'ASEAN must go beyond tariff cut'

'ASEAN must go beyond tariff cut'

Martin Abbugao, Agence France-Presse, Singapore

Southeast Asia must move beyond reducing tariffs to aligning
investment rules with global standards if it is to compete for
foreign investments, European Union (EU) Trade Commisioner Pascal
Lamy said Friday.

Lamy said greater competition from China after its entry into
the World Trade Organisation (WTO) should spur the Association of
Southeast Asian Nations (ASEAN) to open up its markets further.

China has been getting the lion's share of foreign direct
investments into Asia at the expense of the 10-nation ASEAN as
investors take advantage of the regional giant's potential market
of more than one billion people.

But Lamy, in an interview with AFP, said ASEAN nations could
grab a greater piece of the action.

"The solution is that ASEAN as an economic zone becomes more
relevant and more attractive, which means that integrating this
region economy-wise and trade-wise is probably even more relevant
with China in WTO," he said.

ASEAN, which groups Brunei, Cambodia, Indonesia, Laos,
Malaysia, Myanmar, the Philippines, Singapore, Thailand and
Vietnam, offers a market of more than 500 million people.

"My personal view is that it (China's entry to the WTO) will
increase pressure for trade integration and for investment
regimes which are more welcoming than they are at present.

"If EU investors have a feeling that they can invest here,
that there is no barrier to investments and that there is a
potential market... they will come. No doubt about that," he
said.

Lamy, however, stressed that integration went beyond just
reducing tariffs.

Under the ASEAN Free Trade Area scheme, six of ASEAN's
wealthier members have cut tariffs on most goods traded within
the region to between zero and five percent. Newer members
Cambodia, Laos, Myanmar and Vietnam have until 2005 to follow
suit.

"Tariffs are fine. But trade integration and economic
integration in today's world is about more than tariffs," said
Lamy, who was in Singapore to deliver a lecture on Asia-Europe
relations.

"It's about rules, it's about investment regimes, it's about
transport agreements, it's about technical standards... it's
about phytosanitary standards.

"It's no use having no tariffs, or having them reduced, if you
don't have the same sanitary or phytosanitary rules. So there is
a lot to do in this field also," said Lamy, who also mentioned
standardised customs procedures.

Sanitary and phytosanitary standards cover measures to make
sure that consumers are being supplied with food that is safe to
eat.

Lamy's remarks echoed a speech by Singapore Trade Minister
George Yeo in Jakarta on Jan.31. Yeo had said ASEAN must hasten
economic integration if it wants to compete with China.

While countries in the grouping have taken steps to tear down
non-tariff barriers, "much remains to be done", Yeo said.

Lamy said China itself will take some time to comply with its
WTO commitments to open up its markets.

"We are very positive on that and we are helping them... to
upgrade their own rules and systems," he said.