U.S. business group supports Asian financial integration

Asian Economic News, Jan 20, 2003

BANGKOK, Jan. 17 Kyodo

U.S. investors in Southeast Asia favor further Asian economic integration, including financial cooperation and a possible creation of a regional bond and common currency, the head of the U.S. business council said Friday.

''The Asian bond is a step in the right direction for financial cooperation among Asian countries, so we are not against that move,'' U.S.-ASEAN Business Council President Ernest Bower told a news conference.

Bower said he saw the attempts to formulate regional bonds as part of a gradual process of economic integration in Asia, which U.S. investors support.

But he added that U.S. businesses are cautiously watching what the terms of reference of the Asian bond scheme would be.

Bower said negotiations between the 10-member Association of Southeast Asian Nations (ASEAN) and China on establishing a free trade area by 2010 and a move toward closer economic partnerships between Japan and some ASEAN countries are also conducive to achieving Asian economic integration.

He lauded a vision for an ASEAN Economic Community discussed between Thai Prime Minister Thaksin Shinawatra and Singapore Prime Minister Goh Chok Tong last Saturday in Phuket, saying U.S. businesses perceive the initiative as similar to that of the European Economic Community 25 years ago, a precursor to full-fledged economic integration in the region.

''We believe that ASEAN has the opportunity to move beyond the ASEAN Free Trade Agreement and ASEAN Investment Area, and integrate its economies fully -- meaning the energy sector, tourism promotion, movements of labor between countries, sharing of technologies, common standards,'' he said.

Bower called Southeast Asia's market of 500 million people and a gross domestic product of nearly $1 trillion ''an attractive market to invest in for the strategic investors who want to be part of Asia's growth in the next decade.''

He urged ASEAN countries through negotiations with China on the trade liberalization accord to find ways to draw further foreign direct investment into the Southeast Asian region, saying, ''ASEAN can win with China rather than to compete and lose.''

''If ASEAN countries can carefully negotiate its free trade agreement with China and make sure that they integrate their economies I don't see Americans pulling investment out of Southeast Asia. They may double their bets if they will be able to see that strategically they will be able to take advantage of the 500 million people ASEAN market and the 1.3 billion China market,'' he said.

ASEAN comprises Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

Members of the U.S.-ASEAN Business Council include around 150 of the Fortune 1,000 U.S. companies with trade and investment interests in Southeast Asia.