The Fifth Meeting of the ASEAN - US Dialogue took place in Manila from December 5 to 6 at the Manila Hotel.

The ASEAN delegations were led by H.E. Adiwoso Abubakar, Director-General, ASEAN Indonesia; H.E. Mohd. Yusof bin Hitam, Director-General, ASEAN Malaysia; H.E. Benjamin T. Romualdez, Philippine Ambassador to the United States of America, H.E. Ramon B. Cardenas, Deputy Minister for Economic Planning and H.E. Sime D. Hidalgo, Director-General, ASEAN Philippines; H.E. Tan Keng Jin, Director General ASEAN Singapore; and H.E. Pracha Guna-Kasem, Director-General, ASEAN - Thailand. H.E. Benjamin T. Romualdez, leader of the Philippine delegation, was the spokesman for the ASEAN side. Likewise present were H.E. Chan Kai Yau, Secretary-General of the ASEAN Secretariat and a member of his staff. The Chairmen of ASEAN COCI, COSD, COTAC and COTT as well as the representative of the Chairmen of COIME, COST, COFAB, and COFAF, were also in attendance. H.E. Lim Jock Seng, Director-General, ASEAN Brunei, headed the Brunei delegation which participated in the Meeting as observers.

The U.S. Delegation was led by Under Secretary of State W. Allen Wallis, with Deputy Assistant Secretary of State Anthony Albrecht as Deputy delegation leader. The U.S. Trade Representative and AID, and representatives from the U.S. Missions to the ASEAN countries.

The Meeting opened with welcoming remarks by Acting Minister for Foreign Affairs Manuel Collantes of the Philippines. He referred to the determination of both the US and ASEAN sides to further strengthen economic cooperation as an indication of the inexorable trend towards interdependence among nations. Citing further ASEAN's shift from a trade system based primarily on absolute advantage to one based on comparative advantage, he declared that ASEAN - US trade could have expanded even more to the comparative advantage of both except for some problem areas which have stymied efforts towards this end.

Ambassador Romualdez, as the ASEAN spokesman, welcomed the Fifth Dialogue as an opportunity for both the US and ASEAN to exchange views with candor and frankness on items of interest to both sides. He laid emphasis on the need to conduct a meaningful assessment of the ASEAN - US Dialogue to evaluate past gains and to chart future directions for cooperation. He put forward the idea that the Dialogue should be focused on evolving contructive structures for accelerated trade, in particular better market access, investment and technology transfer. He reiterated guidelines for ASEAN cooperation with third countries, stressing among other things, that cooperation should not be at the expense of bilateral relations and that cooperation should be for projects that benefit ASEAN as a region. He also cited the complementary role played by the private sector in the US and ASEAN economies and expressed the desire for the governments to assist in creating an environment conducive to stimulating private sector initiatives.

In his opening remarks, Under Secretary of State W. Allen Wallis stated that the U.S. continues to give high importance to its relations with ASEAN. ASEAN itself has become a success symbol to the world and the regular economic dialogue and the annual meeting between the US and the ASEAN Foreign Ministers have become representative of the importance the U.S. places on the relationship between the U.S. and ASEAN. He referred to the forthcoming signing of the Memorandum of Understanding on Tin Disposal as an example of reasonable resolution of a complex and important problem between U.S. and ASEAN.

He stressed the impact of the U.S. on the world economy and pointed to the good news that U.S. GNP is expected to grow by 6.5 % in 1983 with inflation below 5%. The impact of this is already seen in the growth of ASEAN exports to the U.S. by more than 8% in the first six months of this year. In referring to the tempting solution of protectionism, Mr. Wallis pointed to President Reagan's firm commitment to a free market philosophy and urged other nations to work together to combat protectionist measures. In stressing the importance that the US and ASEAN countries ascribe to the private sector, he mentioned the important role of the ASEAN - U.S. Business Council and drew attention to the new U.S. - ASEAN Center for Technology Exchange proposed by the Council and indicated U.S. government support for the institution.

ASEAN representatives expressed their concern over various developments which adversely affected their growth and prosperity. They referred to the deterioration in the terms of trade, decline in commodity export earnings, protectionism, and high interest rates. They strongly urged the renewal of a liberal U.S. GSP. U.S. statements referred to the healthy non-inflationary growth now underway in the U.S. which already reflects an increase of 11.6% in exports from ASEAN to the U.S. during the first three quarters of 1983 over the same period in 1982.

The US side emphasized that its economy is recovering at a pace paralleling that of other Post-World War 11 upswing. Policies directed at combating inflation and destabilizing economic cycles are now showing positive results. Growth of non-essential spending has been substantially reduced. Budgetary restraint continues to be high on the administration's priority list. Interest rates have yet to fully reflect the progress made in moderating inflation; The difficult task of managing debt and monetary aggregates 'is viewed as vital to stable growth without inflation.
Sustaining current economic progress is a critical U.S. objective, and is dependent on how well monetary, fiscal and trade policy goals are achieved.

