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Roundup: ASEAN Moves Forward With Integration Agenda
Economic Ministers of the Association of Southeast Asian Nations (ASEAN) agreed to redouble their efforts to push forward the economic integration agenda to maintain its economic competitiveness.
Attending the 33rd ASEAN Economic Ministers' Meeting (AEM33), held in Hanoi from September 12-16, they realized the challenges ASEAN is facing due to global economic slowdown.
They noted a decline in EU foreign direct investment in ASEAN and estimated ASEAN's economic growth this year will be much lower than last year's 5.4 percent.
"As we all know, the global economic slowdown is a setback for the recovery of ASEAN from the economic crisis in 1997," ASEAN Secretary-General Rodolfo C. Severino, Jr. admitted, adding that the role of foreign direct investment (FDI) in ASEAN economic development is more important then ever before.
ASEAN-EU trade rose to 94.67 billion U.S. dollars in 2000, up 4.7 percent from that of 1999. Trade volume between ASEAN and China, Japan and South Korea also grew by 27.5 percent from 158.2 billion U.S. dollars in 1999 to 201.7 billion in 2000.
However, despite the significant growth and optimism, the average growth rates in both ASEAN and EU could be lower this year due to the global economic slowdown.
To deal with the severe situation, the ministers agreed that they should continue their efforts with internal reforms and economic restructuring, opening up further to foreign investments, and moving faster on regional economic integration.
ASEAN advanced the completion of the Free Trade Area (AFTA) from 2008 to 2002 which was first signed in Singapore by heads of government in January 1992.
At present, each of the original six members has reduced tariffs to less than 5 percent on at least 90 percent of its tariff lines. The current average CEPT (Common Effective Preferential Tariff) tariff rate for those countries is 3.21 percent.
To hasten the establishment of an integrated ASEAN and bridge the development gap between countries in the region, the ministers agreed to unilaterally extend tariff preferences to ASEAN's new members Myanmar, Laos, Cambodia and Vietnam beginning January 1, 2002.
The ASEAN Integration System of Preferences would benefit ASEAN's new members by extending preferences to nearly 400 million U.S. dollars of their exports a year.
In order to attract larger volume of foreign direct investment, the ministers also agreed to speed up the full realization of ASEAN Investment Area (AIA) for non-ASEAN investors in the agriculture, fishery, forestry and mining sector, and services incidental to manufacturing and these sectors.
Full AIA realization for such investors would be advanced from 2020 to 2010 for Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand and to 2015 for new ASEAN members, which means the exceptions to free entry and national treatment would be fully eliminated by these deadlines.
ASEAN has completed work on 45 regional investment activities since 1999 and more than 65 percent of the investment projects set down in the Hanoi Plan of Action has been implemented successfully.
"We want to make ASEAN a dynamic market by itself with the implementation of the ASEAN Free Trade Area. Particularly as we have a half million or more people," said Malaysian Trade Minister Rafidah Aziz.
ASEAN enjoyed a strong trade growth in 2000. Total exports grew by 19.9 percent from 353.3 billion U.S. dollars in 1999 to 423.6 billion last year while imports rose from 293.1 billion to 360.1 billion, a year-on-year increase of 22.8 percent.
Intra-ASEAN exports also grew by 26.3 percent while intra-ASEAN imports grew by 27 percent in 2000. The level of intra-ASEAN exports of 97.8 billion last year exceeds the previous peak of 85.4 billion reached in 1997.
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