ASEAN daunted by emerging trade issues
JAKARTA (JP): Economic ministers from the seven members of the Association of Southeast Asian Nations (ASEAN) expressed their concerns here over the weekend regarding emerging international trade issues that could adversely affect the group's position.
The new trade issues include a new set of rules of origin for textiles and textile-related products imposed by the United States and the abolishment of the generalized system of privileges (GSP) trading facility for agricultural products by the European Union (EU).
"The (ASEAN) ministers expressed concerns over the new EU-GSP scheme for agricultural products, which places ASEAN's agricultural fishery products at a disadvantage," Indonesian Coordinating Minister for Production and Distribution Hartarto said during a joint press conference last week.
Malaysian Minister of International Trade and Industry Rafidah Aziz explained that the EU will eliminate GSP trading facilities for exports of some ASEAN agricultural products to Europe by January next year.
The EU considers that by January 1997, ASEAN countries -- Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam -- will be considered strong in five agricultural sectors, including fishery, animal husbandry and fruits and cereals. Therefore, they will no longer be entitled to EU-GSP facilities.
"It will have financial and economic impacts on our farmers that produce those products, not to mention the psychological repercussion," Rafidah said.
She noted that the EU should maintain its GSP facilities for ASEAN countries as a reward, especially for its efforts in combating drug trafficking in the region. Moreover, the EU still maintains its GSP facilities to non-ASEAN developing countries.
"We regret that no special arrangement is granted to the ASEAN member countries," Rafidah said.
The EU has reportedly cut aid to the world's least-developed countries because it has redirected the funds to eastern Europe. To replace the missing aid, the EU has facilitated entry of imports from those countries through its GSP facilities.
ASEAN economic ministers also agreed to continue to pursue discussion with the EU on the retention of the E407a ruling because the number of processed eucheuma seaweed (carageenan) in the list of allowable European food additives and the new EC Directive 96/3/EC ruling in relation to the transport of bulk liquid oils and fats places ASEAN's vegetable oils at a disadvantage.
Protest
In addition to discussions with the EU, ASEAN economic ministers also made a strong protest to the United States over its new set of rules of origin for imports of textiles and textile-related products.
"The ministers were concerned over the implementation of the U.S. rules of origin on textiles and apparels, which could adversely affect ASEAN's textile and apparel trade," Hartarto said.
Rules of origin determine which country's quota should be charged for particular exports to quota-importing countries when manufacturing of the products occurs in more than one country.
Since July 1, 1996, the United States has enforced a new set of rules of origin for the imports of a wide range of textile and textile-related products.
Earlier, the origin of a product was determined on the basis of where substantial transformation of the products had taken place (generally, where the cloth used in the product was cut). From July 1, however, the new rules confer the origin to the country where the product is wholly produced or assembled.
It is thought that the new rules will adversely affect the trade of some textile exporting countries in ASEAN, especially those which export yarns and fabrics, like Indonesia.
Some countries import gray fabrics from developing countries for dyeing and printing and then export them. Under the new rules, the origin for these exports will be the country where the gray fabric was produced. Similarly, many countries import fabrics from developing countries for conversion into household linen, draperies or for embroidery. Once again, the country of origin of these products will be the country from where the fabrics were imported.
"In this respect, the (ASEAN) ministers urged the United States to withdraw implementation of the new rules of origin on textiles and apparels pending the conclusion of the World Trade Organization's harmonized rules of origin," the statement said.
Rafidah said that the ASEAN economic ministers had mandated the ASEAN Secretariat to study the U.S. rules of origin and then lodge an official complaint to the United States over the matter. (rid)