ASEAN TO ENHANCE REGIONAL INTEGRATION, LIBERALISE SERVICES TRADE WITH CHINA

The ten members of the Association of Southeast Asian Nations (ASEAN*) ended their annual summit on 15 January, with promises of greater integration within the bloc and expanded trade liberalisation with China and other major economies in the region.

Heads of state from member countries on 13 January vowed to push for the establishment of an ASEAN Community by 2015, five years earlier than originally planned. In addition to liberalised flows of goods, services and investments, this would involve the region-wide institutions and industrial integration, comparable to the early stages of the EU. They signed a separate declaration committing their countries to developing an 'ASEAN Charter' that would lay the foundation for regional cooperation "by providing an enhanced institutional framework as well as conferring a legal personality to ASEAN."

China and ASEAN signed an agreement to cut barriers to trade in services sectors such as telecommunications, transport, and tourism, to be implemented in July. This follows an earlier agreement that cut tariffs on some 7000 types of industrial goods in mid-2005 (see BRIDGES Weekly, 6 July 2005). The two want to create a free trade area in goods and services encompassing close to 1.8 billion people by 2015. The six relatively richer members of ASEAN - Brunei, Indonesia, Malaysia, the Philippines, Singapore, and Thailand - would be required to open their markets five years earlier.

ASEAN has also made progress in negotiating a free trade agreement with India, now expected to be signed in July 2007. Both sides have agreed to bring down tariffs on sensitive products such as black tea, pepper, and palm oil to below 5 percent by 2018, reports the Hindustan Times. They have not, however, agreed on the proportion of tariff lines to be made duty free by 2015 - ASEAN is seeking 85 percent of all product categories, while New Delhi has offered 77 percent.

In addition to China and India, ASEAN is pursuing deeper trade relations with Australia, Japan, South Korea, and New Zealand.

* Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam.

Documents from the ASEAN summit are available at http://www.12thaseansummit.org.ph/innertemplate3.asp?category=documents.

ICTSD reporting; "ASEAN, China agree to cut barriers to services," REUTERS, 15 January 2007; "China and Asean sign trade deal on services," FINANCIAL TIMES, 15 January 2007, "India, ASEAN break ice on tariff cut," HINDUSTAN TIMES, 17 January 2007; "China, ASEAN sign agreement," THE HINDU, 15 January 2007.