The Meeting reviewed the objectives of the Dialogue and considered ways to make it more responsive to the mutual needs of all parties. It considered improvements in the structures to monitor the various aspects of the Dialogue and agreed that follow up action between dialogues should be encouraged. In this regard, better use could be made of existing mechanism such as the Economic Coordinating Committee (ECC) in Washington, D.C. On the level of representation at the Dialogue, it was agreed that it should be held regularly at sub-cabinet level and when necessary at Ministerial level. The Meeting urged that the role and work of the ASEAN - U.S. Business Council be encouraged and enhanced. It was suggested that whenever possible, meetings of the ASEAN - U.S. Business Council be scheduled at the same site, either immediately before or after the ASEAN - US Dialogue.

A Working Group on Development Cooperation discussed in detail the various US - ASEAN cooperative programmes.

Both sides stressed the advantages of cooperation, were involved in candid discussions of on-going projects and creative exchanges on various proposals for new initiative. General satisfaction with the current status or on-going projects was expressed by both sides. The US indicated that approval in principle has been given to further AID funding for the energy conservation buildings project and agreed to consider the extention of the coal training activity. On cooperation in fisheries the U.S. will give serious consideration to the proposed ASEAN Fish Quarantine project.

On cooperation in science and technology both sides agreed that these activities will be strengthened. The US side responded positively to an invitation for U.S. participation in the ASEAN Science and Technology Week to be held in Singapore in 1985. The US side also expressed interest pursuing future cooperation in several areas of marine sciences, the specifics of which be discussed with ASEAN in the coming months.

ASEAN attaches great importance to cooperation in shipping and requested the US to consider favourably the suggestion that both sides make maximum use of the ASEAN Washington Committee (AWC) and the Economic Coordinating Committee (ECC) for the early resolution of the issues in this field. The U.S. has agreed to consider project proposals in this field.

ASEAN views favourably the increased cooperation in narcotics control marked by the signing of an agreement in September 1983 to conduct a mobile seminar on national drug problems. The US expressed its appreciation of joint efforts by. ASEAN countries to counter the narcotics problems which exist in Southeast Asia.

The US also has under active review the possibility of increased funding to support further scholarships in the health field. Responding to an interest expressed in the cultural field, the US Information Agency is currently developing an ASEAN television broadcasters programme to be held in the United States in 1984.

Responding to a request from ASEAN to facilitate exports of fish and other foodstuffs, the US has agreed to sponsor technical seminars in each of the ASEAN countries in 1984 that will deal with food quality control and standards.

In response to ASEAN's proposal, a new Small Business Improvement Project has, been authorized by the US and a letter of intent covering funding was signed during the Dialogue. ASEAN welcomed U.S. government support for the new US - ASEAN Center for Technology Exchange which was approved during the ASEAN - US Business Council Meeting last September.

In stressing the very important role that investment has to play in the development of ASEAN, the U.S. spokesman said that US investment in the region had now reached $ 7.3 billion, an increase of more than 50% since 1980. The US recognizes that investment flows which respond to private market forces to achieve more efficient production and mutual benefit to home and host countries should be encouraged.

The Meeting noted the various practices which serve as possible disincentives to investment in the ASEAN countries. Both sides agreed that as investment flows grow, it is important to continuously exchange views that will lead towards the encouragement of such investments.

The U.S. will continue to facilitate the flow of information on investment opportunities in ASEAN, in particular through the officers of the U.S. Departments of Commerce and State, and its regular U.S. publications and the activities of the Overseas Private Investment Corporation (OPIC).

Both sides agreed that the activities of the OPIC, which insures and finances U.S. investment and sponsorship of investment missions such as the current one in Indonesia, could play a supportive role in encouraging such flows.

ASEAN appreciated the benefits and the effectiveness of such investment missions to encourage the inflow of US investment in ASEAN. They expressed the need to increase the number of investment missions to the ASEAN region in the near future and requested that they be organized on a sectoral basis.

Private sector representatives of the ASEAN - U.S. Business Council participated at a special session of the plenary. Mr. Frank Kittredge, representing the U.S. Section, noted that the Business Council was active in promoting economic and commercial exchange and in developing policy recommendations to the respective governments. The American business community is deeply impressed with ASEAN's cohesion and dynamism and observes with satisfaction that the private sector has been the vehicle for stimulating economic development in ASEAN. Mr. Kittredge noted that the ASEAN Chamber of Commerce and Industry, in a few short years, has become a dynamic and action-oriented federation. The Council is now developing a "Doing Business with the United States" seminar and expects to have the first session in Bangkok in February 1984, followed by the second in Singapore in March of the same year. Mr.Kittredge noted that the U.S. Section of the Council has urged prompt renewal and liberalization of U.S. GSP, a phase out all counter purchase and countertrade policies, and improved protection of intellectual property by ASEAN governments. He noted with satisfaction the establishment of a new US ASEAN Center for Technology Exchange, which will be private in nature, with headquarters in the U.S. and linkages with institutions in each ASEAN country.

