For this reason, the past year saw ASEAN sustaining its comprehensive cooperative activities in the fields of trade, customs, standards, food, agriculture and forestry, intellectual property, investment, industry, minerals and energy, transport and communications, tourism and private sector development.
Intra-ASEAN trade continued to grow in spite of the slowdown in the growth of exports of some Member Countries. For the first half of 1996, intra-ASEAN exports of all products reached US $ 36.28 billion or 11.7% higher than the US $ 32.47 billion during the same period in 1995. Significant achievements in the implementation of the CEPT Scheme for AFTA included the elimination of customs surcharges, and the decision by Member Countries to issue just one legal enactment to cover the whole period of tariff reduction.
Trade facilitation initiatives took centre stage during the year in review. The ASEAN Harmonised Tariff Nomenclature (AHTN) was finalised in May 1997 and Member Countries are now in the process of implementing the AHTN.
The ASEAN Finance Ministers signed the ASEAN Agreement on Customs on 1 March 1997. The Agreement provides a legal basis for the harmonisation of tariff nomenclature, customs valuation systems and customs procedures in ASEAN. ASEAN also began work on a framework for facilitating goods in transit. Both trade and transport officials are involved in the activity through a Joint SEOM-STOM Working Group.
With AFTA now on track and close to realization, the focus has gradually shifted to the formulation and implementation of new economic cooperation schemes. To promote and facilitate joint manufacturing industrial activities among ASEAN-based companies, the new ASEAN Industrial Cooperation (AICO) Scheme was implemented on 1 November 1996. Under the AICO Scheme, the products of participating companies enjoy a preferential tariff rate in the range of 0-5 percent.
New initiatives were formulated in the area of finance and investments. The ASEAN Finance Ministers held their first formal meeting in Phuket, Thailand in March 1997. The Ministers signed a Ministerial Understanding on Finance Cooperation which sets out the areas of cooperation in banking, financial and capital markets development, customs matters, insurance matters, taxation and public finance matters, monetary cooperation, and human resources development in the area of finance. In the area of investments, the ASEAN Economic Ministers agreed to establish an ASEAN Investment Area (AIA). Officials are now formulating the framework and strategies to realize the concept. The 1987 ASEAN Agreement for the Promotion and Protection of Investments was also amended to include provisions for transparency and predictability, the simplification of investment procedures and the approval process, a dispute settlement mechanism and accession of new members.
While forging ahead with ongoing activities, ASEAN also started planning and implementing new cooperation programmes in food, agriculture and forestry to achieve competitiveness through the increased application of science and technology, human resources development and greater liberalization of trade in agriculture and forest products. Efforts are also being undertaken to further strengthen the institutional mechanism of ASEAN cooperation in food, agriculture and forestry by improving work procedures at all levels.
A Protocol on Dispute Settlement Mechanism was signed by the ASEAN Economic Ministers in November 1996 in Manila. This Protocol, patterned after the World Trade Organisation Dispute Settlement Understanding, is expected to make the process of resolving economic disputes in ASEAN more expeditious and transparent. The Protocol is applicable to all past and future ASEAN economic agreements.
Two important decisions taken during the First Informal ASEAN Summit, held in Jakarta in November 1996, are expected to provide a further boost for ASEAN economic cooperation in the coming years. Firstly, the Summit endorsed the Basic Framework of the ASEAN Mekong Basin Development Cooperation. The reaffirmation of the Leaders' commitments to this initiative will promote the economic integration of economies of the ASEAN and non-ASEAN Mekong riparian states. A Steering Committee for the ASEAN-Mekong Basin Development Cooperation has been convened to implement the mandate of the Summit. In addition, a Working Group on the Singapore-Kunming Rail Link has been established. Clearly the initiative will create a new dimension in ASEAN economic cooperation.
Regional linkages were also advanced during the period under review. The Second AEM-CER Consultation, held in September 1996, agreed on joint studies to examine the medium to longterm development of the AFTA-CER linkage, among others. A Memorandum of Understanding and Cooperation in Standards and Conformance was also signed by the ASEAN and CER Ministers to advance cooperative efforts in this area. ASEAN also explored cooperation with countries involved in the North American Free Trade Arrangement (NAFTA), the Mercado Comun del Sur (MERCOSUR), the European Free Trade Association (EFTA), the Economic Cooperation Organisation (ECO) and the Southern African Development Community (SADC).
ASEAN Economic Agreements
PROTOCOL TO AMEND THE AGREEMENT FOR THE PROMOTION AND PROTECTION OF INVESTMENTS, 12 SEPTEMBER 1996, JAKARTA:
original agreement amended to include provisions on transparency and predictability, simplification of investment procedures and approval process, a dispute settlement mechanism and accession of new members.
PROTOCOL ON DISPUTE SETTLEMENT MECHANISM, 20 NOVEMBER 1996, MANILA:
creates a dispute settlement mechanism covering all past and future ASEAN economic agreements patterned after the WTO Dispute Settlement Mechanism.
AGREEMENT ON CUSTOMS, 1 MARCH 1997, PHUKET:
simplifies and harmonises customs valuation systems, tariff nomenclatures, and customs procedures; ensures consistency, transparency and fair application of customs laws and regulations, procedures and other administrative guidelines; ensures efficient administration and expeditious clearance of goods; explores other appropriate intra-ASEAN cooperation arrangements in the field of customs, particularly in the prevention and repression of smuggling and other customs fraud. ASEAN Member Countries remained active in the Asia-Pacific Economic Cooperation (APEC) forum which held its Fourth APEC Economic Leaders' Meeting in Subic, Philippines on 25 November 1996. The Manila Action Plan for APEC (MAPA) launched the implementation phase of the individual and collective initiatives in fulfillment of the voluntary commitment to implement the Osaka Action Agenda. MAPA contained the first steps of an evolutionary process of progressive and comprehensive trade and investment liberalization towards achieving the APEC goals set in Bogor, Indonesia. Cooperation among the potential members of the East Asia Economic Caucus continued. It was hoped that the Caucus would soon be formally instituted for the benefit of its members. The ASEAN private sector continued to play its supporting role towards realizing the goals of ASEAN by participating in official meetings as well as implementing its own programmes. The ASEAN Chamber of Commerce and Industry, ASEAN-CCI, organised the First ASEAN Business Summit in March 1997 in Jakarta which was attended by about 600 participants from all over the world. In the area of intellectual property, the ASEAN Intellectual Property Association was established in December 1996. In the energy sector, the First ASEAN Energy Business Summit was organized in June 1997 in Kuala Lumpur. The annual ASEAN Tourism Forum was held in January 1997 in Kuala Lumpur to boost the tourism industry in the region. The progressive deepening and widening of ASEAN economic cooperation is expected to accelerate over the next few years, leaving ASEAN strategically poised to meet new challenges in the 21st century and become a major regional economic power.