The ASEAN Economic Ministers held their third informal consultations with the Ministers from the countries of the Australia-New Zealand Closer Economic Relations Trade Agreement (ANZCERTA or CER). ASEAN was represented by:

a) H.E. Pehin Dato Abdul Rahman Taib, Ministry of Industry and Primary Resources, Brunei Darussalam;
b) On behalf of Indonesia, Mr. Bachrum Harahap, Assistant to the Coordinating Minister for Production and Distribution, Indonesia;
c) H.E. Mr. Sompadith Vorasane, Minister of Commerce, Lao PDR;
d) H.E. Dato' Seri Rafidah Aziz, Minister for International Trade and Industry, Malaysia;
e) H.E. Brig. Gen. D.O. Abel, Minister for National Planning and Economic Development, Myanmar;
f) H.E. Mr. Cesar B. Bautista, Secretary, Department of Trade and Industry, Philippines;
g) H.E. Mr. Lee Yock Suan, Minister for Trade and Industry, Singapore;
h) H.E. Mr. Narongchai Akrasanee, Minister of Commerce, Thailand;
i) H.E. Mr. Truong Dinh Tuyen, Minister of Trade, Vietnam;
j) H.E. Dato' Ajit Singh, Secretary-General of ASEAN;
and their respective delegations.

a) H.E. the Hon. Tim Fischer MP, Deputy Prime Minister and Minister for Trade, Australia;
b) H.E. the Hon. Dr. Lockwood Smith, Minister for International Trade, New Zealand; and their respective delegations.

2. H.E. Mr. Keat Chhon, Senior Minister in-charge of Rehabilitation and Development and Minister of Economy and Finance, Cambodia and his delegation were present as an Observer.

3. The Consultations was jointly chaired by H.E. Dato' Seri Rafidah Aziz, as the Chairman of the AEM, and H.E. the Hon. Tim Fischer MP.

4. The Ministers recognised the significant potential in the ASEAN and CER economies to create synergy through strengthened inter-regional linkages so as to enhance economic growth as well as trade and investment flows between the two regions. At the same time, the Ministers further reaffirmed their commitment to the multilateral trading system and the need for regional trading arrangements to reinforce the process of liberalisation within the WTO framework. This has been the basis for the continued development and strengthening of cooperative activities under the Linkage between the ASEAN Free Trade Area (AFTA) and the CER, which was launched in September 1995.

Exchange of Views on Regional Developments

5. The Ministers exchanged views on developments in ASEAN and CER cooperation respectively and noted the value of such discussions to promote mutual understanding and the exchange of information.

6. The Ministers also held discussions on the recent economic developments in the region. The Ministers agreed on the need to draw, and capitalise, on the strengths and sound underlying economic fundamentals of the ASEAN and CER economies. Ministers were of the view that the measures established under the AFTA-CER Linkage demonstrated the commitment of these economies to strengthening their global competitive edge. The Ministers asserted that temporary economic difficulties and exchange rate fluctuations experienced by some economies in the region would not impact negatively on the long-term economic potential of these economies. The Ministers expressed their confidence and optimism in the future economic prospects of these economies, 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. The Ministers therefore encouraged the private sectors from both regions to take advantage of the opportunities created.

7. The Ministers noted the significant increase in trade between the two regions; ASEAN's exports to the CER increased by 16.4% in 1996 from US$ 5.9 billion to US$ 6.9 billion. Imports from the CER increased by 22% in 1996 from US$ 8 billion in 1995 to US$ 9.8 billion. CER accounted 2.1% of ASEAN's total exports, whilst ASEAN accounts for 13.1% of CER's exports.

Progress in the Cooperative Activities of the AFTA-CER Linkage

8. The Ministers expressed satisfaction with the developments of the Linkage to date in facilitating trade and investment flows between the two regions. Since the last consultations in Jakarta in September 1996, the Ministers noted the substantial progress made in various areas for e.g. on standards and conformance and customs. In line with their decisions from the previous consultations, the Ministers also noted that initiatives had been taken to commence work in the areas of tourism and transport cooperation and encouraged the relevant ASEAN and CER officials to meet to further develop cooperative activities in these areas. A summary of the progress appears in ANNEX 1.

9. Following the signing of the Memorandum of Understanding on Cooperation in Standards and Conformance between ASEAN and the CER countries in September 1996 further areas of cooperation have been developed, the Ministers endorsed the action plans on cooperative activities which would further the objectives of the MOU, among others, to promote alignment to international standards, to achieve mutual recognition of test results and certification programs and to assist in the development of testing and accreditation systems. The Ministers commended the officials for the notable progress made in the area of standards and conformance and encouraged them to intensify their work.

Handbook on Customs Procedures

10. The Ministers welcomed the recently published Handbook on Customs Procedures which provides a user-friendly reference for importers and exporters on customs procedures in ASEAN and CER. The Ministers further noted that this Handbook would provide greater access to information and transparency to the private sectors on customs requirements and regulations, and expressed the hope that ASEAN and CER companies would make full use of the book.

Consultations with ASEAN and CER Private Sectors

11. The Ministers held consultations with the ASEAN and CER private sectors. From the ASEAN side, the private sector was represented by Mr. Iman Taufik, on behalf of the President of the ASEAN Chamber of Commerce and Industry. The CER side was represented by Mr. Lex Hendry of New Zealand and John Hana of Australia.

