ASEAN talks: The good, the bad and the ugly

ASEAN talks: The good, the bad and the ugly

By Jim Hatton

CHIANG MAI, Thailand (AFP): Economic officials from the six countries that comprise ASEAN ended a week of talks that saw more progress than expected in a plan to cut tariffs, but also showed divisions over relations with the larger APEC trade forum.

The meetings got off to a good start when the trade arm of the Association of Southeast Asian Nations (ASEAN), which groups Brunei, Indonesia, Malaysia, Philippines, Singapore and Thailand, agreed to speed up and expand tariff cuts further than under an earlier scheme.

The ASEAN Free Trade Area (AFTA) Council agreed to shorten, from 15 to 10 years, the period during which tariffs on goods traded within the region are to be reduced to a maximum of 0-5 percent.

Officials had said before the talks that negotiations would probably center on expanding the list of items excluded from tariff cuts.

AFTA, however, unexpectedly agreed to eliminate the list and include all goods -- even unprocessed agricultural products -- in the tariff reduction scheme.

The ASEAN Economic Ministers (AEM) meeting held later last week confirmed that approach.

But the six nations showed last week that there were deep splits over ASEAN's relationship with the Asia Pacific Economic Cooperation forum, which includes the six Southeast Asian countries and the United States, Canada, Mexico, Japan, China, Australia, New Zealand and others.

The final statement of the 26th AEM meeting referred to APEC only briefly. It said the second report by the Eminent Persons Group (EPG) on how APEC should operate was a "useful reference for ASEAN member countries."

The Eminent Persons Group was set up by APEC in 1992 to prepare a broad framework for future regional economic cooperation. It has prepared two reports.

The latest, which called for a free trade area in the Asia- Pacific by 2020, proved controversial, and some ASEAN states held that certain recommendations on trade liberalization were either ambiguous or overly aggressive.

Deputy Prime Minister Supachai Panitchapakdi, who led the Thai delegation, said earlier that the ASEAN ministers were unprepared for the first APEC meeting last year in Seattle and felt a common ASEAN stand on APEC was needed.

Things turned ugly at the final news conference, when AEM ministers insisted that each nation must act in its own best interests, and said the EPG should be disbanded.

"I think EPG has done much work, so much so that I think it should be terminated to give the senior officials (of each country) time to study the proposal," Supachai said.

Supachai also conceded that the ministers feared some long- range aspects of the report on trade liberalization and some of the detailed conditions, if adopted, would dilute the strength of AFTA.

"Whatever we decide to do, we will have to decide on our own...," he said.

Still, Supachai called the AEM talks a "landmark" meeting that had made concrete steps in advancing intra-ASEAN trade.

He cited the AFTA tariff progress and AEM agreements to set up a section within its secretariat to handle AFTA matters, to open informal talks with other trading blocs and to draft an agreement on protecting intellectual property rights.

The ministers also agreed to improve cooperation in transportation, communications and infrastructure, and directed the AEM secretariat to work more closely with the Chambers of Commerce International (CCI) to improve private sector participation in ASEAN.

Later in the week, Japan agreed to help ASEAN rebuild the economies of Vietnam, Laos and Cambodia, and Hanoi formally requested that ASEAN send experts to help Vietnam prepare to become the bloc's seventh member.