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ASEAN moves to regional free trade from January 1
SINGAPORE, Dec 23: After many false starts toward economic cooperation, the Asso elation of Southeast Asian Nations is finally moving to establish regional free trade from January 1. reports Al*.
The pace will be slow, how ever, if the lists of goods to be excluded temporarily from tariff reduction that were issued on Tuesday are any indication.
In Jakarta. Trade Minister A ri fin Slregar said Indonesia would cut tariffs on about 3. 170 items in the first round. But 1.708 items are to be temporarily excluded from the plan to establish AFTA. the ASEAN Free Trade Area, by the year 2008
The Philippines will exclude 1,199 Items, Malaysia 648. Brunei 166 and Thailand 118. officials said. Such "tem-
porary* exclusions may last for years.
Singapore is not seeking temporary exclusions but will reject 1 18 products "for reasons of public policy and not for trade protection’
These permanent exclusions include rhinoceros horns. tobacco, alcohol, firecra ckers. motor vehicles, petroleum and related products and toy currencies, the Trade Development Board an nounced.
The AFTA is the centerpiece of ASEAN’s economic strategy for the 21st century, a free trade zone to stimulate regional growth and supplant •earlier dismal efforts at economic cooperation.
The goal is to gradually cut tariffs on fntra-ASEAN trade In manufacturing and processed
agricultural goods to a maximum of 5 per cent over IS' years
The six have a combined population of 330 million, relatively low cost labour and rich resources. Their total gross domestic product was more than dlrs 330 billion last years
Critics say AFTA offers too many exclusions and other loopholes, and is weakened by omitting the growing services sector and unprocessed farm products.
The 15-year period for setting up AFTA was too long. Malaysian Finance Minister Anwar Ibrahim said in a speech tn Singapore earlier this month.
The free trade area Is an old Idea that was revived In 1991 by former Thai Prime Minister
Anand Panyarachun. who pro posed that It be set up. with in 10 years.
The ASEAN heads of government, citing the emergence of huge Integrated markets 1n Europe and Narth America, agreed at a summit meeting tn Singapore In January to launch AFTA. They hope the large regional market will enhance ASEAN's attraction as a trading partner and investment target.
Tariff reductions are planned under fast track and normal track schedules. which enable member countries to delay phasing in the cuts.
Earlier attempts at coopcra tion featured the Preferential Trading Arrangements of 1977. designed to lower tariff barriers on a product-by-product basis.
It failed because each of the six was allowed to exclude any Item deemed vital to Its econ omy. Thailand, for example, once excluded about 1.600 items, covering 63 per cent of all the goods it traded
An Independent study last year dismissed the programme as "window dressing and irrei evancy
Major joint-venture projects announced with much "ballyhoo — Hepatitis B vaccine for Singapore, soda ash for Thailand, urea for Indonesia and Malaysia, and copper fabrication for the Philippines — made little progress.
Official* said the major obstacle to integration was that the six compete for the same overseas markets and the same foreign investments.