ASEAN seeks more market access to Japan

By Riyadi

KUALA LUMPUR (JP): Economic ministers of the nine-member Association of Southeast Asian Nations (ASEAN) demanded more access Saturday to Japan's markets to help tackle slumping exports.

In a consultation meeting with Japanese Minister of International Trade and Industry Mitsuo Horiuchi here, ASEAN economic ministers also called for more investment from Japan to bring in badly needed foreign exchange to the region, currently being badly hit by a currency crisis.

"We have had some problems with market access, not because of tariffs, but more of non-tariff barriers like a trading network. We would like Japan to make it easier for ASEAN goods to enter its market," Malaysian Minister of International Trade and Industry Rafidah Aziz said after the meeting.

Two-way trade between ASEAN countries and Japan dropped by 4 percent last year to US$116.2 billion, with ASEAN exports rising by less than 1 percent to $43.1 billion and ASEAN imports declining 6.6 percent to $73.3 billion. Still, ASEAN countries suffered a combined trade deficit of $30.2 billion.

Rafidah said ASEAN also proposed that Japan help promote ASEAN exports to Japan, modernize small- and medium-sized firms and assist rural industrialization in the region.

Japan was also urged to continue support for existing ASEAN- Japan cooperation programs, including support for industries, intellectual property rights, total quality management and generic industrial technology research.

Minister Horiuchi responded by saying that Japan would continue to support existing cooperation programs through various state and private institutions.

In addition, the Japanese minister introduced a new package of programs for ASEAN, including assistance for export companies and human resources development.

Rafidah said ASEAN ministers welcomed Japan's offer but reiterated that the ministers needed more time to study it further before making any concrete commitment.

Besides trade, Rafidah said ASEAN ministers also asked the Japanese government to help woo more private firms to invest in the region to benefit from low production costs and a larger market of almost 500 million people, especially after the accession of Laos and Myanmar into ASEAN's realm.

Foreign direct investment flow from Japan to ASEAN countries amounted to $6.6 billion or 13.3 percent of Japan's total global direct foreign investment of $49.72 billion last year.

"The ministers recognize the importance of facilitating greater investment flow," Rafidah said.

Responding to ASEAN ministers' requests, Horiuchi said he would help encourage Japan investors to go to ASEAN. He said ASEAN governments themselves should try their best to attract foreign investment by creating a conducive investment climate in the region.

"ASEAN (countries) should continue to mobilize their own private capital and also attract foreign capital to upgrade their infrastructure, as infrastructure is vital for their economic dynamism," the Japanese minister said.

To attract more foreign investment, Horiuchi said, ASEAN governments should strengthen their economic cooperation and deepen economic integration by reducing tariffs and abolishing non-tariff barriers to create the needed economic scale.

"The current difficulties facing ASEAN countries, triggered by a regional currency crisis, should strengthen their economic linkages, enhance competitiveness of their industries and make their region attractive for direct foreign investment," Horiuchi said after the consultation meeting.

Also attending the meeting were Bruneian Minister of Industry and Primary Resources Abdul Rahman Taib, Lao Minister of Commerce Sompadith Vorasane, Myanmarese Minister of National Planning and Economic Development David O. Abel, Philippine Secretary of Trade and Industry Cesar B. Bautista, Singaporean Minister of Trade and Industry Lee Yock Suan, Thai Minister of Commerce Narongchai Akrasanee, Vietnamese Minister of Trade Truong Dinh Tuyen and Bachrum Harahap, an assistant to the Indonesian coordinating minister for production and distribution.

Cambodia Senior Minister in charge of Rehabilitation and Development and Minister of Economy and Finance Keat Chhon also attended the meeting as an observer.