17-nation grouping that includes among other heavyweights ASEAN's two biggest trading partners the United States and Japan -- it was every country for itself.

"Each country in ASEAN is in APEC on its own, rather than as a group. So each of us has got to evaluate its own national interest as far as the future positions of APEC relationships is concerned," Brunei's Minister of Industry and Primary Resources Abdul Rahman Taib told a joint news conference.

"As a group of course ASEAN would take positions that would further progress the objectives of ASEAN," Added Philippine Secretary of Trade and Industry Rizalino Navarro.

ASEAN, which also includes Indonesia, Thailand, Malaysia and Singapore, agreed this week to speed up the timetable for cutting tariffs within the ASEAN Free Trade Area (AFTA) by five years.

This means as much as 85 percent of goods traded among members will face tariffs of zero to five percent by Jan. 1, 2003.

The six also adopted a gradual timetable to include items that had previously been excluded from the program and pledged to include agricultural products for the first time.

ASEAN -- a vibrant market of 340 million people with a combined Gross National Product of $430 billion -- hopes the ambitious scheme will not only facilitate intra-ASEAN trade but also entice more investment from abroad.

Some ASEAN officials have said they fear a dominant APEC could undermine all their efforts. If the ministers shared those concerns they did not voice them yesterday.

Strong

Indonesian Coordinating Minister for Industry and Trade Hartarto told a small group of reporters earlier in the day faster implementation of AFTA would make it strong enough to tackle any trade liberalization moves including APEC.

"(ASEAN) will have free trade by the year 2003... It means that this region is strong enough to face any program of liberalization of trade anywhere in this world," he said.

"I am happy to see the decision on free trade because this is a very historic moment... This is a strong decision that will make this region very strong," he said.

One proposal under APEC, which meets in Indonesia in November, is to cut tariffs among the members by the year 2020, which Hartarto pointed out was "Very far away".

Skeptics of the ASEAN vision point out that the six economies do not really complement each other and in fact compete instead, which defeats the purpose of AFTA altogether.

Only 18 percent of trade in the region is intra-ASEAN, although officials estimate once AFTA is in place the increased incentives will boost that percentage to nearly 25.

Hartarto said ASEAN needed open trade because the region has some of the fastest growing economies, each dependent on exports. "The only threat (to ASEAN) is protectionism. The only thing that can hamper the growth is protectionism," he said.

On other issues, the six ministers have agreed that a framework for standard rules on intellectual property rights should be drawn up based on existing treaties and commissioned a study to consider linking ASEAN to other existing trade groupings.

They also agreed to start work on coordinating transport, communications and other infrastructure development.