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.