ASEAN common market plan gathers momentum

ASEAN common market plan gathers momentum

By Surachai Chupaka

BANGKOK: A common market, a term that is synonymous with the European Union could, by the end of this year, be associated with the Southeast Asian Nations (ASEAN) if Thailand Prime Minister Chuan Leekpai is able to persuade the ASEAN leaders to ratify the Bangkok Declaration which proposes to make ASEAN a common market by the year 2010.

The idea of an ASEAN Common Market has been floated by Deputy Prime Minister Supachai Panitchpakdi, who began with a proposal to include Australia and New Zealand in the ASEAN Free Trade Area (AFTA), then ambitiously pushed for ASEAN to be a common market. The idea went well beyond general expectations.

Dr. Teerana Bhongmakapat, adviser to Supachai, said: "We can no longer afford to stand still, otherwise the raison d'etre of AFTA and ASEAN would be obsolete because a free trade area under the framework of Asia Pacific Economic Cooperation (APEC), in which ASEAN is a member, will be apparent. We feel the need to transcend APEC free trade area. Besides, if we could have a common objective in order to achieve an ASEAN common market, then ASEAN will have more bargaining power at regional and international levels."

Supachai is enthusiastic about the idea of an ASEAN common market. He recently sent Teerana to a meeting with the Business Economics Department of the Commerce Ministry regarding "ASEAN in the 21st century", at which the idea of an ASEAN common market was presented. Even the director general of the Business Economics Department, Krirk-krai Jirapaet, who is rather dogmatic, expressed his willingness to compromise on the idea.

Krirki-krai said the meeting was to find ways and means to develop ASEAN further and that the ideas discussed will be proposed to the International Economics Relations Committee. And since Supachai is a host of the ASEAN Economic Ministers Meeting scheduled to be held in April at Phuket, the idea of an ASEAN common market will definitely be discussed there.

The common market concept is new to ASEAN. It calls for an evaluation of the role of ASEAN in contemporary context, focusing on its short -- and long-term future. And the compatibility of a common market with ASEAN needs to be researched. The question then arises of what would be a basic framework for a common market.

Competition in trade has intensified, with a resulting increase in the number of economic groupings. The sole economic cooperation grouping within ASEAN is AFTA, which is only two years old. But AFTA has progressed comparatively quickly, particularly when the ASEAN members agreed at the previous meeting to move AFTA towards free trade by the end of 2003. AFTA represents concrete cooperation among the ASEAN members.

Similarly, three master-plan principles of ASEAN economic cooperation will be announced soon at the ASEAN Summit in Thailand. The master-plan principles will include-cooperation in services, transportation and intellectual property. Once announced, these will become the basis for ASEAN economic cooperation.

Cooperation on intellectual property is currently in the process of laying down the explicit frame-work, including regulations for ASEAN trademarks. Regarding the service sector, sources closed to Supachai said that cooperation should first be implemented within ASEAN, prior to the conclusion of negotiations on services under the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) and now the world Trade Organization (WTO). Supachai is concerned at Western pressure on ASEAN to open up the service sector. As a result, he is determined to formulate a clear cooperative frame-work ont he service sector within ASEAN by the end of this year.

In the transportation sector, the committee on transport and communication has already laid down transportation networks on rail, shipping and air routes.

Moreover, the ASEAN Economic Ministers will, in April, discuss inclusion of agricultural products in the AFTA tariff reduction scheme and seek ways to reduce non-tariff obstacles.

Considering the pace of cooperation within ASEAN, it should not be surprising that the cooperation is at a high level. And if the ASEAN leaders are able to integrate AFTA and the three master-plan principles that will be announced at the end of this year, the prospects are good for a common market being achieved by the year 2010.

Sukhumbhand Paribatra, a lecturer at Social Sciences Faculty, Chulalongkorn University said that the path for ASEAN to achieve a common market within 15 years is not at all easy time, in view of the contradiction between the widening and deepening of ASEAN itself.

Abhisit Vejjajiva, deputy secretary to Supachai, shares the same view as Sukhumbhand, who said..." an ASEAN common market is possible only if ASEAN engages in the deepening process itself. ASEAN will face a number of difficulties when accepting new members because they are not ready economically to take part in the deepening process and as a result will slow down the integration process".

Acceptance of Vietnam as new ASEAN member from the middle of this year has shown that the problem is imminent since the regulations stipulate that a country that wishes to join ASEAN must also belong to AFTA as well as other cooperative agreements. Even though, according to Teerana, new members are given a one- year adjustment period, this limited time frame has caused frustration not only to new members, but also to existing members attempting to speed up the implementation of AFTA.

A key problem for new members is that their import duties are still comparatively high and their service sectors need to be protected. Without time to develop, the opening up of their service sectors will put them at a disadvantage compared to the present ASEAN members.

Ideological differences pose another problem among the new and existing members: for example, Myanmar is governed by authoritarian regimes while Vietnam and Laos are socialist and Thailand and the Philippines are unstable democratic countries.

Though both prospective and existing ASEAN members aspire to capitalism, a backbone of ASEAN economic cooperation, in their economic development, it will be more difficult for the new countries to implement agreements formed under ASEAN.

One question that arises is whether ASEAN needs to create a super-national institution such as a Court of Justice as a dispute settlement organization, replacing the ASEAN Secretariat which has no jurisdiction or power.

ASEAN and the European Union have different origins in terms of economic integration. The European Common Market was born out of World War II, when all members faced the same kind of economic and social destruction. They all have similar levels of economic development and are located within the same territory. These factors all help them to move towards the ultimate objective of "economic and monetary union".

It is apparent that Thailand must make an immense effort to prepare the answers when asked how to achieve an ASEAN common market within 15 years.