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)