Introduction

The year under review was marked by the twentieth anniversary of the founding of ASEAN and the beginning of the third decade of ASEAN cooperation. The most significant event of the year was the convening of the Third Meeting of the ASEAN Heads of Government held in Manila on 14 - 15 December 1987. It was preceded by Preparatory Meetings of ASEAN Foreign Ministers and Economic Ministers, which were held separately and jointly.

The ASEAN Summit, the third in ASEAN's 20-year history, was the culmination of nearly 18 months of extensive preparations by senior political and economic officials from ASEAN member countries and the ASEAN Directors-General, who were all members of the High Level Steering Committee (HLSC). The HLSC was- mandated by the ASEAN Foreign Ministers to undertake the substantive preparations for the Summit.
The HLSC had seven meetings while its 15 Issues Committees held a total of 39 meetings during the preparatory period leading to the Summit. They discussed various issues of concern to ASEAN, such as political, economic and functional cooperation, ASEAN's relationship with dialogue partners, the machinery for ASEAN cooperation, and finalised common positions and papers on the various agenda items for the Summit. The HLSC also produced three Summit documents, namely the Report of Ministers to the ASEAN Heads of Government which attached the Programme of Action for the Enhancement of ASEAN Cooperation; the Joint Press Statement; and the Manila Declaration of 1987, which were subsequently adopted by the Summit Meeting.

The Manila Declaration of 1987, signed at the closing ceremony of the Third ASEAN Summit, sets forth the decisions reached by the ASEAN Heads of Government. It outlines the objectives and plans of ASEAN for the immediate present and charts the future course of ASEAN cooperation.

Five ASEAN agreements were also signed at the end of the Third ASEAN Summit. The ASEAN Foreign Ministers signed the Protocol Amending the Treaty of Amity and Cooperation in Southeast Asia, which would allow other states in Southeast Asia and states outside Southeast Asia to accede to the Treaty. They also signed the Revised Basic Agreement on ASEAN Industrial Joint Ventures (BAAIJV) to make the ASEAN Industrial Joint Ventures scheme more flexible, quicker to implement, and more attractive to the private investors. Earlier, at the 20th ASEAN Ministerial Meeting in Singapore on 16 June 1987, they signed the Supplementary Agreement to amend the BAAIJV which deepened the minimum margin of tariff preference (MOP) extended by the participating member countries from 50% to 75%. However, the Revised BAAIJV would further deepen the MOP from 75% to a minimum of 90%.

As the focus of the Third ASEAN Summit was on economic cooperation, the ASEAN Heads of Government had endorsed a package of new initiatives in the areas of trade, tourism, investment, finance and banking, transportation and communication, and food, agriculture. and forestry. Some of the new initiatives are contained in the following three agreements signed by the ASEAN Economic Ministers at the end of the Third ASEAN Summit:

The first agreement aimed at encouraging intra-ASEAN trade further with a major expansion of the list of items covered by the Preferential Trading Arrangements (PTA) and also a further deepening of Margins of Preference on existing items of individual member countries. The targets set for these measures were within a five-year time frame, though exception was allowed for seven years for countries that might require a longer period, namely Indonesia and the Philippines.

The Memorandum of Understanding on Standstill and Rollback of Non-Tariff Barriers Among ASEAN Countries called for implementing immediate standstill on non-tariff barriers (NTBs) while negotiations on rollback of the NTBs would commence after the Summit within a five-year period. The ASEAN Secretariat would function and serve as the surveillance body for monitoring the adherence and commitments and obligations of this agreement.

The Agreement for the Promotion and Protection of Investments aimed at increasing and facilitating the flow of investments and technology in the region which would contribute to the acceleration of industrialization of the ASEAN region.

A significant step forward in economic cooperation was taken by the ASEAN Economic Ministers at their 19th Meeting in Singapore on 9 - 11 July 1987 when they recommended a package of new initiatives to enhance ASEAN economic cooperation for the consideration of the ASEAN Heads of Government. The recommendations on these new initiatives were finalized at the Informal Meeting of the ASEAN Economic Ministers in Singapore on 29 - 30 October 1987. These new initiatives were later adopted at the Third ASEAN Summit Meeting.

