ASEAN summit pushes co-op
Eric Teo Chu CheowChina Daily  Updated: 2004-11-26 06:21

Two areas of co-operation are expected to dominate the ASEAN Summit due in Vientiane, Laos on November 28-30, namely economic co-operation and its common fight against terror from within the region.

Economic co-operation is truly the key to the cohesiveness and co-operation of the Association of Southeast Asian Nations (ASEAN) and a new impetus seems to be emerging, as ASEAN leaders pledge to increase economic, trade and investment links across ASEAN in the lead-up to the Vientiane Summit.

Indonesian President Yudhyono pledged with Singapore's Prime Minister Lee Hsien Loong on November 8 to expediently resolve bilateral economic problems and intensify economic co-operation as a basis for strengthening overall Indonesian-Singaporean and ASEAN relations. During Lee's inaugural visit to Kuala Lumpur earlier on October 5, Malaysia and Singapore had pledged to resolve bilateral problems, whilst intensifying economic co-operation. Indonesia, Singapore and Malaysia, the "original core" (together with Thailand and the Philippines), could be expected to be "prime movers" on economic co-operation at the summit, in order to provide ASEAN with the necessary impetus in "region-building."

In Bangkok on November 10, Lee and Thailand's Prime Minister Thaksin Shinawatra had in fact pledged to accelerate ASEAN economic co-operation, especially in advancing the deadline of the proposed ASEAN Economic Community (AEC) to a date before 2020, as it would make no sense for the AEC to be implemented after the ASEAN-China Free Trade Agreement (FTA) in 2011, as well as similar trade pacts with South Korea, India and Japan, which could all eventually come into effect before 2020. The Thai-Singaporean initiative would undoubtedly be the centrepiece of ASEAN's summit discussions in Vientiane; the "newer" ASEAN countries would have to be convinced to move forward quickly, given their inherent "less developed" economic structures.

Two important meetings, the 36th ASEAN Economic Ministers and 5th ASEAN Army Chiefs Meetings, had in fact taken place in Jakarta in September, which both gave a certain impetus to ASEAN integration in the run-up to the summit.

The bold decisions taken by ASEAN economic ministers constituted both an economic and political breakthrough in speeding up ASEAN economic integration into a single economic community "a la EU." Economic integration in 10 economic sectors would be accelerated although, unfortunately, the air travel sector was bypassed. It was also encouraging that ASEAN ministers revised the rules of origin for goods to qualify for ASEAN preferential tariffs, from a minimum 40 per cent local (ASEAN) content down to 20 per cent; but, to implement this, ASEAN members would need to set up a credible mechanism to issue certificates of origin across the region, which is still clearly not the case.

The immediate challenge for ASEAN is therefore to set up a more dynamic and stronger part of the global supply chain in Southeast Asia, by making its member economies more attractive as regional production bases for foreign investors, who want to tap local comparative advantages and economies of scale. However, such an efficient supply chain would still require such minimal intra-ASEAN conditions as efficient transport, expedient customs services and common production standards, in order to ensure an ultimate free flow of goods, services, investments and even labour for the 540 million ASEAN consumers and market.

ASEAN also established a timetable of trade talks with its regional partners. Meeting with Asia-Pacific trade ministers across the Asia-Pacific, ASEAN ministers decided to begin free-trade negotiations with South Korea and Japan by January 2005 and April 2005. ASEAN will start talks with Australia and New Zealand in early 2005 and begin implementing a planned FTA with India by January 2005, when tariffs on 105 products will be gradually reduced under an "early harvest" programme, with prospects for zero tariff by 2007. This should result in a full-fledged FTA with India by 2011 for the more advanced ASEAN economies, and by 2016 for the less developed ones. Moreover, ASEAN and China announced substantive progress in concluding the ASEAN-China FTA by 2011.

All these initiatives should complement ASEAN's integrative process of better managing its internal supply chain, attracting foreign direct investment and capital and promoting greater ASEAN efficiency and competition from within. These economic initiatives should be confirmed at the Vientaine Summit.

The Army Chiefs' Meeting in September was equally a watershed in Southeast Asia's joint fight against terrorism and illegal arms trafficking, which are recognized to be intrinsically linked. The military chiefs decided to crack down on groups with paramilitary training camps for terrorism purposes in each other's territories. This was a significant step forward in attempting to counter such groups' access across ASEAN's internal porous borders in order to wreak havoc on other member countries' soil. At the back of their minds were clearly the armed separatist movements in Aceh and Mindanao (southern Philippines).

In fact, the army chiefs had already decided during their fourth meeting in Malaysia last year to deal jointly with terrorist threats within ASEAN; multilateral military co-operation in the region began in June this year, when Indonesia, Malaysia and Singapore formed a joint patrol in the Melaka Straits to fight piracy and terrorism. But on-land terrorism had taken place notably in Indonesia, ranging from the fatal October 2002 Bali bomb blasts to the JW Marriot bomb in Jakarta in 2003 and the more recent car-bombing in front of the Australian Embassy. The perpetrators of such incidents are believed to have been trained in camps in the southern Philippines run by the al-Qaida-linked network. ASEAN is now intent on snuffing them out as ASEAN security co-operation intensifies.

ASEAN's integrative process in economic integration, external economic out-reach and security co-operation will take a significant step forward at the ASEAN Vientiane Summit, thereby confirming this joint ASEAN commitment at its highest level, which in turn could generate greater confidence and stability for the region.

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