ASEAN leaders, businesses differ on economic integration drive
The Jakarta Post Nusa Dua, Bali
While 10 ASEAN leaders gathering here for an annual summit endorsed a proposal from their economic ministers to speed up the liberalization process in 11 priority industries, hundreds of the region's business leaders gathering at a next hotel wanted to focus first on two sectors: agriculture and tourism.
"At the governmental level, the decision is to move quickly on the 11 sectors, which include tourism and agriculture. But for the business people, given the fact that they have limited time and limited resources ... They just said: let's focus on tourism and agriculture first," Association of South East Asian Nations (ASEAN) Secretary-General Ong Keng Yong told a press conference on Tuesday at the end of a three-day ASEAN Business and Investment Summit (ASEAN-BIS), which the organizing committee said involved 700 businessmen.
The regional grouping's first business and investment summit was organized by the ASEAN Business Advisory Council (ASEAN-BAC), a unit of the grouping which advises governments in the region on how to resolve problems faced by the business sector. The summit was being held at the same time as the ninth ASEAN leaders summit ending on Wednesday. Seven ASEAN leaders and four leaders from the region's key trading partner countries -- Japan, China, India and South Korea -- spoke at the business summit.
The ASEAN leaders endorsed a framework, called Bali Concord II, on how to realize the ASEAN Vision 2020 which includes creating a security community, economic community, and social and cultural community.
The economic community vision envisages "a stable, prosperous and highly competitive ASEAN economic region in which there is a free flow of goods, services, investment, labor and a freer flow of capital." The goal is to create a single market and production base by 2020 by adopting relevant economic liberalization models and principles of other regional trade arrangements, particularly of the European Economic Community in the 1960s-1970s.
On Monday, a day before the ASEAN leaders started their summit, the region's economic ministers reached an agreement to speed up the liberalization drive in 11 key industries: trade and investment activities in the sectors will be fully liberalized by 2010, much earlier than the original 2020 deadline. This was endorsed by the grouping's leaders on Tuesday.
The 11 sectors are wood-based products, automotive, textiles and apparels, fisheries, electronics, healthcare, air travel and tourism, and e-business.
According to Ong, the reason behind the move to advance the integration deadline in the sectors is as follows: For the past year, ASEAN, Japan, China, and India have been in talks to create Free Trade Areas (FTAs) by between 2010 and 2012. This means that the 2020 deadline would no longer be relevant as markets would have already been opened eight years before this deadline.
Thailand Prime Minister Thaksin Shinawatra and Singapore Prime Minister Goh Chok Tong were the first to propose the acceleration in the liberalization deadline of the 11 sectors.
"If we can finish discussions with China, India and Japan by 2010-2012, why wait for another eight years. They (ASEAN leaders) generally agree with this idea," Ong said.
He added that in general, the ASEAN leaders were committed to advance the 2020 deadline for other sectors as well. "The problem is how fix a new date ... It should be 2020 minus something. But what is the minus something, the ministers will discuss it again. 2020 is no longer (relevant) due to all these discussions with the economic trading powers."
Elsewhere, Ong said the new members of ASEAN, including Cambodia, Laos, Myanmar, and Vietnam, remained committed to the economic integration drive. The economies of these countries are relatively less-developed that the other six ASEAN members.
A high level task force set up by ASEAN has recommended that flexibility be allowed in the implementation of the economic integration plan.
Results of ASEAN-BIS
- Business leaders agree to accelerate liberalization in agriculture and tourism sectors - Business memorandum of understandings involving several companies - ASEAN heads of government agree to appoint "focal points" that would discuss ways with ASEAN-BAC on how to resolve problems faced by the business sector
Major economic agreements at ASEAN Leaders Summit
- Bali Concord II, which includes framework on the economic integration plan (endorsed on Tuesday) - Establishment of a rubber consortium involving Thailand, Indonesia and Malaysia To be endorsed on Wednesday: - Acceleration of liberalization drive in 11 key industries - ASEAN-Japan Comprehensive Economic Partnership (covering a plan to set up a Free Trade Area/FTA by 2012) - ASEAN-India Comprehensive Economic Partnership (covering a plan to set up an FTA by 2011) - ASEAN-China Comprehensive Economic Partnership (including amendment of last year's agreement to set up FTA by 2010)