ASEAN to open up 11 'priority sectors'

Zakki P. Hakim, The Jakarta Post, Jakarta

Economics ministers of the 10 member nations of ASEAN are expected to strengthen their commitment to push for the liberalization of trade and investment activities in 11 key economic sectors by 2007 when they gather here for a three-day meeting.

Director of regional cooperation at the Ministry of Industry and Trade Eliver Radjagoekgoek, however, said on Tuesday that the ministers gathering for the 36th ASEAN Economic Ministers (AEM) conference would also agree to temporarily exclude certain products of the above "priority sectors" from the liberalization drive.

The temporary exclusion would expire by 2010, he said.

"The (ASEAN) secretariat will examine whether each country's (negative) list has met the agreed requirement," Eliver said on the sidelines of the first day of the ASEAN Senior Economic Officials Meeting (SEOM), which precedes the AEM meet.

During the leaders' summit of the Association of South East Asian in Bali last year, a regional grouping agreed to create the ASEAN Economic Community in 2020, where there would be a free flow of investment, trade and labor within a region of some 500 million people. It was also agreed to accelerate liberalization in the 11 priority sectors, ranging from the automotive to the agriculture sector.

Opening up of the 11 sectors is expected to boost trade within the region. Despite the start of a gradual implementation of the ASEAN Free Trade Area in 1992, intraregional trade so far accounts for only about 23 percent of the region's total foreign trade. In comparison, intraregional trade within the European Union was around 75 percent, while the figure for the "Mercosur" region was 35 percent last year. Mercosur is a regional trade grouping of South American countries including Brazil, Argentina, Paraguay, Uruguay, Chile and Bolivia.

The planned liberalization measures will include cutting import tariffs under the Common Effective Preferential Tariff (CEPT) facility, streamlining customs procedures and adopting shared product standards by 2007 for the six original ASEAN members and by 2012 for the four newer members.

ASEAN original member were Singapore, Thailand, Malaysia, the Philippines, Indonesia and Brunei, while Laos, Cambodia, Vietnam and Myanmar joined later.

Despite the seemingly upbeat sentiment of trade officials, some experts said that implementing the liberalization goals would not be easy, particularly in the agriculture sector.

One of the problems with the sector is the long list of more than 1,200 products, compared with about 80 products in the electronics sector. This would make things more complicated.

During the AEM meeting, ministers will also discuss the trade disputes settlement mechanism, rules of origin and hold a dialog with ministers from the region's key trading partners, including China, Japan, India, Australia, New Zealand, South Korea and the European Union.

ASEAN is also aiming to create free trade deals with these regions.

After the SEOM, ASEAN officials will gather for the AFTA council meeting on Thursday, which will include discussion of measures to push for the implementation of a fully fledged, free trade area in the region.

The officials will also hold the ASEAN Investment Area meeting on the same day.

ASEAN 11 priority sectors

Priority Sectors Coordinator

1. Agriculture Myanmar

2. Fisheries Myanmar

3. Automotive Indonesia

4. Wood-based products Indonesia

5. Rubber-based products Malaysia

6. Textile and apparel Malaysia

7. Electronics Philippines

8. Air transport Thailand

9. Tourism Thailand

10. E-commerce Singapore

11. Healthcare Singapore

Source: Ministry of Industry and Trade