ASEAN cuts deeper into trade barriers

ASEAN cuts deeper into trade barriers

PHUKET, Thailand (AFP): The Association of Southeast Asian Nations (ASEAN) is several steps closer to forming an integrated market of more than 500 million people following trade and investment talks here.

Trade ministers and investment chiefs from around the region said that under new targets of economic liberalisation, most of ASEAN's nine members would be fully integrated by 2003.

"Instead of New York, Los Angeles, Detroit and Chicago you will have Manila, Jakarta, Singapore and Bangkok -- an integrated market of more than 500 million people," Philippine Trade and Industry Secretary Jose Pardo said.

"We have all agreed to begin stepping up efforts to respond to the challenges of globalization," he said.

An informal meeting of ASEAN economic ministers on this holiday island in southern Thailand on Saturday approved a deepening of tariff cuts with a view to eliminating charges on most imported goods before 2002.

Ministers said that by then most products traded within the region would incur no tariffs at all.

Barriers to foreign investment in manufacturing, agriculture and fisheries are to be dismantled by 2003 under commitments made at the first-ever formal meeting of the ASEAN Investment Area Council here Friday.

The council said the deadline for 100-percent non-ASEAN ownership of regional companies would also be brought forward to send a clear message to the world that business was welcomed from all sources.

"We are moving toward blurring the distinction between ASEAN and non-ASEAN investors," ASEAN secretary-general Rodolfo Severino said.

"When we start dismantling limits on investment most countries agree it is just not practical to distinguish between ASEAN and non-ASEAN members."

No date was set for the liberalisation of all non-ASEAN investment.

Less-developed countries such as Laos and Vietnam have more time to liberalize but are just as committed to the long-term goal of an integrated regional market, officials said.

ASEAN groups Brunei, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. Cambodia is likely to become the 10th member soon.

Countries which lag behind the scheduled tariff reduction will be subject to "peer pressure" to keep up.

"We will not backtrack from this," Severino said. "It is a peer pressure. The pressure here is the need for investments."

Delegates said ASEAN was determined to push ahead with its liberalisation plans despite the economic crisis which has sent many members into recession since 1997, the year the "Asian economic miracle" ended.

They said that by the time their targets had been reached, the region would be on its feet and heading into a new growth phase.

"The worst is behind us and the process of recovery has begun," the Philippines' Pardo said.

"We are hoping that as we enter the new millennium ... higher levels of growth can again happen in our part of the world."

Despite ASEAN's ambitious drive for an integrated market, Severino said he doubted if the region would ever go as far as the European Union with its single currency and common external tariff.

"ASEAN is much less protectionist in agriculture than Europe, even now," he said.

"The main difference between ASEAN and the EU is that we don't have a common external tariff. Who would set the tariff and who would administer it?"

ASEAN nations agreed in Hanoi last year to lower tariffs on manufactured products to zero-5.0 percent by 2002 under the ASEAN Free Trade Area (AFTA), a year ahead of earlier schedules.

They said that after Saturday's meeting, the consensus was to eliminate tariffs as soon as possible and to reduce the number of items currently exempted under AFTA.