Import & export

ASEAN unveils plans for 2015 single market

Southeast Asian trade ministers yesterday agreed to create a European-style single market by 2015.
Ministers plan to achieve that by speeding up liberalization in the services industry and providing new incentives for businesses.
Myanmar's political problems, Malaysia's affirmative action programme for Malays and some countries' reluctance to open markets for sensitive products such as agriculture are not stumbling blocks to set up the proposed ASEAN Economic Community, or AEC, by 2015 five years earlier than originally planned, officials said.
The goal is to allow the free flow of goods, services and investment across the 10-nation region. The plan, which needs to be approved by leaders later this year, does not call for a single currency system.
In a joint statement after two days of talks, trade ministers from the Association of Southeast Asian Nations (ASEAN) pledged to remove "all forms of restrictions that affect national treatment and market access limitations by 2015" in the services sector, including air transport, tourism and health care most of which are owned or controlled by the government.
They said they would extend a waiver of a 30 per cent national equity requirement for industrial projects in the region until the end of 2009 to woo more foreign investors.
Trade ministers also agreed to remove all non-tariff barriers such as licensing requirements, quantitative restrictions, technical control and inspection measures by 2012.
Malaysia's Trade Minister Rafidah Aziz said ASEAN ministers hope to sign an agreement in April 2007 to liberalize logistics services, a key element to facilitating the free flow of trade in the region by the end of the decade.
She said they have also begun talks to integrate the region's air transport, e-commerce and health care sectors most of which are state-owned or controlled.
"We have to look inwards to see how we can change our policies... to make sure there is better cross-border flows," she said.
Obstacles exist
Analysts, however, said ASEAN members will have to overcome years of distrust and decades-old protectionist policies to achieve a common market.
Malaysia requires companies in key industries to be at least 30 per cent owned by majority ethnic Malays. Indonesia, the region's biggest country, bans rice imports.
Rafidah rejected criticisms that Malaysia's decades-old policy of giving business and other privileges to help Malays compete economically was a barrier to regional trade liberalization. She said the policy, instituted after bloody racial riots in 1970, was crucial to ensure political stability.
"The policy has never been a hindrance... we cannot be talking about economic integration in a vacuum. If one country is not stable, the whole of ASEAN will be hit," she said.
Rafidah said political problems in Myanmar has not affected its participation in ASEAN's economic activities.
"We are all going ahead together. In the economic sphere, we don't think politics at all," Rafidah added.
ASEAN Secretary-General Ong Keng Yong said the bloc has set up capacity building programmes to help newer members Cambodia, Laos, Myanmar and Viet Nam narrow the development gap with more advanced members Brunei, Indonesia, Malaysia, Singapore, Thailand and the Philippines.
He said sensitive issues such as protecting rice and other agriculture markets would periodically appear as an "irritant" but is not hindering ASEAN's economic integration.
Despite setting the stage for the AEC by 2015, there are no plans for a monetary union like the European Union, said Indonesian Deputy Economic Minister Mahendra Siregar.