Ministers settle farm produce rift

Ministers settle farm produce rift

JAKARTA (JP): Economic ministers from the seven members of the
Association of Southeast Asian Nations (ASEAN) finally reached a
compromise yesterday on the thorny issue of liberalizing trade in
sensitive farm products.

The ministers, who convened here for the 28th ASEAN Economic
Ministerial Meeting, also agreed on many other topics, including
rules of origin for textiles and textile products, facilitation
of goods in transit, a dispute settlement mechanism, ASEAN
Investment Area and cooperation in services.

"The ministers confirmed that Indonesia will begin phasing in
rice and sugar into the Common Effective Preferential Tariff
(CEPT) scheme by Jan. 1, 2003 and end by Jan. 1, 2010 with
flexibility on the ending (tariff) rates, safeguards, and so
forth," Indonesian Coordinating Minister for Production and
Distribution Hartarto said at a joint press conference.

"As far as the tariff is concerned, they (the ministers) are
leaving it to us to decide," Hartarto said.

He said that the Philippines will also complete the phasing in
of rice into the CEPT scheme by Jan. 1, 2010. However, the
Philippines will revert to the informal ASEAN economic
ministerial meeting in November on the beginning date, ending
rates and safeguard measures.

Indonesia and the Philippines had expressed their demand to
senior economic officials meeting here earlier this week that
ASEAN push back by 10 years the 2010 deadline for integrating the
"highly sensitive" farm products into the CEPT scheme, which had
been vehemently opposed by Thailand, Asia's largest rice producer
and exporter.

"Although we recognize that the flexibility will be given to
Indonesia and the Philippines in deciding the ending rates... we
hope that the flexibility provision will be exercised in the most
favorable manner in the region," Thai Deputy Prime Minister and
Minister of Foreign Affairs Amnuay Viravan said at the joint
press conference.

With such flexibility, officials said, Indonesia and the
Philippines can maintain import tariffs for rice and sugar above
5 percent until after 2010 and also introduce safeguard measures
to protect their farmers.

"Rice is important for us. That's why Indonesia will decide
and announce the ending rates at the right time... not today,"
Hartarto said.

Press reports

Hartarto yesterday blasted press reports which, during the
last few days, had focused more on the tricky issue of the
liberalization of sensitive farm products rather than on the
progress being made by member countries toward the creation of
the ASEAN Free Trade Area (AFTA) by 2003.

"The ministers reiterated that contrary to adverse press
reports over the past few days, the implementation of the CEPT
scheme for AFTA has made great strides," Hartarto said.

He noted that a green lane system, now in operation in the
respective member countries' customs checkpoints, have helped
expedite the clearance of CEPT goods from customs areas.

To further facilitate the movement of goods in the region, the
ministers agreed in principle to a proposal to expedite the
clearance of goods in transit. They recommended the convening of
a joint meeting of senior economic officials and senior transport
officials to formulate a framework agreement for goods in
transit.

The ministers approved the draft yesterday on the dispute
settlement mechanism, which covers all economic agreements in
ASEAN, including the AFTA agreement. They requested senior
economic officials to formulate a specific set of procedures to
address CEPT-related disputes.

They agreed on the ASEAN Investment Area and decided to assign
the ASEAN Secretariat and senior economic officials to prepare
and submit recommendations on the matter to the informal economic
ministers meeting in November.

Yesterday, they also signed a protocol to amend the ASEAN
agreement on the promotion and protection of investment, which
basically provides guarantees of protection for foreign
investment in ASEAN countries: Brunei, Indonesia, Malaysia, the
Philippines, Singapore, Thailand and Vietnam.

The ministers also had an extensive discussion yesterday on
matters pertaining to the preparation of the first ministerial
conference of the World Trade Organization (WTO) in Singapore in
December.

When opening the ministerial meeting yesterday morning,
President Soeharto emphasized the necessity that the WTO should
concentrate its attention more on concrete trade issues and not
divert its attention to issues beyond them, notably the linkage
between labor standards and trade, so as to avoid unnecessary
controversy.

"The discussion on new issues, which have not yet been
thoroughly studied or are still untimely, must also be avoided,"
he told the delegates.

Soeharto suggested that the upcoming WTO ministerial meeting
take into account the domestic situations of the respective
member countries with full understanding and sensitivity. (rid)