ASEAN urged to speed up plans to become single market

ASEAN urged to speed up plans to become single market

Agence France-Presse, Vientiane

The Association of Southeast Asian Nations (ASEAN) must speed
up trade liberalisation if it wants to unify into a powerful
economic bloc, business experts said on Saturday.

The 10-member ASEAN aims to establish a European-style
economic community, which would see a single market of over 500
million people in goods, services and investments, by 2020.

But experts at a two-day ASEAN business and investment
conference cited a web of business regulations, nationalistic
tendencies and growth of non-tariff barriers such as domestic
taxes, as threats to regional integration efforts.

Oudet Souvannavong, who heads the ASEAN Business Advisory
Council, said the 2003 implementation of the ASEAN Free Trade
Area had created new non-tariff measures obstructing the free
flow of goods and commodities in some countries.

"The ASEAN environment, seen as a bloc, is not yet
favourable," he said.

"Despite the effort made by the ASEAN governments to build up
the spirit of a unified ASEAN, there are psychological barriers
such as national interests."

Oudet said the council had identified tourism and agriculture
as two initial priority sectors where indigenous companies could
flourish and cross-investment and alliances between ASEAN
companies could be enhanced.

But faster harmonisation of product standards, simplified
customs procedures and removal of non-tariff barriers were
crucial to accelerate economic integration, he said.

Walter Lohman, president of the US-ASEAN Business Council,
said China's booming economy was driving ASEAN's renewed efforts
to become a truly synergistic trade bloc.

"They need to create efficiently the economies of scale to
stay competitive," he told AFP on the sidelines of the conference
held before the annual ASEAN summit next week.

"The challenge is in reconciling such vastly different
economies. From Laos to Singapore, there is a lot in between, a
lot of trade barriers entrenched that will have to be dealt
with."

The United States is the top investor in ASEAN, pumping US$88
billion into the region so far. But there has been a lull in
large American investments since 1997, when the region was struck
by financial turmoil.

Lohman said ASEAN's efforts to deepen economic ties with
regional neighbours would create a bigger market and new
opportunities for US businesses.

ASEAN has started free trade negotiations with China, Japan
and South Korea that will form the building blocks for a proposed
East Asia Free Trade Area comprising nearly two billion people.