ASEAN warned not to delay on utilizing AFTA

Member countries of the Association of Southeast Asian Nations should move quickly to implement the Asean Free Trade Agreement to meet the 2002 deadline, the World Trade Organization's Director-General designate Supachai Panitchpakdi said Tuesday.

Faced with the global economic slowdown, "some countries may want to delay full participation in AFTA," he warned. But "we need full commitment to free trade and shouldn't allow AFTA to drag on."

The founding members of Asean, including Singapore, Malaysia, Indonesia, the Philippines, Thailand and Brunei, have agreed to cut interregional trade tariffs to 0-5% by the beginning of 2002, while some of the less developed members will follow by 2006.

Other members of Asean include Cambodia, Vietnam, Laos, Myanmar.

Supachai, speaking on the sidelines of the World Economic Forum's East Asia Economic Summit, also outlined some steps that could facilitate a currency union similar to the Euro-zone, though he said adopting an Asian currency may be some time away.

First, Asia would need to implement bilateral swap agreements to start financial cooperation, he said.

In addition, Asia would need to set up an Asian Monetary Fund to help support reform efforts encouraged by the International Monetary Fund. Financial reform in Asia would help prevent a reoccurrence of the Asian financial crisis, he said.

"That could be a step toward currency union based on the yen," though ultimately such a move would depend on Japan allowing internationalization of the yen, he said. --Dow Jones