ASEAN ministers open their economic meeting

ASEAN ministers open their economic meeting

MANILA (AFP): Southeast Asian economic ministers began a two- day meeting here Wednesday with commitments to drastic tariff cuts as a pill to revive economies knocked down by the Asian financial flu.

Philippines President Joseph Estrada set the tone in a keynote address, urging the Association of Southeast Asian Nations (ASEAN) to maintain open markets and cautioning members against "backsliding" on commitments to trade liberalization.

He also called on the Group of Seven most industrialized nations to provide the leadership needed to bail the region out of crisis.

"It is imperative that we maintain this course of continued integration of our economies within ASEAN and the continued integration of ASEAN with the rest of the world," Estrada said.

"Whatever adjustments and policy options we have to take from hereon must be fashioned in the larger context of global integration and interdependence, " he said.

He said ASEAN's thrust is to promote a "freer flow of goods and services, investments and capital" and warned against reneging on international commitments to free trade.

"Given the interdependence of trading nations, backsliding on our commitments would give out the wrong signals to our trading partners -- weakening the links we have forged among ourselves and disrupting harmonious alliance," he said.

But the Philippine leader stressed that "a fast ASEAN turnaround cannot be accomplished without the concerted commitments of the G7."

The group of the world's seven richest nations "can help contain the current financial turmoil" by generating economic activities, maintaining open markets and sustaining credit to the most seriously affected economies.

He urged the United States and other countries "which are in a position to do so" to "make available their share in the recapitalization of the International Monetary Fund" and lend support to other multilateral agencies involved in efforts to restore global financial stability.

The meeting involved the economic ministers of Brunei, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

During a meeting of the ASEAN Free Trade Area (AFTA) council involving the same ministers Tuesday, the group pledged to speed up import tariff cuts on sensitive products including unprocessed agricultural commodities traded within the region.

The ministers said the crisis has only strengthened their commitments to the region's goal of a tariff-free area for most products by 2003 to increase trade and lure back investors.

Thai Deputy Premier Supachai Panitchpakdi said the commitments would send a "correct signal to the world that we are moving ahead" with economic liberalization despite the turmoil.

In his speech, Estrada urged fellow ASEAN members to reform their banking systems and adopt fiscal discipline to tame inflation while pump-priming the economy and assisting viable enterprises through credit.

"We have to maintain internationally viable foreign exchange rates. These can bring back business and private sector confidence and in turn draw investments and long-term capital," Estrada added, in apparent reference to Malaysia which imposed currency controls last month.

Malaysia's trade minister, Rafidah Aziz, was not at the opening session and was represented by a junior minister. Organizers said she would be arriving later Wednesday.

Philippine Trade Secretary Jose Pardo said Tuesday that Malaysia appeared to be alone in its move to adopt foreign exchange restrictions, with the rest of the region committed to free currency flows.