Speaking for the ASEAN section of the Council Mr. Adriano C. Dy, said that ASEAN private sector supports the Center for Technology Exchange and generally endorses the points -made by Mr. Kittredge. In addition, he noted that the ASEAN Section in Washington on September 29 - 30, 1982, had expressed concern about U.S. trade actions, including GSP proposals which would link renewal with reciprocity, textile restrictions, and difficulties over the passage of U.S. contributions to the IMF. Happily, he noted, the latter problem has been solved. All members of the plenary agreed that the ASEAN - US Business Council should and would remain very active.

ASEAN expressed its concern regarding two shipping issues which have remained unresolved over the last three years and which adversely effect ASEAN shipping and trade: the Controlled Carrier Provisions of the OCEAN Shipping Act of 1978, and the practise of US - based shipping conferences unilaterally raising freight rates without consulting ASEAN Shippers' Councils.

In an atmosphere of friendliness and frankness the U.S. and ASEAN Governments exchanged views and information on trade liberalization initiatives, and trade and commodity policy issues. Cooperative projects to expand trade were agreed upon, and a significant understanding in the commodity area was noted. In other areas where agreement is still lacking because of broader U.S. policy interests, the U.S. listened with considerable interest to ASEAN concerns. ASEAN countries were particularly interested in developments in U.S. trade policy related to GSP, the CBI, Subsidies Code accession, and textiles.

Recognizing the ASEAN's desire to increase exports to the U.S. market and the benefits of increased two-way trade, the Meeting exchanged views on the improvement of the US GSP Scheme, and specific measures to expand trade.

On GSP, the improvements sought by ASEAN included liberalization of competitive need limits, inclusion of donor country content rule, increase of "De Minimis" provision to US$ 10 million, lowering of GSP rule of origin to 30%, and delisting of textile and apparel articles and footwear from the statutory exclusion. ASEAN also expressed the hope that the U.S. will not only renew its GSP scheme for at least ten (10) years but also improve it taking into account improvements sought in the present scheme. The U.S. noted that some of the points raised by the ASEAN delegation were taken into account in the renewal legislation of GSP and indicated that these points will also be accorded due consideration in its continuing review. The U.S. agreed to provide assistance on trade promotion through U.S. Department of Commerce offices in the U.S. and overseas, FDA seminars funded by AID, and GSP seminars. The U.S. agreed to explore the possibility of providing assistance on textile classification, and to support for a feasibility study and symposium on strengthening the capacity of the various ASEAN Chambers of Commerce and industry to provide trade promotion, services.

ASEAN observed that it could understand the reason behind the Caribbean Basin Initiative (CBI) but was considered about possible detrimental effects on ASEAN trade. The U.S. believed there was no danger of meaningful competition to the dynamic ASEAN economies arising from the CBI, but agreed that was important that ASEAN continue to bring any specific problemsit forsees U.S. to attention. ASEAN pointed out serious problems it has with US policy on accession by developing countries to the GATT Code on Subsidies and urged its reconsideration in keeping with the spirit of the Code. The U.S. explained that this policy reflected very strongly held views in the U.S. Congress. With regard to ASEAN's considerable reservation over proposals for amendment to U.S. countervailing duty legislation in the proposed Trade Remedies Act of 1983, the U.S. side noted that it too has difficulty with several provisions and welcome ASEAN's intent to make its views known in the Congressional hearings. Responding to ASEAN apprehension over the recent U.S. restriction on a number of textile categories in ASEAN country agreements, the U.S. pledged adherence to the standards of the Multi- Fiber Arrangement (MFA) and confirmed that its textile agreements with ASEAN countries are considerably more liberal than those with major suppliers.

The Meeting welcomed the imminent signing of the ASEAN - US Memorandum of Understanding on Tin as a significant achievement of the dialogue. ASEAN expressed concern about the delay in ratification of the Common Fund and urged expeditious US action. The US reaffirmed that it preferred to await evidence of the intent of relevant commodity agreements to associate with the Fund before considering further steps. ASEAN also emphasized the need for appropriate compensatory financing arrangements, calling for priority implementation of a global STABEX and for US participation in the UNCTAD Experts Group. The US reiterated its view that the issue of export earning shortfalls is more properly discussed in the IMF. The US indicated it strongly supports ASEAN in urging all major producers to join the International Sugar Agreement. On the Rubber Agreement, the US reassured ASEAN of its willingness to consider and analyze all economic data relating to the producers' desire to adjust the price levels upward but stressed the importance of making progress on other measures.