ASEAN free-trade agenda faces stumbling block
JAKARTA (JP): Free trade goals of the Association of Southeast Asian Nations (ASEAN) received a blow yesterday when Indonesia and the Philippines insisted on delaying the timetable for the reduction of tariffs on sensitive farm products, officials said.
At yesterday's ASEAN senior officials meeting, the two countries refused to accept a 2010 deadline adopted last year by the ASEAN Free Trade Area (AFTA) Council for including such products as rice and sugar in the tariff liberalization agenda under the Common Effective Preferential Tariff (CEPT) scheme.
"In principle, as we all know, we agreed to phase in the unprocessed agricultural products into the CEPT. Now the question is: When will the phase-in process be started and when will it be ended?" Rahardjo Jamtomo, director general of the ASEAN department at the Indonesian Ministry of Foreign Affairs, told journalists during a break in the meeting.
ASEAN senior officials began the two-day closed-door meeting yesterday to prepare the way for the Afta Council's meeting on Wednesday and the ASEAN economic ministers' meeting on Thursday.
Rahardjo explained that Indonesia proposed to begin the phasing-in process of its highly sensitive agricultural products, notably rice and sugar, into the CEPT on Jan. 1, 2010 and end the process 10 years later.
"This is the level of development which will allow us to set (the process in motion) in 2010 ...," Rahardjo contended, adding that Indonesia had not come to an agreement with colleagues on when the process should begin and end. He noted that every country in ASEAN had its own position in regards to the highly sensitive products.
ASEAN members -- Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam -- have agreed to extend the Afta to cover unprocessed agricultural products, to be liberalized by 2003. The members are then given the option of extending the tariff reduction deadline on certain sensitive items until 2010.
Indonesia backtracked on AFTA last year by withdrawing 15 farm products from the inclusion list and, instead, placing them on the sensitive list. Other ASEAN members agreed to give Indonesia some leeway by allowing the establishment of a special temporary exclusion list for the 15 products.
Spirit
A Thai official blamed Indonesia yesterday for weakening the spirit of trade liberalization among ASEAN members by backpedaling on the liberalization process of its farm products.
"If you said you'll go for free trade in 100 years, it doesn't make sense. And if you said you'll go for free trade in 20 years, it also doesn't make sense because most of the free trade elements will mature in 10 years or 15 years at most," Krirk-Krai Jirapaet, the director general of the business and economic department at the Thai Ministry of Commerce, told journalists.
Jirapaet warned that any delay in implementing the phase-out of tariffs on farm products would hurt the credibility of ASEAN, which collectively is home to 400 million people.
"They say the phase-in starts in 2010, which is not the understanding of other ASEAN countries," Jirapaet said "This matter, of course, has to go to the ministers on Wednesday."
Indonesia's Coordinating Minister for Production and Distribution Hartarto said after meeting with President Soeharto at Merdeka Palace yesterday that the ministers would meet Wednesday for the annual AFTA Council meeting to review the progress towards the creation of a free trade area by 2003.
The AFTA Council meeting is to be followed by a ministerial meeting on Thursday to discuss a wide range of issues, ranging from economic relations among ASEAN members to their common position for the upcoming World Trade Organization ministerial conference in Singapore in December, Hartarto said.
He added that the economic ministers are also scheduled to hold consultation meetings with counterparts from Cambodia and Laos, two countries which will join ASEAN next year, and three dialog partners: Australia, New Zealand and Japan. (rid)