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.