The continuing interest of the US-ASEAN Business Council in our part of the world is not surprising. The companies that are represented here today are by-words - household words, most of them - in American business. The over four hundred member-corporations of the US-ASEAN Business Council epitomize America's industrial, commercial and financial vigor and strength, as well as her global outlook - qualities so evident today. These corporations are in ASEAN for the long haul. Their interest in our part of the world is long-term. They are not fair- weather friends, running away with their money at the first sign of trouble. They are serious and dependable partners.

They also, as Americans say, put their money where their mouth is, supporting projects to promote trade and investment between ASEAN and the United States. For example, the US-ASEAN Business Council has been underwriting for several years now the regular tours around the United States of U. S. Ambassadors to the ASEAN countries and of ASEAN Ambassadors in Washington. On each tour, the Ambassadors go to several cities around the country drumming up interest among corporations, cities and states in doing business with ASEAN.

I recall my own encounters in the past five years with the US-ASEAN Business Council - at the ASEAN-US Forums in Bandar Seri Begawan, Washington, D.C., and Batam. I also had the chance to meet with leaders and members of the US-ASEAN Business Council in Ball in January 1996, when the ASEAN-US Forum for that year had to be deferred because U. S. Government officials were snow-bound in Washington. What struck me in these encounters was the strong commitment expressed by the Business Council's leaders to internationalism in business, to open economies, to America's economic engagement with the world, particularly with Asia. They reaffirmed this same commitment at the First ASEAN Business Summit in Jakarta last March.

Developments in ASEAN

Since then, some important developments have taken place in ASEAN, some good, some bad.

The worst things of course, is the currency and financial upheaval, with its impact on trade and investment flows.

But, being in ASEAN for the long haul and capable of a more than superficial assessment of the area's long-term prospects, solid investors and corporations do not overlook the many positive developments that have unfolded.

Among these developments is ASEAN's enlargement. With the admission of Laos and Myanmar in July last year, ASEAN now has nine members, which, in 1996, had a combined population of 483 million, a total GDP of US$838 billion, and total exports of US$338 billion. The ASEAN market is now as large as China's, and, according to the WTO, ASEAN is fourth in the world in exports, behind only the European Union, the United States and Japan.

We are now only five years away from the completion of the ASEAN Free Trade Area. 42,252 tariff lines - more than ninety percent of all ASEAN tariff lines - have already been included in the Common Effective Preferential Tariff scheme leading to AFTA. Since 1993, when CEPT started, average tariffs on the products involved have fallen by half, from 12.76 percent to 6.38 percent today.

The result is that exports among ASEAN countries grew from US$43.26 billion in 1993 to almost US$80 billion in 1996, an average yearly growth rate of 28.3 percent. In the process, intra-ASEAN exports rose from almost 21 percent to 24.7 percent as a share of total ASEAN exports.

The ASEAN states last June concluded initial negotiations to liberalize trade in services. They agreed on a package of commitments in such areas as tourism, air transport, maritime transport, telecommunications, and business services. They will start carrying out these commitments on 31 March 1998.

The new ASEAN Industrial Cooperation scheme, or AICO, has enhanced the advantages of putting up manufacturing facilities in the ASEAN countries. Under the scheme, which became operational in November 1996, products manufactured by participating companies can immediately enjoy the 0-5 percent CEPT tariff rates instead of waiting for 2003. The AICO scheme has generated much interest from such companies as Matsushita, Toyota, Denso, Honda, Sony, and Goodyear. About twenty applications are now being processed in the automotive and electrical- appliance sectors.

ASEAN has also agreed to establish the ASEAN Investment Area. This entails jointly promoting ASEAN as a single investment destination, facilitating investment applications and procedures, and liberalizing investment regimes.

At the same time, ASEAN's Finance Ministers and Central Bank Governors, by themselves and together with the IMF and supportive countries like the United States, have been addressing the financial crisis disturbing the region. With such cooperation, ASEAN is confident that these difficulties will be overcome before long.

With the expansion of ASEAN, the acceleration of AFTA, the special treatment of AICO investments, and the liberalization of trade in services and of investment regimes, investors and corporations operating in ASEAN for the long term will find in ASEAN an even more hospitable climate for investments.

My colleagues in the Secretariat look forward to a productive exchange of ideas with you on these prospects.