12. The Ministers emphasised the significance of enhancing networking and dialogue among business people, so as to expand trade and investment between ASEAN and the CER countries. The Ministers encouraged greater strategic alliances, joint ventures and investments between ASEAN and CER companies to exploit the business opportunities created by AFTA and the CER respectively. To this end, the Ministers welcomed the meetings held between ASEAN and CER private sectors to develop activities under the Linkage.

13. The Ministers noted the list of trade impediments in ASEAN and the CER which have been compiled by the private sectors from both regions. The Ministers recognised the value of such compilations to promote greater transparency in trade and underscored the need for the list to be continuously updated. The Ministers also recognised the potential use of the list to form a basis for future AFTA-CER activities, and agreed that officials study and verify these lists and provide a response to ASEAN and CER respectively. In view of the country-specific nature of the barriers identified, the Ministers tasked officials from the relevant countries in ASEAN and the CER to look into this further on a bilateral basis, with the view to promoting trade. The Ministers further directed officials to work with ASEAN-CER Business Council to identify priority issues to be reported back to the next Consultations in 1998.

14. The Ministers welcomed the exchange programme involving young entrepreneurs from small and medium enterprises which was developed by the private sectors and noted that this would contribute towards human resources development in ASEAN and the CER. The Ministers encouraged ASEAN and CER entrepreneurs to utilise this programme for mutual benefits.

15. The Ministers proposed that the private sectors study the possibilities for enhancing business linkages on a sector-to-sector basis as well as the feasibility of establishing sub-regional arrangements between ASEAN and the CER. The Ministers encouraged further brainstorming by the private sectors on possible modalities to advance the linkage.

16. The Ministers noted that in response to their suggestion, researchers from representative ASEAN and CER think tanks, together with business representatives and officials in their private capacity, held a seminar to consider longer term future directions for the AFTA-CER Linkage. The Ministers noted the recommendations of the seminar, "AFTA-CER: The Way Forward", which was held in Singapore on 5-6 September 1997. Ministers encouraged further collaborative work between researchers and think tanks on the future development of the AFTA-CER Linkage.

17. The Ministers agreed to hold similar consultations with the representatives of the private sector of both regions next year at the next AEM-CER consultations.

Future Areas of Cooperation

18. Recognising the need to intensify activities under the AFTA-CER Linkage, the Ministers agreed to the following additional areas of cooperation, among others:

a) Human Resource Development;
b) investment promotion;
c) services sectors like professional services, building/construction etc.;
d) electronic commerce;
e) sanitary and phyto-sanitary issues;
and tasked their officials to develop cooperative activities further.

Exchange of Views on International Economic Issues

19. The Ministers held an exchange of views on international economic issues, in particular those pertaining to the WTO and APEC. On the WTO, cognizant of follow-up work from the 1996 WTO Singapore Ministerial Review Conference (SMC) and having regard to the 1998 WTO Ministerial Conference and the 50th anniversary of the multilateral trading system, the Ministers underlined the importance in advancing issues of shared interest to ensure the primacy of the multilateral trading system. In this regard, the following issues were discussed:

a) the Ministers noted the contribution that their joint efforts at the SMC to ensuring that potentially divisive, non-trade related issues were kept out of the WTO and this will further strengthen the Organisation;

b) the Ministers supported efforts to integrate the Least Developed Countries (LDCs) into the global trading system, in particular to improve their capacity to take advantage of the opportunities such integration creates. To further this process, the Ministers supported the WTO membership of some of the region's members and their early accession;

c) the Ministers underlined the importance of achieving agreement and advancing the financial services negotiations at the WTO to improve market access and critical mass by the agreed deadline of December 1997;

d) the Ministers exchanged views on other follow-up issues of the SMC, including further tariff liberalisation, new issues (such as trade and investment, trade and competition policy, government procurement), standards, intellectual property rights, rules of origin and other aspects of trade facilitation, the review of regional trade agreements and forthcoming important negotiations and reviews of the built-in agenda;

e) the Ministers noted that new negotiations in agriculture are to start in 1999 and that it was important to advance the work in analysis and information exchange so that negotiations would start promptly;

f) the Ministers discussed the need for a substantive and forward-looking WTO Ministerial Conference next year. They saw it as an important opportunity to review progress in Uruguay Round implementation and build on the outcomes from last years' Ministerial Conference, and to address major issues concerning the future management of the WTO's expanding agenda. In particular, the Ministers look to the commencement of a preparatory work program at the next WTO Ministerial across all aspects of the built-in agenda and to address the gaps in that work program.

20. Ministers also exchanged views on global developments, particularly technological change, and their implications on WTO rules notably electronic commerce. The Ministers noted the value for such exchage of views on electronic comemrce developments. Accordingly, Ministers requested senior officials to begin a policy dialogue on this as a matter of priority.

22. The Ministers recognised the benefits of such exchanges on the WTO and tasked their officials to establish trade policy dialogues to further this process.

23. On APEC, the Ministers noted the preparations made by Malaysia in hosting the APEC Leaders and Ministerial Meetings in 1998. The Ministers concurred on the need for closer consultations in APEC to ensure mutual benefits. The Ministers further discussed the importance of developing the Individual Action Plans (IAPs) of APEC member economies and examining various sectoral initiatives.

24. On ASEM, ASEAN briefed the CER on latest developments, including the outcome of the recent ASEM Economic Ministers Meeting in Japan in September 1997.

Conclusion

25. The Ministers agreed to hold the next consultations back-to-back with the 30th AEM in September/October 1998 in the Philippines.