ASEAN countries agree to cooperate on capital goods
JAKARTA (JP): The governments and business agencies of the seven members of the Association of Southeast Asian Nations (ASEAN) agreed here yesterday to sound out regional cooperation in the production of capital goods.
"We support the priority (of the private sector) in pursuing cooperation for the production of capital goods," Indonesian Coordinating Minister for Production and Distribution Hartarto told journalists after chairing a meeting between ASEAN economic ministers and ASEAN Chambers of Commerce and Industry (ASEAN CCI).
Hartarto said that the ministers had agreed to involve the ASEAN CCI in the decision making process of the annual ASEAN economic ministers meeting, especially for the development of the private sectors in the region.
With such an integration, ASEAN CCI Chairman Aburizal Bakrie of Indonesia said that the chambers would work closely with the governments in the region in pursuing cooperation in the production of capital goods.
"ASEAN CCI will conduct a thorough study to identify strengths and weaknesses as well as opportunities and threats in the production of capital goods in the member countries," Aburizal said.
He added that ASEAN CCI had appointed Indonesia's and Malaysia's chambers of commerce and industry to conduct the study, which will take a year to complete.
ASEAN countries -- Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam -- collectively suffer a deficit of US$30 billion annually in their international trading of capital goods.
"Based on the planned study, we will know which kinds of capital goods we can cooperate in their production to serve this ASEAN captive market and eventually reduce our collective deficit," Aburizal said.
He called on the governments in ASEAN countries to source as many ASEAN capital goods as possible in their projects, including those partly financed by the private sectors.
"However, everything must be in accordance with the multilateral trading rules of the World Trade Organization," he said.
Meanwhile, at the meeting with Japanese Minister of International Trade and Industry (MITI) Shumpei Tsukahara, ASEAN economic ministers called on Japan to look into ASEAN countries in sourcing out components for its industries.
"ASEAN has certainly comparative advantages in many areas, especially in costs and also technology. Therefore, if Japan uses ASEAN components, it will improve further their competitive edge," Indonesian Minister of Industry and Trade Tunky Ariwibowo told journalists after the meeting.
Total deficit
He noted that ASEAN countries collectively suffered a total deficit of US$36 billion in their trade with Japan last year. Only Indonesia managed to enjoy a surplus of $3 billion in its trade with Japan last year, because of its huge oil and gas exports to that country. Excluding oil and gas, Indonesia suffered a deficit of $2 billion in its bilateral trade with Japan.
The ASEAN and Japan ministers reaffirmed yesterday the need to continue a program on cooperation in the supporting industries in ASEAN, proposed by Japan at the ASEAN economic ministers-MITI meeting in Singapore in 1993.
The ministers agreed that the program should put emphasis on the development of small and medium enterprises, Hartarto said at a joint press conference after the meeting.
"In this regard, the ministers agreed to task ASEAN-MITI senior economic officials to consider how to reinforce measures to promote the sustainability of small and medium enterprises and exports of their products," he said.
He noted that the development of small and medium enterprises in ASEAN would facilitate structural changes in the industry and trade of ASEAN countries, which will eventually reduce ASEAN's large imbalances in industrial goods trade with Japan.
The ministers also reaffirmed their commitments to maintain close economic cooperation between ASEAN and Japan, and agreed to hold an ASEAN economic ministers-MITI meeting in Malaysia next year. (rid)