Introduction

1. The Fourth Informal Consultation between the ASEAN Economic Ministers (AEM) and the Ministers from the countries of the Australia-New Zealand Closer Economic Relations Trade Agreement (CER) was held on 1 October 1999 in Singapore. ASEAN was represented by Ministers from Brunei Darussalam, Cambodia, Lao PDR, Myanmar, the Philippines, Singapore, Thailand and Vietnam. Representatives from Indonesia and Malaysia also attended the Consultation. The CER countries were represented by Ministers from Australia and New Zealand.

2. The Consultation was jointly chaired by H.E. BG (NS) George Yeo, Chairman of the AEM, H.E. the Hon. Mark Vaile, Minister for Trade, Australia and H.E. the Hon. Dr. Lockwood Smith, Minister for International Trade, New Zealand.

3. The Miinisters recognized the significant potential in the ASEAN and CER economies to create synergy through strengthened trade and investment linkages and, at the same time, reaffirming their commitment to the multilateral trading system, including the role which regional trading arrangements play to reinforce the process of liberalisation within the WTO framework.

Feasibility Study for an AFTA-CER Free Trade Area by 2010

4. The Ministers agreed to establish a high-level ASEAN-CER task force to look into the feasibility of establishing an AFTA-CER free trade area by 2010. This proposed free trade area should be WTO-consistent. The Ministers unanimously nominated H.E. Mr. Cesar Virata, former Prime Minister of the Philippines as the leader of the task force. The study will be completed within 12 months and will be submitted to the 32nd AEM for consideration in October 2000, Thailand. The study would examine the potential of an AFTA-CER free trade area and the adjustments required, including the flexibility needed by the four new Members of ASEAN.

Regional Developments

5. The Ministers emphasised the improving regional economic outlook in ASEAN, with countries showing significant signs of economic recovery. ASEAN indicated its commitment to reform and to further strengthen its economic fundamentals for long term sustainable economic growth. The ASEAN countries further reiterated their commitment to implement the ASEAN Free Trade Area (AFTA), the ASEAN Investment Area (AIA) and to promote the Bold Measures which were endorsed at the ASEAN Hanoi Summit in December 1998. Ministers were of the view that the measures established under the AFTA-CER Linkage demonstrated the commitment of these economics to strengthening their global competitive edge. Ministers further expressed confidence in the future economic prospects of the countries in the region, and reaffirmed their commitment to undertake the necessary measures to advance such inter-regional linkages so as to create a conducive trade and investment climate.

6. Ministers noted recent developments in the CER, in particular the coming into effect of the Trans Tasman Mutual Recognition Agreement (TTMRA) in May 1998, further movement towards completely free trade in services, and the work of the Joint Prime Ministerial CER Task Force this year. The TTMRA was a significant step in the development of CER; part of a "third generation" of CER issues which are further integrating Australia and New Zealand regulatory regimes. The Task Force made significant progress resolving several outstanding bilateral issues. In addition, the Prime Ministers agreed that Australia and New Zealand would be willing to consider free trade agreements with other significant individual economies or regional groupings. Such arrangements would need to reflect the principles underpinning CER, including WTO consistency.

7. The Ministers noted that ASEAN's exports to the CER had increased by 16.6% in 1998 from US$8.3 bn to US$9.7 bn in 1998, whilst imports from the CER fell 24.4% from US$9.3 bn to US$6.7 bn. The proportion of ASEAN trade with the CER increased to 2.8% in 1998, from 2.5% in 1997. ASEAN's previous trade deficit with the CER of US$960.7m turned into a surplus of US$2.98 bn in 1998. In proportion terms, ASEAN exports mainly consisted of machinery and electrical appliances (33.4 %), minerals (13.9 %) and gems (10 %) to the CER. Gems (279 %), vehicles (71 %) and pulp and paper (33 %) have seen the highest growth in exports to the CER in 1998. CER exports to ASEAN consisted mainly of live animals (16%), vegetable products (14%) and base metals (13%). Wood and wood articles (51%), stone and cement (49%) and vehicles (44%) have seen the largest falls in exports to ASEAN in 1998.

