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.