ASEAN finance ministers sign free trade accords
ASEAN finance ministers sign free trade accords
PHUKET, Thailand (AFP): Southeast Asian finance ministers signed two agreements Saturday as part of efforts to liberalize trade and financial systems in the region.
Ministers signed a customs agreement seen as a step forward in the realization of the ASEAN Free Trade Area (AFTA) and a pact to boost ties between the member countries' finance ministries.
In a communique, the ministers said the customs agreement would "help expedite the early realization of AFTA as it contains provisions that would facilitate greater regional trade and investment flow."
The Ministerial Understanding on ASEAN Cooperation in Finance, it added, would strengthen ties between ministries in banking and finance, as well as insurance, customs and taxation.
Ministers highlighted "the importance of concrete and pragmatic cooperation in the area of finance as a part of a building block to realize ASEAN's goal of greater economic integration," the communique said.
ASEAN -- the Association of Southeast Asian Nations -- groups Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.
The meeting, the first gathering to take place of ASEAN finance chiefs without other economic ministers, was touted as a step towards greater financial liberalization within the group.
"We have looked into this financial liberalization program and we have agreed that we will make efforts to deepen and broaden our financial liberalization activities," Thai Finance Minister Amnuay Virawan said.
Thai officials have said that one of the aims of the meeting was to push for such liberalization in order to put the ASEAN house in order ahead of the implementation of the terms of the World Trade Organization (WTO).
The communique said ministers "reaffirmed their commitment to further liberalize their financial services sector as part of the deregulation process in their respective economies."
Many ASEAN countries have kept their financial sectors firmly closed, arguing that they were not mature enough to withstand foreign competition.
However, despite the talk of financial liberalization, ministers added in the communique that trading partners should have realistic expectations in the opening of financial markets.
Malaysia's Finance Minister Anwar Ibrahim said ASEAN wanted "meaningful dialog" in WTO talks and not have regional groups dictate terms for others.
"Whilst we support as a principle the liberalization process and the deregulation process, we have to, of course, view our own priorities," he said.
Amnuay said one of the main topics of discussion was customs procedures between member countries to help prepare for AFTA.
The AFTA plan calls for lowering tariffs on most goods traded within the region to a maximum of 5 percent by 2003. Vietnam, which joined in 1995, has been given until 2006 to match the tariff cuts of the other economies.
"To be realistic, the free trade area has to be very free, not just partially free," Amnuay said.
He added that to achieve that target, ASEAN countries needed more financial liberalization, especially in money markets and the banking industry.
Amnuay said ministers discussed possible cross-border listings on regional money markets, saying there had been agreement that each country would benefit by having foreign investors register on local bourses.
Although all formal discussions were scheduled for Saturday, the seven ministers were expected to talk informally while playing golf in Phuket Sunday.