On cooperation in finance and banking, the Third ASEAN Summit endorsed the establishment of the ASEAN Reinsurance Cooperation as a major initiative of the ASEAN private sector. To support and facilitate growing intra-ASEAN trade and investment activities, the Summit also agreed to accelerate cooperation in the field of finance, banking, taxation, customs matters and insurance cooperation. Other measures to enhance cooperation in this field include the use of Intra-ASEAN Model of Double Taxation Convention to guide member countries' negotiations with third countries for the avoidance of double taxation, the liberalization in the use of ASEAN currencies in intra-ASEAN trade which could be extended to intra-ASEAN investment, and the enhancement of the efficiency of ASEAN tax and customs administrators through training programmes.

Marked progress in the field of agriculture and forestry was made at the 9th Meeting of ASEAN Ministers on Agriculture and Forestry in Bandar Seri Begawan in September 1987. Agreement was reached on a number of policy issues including inter alia a draft on New Initiatives to Enhance ASEAN Economic Cooperation in Food, Agriculture and Forestry, which formed part of the above mentioned new initiatives of the ASEAN Economic Ministers. To further strengthen cooperation in this area, the Ministers approved a number of new project proposals which included the establishment of the ASEAN Rattan Re- generation Centre in South Kalimantan, Indonesia. Meanwhile, the signing of agreements between ASEAN and the USA, Canada and EC on the implementation of four agricultural projects, namely Phase II of Agricultural Development Planning Centre; Phase II of Plant Quarantine Centre and Training Institute; Phase II of ASEAN- Canada Forest Tree Seed Centre; ASEAN Grain Post Harvest Programme; and ASEAN Aquaculture Development and Coordinating Programme; is a significant step towards strengthening the existing cooperation between ASEAN and its dialogue partners in the field of agriculture and forestry.

In the field of industrial cooperation, the ASEAN Heads of Government affirmed their commitment to accelerate sound industrial development as a long-term goal for the ASEAN region. ASEAN's objective is to substantially increase the flow of investments into the region and to raise intra-ASEAN investments to at least 100/o of total foreign investments in ASEAN by the turn of the century. In the field of energy, ASEAN shall continue to pursue and promote regional energy cooperation in, among others, energy planning, exchange of information, transfer of technology, research and development, manpower training, conservation and efficiency and the exploration, production and supply of energy resources.

Recognizing that a more efficient ASEAN transportation and communications system could act as catalyst to accelerate ASEAN economic growth and development, the Third ASEAN Summit Meeting agreed to promote and strengthen shipping links among the ASEAN countries by encouraging the participation of the ASEAN private sector to examine the feasibility of establishing an Inter-ASEAN Bulk Pool System and a Broker Telegraph System and to determine the need to expand shipping services such as point-to- point services; to establish and strengthen Freight Booking and Cargo Consolidation Centres; to establish new links and strengthen the existing modes of transportation, namely road, rail, shipping, ferry and air to form a more effective overall ASEAN transportation network; and to strengthen the technical capacity of COTAC by adopting, among others, the following measures:

In order that a substantial share of the number and value of intra-ASEAN traded items be covered by the Preferential Trading Arrangements (PTA) by the turn of the century, the Third ASEAN Summit agreed to implement a package of new initiatives on trade. These measures to be achieved within a five-year period with allowance for seven years for countries requiring a longer period, namely Indonesia and the Philippines, are briefly the substantial reduction of items in the exclusion lists 10% or less of traded items of individual member countries and items remaining in the exclusion lists to account for no more than 50% of intra-ASEAN trade value; the phasing in of new items from the exclusion lists into the PTA lists with a minimum margin of preference (MOP) of 25% and the deepening of the MOP already in the PTA to 50%; the reduction of ASEAN content requirement under the PTA Rules of Origin from 50% to 35% on a case-by-case basis (with respect to Indonesia, the ASEAN content requirement will be reduced from 60% to 42%) and the immediate implementation of the standstill and the negotiations of the rollback of non-tariff barriers.

