EAGA free trade gets big boost

EAGA free trade gets big boost

By Hendarsyah Tarmizi

MANADO, North Sulawesi (JP): Senior ministers of Indonesia,
Brunei, Malaysia and the Philippines agreed at a meeting here
yesterday to speed up the creation of a free trade zone in the
eastern part of the Association of Southeast Asian Nations
(ASEAN) region.

Indonesian Coordinating Minister for Trade and Industry
Hartarto said the meeting strongly endorsed recommendations from
the senior officials convening here on Monday and Tuesday to
jointly develop cooperation in tourism, air linkages,
transportation, shipping and fishery to stimulate trade and
investment in the East ASEAN Growth Area (EAGA).

The EAGA was formed in Davao City of the Philippines early
this year to create a free trade zone in areas encompassing
Maluku, Sulawesi, West and East Kalimantan in the eastern part of
Indonesia, Sabah and Sarawak in the eastern part of Malaysia,
Brunei and the Philippines's Mindanao island.

Hartarto said priority sectors to be promoted in the EAGA will
also include forestry, energy, human resource development and
people mobility. The recommendations will be deferred to their
respective governments for further considerations.

"For this purpose the ministers designated senior officials to
undertake necessary steps," Hartarto told a joint press
conference, which was also attended by other heads of delegations
comprising of Brunei Minister of Industry and Primary Resources
Abdul Rahman Taib, Malaysian Minister for the Coordination of
Growth Triangle Project Daim Zainuddin and Philippine Secretary
of Trade and Industry Rizalino S. Navarri.

Hartarto said that the progress towards the establishment of a
free trade zone in the EAGA was much faster than expected due to
the enthusiasm of regional business people to tap the growing
business opportunities in the area.

Agreements

"A number of agreements have been signed in the private sector
even though the feasibility study on the new economic cooperation
forum has not been completed," the minister said, referring to
the signing of 13 business deals during the first convention of
the EAGA Business Convention in Davao last month and another
eight projects to have coincided with yesterday's meeting.

The meeting, also attended by Indonesian Minister of
Transportation Haryanto Dhanutirto, Minister of Agriculture
Sjarifudin Baharsjah and State Minister for Agrarian Affairs Soni
Harsono, however, did not include the timeframe for the
elimination of tariff barriers despite their strong commitment to
create a free trade zone in the EAGA territory.

On this question, Hartarto said that trade arrangements and
investment will be dealt with under the ASEAN Free Trade Area
(AFTA), which seeks the reduction of tariffs to between zero and
five percent by 2003.

"This sub-regional cooperation will create a new impetus and a strong
stimulus in speeding up the implementation of the AFTA," he said of the
EAGA, citing that import tariffs of certain goods in the Sijori
growth triangle -- involving Indonesia, Singapore and Malaysia --
have been reduced to zero percent.

Commitment

The minister said that Brunei, the Philippines and Malaysia
have lowered their import tariffs to encourage trade among the
EAGA members. "Indonesia has the same commitment and will do the
same thing for the same purpose," he said.

Besides endorsing the senior officials' recommendations, the
ministerial meeting also welcomed the establishment of the EAGA
Business Council and its permanent secretariat.

Yesterday's meeting also agreed on a proposal to formalize the
establishment of ad-hoc working groups as a permanent
institutional mechanism for the EAGA.

"If needed, it will also be possible to establish a permanent
secretariat for the EAGA," Hartarto said.

He said that the meeting also felt the importance of holding a
meeting of finance ministers of ASEAN to enhance financial
services in the ASEAN member countries, formation of venture
capitals and cooperation in broad-based financial services,
including insurance.

Other agreements include the selection of Kuching in Sarawak
as the venue for the next ministerial meeting and the selection
of Brunei for the 1996 meeting.

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