BLOOMBERG/Asean Works to Boost Trade, ‘Project Voice’ on World Stage
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The 10-member Association of Southeast Asian Nations will accelerate efforts to increase investment and to boost trade in services as it seeks a greater role in driving the global economy.
Asean trade ministers set deadlines for completing agreements covering investments and trade in goods and services, Surin Pitsuwan, the bloc’s secretary general, said after a weekend meeting in Putrajaya, Malaysia.
The group aims to form an integrated economic community by 2015.
“The question we are dealing with now is how do you respond to the global expectations that Asean and East Asia should be the locomotive for the global recovery,” Surin said.
“We are now talking about how to coordinate among ourselves to project our voice and to project our own profile onto the world stage.”
Asia’s export-dependent economies are emerging from recession as global demand increases for the region’s computer chips, cars and commodities.
Malaysia and Thailand exited recession during the last quarter, and Singapore raised its growth estimate for this year.
An Asean representative will join the next Group of 20 meeting in Canada four months from now, Surin said.
The bloc also formed committees to clear up trade issues with dialogue partners China, Japan, South Korea, India, New Zealand and Australia, he said.
Asean ministers will visit three US cities in May as part of efforts to boost investment in the region.
US President Barack Obama plans to visit Indonesia later this month.
Six Asean members formed a free-trade area on Jan. 1, eliminating tariffs among their countries on more than 87 percent of imports. Other members, which are less developed, will follow later.
Southeast Asia wants to be seen by investors as a single entity with a combined potential market of 584 million people.
To date, wide economic disparity among Asean members has hindered the region’s ability to leverage its market and compete for investment with China and India, the world’s fastest-growing economies.
Malaysia’s minister of international trade and industry, Mustapa Mohamed, “strongly voiced his concerns over Asean member states adopting new trade measures which are deemed to be trade-restrictive by the private sector,” according to a ministry statement.
He proposed a new mechanism for discussion.
The bloc plans to achieve the free flow of goods, services, investment and skilled labor within five years, although it has fallen short so far in most of the sectors it has targeted for accelerated integration.
“The crisis has somewhat affected our progress,” Mustapa said. “There is a tendency to be more protective.”
Mustapa said satisfactory progress has been made in only four of 11 priority sectors targeted for accelerated integration: tourism, air travel, textiles and the automotive sector.
Some countries also failed to meet goals to eliminate non-tariff barriers, harmonize product standards and accelerate customs clearance, he said.
But it still has met most of its overall integration targets, and ministers meeting this weekend renewed their commitment to speed up trade liberalization to create the Asean Economic Community as planned by 2015, Mustapa said.
“We need to put our house in order,” he said. “We have not been able to achieve a perfect score but we have come a long way.
“The shortcomings are not fundamental. The [2015] goal is going to be achievable,” Mustapa insisted.
Skepticism remains about Asean’s ability to achieve complete economic integration and ensure that its diverse members, which have occasional disputes among themselves, can cohere effectively.
Indonesia, Asean’s largest economy, played down those concerns.
Non-tariff barriers have not “escalated in a big way,” Trade Minister Mari Elka Pangestu said.
“It always sounds bad, but it doesn’t necessarily have to be bad as long as you’re doing it for a reason, usually consumer safety or standards,” she said.
Several Asean countries, particularly Indonesia and Malaysia, have received complaints from the private sector about threats posed by a potential influx of cheap goods resulting from the Asean-China Free Trade Agreement.
China’s agreement with Southeast Asia took effect on Jan. 1, scrapping import tariffs on 90 percent of goods.
Asean’s member nations are Indonesia, Brunei, Cambodia, Laos, Malaysia, Myanmar, the Philippines, Thailand, Singapore and Vietnam.
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