Economic ministers of the Association of Southeast Asian Nations (ASEAN) agreed to redouble their efforts to advance their economic integration agenda to maintain its economic competitiveness.
Participants of the 33rd ASEAN Economic Ministers' Meeting, held here from September 12 to 16, discussed the challenges ASEAN is facing due to global economic slowdown.
They acknowledged the decline in EU 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 conceded, adding that the role of foreign direct investment (FDI) in ASEAN economic development is more important then ever.
ASEAN-EU trade rose to US$94.67 billion 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 US$158.2 billion in 1999 to US$201.7 billion in 2000.
However, despite the significant growth and optimism, the average growth rates in both the ASEAN and the EU could be lower this year because of the global economic slowdown.
To deal with the severe situation, the ministers agreed that they should continue their efforts restructuring the economy, 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 heads of government first signed nine years ago in Singapore.
Currently, 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 Common Effective Preferential 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 Viet Nam - beginning January 1, 2002.
The ASEAN Integration System of Preferences would benefit ASEAN's new members by extending preferences to nearly US$400 million of their exports a year.
To attract larger volumes of foreign direct investment, the ministers also agreed to speed up the full realization of the ASEAN Investment Area for non-ASEAN investors in the agriculture, fishery, forestry and mining sectors.
Full realization for such investors would be advanced from 2010 to 2020 for Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand and to 2015 for new ASEAN members.
In other words, the exceptions to free entry and national treatment would be eliminated by those deadlines.
ASEAN has completed work on 45 regional investment activities since 1999. 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 since we have a half-million or more people," Malaysian Trade Minister Rafidah Aziz said.
ASEAN enjoyed a strong trade growth in 2000. Total exports grew by 19.9 percent from US$353.3 billion in 1999 to US$423.6 billion last year while imports rose from US$293.1 billion to US$360.1 billion, a year-on-year increase of 22.8 percent.
Intra-ASEAN exports also grew by 26.3 per cent while intra-ASEAN imports grew by 27 percent in 2000. The level of intra-ASEAN exports of US$97.8 billion last year exceeds the previous peak of US$85.4 billion reached in 1997.
(Xinhua News Agency 09/18/2001)
