Scorecards show ASEAN on track for single community

Linda Yulisman, The Jakarta Post, Phnom Penh | Tue, 04/03/2012 10:31 AM A | A | A | - Klipping The Jakarta Post

A joint assessment of the score cards evaluating the progress of each ASEAN member toward the creation of a single economic community in the region shows that all countries are on track with their commitments, a minister has said.

“Every country has achieved the requirements or is on target to achieve them. In various aspects, such as connectivity, trade in goods and services, we are ready,” said Trade Minister Gita Wirjawan after the seventh ASEAN Economic Community Council Meeting in Phnom Penh, Cambodia, on Monday.

Gita cited several achievements, which have been made recently, including the signing of a customs agreement by the region’s finance ministers in March and another agreement on a single aviation market made between transportation ministries.

As envisioned by the AEC 2015 Blueprint, the community will be supported by four pillars: a single market and production base, a highly competitive economic region, a region with equitable economic development and a region fully integrated into the global economy.

The establishment of the community will be a continuation of earlier efforts made through the ASEAN Free Trade Area (AFTA) started in 1992. Through the free trade pact, 99.11 percent of tariffs in ASEAN-6 (Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand) have already been lifted since 2010, while 98.86 percent tariffs of ASEAN-4 (Cambodia, Laos, Myanmar and Vietnam) have been reduced to between 0 and 5 percent.

Despite this progress, Gita said, ASEAN countries might face tougher challenges ahead in implementing the ninth and 10th packages of the ASEAN Framework Agreement on Services (AFAS).

“Package 9 will be challenging and Package 10 will even be more so, but we’ll try to address issues pertaining to them,” he said.

In the meeting, ASEAN trade ministers agreed to make special efforts to fulfill the integration of services by using available measures to protect sensitive subsectors.

ASEAN sealed its integration commitment in the services sector through the AFAS signed by ASEAN economic ministers on Dec. 15, 1995, in Bangkok, Thailand.

It aims to boost cooperation in services among the ASEAN member states to improve efficiency and competitiveness, enlarge production capacity and the supply and distribution of services as well as improving market access.

All AFAS rules comply with international trade rules under the General Agreement on Tariffs and Trade (GATT) of the World Trade Organization (WTO), including most favored nation (MFN) rules.

Gita said that apart from these issues, ASEAN members would also work on the issue of equitable development toward the establishment of AEC through financial inclusion and diversification of export markets to nontraditional markets, such as the Middle East, South American and African countries.

Indonesia would host a conference on financial inclusion and an ASEAN-Latin America Forum in the middle of this year, which would include government officials and business communities in the region, he said.

Intra-ASEAN trade has expanded significantly in recent years, reaching US$470 billion in 2008, $376.2 billion in 2009 and $519.7 billion in 2010. Indonesia’s non-oil and gas exports to ASEAN totaled $26.99 billion in 2010 and rose by 19.4 percent to $32.22 billion last year.