ASEAN signs unique pact but trade worries linger
ASEAN signs unique pact but trade worries linger
By Robert Birsel
BANGKOK (Reuter): The Association of Southeast Asian Nations
(ASEAN) may have signed a landmark security pact at last week's
summit but efforts to quicken economic integration and create a
huge common market seem to be lagging.
The highlight of the two-day summit was a treaty declaring the
whole of Southeast Asia a nuclear-weapons free zone. The pact was
signed last Friday by the leaders of the seven ASEAN countries
and the group's three prospective members.
"This really makes ASEAN look very good, a very strong bloc
able to contend with the European community," an Asian diplomat
said on Sunday of the group which represents 420 million people.
"They've really achieved a milestone. They've brought
countries in with other political systems, into a broad Southeast
Asia that is quite strong, what was envisaged by the founding
fathers," he said.
ASEAN groups Brunei, Indonesia, Malaysia, the Philippines
Singapore, Thailand and Vietnam. Last Friday the seven leaders
issued a call for the other three Southeast Asian countries,
Myanmar, Cambodia and Laos, to be included by the year 2000.
Formed in 1967 by five non-communist countries, for its first
two decades ASEAN focused on blocking the spread of communism.
But with the end of the Cold War and the withdrawal of
Vietnamese forces from Cambodia in 1989 the group, which by then
included six countries, began searching for a new direction.
It adopted a 1992 proposal from then-Thai prime minister Anand
Panyarachun to set up an ASEAN Free Trade Area (AFTA) within 15
years and last year agreed to shorten the time frame to 10 years.
But the refusal last week by Indonesia to lower tariff walls
on 15 key farm products cast a pall over the summit and
illustrated the fundamentally competitive nature of the group's
economies.
The row was papered over when the leaders agreed in principle
to slash tariffs on most items to zero percent by 2003 but
allowed for flexibility in implementing cuts. They pledged to
work to maximize the number of zero-tariff items by 2000.
ASEAN officials say there is likely to be some hard bargaining
when it comes to removing protection on sensitive farm products,
including rice.
"They have agreed in principle to zero percent by 2003 but
there is going to be flexibility, that's the problem," Thai
commerce ministry official Krik-Krai Jirapaet told Reuters last
Friday.
The seven did agree to open up service industries. And an
agreement on intellectual property cooperation, including the
setting up of an ASEAN patent and trademark office, should spur
development of a high-technology sector, ASEAN officials said.
The leaders also endorsed a proposal by Singapore Prime
Minister Goh Chok Tong to introduce cooperation between central
banks to withstand currency speculation through repurchase
arrangements.
Goh also warned that as ASEAN grows to include Burma, Cambodia
and Laos the group is likely to lose its cosy, club-like
atmosphere where decisions are reached through informal get-
togethers and consensus.
"An enlarged ASEAN membership will create both opportunities
and challenges," Goh said in his closing speech.
"New members will have to adjust quickly to ASEAN's value and
corporate culture ... They will also face difficulties in
discharging their multifold obligations within ASEAN, including
phasing in commitments in AFTA," he said.
"The membership of these countries will also change the tone
and character of ASEAN. Some of the comfortable live-and-let-live
relationships may evaporate," he said.
"ASEAN consensus on some issues may be more difficult to
achieve. We will have to increasingly rely on the principle of
flexible consensus," Goh said.