ASEAN makes progress to integrate economy

ASEAN makes progress to integrate economy

The Jakarta Post, Nusa Dua, Bali

The Association of the Southeast Asian Nations (ASEAN) is
making significant progress in laying the groundwork to
liberalize and integrate their economies, director general of
Asia Pacific and Africa, at the Ministry of Foreign Affairs
Makarim Wibisono said.

"We've made very substantive progress," he told reporters on
Friday at the close of a two-day Senior Officials Meeting of
ASEAN, held ahead of the grouping's leaders summit starting next
week.

He explained that the 10 members of the grouping, for
instance, had agreed to select 11 key industries as "fast track
sectors" to accelerate the liberalization and economic
integration drive.

He did not name the specific sectors, but he said the
Indonesian government had been mandated as a coordinator to
cooperate with the private sector in an effort to boost
competitiveness of the wood-based and automotive sectors. The
Philippines is in charge of the electronics industry.

ASEAN aims to create a single market -- dubbed the ASEAN
Economic Community" -- of over 500 million people. The results of
meeting among the ASEAN leaders will result in the Bali Concord
II, which includes a commitment toward economic integration.

Makarim said that the vision of ASEAN economic integration was
a prosperous and highly competitive region in which there was a
free flow of goods, services and investment.

Experts have said that improving the region's global
competitiveness through a liberalization drive is crucial
particularly to compete with China in luring foreign investment.

"The deepening and acceleration of regional economic
integration, through the ASEAN Economic Community project, will
significantly elevate ASEAN's attractiveness as a global
production base, drawing quality investment into the region and
thus, will help sharpen the region's competitive edge," experts
stated in a document.

Although the founding nations of ASEAN have already cut
tariffs on most manufacturing products to between zero and five
percent since the beginning of this year under the ASEAN Free
Trade Area (AFTA) program, analysts have said that this has yet
to be fully implemented and that the region must still find ways
to seriously eliminate non-tariff trade barriers as well as
improve the investment environment.

Harmonization of external tariffs must also be immediately
introduced into the ASEAN agenda, especially among members with
higher tariffs.