For the continued growth of ASEAN tourism industry, the Third ASEAN Summit agreed that 1992 be declared a "Visit ASEAN Year (VAY)" and the period 1988 - 1992 as a promotional and preparatory period to encourage intra- and inter-ASEAN travel and that member countries will develop and implement specific cultural, sporting and trade activities in support of "Visit ASEAN Year".

ASEAN cooperation in science and technology continued to make progress through regional research and development activities in food, environment, non-conventional energy, marine science, climatology,- micro-electronics, materials science and biotechnology. The revised ASEAN Plan of Action on Science and Technology reached the second draft stage after circulation to member countries and consideration at COST meetings. Preparations were underway for the ASEAN Food Conference in October 1988 and for the Second ASEAN Science and Technology Week in January - February 1989 in Manila. After two years of preparatory work, substantial agreements were reached on the regional project on materials science and technology in which Japan agreed to provide funding of about US$ 16 million. The Committee on Science and Technology met twice in November 1987 to develop several new initiatives and in April 1988 to follow up the Programme of Action adopted at the Third Meeting of the ASEAN Heads of Government, namely that regional cooperation in science and technology should be intensified, particularly, in biotechnology, materials science, microelectronics and new energy sources; and that regional research networks should be established; and that technology transfer and information technology should be promoted.

In the environmental field, the Third ASEAN Ministerial Meeting on the Environment (AMME) was held in Jakarta on 27 - 28 October 1987. The Meeting adopted the ASEAN Environment Programme III ( 1988 - 1992) and issued the Jakarta Resolution on Sustainable Development. The Third AMME proposed that the principle of sustainable development be integrated into development processes and this was later adopted at the Third Meeting of ASEAN Heads of Government in 1987.

The ASEAN Committee on Social Development (COSD) continued its effort in enhancing ASEAN collaboration in the field of social development. The COSD and its subsidiary bodies adopted the decisions and guidelines issued by the ASEAN Heads of Government as the guidelines for their present and future activities. Consistent with the decisions of the Third ASEAN Summit that the three-pronged objective of ASEAN functional cooperation shall be to increase awareness of ASEAN, widen the involvement and increase the participation of the peoples of ASEAN in ASEAN undertakings and to promote socioeconomic development through human resources development (HRD), COSD and its subsidiary bodies concentrated on people- oriented projects designed to benefit the ASEAN population, particularly the women and youth. The Declaration of the Advancement of Women in the ASEAN Region has been finalised and will be signed at the 21st ASEAN Ministerial Meeting in July 1988.

In the year under review, the Committee on Culture and Information (COCI) completed another 17 projects in the areas of visual arts, literary works and ASEAN studies, performing arts and communication media. A budget of approximately US$ 1.4 million was allocated for these activities. The COCI continued its efforts to implement programmes to increase the knowledge of the ASEAN population of the region's rich cultural heritage.

The Third ASEAN Summit has provided both COSD and COCI with a new sense of purpose and further impetus for strengthening collaborative efforts in their respective areas of concern.

The period under review also saw the transfer of Chairmanship of COCI and COSD from Malaysia to Brunei Darussalam and the Philippines repsectively with effect from 1 January 1988 for a period of three years. This resulted from the ASEAN Standing Committee's decision that no one ASEAN member country should host more than one non-economic committee at any one time.

ASEAN's efforts to combat the drug menace received due recognition from all member states of the United Nations, which culminated in the election of the Prime Minister of Malaysia Dato Seri Dr. Mahathir Mohamad as President, and Deputy Prime Minister of Thailand, Admiral Sontee Boonyachai, as one of the Vice Presidents of the Ministerial Level International Conference on Drug Abuse and Illicit Trafficking (ICDAIT), held in Vienna, 17 - 26 June 1987.

