Hanoi, 13 Sep.  - ASEAN Secretary-General Rodolfo C. Severino, Jr., urged the ten member countries of the Association of Southeast Asian Nations to hasten the establishment of an integrated regional market to maintain ASEAN’s economic competitiveness. 

Speaking at separate consultations between ASEAN Economic Ministers and American and Japanese businessmen in Hanoi Thursday, Severino outlined ways for Southeast Asia to sustain its recovery from the 1997-1998 economic crisis and to overcome the effects of global economic slowdown.

He said that these measures include continuing with internal reforms and economic restructuring, opening up further to foreign investments, and moving faster on regional economic integration.

“As we all know, the global economic slowdown is a setback for the recovery of ASEAN from the economic crisis in 1997,” he said.  Based on the economic performance of the region in the first half of 2001, ASEAN estimates this year’s economic growth to be much lower than last year’s 5.4 percent growth.

Severino said that “the role of FDI in ASEAN economic development is more important than ever before.”  

Between 1995 and 2000, the United States and Japan, the two most important sources of FDI in ASEAN, accounted for 15% and 16%, respectively, of US$120 billion worth of investment in the region.  During this period, the volume of Japanese investments has been decreasing.

Severino informed the US and Japanese businessmen that the ASEAN Free Trade Area is on track.  At present, ninety percent of the products included in AFTA has tariff levels of 0-5 percent.  By the beginning of 2002, ASEAN expects to complete the free trade area among the older ASEAN members, namely Brunei Darussalam, Indonesia, Malaysia, Philippines, Singapore and Thailand.  The four newer members, Cambodia, Laos, Myanmar and Vietnam,  have different timetable for tariff-cutting completion.  

Under the free trade area, product standards are being harmonized and promoted through ASEAN mutual recognition arrangements.  ASEAN has identified 20 priority product groups for standards harmonization.

To promote industrial complementation, ASEAN has approved  77 projects under the ASEAN Industrial Cooperation Scheme with annual trade transaction worth almost US$ 1 billion.  AICO scheme aims to enhance production efficiency in the ASEAN region by extending tariff incentives to manufacturers which operate in two or more ASEAN countries.

To support investments and create investment opportunities, master plans are being worked out for infrastructure building, such as the ASEAN Highway Infrastructure Development Plan and the Singapore-to-Kunming Rail Link.  To facilitate transport and logistics movement in the region, ASEAN is implementing a framework agreement on the facilitation of goods in transit. 

Negotiations are on-going to liberalize and facilitate services in the region in such areas as air transport, business services, construction, financial services, maritime transport, telecommunication and tourism.

ASEAN has agreed to liberalize trade in ICT products.  Under the e-ASEAN Framework Agreement of November 2000, member countries would eliminate duties and non-tariff barriers in three tranches from 2003 to 2005.  ASEAN is working out a common framework for e-commerce laws.     

To ensure the smooth flow of goods across borders, customs procedures are being harmonized.  Moreover, an ASEAN system of common tariff nomenclature has been endorsed for implementation.  ASEAN will also implement the WTO Valuation Agreement, which lays emphasis on the process of verification through post-importation audit.

Severino briefed the American and Japanese business delegations of the progress of cooperation between ASEAN and China, Japan and the Republic of Korea.  He also informed them of ASEAN’s efforts of build closer economic relations with Australia and New Zealand.

Severino called on the American and Japanese businessmen to take advantage of the highly diverse economic structure and resources of ASEAN economies as a single production base and market.

Finally, Severino reaffirmed that “integrating the ASEAN market, undertaking internal liberalization and reforms, and building closer market linkages with neighbors are the surest ways to maintain the region’s attractiveness to investors.”