ASEAN seen forging closer security, economic ties

ASEAN seen forging closer security, economic ties

By Alastair McIndoe

MANILA (Dow Jones): Security issues and sustaining Asia's
economic recovery are expected to dominate this week's gathering
of leaders and ministers from the 10-member Association of
Southeast Asian Nations (ASEAN) in Manila.

Tensions in East Timor and Indonesia's Aceh province, coupled
with a territorial dispute over the Spratly Islands, a cluster of
potentially oil-rich reefs in the South China Sea, mean security
issues will likely have a commanding presence at a meeting
normally given over to trade and economic issues.

In an early draft of a joint statement, ASEAN leaders, as well
as the heads of state of Japan, China and South Korea, who will
also attend the summit, recognize the need for closer political
and security ties.

The draft also underlines the group's aim to intensify
economic cooperation in East Asia, and work more closely in
monetary and financial areas. A final version of the draft is to
be endorsed by leaders on Nov. 28; it was prepared by the
Philippines, which is chairing this year's summit.

ASEAN, formed in 1967 at the height of the Vietnam war, groups
Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar,
Philippines, Singapore, Thailand and Vietnam.

On the economic front, ASEAN economies have recovered more
strongly and faster than expected from Asia's 1997-1998 financial
crisis. But some fear the still-shaky banking and corporate
sectors in Indonesia, Thailand and Malaysia pose risks for the
whole region, while some ASEAN countries may slacken the pace of
reforms given the strength of their recoveries.

"ASEAN is trying to ensure that the reforms continue and that
there is no repeat of 1997," ASEAN Secretary General Rodolfo
Severino said recently. He insisted there was no sign of a
slowing of reforms at the national level.

Japan, for one, appears keen to promote closer ties on
economic issues. "Since the meeting is taking place against the
backdrop of the changed economic situation in Asia, Prime
Minister Keizo Obuchi will probably talk about enhancing the
dialogue among the ASEAN Plus Three," said Japanese Foreign
Ministry spokesman Sadaaki Numata.

For the first time, ASEAN finance ministers will meet ahead of
the leaders' summit on Nov. 28 to discuss regional developments,
and specifically the latest report of an ASEAN surveillance group
formed last year to spot fault lines appearing in the bloc and
prevent future crises.

In the draft communique, the leaders agree to "enhance
regional monetary and financial cooperation, including the
regulatory and supervisory areas".

On economic cooperation, the statement envisages
"strengthening efforts in accelerating trade and investment". The
draft is thin on detail.

ASEAN's Severino noted the bloc's agenda of liberalizing trade
and investment by dismantling tariffs and other protectionist
measures has been accelerated to create an ASEAN Free Trade Area.
The six early members of ASEAN plan to reduce tariffs to 5
percent or less by 2002, while its poorest members, such as
Myanmar and Laos, have until 2008.

Severino said ASEAN supports a new round of global trade talks
under the World Trade Organization (WTO), but that industrialized
countries are paying insufficient attention to the concerns of
developing ones. "The summit should give further momentum to this
issue," he said.

Indeed, resistance is growing in some ASEAN countries against
further tariff liberalization while the region is still trying to
recover from the financial crisis.

Akitaka Saiki, spokesman to Obuchi, said Japan wants East Asia
as a bloc to take an active role at ministerial WTO talks which
will open in Seattle next month, and this idea would be raised in
Manila.

"Japan has to assume a certain amount of responsibility as a
leader of this economic region," Saiki said.

The draft offers little insight into how ASEAN as a forum will
get to grips with a number of security issues. It envisages
"continuing dialogue and cooperation, including addressing
transnational issues, to strengthen regional peace and
stability".

ASEAN wasn't prominent in the international peacekeeping
effort to end the crisis in East Timor, and has firmly opposed
developing the group as a military bloc.

But the meeting will be the first ASEAN gathering since East
Timor gained its autonomy and the issue of the territory's
membership may well be raised.

Meanwhile, other regional disputes continue to brew. A row
between Thailand and Myanmar resulted in Yangon closing its
boarder with Thailand after gunman seized the Myanmar embassy in
Bangkok last month. ASEAN, say some observers, may be asked to
take a hand in settling the dispute.

The dispute over the Spratlys, involving territorial claims by
China, Philippines, Taiwan, Vietnam, Malaysia and Brunei,
continues to simmer -- and occasionally boil. This month, Beijing
argued with Manila when a Philippine navy vessel ran aground in
the disputed area after responding to a distress signal from
local fisherman.

Beyond a vague pledge to strengthen political and security
ties, ASEAN leaders are unlikely to grasp the nettle of what one
senior ASEAN official terms "preventative diplomacy" to help
diffuse such potential flashpoints. "Some countries are more
cautious than others on this issue," the official said.

Before the ASEAN Plus Three leaders' summit on Nov. 28, ASEAN
finance, economy, trade and foreign ministers will hold various
meetings between Nov. 25 and Nov. 27.