The 37th ASEAN Economic Ministers (AEM) meeting held in Laos’ Vientiane capital on September 28, 2005 agreed that the 10 members of the Association of Southeast Asian Nations would take more specific measures to speed up regional economic integration and cooperation, as well as broaden and deepen economic relations with non-member countries.
ASEAN economic ministers agreed that 2015 should be the deadline for the liberalisation of all service sectors, tasking senior economic officials to beef up service liberalisation by outlining a roadmap to open up the sectors in all modes of supply. To this end, other approaches to liberalisation, including the possible use of the Common Effective Preferential Tariff (CEPT) approach, will be probed into.
They urged ASEAN countries to complete the 5th package of commitments by the target date of 1 August 2006 in order for the Protocol to Implement the 5th Package of Commitments under the ASEAN Framework Agreement on Services (AFAS) to be inked by the next AEM meeting. In 2004, the countries singed the protocol to implement the 4th package which increased the number of sub-sectors included in the schedule of commitments, and improved the level of their commitments compared to the previous rounds of service negotiations under the AFAS.
The 37th AEM meeting agreed that air travel and tourism can be integrated at a faster pace. Air travel is one of the designated 11 priority sectors for economic integration by 2007 for Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand (ASEAN-6), and 2012 for four less developed members, namely Cambodia, Laos, Myanmar and Vietnam (CLMV). The Action Plan for ASEAN Air Transport Integration and Liberalisation 2005-2015 adopted in 2004 sets strategic actions to further liberalise air services and promote an enabling environment for a single and unified air transport market in the region.
Tourism, also one of the 11 priority sectors, has recently received greater attention of ASEAN countries which have agreed to center on forging cooperation with the stakeholders, improving air linkages, road and waterway transport, eliminating all obstacles to travel and tourism, and enhancing the safety and security of travelers. A common set of regional standards and certification systems is being developed to guide the hospitality industry. Tourism standards for hotels, tourist sites, home-stay, food and beverage services, and public restrooms are being considered.
The delegates to the 37th AEM meeting noted that the ASEAN Single Window (ASW) Agreement would be inked in December 2005 in Malaysia. The ASW, the most important customs initiative, will accelerate the clearance of imports via electronic processing of information, documents and formalities at national and regional level. It is scheduled to be fully carried out by 2008, at the latest, for ASEAN-6, and by 2012 for CLMV. Thailand and the Philippines will experience pilot implementation by late 2005.
Recognising the continued importance of the ASEAN Industrial Cooperation (AICO) Scheme in ASEAN economic integration, the ministers agreed to extend the waiver of the national equity requirement of 30 per cent under the scheme to 31 December 2006. The AICO Scheme is the latest industrial cooperation program of ASEAN to promote joint manufacturing industrial activities between ASEAN-based companies.
A minimum of two companies in two different ASEAN countries are required to form an “AICO Arrangement”: a cooperative arrangement consisting of a minimum of two participating companies from two different ASEAN countries. It is not a legal entity but merely an “umbrella association” under the scheme wherein the output of the participating companies will enjoy a preferential tariff rate in the range of 0-5 per cent. The major privilege of the scheme is that approved AICO products, output of an AICO Arrangement, shall enjoy preferential tariff rates of 0-5 per cent immediately upon its approval. To set up an AICO Arrangement, the prospective companies must be incorporated and operating in any ASEAN country, have a minimum 30-per cent national equity, and undertake resource sharing or pooling, or industrial complementation or other industrial cooperation activities which are accepted by the participating country.
While centering on intra-ASEAN economic integration, ASEAN also keeps on pursuing broader and deeper economic ties with other countries, especially its dialogue partners. At the 37th AEM meeting, the ministers noted the progress in ASEAN’s negotiations with China, Japan, South Korea, India, Australia and New Zealand, on the establishments of free trade areas. They welcomed the creation of the ASEAN-EU Vision Group which has been tasked to submit recommendations on the future of ASEAN-EU economic relationship, including the possibility of an ASEAN-EU free trade area. They also agreed that a similar feasibility study on beefing up ASEAN-Pakistan economic ties would be made.
The 37th AEM meeting was preceded by a preparatory ASEAN senior economic official meeting, the 8th ASEAN Investment Area (AIA) Council meeting, and the 19th ASEAN Free Trade Area (AFTA) Council meeting.
The AIA Council believed that the 11 priority sector represents an integral component in efforts to speed up ASEAN economic integration and lure more foreign direct investment into the regional grouping. The 10 member countries have agreed to eliminate tariffs on 85 per cent of the products in the 11 priority sectors by 2007 for ASEAN-6, and 2012 for CLMV. Under the Framework Agreement for the Integration of Priority Sectors inked by the countries in 2004, the priority sectors include agro-based product, air travel, electronics, e-ASEAN, fishery, healthcare, tourism, textile and apparel, rubber-based product, automotive product and wood-based product.
Delegates to the 19th AFTA Council meeting endorsed the criteria that would facilitate the identification of non-tariff barriers for priority removal and act as a guide to the classification of non-tariff measures. ASEAN members are well on their way towards full realisation of the AFTA. For ASEAN-6, up to 98.99 per cent of products in the inclusion list (IL) under the CEPT scheme are now in the tariff range of 0-5 per cent. Vietnam will transfer the remaining items under the Temporary Exclusion List, Sensitive List and Highly Sensitive List into the IL on 1 January 2006.
In 2004, ASEAN's trade exceeded the US$1-trillion mark for the first time, with the exports surging by nearly 20.6 per cent to US$550.6 billion, and the imports increasing by over 26.6 per cent to US$492.3 billion. Japan, the United States, the EU, China and South Korea remained its biggest trading partners. ASEAN posted GDP growth of 6 per cent in 2004, up from 5.4 per cent in 2003, mainly due to being fueled by robust private consumption and investment.
Dong Phong
Vietnamese
