ASEAN to sign new cooperation accord

ASEAN to sign new cooperation accord

SINGAPORE (AFP): ASEAN economic ministers are to sign a new industrial cooperation agreement at a special meeting here next week, Singapore's trade and industry ministry said yesterday.

A week-long "retreat" of trade ministers and senior officials from the seven-member Association of Southeast Asian Nations (ASEAN) is to start on Tuesday in Sentosa, a resort island just off Singapore.

The ASEAN Industrial Cooperation Scheme Agreement (AICO) to be signed by the ministers next Friday is aimed at boosting intra- ASEAN investment as well as investment from outside the region, a statement from the ministry said.

ASEAN includes Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.

AICO would replace ASEAN industrial schemes that have generated lackluster participation -- the ASEAN Investment Joint Venture Program and the Brand-to-Brand Complementation scheme, limited mainly to car assemblers.

Industries approved for AICO participation would enjoy zero to 5 percent tariffs on products sold within the region, provided ASEAN companies own 30 percent of the shares and the ventures meet local-content criteria.

Details are to be announced next week.

U.S. auto giants are reportedly interested in taking part in the AICO program in a bid to strengthen their presence in the region, currently dominated by Japanese car manufacturers.

General Motors Corp. is choosing between the Philippines and Thailand as the site of a one-billion-dollar automotive manufacturing and assembly facility.

The ASEAN economic ministers' meeting is aimed at thrashing out details of the group's plan to create an ASEAN Free Trade Area by 2003, which has been affected by demands from some members for tariff protection for sensitive products topped by agricultural items.

In a related development Reuter quoted Singapore officials yesterday as saying that the ministers would hold a meeting of the AFTA council on April 26. It would be followed by two days of what the ministry called a ministers' retreat.

There would be no formal agenda for the retreat, but the ministers were expected to prepare for the World Trade Organization (WTO) ministerial meeting in Singapore in December.