Malaysia says AFTA for most favored nations too

Malaysia says AFTA for most favored nations too

KUALA LUMPUR (Reuter): A free trade area proposed by Southeast Asia will also grant non-tariff privileges to countries having most favored nation (MFN) status in the region, Malaysian Trade Minister Rafidah Aziz said yesterday.

"For us zero means it's for the world," Rafidah told reporters, referring to the zero tariff rate for most products envisioned in the Association of Southeast Asian Nations' Free Trade Area (AFTA) by 2003.

AFTA is to be launched by the seven-member Southeast Asian association, known as ASEAN, by 2000.

ASEAN -- which groups Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam -- originally proposed AFTA as an exclusive free trade for members but recently made known its plan to open the zone to others.

Indonesia's Coordinating Minister for Production and Distribution Hartarto was quoted as saying in the International Herald Tribune last week that Indonesia's proposed reduction of import duties was based on the multinational MFN principle which it planned to extend to AFTA.

Reacting to this in Kuala Lumpur, Rafidah said: "Under AFTA, where we can allow MFN (countries), we should. It's provided for."

AFTA aims to cut at least 90 percent of tariff on most manufactured products in the region to no more than five percent at its launch date, and abolish them altogether three years later. Vietnam, which only joined ASEAN last year, will have until 2006 to comply with this.

ASEAN economic ministers decided last month that all other products in the region, including politically sensitive farm commodities like rice and sugar, will have duties removed by 2010. The ministers will meet in Jakarta in September for further discussions.