The Conference adopted the Declaration and the Comprehensive Multidisciplinary Outline of Future Activities (CMO) which reaffirmed among others, the commitment of the inter- national community to vigorous international activities against drug abuse and illicit trafficking; and, the determination of States to strengthen action and cooperation at the national, regional and international levels to overcome the problem of drug abuse and illicit trafficking.

ASEAN member countries, realizing the importance of bilateral and multilateral efforts in dealing with the drug problems, have collaborated closely in the war against drugs. In this regard the ASEAN Senior Officials Meeting on Drugs have drawn a comprehensive programme which would cost a total of US$ 5 million to be implemented over the next 5 years.

The ASEAN Heads of Government, in reviewing ASEAN cooperation with dialogue partners at their Third Summit Meeting in Manila in December 1987, agreed to place more emphasis on areas of special interests to ASEAN, such as market access, trade and tourism promotion, investment, flow of resources, industrial development, transfer of technology, human resources development, and Support for ASEAN's position at international fora, such as GATT and UNCTAD.

During the year under review, dialogue meetings were held with Japan in July 1987, the United States in February 1988, Canada in April 1988, and Australia in June 1988. The Seventh meeting between the Foreign Ministers of ASEAN and the European Community was held in Dusseldorf in May 1988. There was no dialogue meeting with New Zealand during the period under review.

The announcement by the Japanese Prime Minister during the Meeting with the ASEAN Heads of Government right after the Third ASEAN Summit in Manila to establish an ASEAN - Japan Development Fund (AJDF) with a commitment from Japan of no less than US$2 billion for the upgrading of private industrial sector in ASEAN countries was an encouraging development in ASEAN - Japan cooperation. ASEAN also welcomed Japan's announcement of the launching of an ASEAN - Japan Comprehensive Exchange Programme and its commitments to take measures to alleviate the ASEAN's debt burden in view of the rapid appreciation of the Yen which had reduced the aid element of the Yen credit. A t the Ninth ASEAN - Japan Forum in June 1987, issues of improving market access, restoring and stabilizing commodity prices and increasing the flow of Japanese investment into the ASEAN region were discussed. Both sides agreed to continue to work closely to strengthen ASEAN - Japan cooperation.

During the year under review, the implementation of on-going projects under the ASEAN
The US decision to withdraw General System of Preference (GSP) benefits from Brunei Darussalam in 1987 and from Singapore with effect from 1 January 1989 were of concern to ASEAN. The latter case was brought up at the Eight ASEAN - US Dialogue in Washington D.C. in February 1988. ASEAN expressed its concern over the US action. However, both sides agreed to continue to work towards a long-term economic relationship of mutual benefits and to focus future cooperation on the dominant theme of economic growth in ASEAN. ASEAN was appreciative of the US continued assurances that the Administration would continue to oppose protectionist trade bills and in particular, the President would veto the Omnibus Trade Bill if passed by the US Congress, and that the Administration would continue to oppose labelling legislation to discriminate against coconut and palm oils produced by ASEAN in favour of non-tropical vegetable oils produced in the United States. One concrete development in the ASEAN - US relations was the agreement for a Joint Study on ASEAN - US Economic Relations to look into the possibility of establishing an ASEAN - US Initiative (AUI). During the year under review, AUI Coordinators of the two sides were appointed and have met in Washington DC to approve the Joint Study and to establish a Joint AU I Steering Committee to oversee the study.

During the Fifth Meeting of ASEAN - Canada Joint Cooperation Committee (JCC) held in Ottawa in April 1988, frank and useful ex- changes of views on issues of mutual interest were made. Both sides agreed to work closely to improve the economic situation for their mutual benefits. The Meeting also witnessed the signing of the Memorandum of Understanding between ASEAN and Canada on the ASEAN - Canada Forest Tree Seed Centre (Phase II). The Fifth JCC marked the first participation by the private sector, represented by the ASEAN - Canada Business Council, in the discussions under commercial and industrial cooperation.

