Bali Concord II, historic step toward regional integration

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Last updated at: (Beijing Time) Wednesday, October 08, 2003

Bali Concord II, historic step toward regional integration

The Declaration of ASEAN Concord II, also known as Bali Concord II, which was endorsed at the just-ended Ninth ASEAN Summit, is a historic step toward regional integration.

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The Declaration of ASEAN Concord II, also known as Bali Concord II, which was endorsed at the just-ended Ninth ASEAN Summit, is a historic step toward regional integration.

The Bali Concord II, named after the Declaration of ASEAN Concord, or The Bali Concord, which was produced at the First ASEAN Summit in Bali in 1976, consists of three pillars, namely an ASEAN Security Community (ASC), an ASEAN Economic Community (AEC) and an ASEAN Socio-cultural Community (ASCC) among ASEAN member countries.

As Indonesian Foreign Minister Hassan Wirajuda put it in his opening address at the Association of Southeast Asian Nations' (ASEAN) Ministerial Meeting on Sunday, the three envisioned communities are "equally important, and thereby should be mutually reinforcing in our efforts to materialize an ideal form of the ASEAN Community."

ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

Of the three pillars of the Bali Concord II, AEC is much more advanced in its end-goal, that is, to establish both a single market and a single production base by 2020, so as to enhance ASEAN's credibility and economic weight.

For example, 10 years ago, the six older ASEAN members had agreed to bring tariffs down to 5 percent or less within 15 years.Thanks to the concerted efforts of all the member countries, the goal was achieved this year, five years ahead of the schedule.

ASEAN's strategy in achieving an economic community comprises two fundamental approaches: the grouping's integration and its enhanced economic competitiveness.

The ASEAN Security Community is essentially a community that relies exclusively on peaceful processes in the settlement of intra-regional differences. Its theme is comprehensive security, comprising national and regional resilience.

The security community involves maritime cooperation and fight against terrorism, but excludes military cooperation, alliances and defense pacts, although some analysts deem that options for common defense and foreign policies should be kept open.

According to a press statement of Indonesian President MegawatiSoekarnoputri, the summit's chairperson, on Tuesday, the High Council of the Treaty of Amity and Cooperation (TAC) would be a principal instrument of the ASC, as it reflects ASEAN's commitmentto resolving all differences, disputes and conflicts peacefully.

Under the concept of ASEAN Socio-Cultural Community, ASEAN countries would carry out joint measures to improve human resources development, reduce unemployment, cope with environment destruction and tackle dangerous diseases such as HIV/AIDS and SARS.

The Bali Concord II with the three envisioned communities as its pillars was necessitated by the challenges posed by globalization and by the economic and security situations after the 1997 financial crisis and the terrorist attacks with their severe impact on the region and worldwide.

At the ASEAN Business and Investment Summit which was held in conjunction with the Ninth ASEAN summit, leaders of ASEAN member states and its partners voiced their anxiety and concerns over themuch slower pace with which the Asian nations move toward economicintegration, compared with Americas and Europe.

As Singapore Prime Minister Goh Chok Tong noted, the North American Free Trade Agreement (NAFTA) which came into effect in 1994 linked the world's largest economy with its northern and southern neighbors, and when the Free Trade Area (FTAA) on Americas will be formed as agreed by the heads of state of the twocontinents in 2001, the FTAA will link 34 economies, stretching from Alaska to Antarctica.

Meanwhile in Europe, Goh said, after its last round of enlargement in 1995 involving Austria, Finland and Sweden, the European Union (EU) will admit 10 more Central and Eastern European countries in 2004.

In this regard, the prime minister gave a telling example. While in EU 50 percent of personal care products and 25 percent offood are sourced regionally, the corresponding figures in ASEAN are only 18 percent and 5 percent, respectively. The striking difference shows the Asian grouping is far from an integrated market and an integrated production base.

As for the ASEAN Security Community, the concept has become more relevant after the Bali bombings exactly a year ago and the terrorist attacks in other parts of the region since the Sept. 11 incident.

In such circumstances, it's only logical that the countries in the region need much closer cooperation to deal with the aftermathof such tragedies and prevent their reoccurrence, not to mention the various bilateral and multi-lateral disputes and differences to be resolved.

The need for an ASCC is self-evident as the region is the home to 500 million people and has various problems associated with population growth, education, unemployment, prevention of infectious diseases, environmental degradation and trans-boundary pollution.

"A number of social and cultural problems in the region can incur great losses to ASEAN economy and security, so we need the ASCC," said Makarim Wibisono, director-general for Asia, Pacific and Africa at the Indonesian foreign ministry.

However, encouraging and heartening as the blueprint is, the road will not be smooth for the regional grouping to fully realizeintegration.

For one thing, although ASEAN has done a good job in reducing tariff among its members, only a small percentage of intra-ASEAN trade is conducted under the ASEAN Free Trade Area (AFTA) due to the red tape and delays in the process of applying for preferential treatment.

And the bewildering range of products standards, which vary from one member country to another, also pose non-tariff barriers to the intra-ASEAN trade. For example, to bring a new pharmaceutical drug to the ASEAN market, a manufacturer needs the approval of 10 health authorities.

In view of the different levels of development and extents of liberalization, the task of establishing the AEC is far from beingeasy.

Compared to AEC, more suspects and concerns were voiced on ASC,as some members are wary of being involved in a military alliance and there are also many differences on various security matters.

Notwithstanding all the disparities and problems, the ASEAN leaders took a significant step at their summit by adopting the Bali Concord II, which is definitely a good starting point for the grouping's future integration.

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