ASEAN members forge closer cooperation

ASEAN members forge closer cooperation

By Meidyatama Suryodiningrat

BANGKOK (JP): ASEAN senior economic officials made great
strides yesterday in forging closer economic cooperation,
particularly in investment, despite the hampering deadlock on
Indonesia's plan to withdraw a number of items from the list of
immediate tariff reductions.

The Senior Economic Officials Meeting wrapped up its
discussions here yesterday after three days of talks which saw
the formation of an ASEAN Industrial Cooperation (AICO) plan,
replacing the two existing programs -- the ASEAN Industrial Joint
Venture and the Brand to Brand Complementation -- to help boost
investments to the region.

Compared to the previous two programs, AICO requires less
ASEAN investment and eliminates the temporary protection
previously granted.

Senior officials from the Association of Southeast Asian
Nations (ASEAN) have been meeting since Wednesday as a run-up to
a ministerial meeting which will begin on Monday.

The ministerial meeting will precede the fifth ASEAN Summit
which starts on Thursday.

ASEAN, formed in 1967, now comprises of Brunei, Indonesia,
Malaysia, Singapore, the Philippines, Thailand and Vietnam.

It is hoped that the development of AICO, which will be done
together with the private sector, can help boost investments,
particularly those in high-tech industries, by allowing investors
to get easier access into areas already receiving preferential
trading terms.

Investors under the AICO plan will be granted free trade
tariffs of zero percent to 5 percent without having to wait for
the deadline of the implementation of the ASEAN Free Trade Area
(AFTA) agreement in 2003.

Furthermore, the required ASEAN investments have been reduced
from 40 percent to 30 percent.

During their meeting, senior economic officials also got a
promise from Vietnam to hand in an additional list of products to
be included in the Common Effective Preferential Tariff (CEPT)
program.

According to Thailand's director general for foreign economic
affairs, Krirk-Krai Jirapaet, Vietnam has been overdue since
November and that the number of items on the original list of 853
products was not proportional to those handed in by other ASEAN
states, which average over 1,000.

Under the framework of AFTA, ASEAN has created the CEPT
program, under which member states hand in lists of items for
tariff reductions.

Jirapaet said that Vietnam has promised to hand in the
additional list in the next few days.

"They told us that it will be available before the AFTA
Council meeting," he said, referring to the ministerial meeting
here tomorrow.

Economic ministers are due to meet tomorrow for the AFTA
Council meeting to discuss the possible acceleration of CEPT for
AFTA, among other things.

The issue of Indonesia's intention to exclude several
agricultural items from a list which will not require immediate
tariff reduction was still deadlocked last night.

Among the 15 items to withdrawn from the list are rice,
cloves, milk, sugar, wheat flour and soybean meal.

Indonesia's intention has come under strong attack from the
majority of ASEAN members.

Thailand's director general for information, Suvidhya
Simaskul, tried to calm fears over worries that the reduction of
tariff barriers in agricultural products would lead to a swamp of
products from Thailand, which is known to be a regional leader in
such commodities.

"Thailand won't be able to feed the whole region by itself,"
he said.

He further played down the controversy by arguing that
discussions still transpired in a good atmosphere.

"We don't have any difference in terms of thinking and
understanding. Maybe, we just need time to adjust," he said.