ASEM proposes investment action plan

ASEM proposes investment action plan

BANGKOK (JP): The chairman of the Asia-Europe Meeting (ASEM),
Thai Prime Minister Barnhan Silpa-archa, proposed that both sides
draw up an investment action plan to promote greater bilateral
investment.

Speaking at the opening of the two-day inaugural meeting here
yesterday, Barnhan suggested that leaders of the 25 Asian and
European governments establish a joint government and private
sector working group within six months to draft the action plan.

Barnhan said an action plan is necessary to encourage the
private sector on both sides to seek investment opportunities.

"Such cooperation would open up valuable opportunities for our
private sectors. Private sector interaction is a key component in
reconnecting Asia and Europe," Barnhan said in his opening
speech.

He suggested the establishment of an Asia-Europe Business
Forum, similar to the Pacific Business Forum of the Asia-Pacific
Economic Cooperation forum.

Informed sources here said that ASEM will likely agree to
create an Asia-Europe Business Forum. Thailand has offered to
host a meeting of the forum early next year.

"This forum could also play an important role in helping
draft the Asia-Europe Investment Promotion Action Plan," Barnhan
said.

A Thai official was quoted by the local press as saying that
Barnhan's proposed action plan would involve studies to identify
sectors offering investment opportunities, to formulate financial
networks to support investment, and to discuss post-investment
measures such as the treatment of labor and environmental
standards.

Vice President of the European Commission, Leon Brittan, said
yesterday that he welcomed the ASEM chairman's investment
promotion action plan.

Barnhan's proposal, however, differs from the European Union's
(EU) multilateral treaty on foreign direct investment proposal.
The EU's proposal seeks to establish rules for further opening
markets to foreign investment, providing guarantees on profit
repatriation, and ensuring national treatment.

Indonesia's spokesman, State Secretary/Minister Moerdiono,
noted that Indonesia supports measures that boost investment in
both regions. Indonesia rejects, however, the idea of
establishing multilateral investment codes as proposed by the EU.

Moerdiono argued that the multilateral agreement would impede
the growth of local small and medium enterprises because foreign
capital would affect all sectors.

He said it would only protect foreign investment and
investors, while neglecting the people and the places where the
investments would be located.

The EU has been campaigning to get the first ministerial
meeting of the World Trade Organization (WTO) to discuss the
establishment of a multilateral agreement on direct foreign
investment. The meeting will be held in Singapore in December.

The union is seeking Asian support, especially from Asian
participants in ASEM, for the creation of such a treaty.

In his opening speech, Jacques Santer, president of the
European Commission -- the EU's executive body -- asked
participants to use ASEM to introduce new subjects to the WTO and
to identify their main concerns.

"Let us work together on investment and intellectual property
rights," Santer said.

The European delegates want to boost investment in Asia to
catch up with investment from North America, Japan, Taiwan, South
Korea and Singapore.

Direct foreign investment from the EU represented 10 percent
of East Asia's total foreign investment between 1986 and 1992.

Increased investment between Asia and Europe is expected to
help raise trade between the two regions.

According to European Commission figures, the value of trade
between the EU and Asia totaled some US$312.5 billion in 1994,
about 25 percent larger than the two-way trade between the United
States and the EU, which stood at $235 billion.

The EU's trade with the Association of Southeast Asian Nation
(ASEAN) hit $74 billion in 1994, higher than its trade with all
of Latin America.

The Asia-Europe Meeting is made up of the 15 members of the EU
-- Austria, Belgium, Britain, Denmark, Finland, France, Germany,
Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal,
Spain and Sweden -- the seven members of ASEAN -- Brunei,
Indonesia, Malaysia, the Philippines, Singapore, Thailand and
Vietnam -- and China, Japan and South Korea. (mds/rid)