Fri, 07 Mar 2003

ASEAN urged to crank up campaign on AFTA benefits

Adianto P. Simamora, The Jakarta Post, Bali

Two months after the ASEAN free trade area (AFTA) was fully implemented, visiting ASEAN Secretary-General Ong Keng Yong on Thursday acknowledged that many people in the region remained unaware of the benefits to be derived from competition under AFTA.

"Many people in all the ASEAN countries are not fully aware of the meaning of competition," Ong told reporters on the sidelines of a two-day ASEAN conference on fair competition law and policy.

He urged the ASEAN member countries to take action to boost the public's understanding of competition to help smooth the implementation of AFTA.

"We tell the people that competition will benefit consumers as it will produce lower prices," he said.

The conference was sponsored by the ASEAN secretariat, the World Bank and Germany-based Deutsche Gesellschaft fur Technische Zusammenarbeit (GTZ) GmbH.

The conference is aimed at developing a common understanding among ASEAN countries of the benefits of competition laws and policies in the implementation of AFTA.

"In terms of policy, all of us here must agree ... to move constructively to set up our own respective competition policies or laws," Ong said.

Ong expressed disagreement with the policies of some countries in maintaining high import tariffs on a number of products.

"There are some countries that are maintaining high import tariffs and want to delay AFTA, but we have signed an agreement so we have to implement it," Ong said.

AFTA was agreed upon in 1993, with the implementation of the free trade scheme initially scheduled for 2008. The timeframe was later brought forward to 2003.

Under the AFTA scheme, the six original ASEAN member countries -- Brunei Darussalam, Indonesia, Malaysia, Singapore, the Philippines and Thailand -- have to slash their import tariffs on almost all products traded in the region to below five percent.

The four newer ASEAN countries -- Vietnam, Laos, Cambodia and Myanmar -- are allowed to delay their tariff reductions until 2010.

According to Ong, the adoption of competition policies and laws by individual member countries would promote, among other things, the protection of consumer well-being, address uncompetitive practices in enterprises, and make the countries more attractive to foreign investors.

Meanwhile, the chairman of Indonesia's Business Competition Supervisory Commission (KPPU), Syamsul Maarif, said that competition law in ASEAN should be a key component in developing a freer regional market.

"Without any provision for rules on competition, trade liberalization cannot prevent business players and the authorities from creating new barriers," Syamsul said.

The KPPU was set up three years ago to promote fair competition in the business sector and prevent monopolistic practices from developing.

However, according to the KPPU report, it had found difficulties in curbing unfair business practices here due to the loopholes in the existing regulations, and lack of support from the government.

The KPPU also expressed concern over the country's judicial system, which had not displayed any goodwill in helping promote fair business competition as shown by the handing down of several court verdicts in favor of unscrupulous businessmen.