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.