Asian editorial excerpts : The ASEAN Free Trade Area is in Jeopardy

Asian Political News, July 10, 2000

TOKYO, July 3 Kyodo

Selected editorial excerpts from the Asia-Pacific press:

The ASEAN Free Trade Area is in Jeopardy (The Nation, Bangkok)

East Asia is growing again. China is set to join the World Trade Organization. Hong Kong has reemerged from the crisis as a strong cyber player. And in South Asia, India is slated to become an economic powerhouse sooner or later. But what about Southeast Asia?

The signs are troubling. Indonesia remains the sick man of ASEAN (the Association of Southeast Asian Nations). The Philippines continues to slip back due to the apathy of the Estrada government. Thailand has yet to put its house in order. Only Malaysia and Singapore are, figuratively speaking, carrying the ASEAN flag in the global marketplace.

Furthermore, ASEAN as a whole may be embracing less of the New Economy of the Internet and e-commerce than the rest of Asia.

All this means that there could be less direct investment coming into ASEAN and lower growth prospects in the future.

The founding fathers of the ASEAN Free Trade Area (AFTA) had anticipated that such a situation would arise. That's why they devised the blueprint for ASEAN's transformation into a regional investment hub.

But AFTA is being derailed by the vested interests of ASEAN members who are dampening the spirit of the agreement and casting a major shadow over the concept of a free-trade area. Malaysia has been joined by Indonesia in delaying participation in AFTA's automobile tariff reduction program.

The ASEAN Economic Ministers Meeting later this year in Chiang Mai is expected to take up and resolve this matter. Thailand must demonstrate that by keeping to the original time frame, there would be a win-win situation for all AFTA members.

But Malaysia must also play the regional game as an active member of ASEAN. Malaysia should think with a vision that goes beyond its boundaries. The Proton car cannot be salvaged by risking the future of ASEAN's economy. Back-up plans for the Proton are necessary in order to keep the tariff-reduction time frame on course. This can be done by seeing the Proton as a regional car and not specially a Malaysian one.

Likewise, Indonesia must look forward rather than backward. While its reasoning that it is still in an economic crisis is justified, Indonesia must look beyond and see the benefits of keeping the AFTA time frame alive.

It will be tough for ASEAN to overcome this latest difficulty, but the stakes are high. We must keep foreign investors engaged in the region. The big picture of a mutual win-win situation must not be forgotten.

(July 3)