ASEAN firm on free trade plan

ASEAN firm on free trade plan

SINGAPORE (Reuters): The Association of Southeast Asian
Nations (ASEAN) senior officials at a heads of investment meeting
yesterday stood solidly behind the push for oneness in their
economies despite the current economic crisis.

"In these times there are bound to be voices calling for
protectionism but if we do that it will be a step backwards. In
this crisis we must push forward," Singapore Trade and Industry
Minister Lee Yock Suan told reporters after opening the fourth
meeting of the ASEAN Heads of Investment Agencies (AHIA) here.

"The key thing is to emphasize that ASEAN must continue to
work together to open up our economies, liberalize and not pull
back, that is why I emphasized in my speech the importance of the
ASEAN Free Trade Area (AFTA) and the ASEAN investment area."

Lee had said in his opening speech the "contagion effect" of
the crisis, which has spread to all the major ASEAN countries
"vividly demonstrates ASEAN interdependence".

"Clearly it is in our collective interest to help one another
through this economic crisis."

ASEAN groups the countries of Brunei, Indonesia, Thailand,
Laos, Malaysia, Myanmar, Singapore, the Philippines and Vietnam.

Lee said that the ASEAN free trade area had made substantial
progress since it was mooted and plans for the speeding up of the
AFTA implementation target from 2008 to 2003 were on track.

He told reporters later that the regional crisis had not
derailed the AFTA time frame for all the Asian countries
including Indonesia.

"We are still on track...every country has to reckon with
their own local problems and there is a lot of local pressure but
on the while we are on track," Lee said.

"Even for Indonesia, the problem is not tariffs. The problem
is more one of the financial situation and we need to get the
trade (in Indonesia) going again," he said.

Lee said the plans for an ASEAN Investment Area first mooted
during a Bangkok Summit in 1995 were also progressing and an
agreement between the member countries would be finalized and
signed at the ASEAN ministerial conference in Manila in October.

Lee's remarks were made at a time when political analysts are
saying protectionist tendencies have emerged in the ASEAN region
due to the economic crisis.

Protectionist

The Political and Economic Risk Consultancy (PERC) in its
latest assessment of protectionist behavior of Asian countries
cited Hong Kong and Singapore as the most open economies in the
region.

The PERC report said Singapore was a victim of protectionist
sentiments of its closest neighbors.

Responding to queries on the protectionism issue, Malaysian
Industrial Development Authority chairman Zainal Abidin Sulong
said:

"I don't want to use that word protectionist because it makes
the wrong interpretation. If you think in terms of the Malaysian
and Singapore economies...we move in the direction it has moved
before, quite positive," he said.

ASEAN officials said they were optimistic any differences
between ASEAN member nations would eventually be resolved for the
long-term good of the grouping.

"People have thought that given the crisis each Asian country
would want to be on its own and try to compete with each other
but the contrary has come out," said Melito Salazar, vice-
chairman of the Philippines Board of Investment and chairman of
the AHIA meeting.

"Just last month we were together in Japan. The various heads
of the ASEAN agencies got together with the Keidanren, the
biggest federation of businessmen in Japan, and we gave a common
pitch to them emphasizing the coming of age of the ASEAN
Investment Area."

The ASEAN Investment Area will be set up to encourage and
collectively promote foreign direct investment to the region.

Friday's one-day meeting will discuss issues related to
promoting investments, including the implications of crisis and
the measures the respective economies have taken, and explore
further areas of liberalization and cooperation between the ASEAN
nations, Salazar said.

Lee also said ASEAN leaders would be watching the developments
in Japan very closely.

"Japan is very big. It accounts for two-thirds of Asian
economies, so we are all looking to Japan to resolve its
problems," he said.