International Economic Issues

WTO

8. The Ministers called for the launch of a New Round of multilateral trade negotiations at the Third WTO Ministerial Conference to be held at Seattle in November 1999. In this regard, the Ministers underlined the importance of the on-going preparatory process in Geneva. The Ministers also:

1. stressed the importance of ensuring the full and faithful implementation of existing WTO agreements;

2. agreed that the forthcoming WTO negotiations will include the mandated negotiations on the built-in agenda, principally agriculture and services and, in addition, should include comprehensive market access negotiations covering industrial tariffs;

3. called for the further opening up of all agricultural markets including the elimination of agricultural export subsidies and unjustifiable export prohibitions and restrictions, and major reductions of domestic support as an outcome of the round;

4. called on the the new Round of WTO negotiations to be balanced, sufficiently broad-based to respond to the interest of all Members and be finalised, bound and fully implemented as a single package within three years;

5. agreed that the negotiations should provide timely and effective market access for Members, particularly least developed and developing countries. Concerns of developing countries should be addressed through enhanced attention to the effective implementation of special and differential treatment provisions of the WTO Agreements and ongoing support for capacity building and technical assistance, so as to facilitate their ability to participate fully in the WTO. Consistent with this. the Ministers expressed strong support for the development of other dimensions including the concept of differential timing in the implementation of WTO commitments, to address developing country concerns;

6. agreed that there should be scope to review and strengthen rules and disciplines in the WTO;

7. agreed that the current moratorium on duties on electronic commerce transactions be extended;

8. supported efforts to reach an agreement on transparency in government procurement;

9. called on all WTO Members not to introduce new or more restrictive trade measures for the duration of the negotiations and pledged not to impose such measures before the Seattle WTO Ministerial meeting; and

10. called for the accession of non-WTO ASEAN members to be expedited, in accordance with WTO rules.

APEC

9. Ministers welcomed APEC's achievements over the last decade, They noted the important role that APEC has played in strengthening regional economic cooperation and pledged to exercise leadership to reach APEC's goals. Ministers congratulated New Zealand for the effective way in which it chaired APEC 1999. They welcomed the successful outcomes of the Auckland Ministerial and Leader's meetings as contained in the APEC Leader's Declaration of 13 September 1999.

10. Ministers expressed confidence that further substantive progress on APEC's trade and investment liberalisation and facilitation, and Ecotech agenda would be achieved in 2000 under the chairmanship of Brunei Darussalarn and gave their full support for these goals. Ministers welcomed Brunei Darussalam's intention to focus on human resource development, SME development and information and communications technology. The Ministers also welcomed the decision by Thailand to chair APEC in the year 2003 and reaffirmed that they would contribute in whatever way to easuriing its success.

AFTA-CER Cooperation

11. The Ministers expressed satisfaction with the progress in the cooperation activities which have been carried out since the last Consultation in October 1997. The initiatives under the AFTA-CER Linkage covered the following areas:

1. Standards and Conformance. With the signing of the MOU on cooperation in standards and conformance in 1996, an Action Plan has been drawn up. To-date, 6 out of 37 projects had been completed, 17 were currently being implemented of which 8 are in the preparatory stage. The focus of the activities include the identification of common areas in international standards, enhancement of accreditation systems and certification and exchange of views on developing Mutual Recognition Arrangements (MRAs). The Ministers welcomed the Extension of the Memorandum of Understanding on Cooperation in Standards and Conformance between ASEAN and the CER countries to Cambodia, Lao PDR and Myamnar, signed on 1 October 1999;

2. Agriculture. Ministers welcomed the CER proposal for a pilot program on electronic quarantine certification, an ASEAN-CER Directory of Food Standards Authorities, assistance on Sanitary and Phytosanitary Risk Analysis and greater cooperation on quarantine issues. Ministers urged agriculture officials to look into advancing cooperation in this important area;

3. Market Access. In an attempt to clarify and eliminate any non-tariff barriers to trade between ASEAN and the CER countries, progress has been made in identifying and verifying non-tariff measures which may constitute as a barrier to trade. The Ministers prioritised the areas of antidumping, standards and conformance, Foreign Direct Investment, intellectual property rights and quarantine procedures and practices to be looked into by officials from both sides;

4. Transport. Ministers welcomed progress in the creation of a Transport Information Directory where an AFTA-CER Transport Information Homepage would be established in the ASEAN Secretariat's web-site and hyperlinked to Member Countries' Transport Information Directories. Ministers also welcomed discussions to conduct a transport corridor logistics study to examine freight movements in the Mekong region. Ministers welcomed CER assistance on these areas for possible completion by June 2000. Ministers directed their officials to intensify cooperation in transport;

5. Customs. Ministers welcomed the training provided by New Zealand on the GATT Customs Valuation Agreement to the new Members of ASEAN, and requested for further assistance for these countries in this area. Ministers also look forward towards assistance on pre-entry classification for ASEAN;

6. Investment. Ministers commended the launching of a website to promote investment opportunities in ASEAN and the CER by the Australian Industry Group. Ministers agreed that ASEAN investment officials will be consulted on the development of the website;

7. Competition Policy. Ministers welcomed assistance from the CER to provide an educative process on competition policy and consumer protection.

Conclusion

12. The AEM-CER Consultation was held in a spirit of friendship and cooperation. The Ministers agreed to hold their next consultation back-to-back with the 32nd AEM in Thailand in October 2000.