ASEAN Signs Blueprint for Economic Integration

SINGAPORE ~ Southeast Asian leaders signed an “economic blueprint” this week aimed at creating a single market of more than half a billion people by 2015 to help battle competition from giants China and India.

The Association of Southeast Asian Nations (ASEAN) is fast-tracking the integration of its 10 economies to create a free market zone with a unified production base and no tariffs, moving up the timetable by five years.

The plan will make ASEAN “more dynamic and competitive” while addressing the “development divide and accelerating integration of Cambodia, Laos, Myanmar and Vietnam,” the bloc’s four poorest countries, the document said.

“A free and open investment regime is key to enhancing ASEAN’s competitiveness in attracting foreign direct investment as well as intra-ASEAN investment,” the ASEAN Economic Community Blueprint said.

The document calls for the elimination of import duties on all products, except for some sensitive items, by 2010 for the six bigger members and by 2015 for the four smaller economies.

Restrictions in trade and services in the sectors of air transport, e-commerce, healthcare and tourism would also be substantially removed by 2010 and by 2013 for the services sector.

Ramon Kabigting, a Philippine trade official who helped draft the blueprint, said it takes ASEAN a step closer to its ambitious goal of becoming a European-style single market.

He said it binds ASEAN countries into instituting economic reforms while giving smaller members enough time to adjust to liberalisation.

“By 2015 we will have a zone that is a seamless production base and a single market,” Kabigting told reporters. “There are measures here that are here specifically to help us.”

He said that once the targets are achieved, “goods and materials as well as peoples will move freely across the borders.”

Complicating the situation are disparities between the group’s more developed members Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand, and lower-income states Cambodia, Laos, Myanmar and Vietnam.

Observers say the reforms are also imperilled by vested interests, red tape and foot-dragging in the region.

ASEAN economic ministers said that achieving the goals would not be easy, and that leaders must show political will if the region is to transform itself into a unified trading zone.

“We really have to see this in a very, very positive way,” said Indonesian Trade Minister Mari Pangestu. “We cannot stop the clock – we need to make ourselves more competitive.”

Jose Concepcion, the Philippine representative to the ASEAN Business Advisory Council, said that while there may be some “hiccups in the political front,” liberalisation must not be stopped.

He was referring to calls for trade sanctions against ASEAN’s pariah state Myanmar, which has refused calls to shift to democracy and sparked outrage with a recent deadly crackdown on pro-democracy rallies.

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