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.