During the Eleventh ASEAN - Australia Forum held in Manila on 7 - 8 June 1988, ASEAN and Australia formulated the framework of the second phase of the ASEAN -Australia Economic Cooperation Programme (AAECP) and finalized the Memorandum of Understanding on the AAECP. The MOU will be signed at the Post Ministerial Conference with Australia on 9 July 1988.

At the Seventh ASEAN - EC Ministerial Meeting (AEMM VII) in Dusseldorf, West Germany, in May 1988, the Foreign Ministers of ASEAN and the European Community exchanged views on international and regional political and economic issues and agreed to strengthen their cooperation in areas of mutual interest. The Ministers welcomed significant progress in the internal developments of both ASEAN and the EC regions at the Third Meeting of the ASEAN Heads of Government in 1987 and the EC's integration process towards an internal market by 1992 respectively as constructive steps towards a more unified and fruitful relationship. The Meeting also agreed to intensify ASEAN - EC industrial cooperation and to establish an ASEAN - EC Management Centre in ASEAN. ASEAN has agreed to locate the Centre in Brunei Darussalam.

Marked progress was made in ASEAN - UNDP cooperation with the launching of ASEAN - UNDP Fourth Cycle Inter-Country Programme (1987 - 1991). Marked improvements have been made in expediting the processing and approving of project documents and the implementation of the projects. UNDP had also taken its own initiative to organise two programmes for ASEAN with funding provided over and above the Fourth Cycle Budget Allocation. These were the training of ASEAN officials in "Development Assistance Management and Coordination" and "Seminar/Workshop on the Role of Private Sector in ASEAN Economic Development". Furthermore, UNDP had also approved the funding for the ASEAN share of the "Joint ASEAN - US Study on ASEAN - US Economic Relations".

ASEAN finds the continued occupation of Kampuchea by Vietnam a major obstacle to the promotion of regional peace and stability. The Vietnamese aggression is also perceived as a threat to international peace and security. The ASEAN Heads of Government agreed in Manila that "efforts should be intensified to resolve the Kampuchean problem". They again reiterated the call for Vietnam to engage in serious discussions on 'a just and enduring solution to the Kampuchean problem. This would include the total withdrawal of Vietnamese forces from Kampuchea to allow the Kampucheans to exercise the right to self-determination and to enable Kampuchea to become a neutral, independent and non- aligned nation posing no threat to its neighbours. ASEAN's political and diplomatic efforts in pursuing the solution to the Kampuchean problem during the past year included an informal meeting of the ASEAN Foreign Ministers in Bangkok on 16 August 1987 to discuss and assess their diplomatic efforts and the situation and their annual informal meeting during the 42nd Session of the UNGA.

In the United Nations General Assembly, ASEAN again scored a major diplomatic victory. An overwhelming majority of the world community supported the ASEAN Resolution on the Situation in Kampuchea at the United Nations. The Resolution was passed in October 1987 with an increasing support.

Progress has been made in realizing the Zone of Peace, Freedom and Neutrality by having agreed that ASEAN should, through the consideration of all aspects, intensify its efforts towards the early establishment of a Southeast Asia Nuclear Weapon Free Zone (SEA NWFZ) including the continuation of the consideration of all aspects relating to the establishment of the zone and of an appropriate instrument to establish the zone. The establishment of an effective SEA NWFZ will serve as a regional contribution by ASEAN to the efforts for achieving general and complete disarmament and as an effective measure for promoting peace and security in the region.

Considering the influx of Indochinese refugees and displaced persons into the ASEAN region, the ASEAN Heads of Government reaffirmed to continue to undertake serious efforts with other parties concerned to find an effective solution to the problem, since these refugees have caused a burden to the countries of first refuge of ASEAN.

Proposals for strengthening the machinery of ASEAN cooperation were made by various fora. Some of these proposals had been considered and endorsed by the Summit.