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8 Dec 2005

International Economy

ASEAN Summit, 2005: Striding toward a Single Market


Malaysia will host the 11th ASEAN Summit in Kuala Lumpur during December 12-14, 2005. On this occasion, ten ASEAN leaders are scheduled to talk with non-ASEAN counterparts from Japan, China, South Korea, Russia, India, Australia and New Zealand. The meeting is regarded as significant, because it will be the first forum where leaders from ASEAN and Russia will have met. It will also serve as the first East Asia Summit (EAS) to be attended by leaders from the ASEAN bloc, along with China, Japan and South Korea. The ASEAN summit and conference between ASEAN leaders and its negotiating partners, i.e., China, Japan, South Korea, India, Russia, Australia and New Zealand will be quite significant for the Asian region that has gained a greater role in the world economy.

High on the agenda will be monitoring of ASEAN's ultimate goal of becoming the ASEAN Economic Community (AEC) in 2020. ASEAN will then become a single market and production base, where goods, services, investment and laborers will be able to move freely, while movements of capital will become more flexible. In the latest development, ASEAN has expedited liberalization of eleven priority sectors, i.e., vehicles, plus wood, rubber, textile, electronic, agricultural and fishery products, as well as information technology, health, tourism and aviation.

Progress has been seen in ASEAN's measures which are proceeding on schedule. These include commitments to cut tariffs under the AFTA agreement; which has been achieved. Tariff rates on most products were made lower than 5 percent in 2003, will be completely eliminated in 2010 for the founding member countries, and by 2015 for the four new member countries (Vietnam, Laos, Myanmar and Cambodia). Meanwhile, non-tariff barriers (NTBs) will also be removed.

Coming implementations include liberating investments in ASEAN and giving a 'National Treatment' to ASEAN investors by 2010, and the expedite of liberalization in the service sector by 2020. At present, this plan is spearheaded by ASEAN tourism promotions to make it a tourism hub, as well as in aviation, wherein ASEAN has set targets to liberate trade and passenger transportation within the group by 2010. These are all important targets that ASEAN has to achieve to create accountability in the eyes of the people of the world.

Moreover, ASEAN is trying to improve rules and regulations and speed up other implementations among within the group. In 2004, it improved and increased efficiency to the ASEAN Dispute Settlement Mechanism to support the AEC (ASEAN Economic Community) formation in 2020. It has also revised the operating mechanisms of ASEAN for greater efficiency and has strengthened the ASEAN Secretariat, particularly in policy analysis, and in providing suggestions to ASEAN member countries to promote cooperation, assist development and update ASEAN agreements for more effective enforcement.

Though ASEAN's efforts to become the AEC, while clear-cut success is not imminent ? partly because the levels of economic development between ASEAN members differ somewhat, particularly among the four new ASEAN member states ? the target to attain the above policy is an important driving force to stimulate the stability and unity of ASEAN, which will thus become an important trade negotiating power on the global stage, and attract other countries outside ASEAN to form more economic cooperation with us.

International Economy