INDUSTRY


78. The ASEAN Investment Cooperation (AICO) Scheme will replace the ASEAN Investment Joint Venture (AIJV)Programme and Brand-to-Brand Complementation Scheme. This was decided at the AEM Retreat of 28-29 April 1995 in Phuket, Thailand. At its Retreat in Singapore in April 1996, the AEM signed the text of the Basic Agreement on the AICO Agreement, Interpretive Notes to the AICO Agreement and modality to accommodate the BBC Scheme and AIJV Programme under the AICO Scheme.

79. The new scheme was developed with the help of the private sector in ASEAN. Based on the CEPT Scheme for AFTA, it is designed to p romote investment in technology-based industries and enhance value added activities.

80. The AICO Scheme encourages companies in ASEAN countries to cooperate with one another in the manufacture of approved AICO products. A minimum of two companies in two different ASEAN countries is required to form an AICO Arrangement. To expedite its implementation, the new scheme operates on the 7-X formula where only the approval of the participating countries are required in any application to form such an arrangement. The companies are also required to have a minimum 30% ASEAN national equity and be willing to undertake resource pooling, industrial complementation, or other industrial cooperation activities.

81. The major draw of the new scheme is that an AICO final product, AICO intermediate product or AICO raw material would enjoy preferential tariff rates of 0-5%, the final CEPT rate to be reached by ASEAN by year 2003. Other incentives include local content accreditation where applicable and other non-tariff incentives to be provided by the participating Member Countries.

82. In keeping with the decision of the 27th AEM Meeting in Bandar Seri Begawan of 7-9 September 1995, the WGIC continued to approve AIJV and BBC applications until the AICO Scheme was signed on 26 April 1996. For the period under review, ASEAN approved the Proton AIJV between Malaysia and Philippines. The participation of Indonesia as a new participating country in the BBC Scheme as well as participation of new automotive brand owners like Honda were also approved during the same period.

83. ASEAN Small and Medium Scale Enterprise (SME) Agencies are presently conducting a policy analysis to establish "ASEAN best practice" for SME development. The policy analysis will cover areas such as SME financing, human resources development, technology sharing, national SME policy, export marketing and industrial linkages. During the period under review, ASEAN participated actively in the SME activities of APEC.

Intellectual Property

84. To monitor regional and international developments in intellectual property, a Working Group on Intellectual Property Cooperation (WGIPC) was established. The Working Group will also implement its Programme of Action (1996-1998) for the ASEAN Framework Agreement on Intellectual Property Cooperation. The WGIPC will also serve as the mechanism for ASEAN Member Countries to have regular consultations on pertinent developments.

Standards and Quality

85. Activities to increase trade among ASEAN Member Countries, especially for products in the CEPT Scheme for AFTA, were the focus of a draft Work Programme for the ASEAN Consultative Committee on Standards and Quality (ACCSQ) for 1995-2003. Currently being finalised, the Work Programme also contains measures to harmonise standards in ASEAN and to create mutual acceptance arrangements in the areas of testing, calibration and certification. In relation to this, Member Countries have also identified a list of product standards to be harmonized by the end of 1996. The private sector as well as regulatory bodies in ASEAN will be involved in the programme.

86. The year saw the ASEAN strengthen its links with some of its external partners in the area see table 4 and 5 of cooperation in standards and quality. A draft 1996 Work Plan for the Total Quality Management (TQM) Project has been formulated with MITI (Japan). The ACCSQ is now following up with MITI (Japan) on the broad principles, financial arrangements and detailed components of the proposed Work Plan for speedy implementation. The ACCSQ also met with its CER counterparts in January 1996 under the framework of the AFTA-CER Linkage. The information exchanged among participants enabled them to identify more cooperative activities for 1996-1997. The ACCSQ and the CER countries have also agreed to jointly draft an MOU to formalise and implement the cooperative activities before the next AEM-CER Consultation in September 1997.