ASEAN ready to ease burden of tariff-cut plan

ASEAN ready to ease burden of tariff-cut plan

SINGAPORE (Agencies): Southeast Asian leaders are poised to
sign an agreement giving flexibility to some countries having
trouble meeting tariff-cutting measures that are part of an
effort to achieve a regional free trade area by 2002.

The agreement would help countries like Malaysia, which had
expressed concern that the tariff-cutting plan would damage its
burgeoning auto sector and national car maker Perusahaan Otomobil
Nasional Bhd., or Proton.

The Association of Southeast Asian Nations (ASEAN) released a
draft of the protocol Wednesday in advance of a formal signing
scheduled for Thursday at the group's annual informal summit, Dow
Jones reported.

The protocol modifies the Common Effective Preferential Tariff
scheme signed by the ASEAN leaders in Singapore in 1992. The
scheme is an integral part of the group's goal of achieving an
Asean Free Trade Area, or AFTA, by 2002.

In November 1998 ASEAN leaders decided to accelerate their
free trade push, agreeing to drop tariffs on each other's
products by zero to 5 percent on at least 85 percent of the
products on their "inclusion lists" by 2000, on 90 percent by
2001 and on all such products by 2002.

One year later the leaders agreed to eliminate all import
duties by 2010 for the original six AFTA participants, and by
2015 for the four newer Asean members.

At the behest of countries like Malaysia, Asean economic
ministers in May decided to allow "limited flexibility" in the
implementation of the tariff-elimination scheme.

The protocol will allow a country to delay transfer of a
product from its temporary exclusion list to an inclusion list or
to temporarily suspend its concession on a product already
transferred to the inclusion list.

The stated goal of ASEAN leaders attending the summit is to
achieve greater regional cooperation in both trade and finance.

In the financial arena, the leaders are expected to push
forward with plans to enlarge a network of bilateral currency
swap arrangements that would make foreign exchange reserves
available to member countries suffering balance of payments
problems.

The leaders also are expected to discuss establishing a
bilateral swap program between Japan, China, South Korea and
ASEAN member nations.

Malaysian and Thai officials will meet next month to discuss
compensation owed by Kuala Lumpur for delaying tariff cuts in its
auto sector, a top Thai official said Wednesday.

Boontipa Simaskul, Thailand's director of Business Economics,
ministry of commerce said the December 14-15 meeting would also
try to iron out Malaysia's difficulties in the auto industry.

"We are now asking Malaysia for their submissions on their
difficulties," she told AFP on the sidelines of the Association
of Southeast Asian Nations meeting here.

Bilateral deals

Manila's assistant trade secretary Jose Antonio Buencamino
said regional and bilateral agreements threatened the
significance of the Association of Southeast Asian Nations
(ASEAN) while its own free trade area (AFTA) was some years off.

"If ASEAN wants to be significant then ASEAN needs to be a
strong free trade area as well," Buencamino told AFP.

ASEAN needed to "show aggressiveness" in pursing an AFTA
"because if not we will be left behind"

Buencamino is attending an ASEAN senior officials meeting here
ahead of a leaders' summit on Friday and Saturday.

In the agenda-less forum, the issue of free trade agreements
is expected to be repeatedly raised, as some countries point the
finger at host Singapore for breaking ranks and negotiating
agreements outside the region.

The Bernama news agency quoted Malaysian Foreign Minister Syed
Hamid Albar as saying ASEAN members must work towards
strengthening the relevance of the organization which groups
Brunei, Cambodia, the Philippines, Indonesia, Laos, Malaysia,
Myanmar, Singapore, Thailand and Vietnam.

"When we do something outside the ASEAN context which could
weaken the organization, we must think twice," he said.

Singapore has just concluded an FTA with New Zealand and is
negotiating others with Japan, Australia, the United States,
Canada and Mexico.

Buencamino said the pursuit of FTAs was a problem which ASEAN
had to resolve.

"If we want to be a significant player in this phenomenon of
FTAs ... then we have to be more aggressive. We should stick to
the AFTA schedule."

Meanwhile, China has signaled its willingness to explore a
free-trade pact with the ASEAN in a sign it has overcome earlier
reservations over bilateral and regional free trade agreements
(FTAs), a published report said on Wednesday.

An official in charge of multilateral affairs in the Chinese
Foreign Ministry's Asian Department made the disclosure to The
Straits Times ahead of Premier Zhu Rongji's visit to Singapore
this week to meet with his ASEAN counterparts, Deutsche Presse
Agentur (DPA) reported.

"There are now more than 100 regional and bilateral FTAs in
the world," the official, who spoke on the condition of
anonymity, was quoted as saying.