NEWS RELEASE
25 October 2002
ASEAN AND APEC IN A GLOBALIZING WORLD
Statement by Rodolfo C. Severino, Secretary-General
of the Association of Southeast Asian Nations,
at the APEC Ministerial Meeting
Los Cabos, Baja California Sur, Mexico, 24 October 2002
When the Australian Prime Minister, Bob Hawke, first proposed the idea of APEC early in 1989, his first public move was to send a high-level envoy to the leaders of the then-six ASEAN countries to gain support for the concept. Bob Hawke knew that no region-wide initiative would get off the ground without the support and engagement of ASEAN. ASEAN has been at the core of APEC since then.
This relationship is based on the shared purposes of ASEAN and APEC and on their mutual reinforcement. APEC’s commitment to a free and open trade and investment regime within the region and in the world is consistent with ASEAN’s objective of integrating the Southeast Asian economy while remaining open to and engaged with the rest of the world. APEC’s target dates and timetables have served as useful milestones for ASEAN’s journey toward an integrated regional economy. They have encouraged ASEAN to accelerate its own timetables for market liberalization and integration. At the same time, the increasingly integrated ASEAN economy, shaped by binding agreements, has served as a building block for the APEC structure. Moreover, ASEAN has made it its responsibility to ensure that the interests of the less developed APEC members are taken into account.
In 1992, ASEAN placed the region squarely on the path of regional economic integration when it agreed to create an ASEAN Free Trade Area by a certain date, essentially by removing tariff and non-tariff barriers to intra-regional trade. In 1997, in their ASEAN Vision 2020, ASEAN’s leaders defined the destination of this road as an “ASEAN Economic Region in which there is a free flow of goods, services and investments.”
Since then, AFTA’s timetable has been accelerated twice, so that today tariffs on almost all trade within ASEAN are no more than five percent or none at all; they are at a minimal average level of around three percent. ASEAN has agreed to do away with tariffs altogether on practically all intra-ASEAN trade well before the date that APEC set in Bogor for freeing trade among its developing members. A number of ASEAN members have agreed that, by the beginning of 2003, they would abolish tariffs on goods traded within the ASEAN Industrial Cooperation scheme. As part of its resolve to cooperate in the development and use of information and communications technology, the six older ASEAN members have agreed to eliminate, within the period 2003-2005, tariffs on ICT products traded among themselves, with the four newer members having a somewhat longer timeframe. ASEAN’s older members are extending tariff preferences to the exports of the newer members.
Market integration, of course, is more than just about tariff-cutting. ASEAN is committed to the dismantling of non-tariff barriers as much as to the elimination of tariffs. Much work has to be done in this regard. ASEAN is working together on the simplification of customs procedures. Several ASEAN countries have adopted the WTO customs valuation system; others are in the process of doing so. The set of ASEAN Harmonized Tariff Nomenclatures has been completed and is now awaiting formal signature. Arrangements for the mutual recognition of testing and certification of products have been agreed upon for electrical and electronic equipment and for telecommunications equipment. Similar ones for pharmaceuticals and for prepared food are being worked out. An agreement to harmonize ASEAN regulations on cosmetics is ready for signature.
ASEAN officials are negotiating the liberalization of trade in services. Master plans for the ASEAN Power Grid, the Trans-ASEAN Gas Pipeline, the ASEAN Highway Network, and the Singapore-Kunming Rail Link are in place. The foundation has been laid for the free flow of investments within ASEAN and into ASEAN. ASEAN countries and fellow-APEC members China, Japan and Korea are cooperating closely in financial matters. In eleven days, ASEAN’s leaders are scheduled to sign a comprehensive tourism agreement to make it easier and more attractive for visitors to travel within and into ASEAN.
We all know that terrorism, particularly of the kind that we have seen and suffered from recently and in the past year, poses a cruel threat not only to the security of our people, our nations and our region, but also to tourism, trade and investments. ASEAN countries have stepped up their cooperation among themselves and with others in the fight against terrorism.
Open Regionalism
Even as ASEAN strives to integrate the regional economy, it remains ever more committed to open regionalism, the principle on which APEC was founded. ASEAN considers an economically integrated region to be a building block for a liberal global trading regime. ASEAN continues to be committed to the World Trade Organization, despite its disappointment with, if not outrage over, the pattern of behavior of the stronger members that runs counter to the agreed norms of international trade – behavior that includes the unjustified raising of tariff walls, destructive agricultural subsidies, and the abuse of anti-dumping measures. Indeed, ASEAN calls for the expeditious admission of Cambodia, Laos and Viet Nam into WTO and urges APEC to help in bringing this about. Similarly, ASEAN wishes to see the eventual entry of Cambodia, Laos and Myanmar into APEC.
It is in line with this building-block approach and in the spirit of open regionalism that ASEAN has been forging stronger bonds with its major economic partners. In less than two weeks, the heads of government of ASEAN and China are scheduled to sign a framework agreement committing their countries to begin, in 2003, negotiations on the creation of an ASEAN-China free trade area within ten years, to liberalize trade in services between them, and to develop a liberal investment regime. On the same occasion, the heads of government of ASEAN and Japan are expected to agree on a framework for deepening the long-standing partnership between them, including elements of a free trade area. ASEAN and Korea are taking leading parts in the effort to strengthen the economic links among the Southeast Asian and Northeast Asian countries in what is known as the ASEAN-Plus-Three process.
ASEAN and Australia and New Zealand last September issued a joint declaration embodying their agreement to remove obstacles to, and otherwise promote, trade and investments between them. They have set their sights on doubling such trade and investments by 2010. ASEAN and the United States have agreed to draw up a work program for commercial cooperation between them, and ASEAN looks forward to intensified economic relations with the United States. China, Japan, Korea, Australia, New Zealand and the United States – these ASEAN partners are all members of APEC. These efforts thus significantly contribute to the advancement of APEC’s purposes. Next month, an ASEAN-India summit is expected to give impetus to the growing relationship between ASEAN and India.
For ASEAN, the core of its economic agenda is its integration as a region. Only an integrated ASEAN can effectively deal with its economic partners. Only an integrated ASEAN can contribute meaningfully to APEC and to the global economy. Only through an integrated ASEAN can the economies of Southeast Asia compete effectively in a globalized world economy.
ASEAN cannot stop at tariff-cutting, but must build upon the foundations already laid for the comprehensive integration and stronger competitiveness of its economy. On the orders of ASEAN’s leaders, a roadmap is being charted to take ASEAN integration beyond AFTA. ASEAN has commissioned a study of the region’s competitiveness that is expected to produce a clearer picture of ASEAN’s place in the global competition and draw up recommendations on how to strengthen ASEAN’s position. A work plan has been adopted for the narrowing of the development gap between the older and newer members of ASEAN. We hope that APEC members will support the implementation of the projects in this work plan.
One thing is sure: fuller integration is key to ASEAN’s competitiveness. It would advance APEC’s purposes. It would help to realize a free and fair global trading system.
