ASEAN economic ministers ink 6 economic agreements

Economic ministers of the ten-member Association of Southeast Asian Nations last Friday night signed six economic agreements to expand further trade and commerce in the region despite the postponement of the ASEAN Leaders' Summit.

The economic ministers led by Malaysian Trade Minister Rafidah Aziz and Philippine Trade and Industry Secretary Peter Favila worked overnight at the Mactan Ballroom of Shangri-la's Mactan Island Resort and Spa to craft the six agreements, including two with the People's Republic of China.

Four of the six agreements signed were for intra-ASEAN trade while the two others were economic agreements expanding trade with China.

The four intra-ASEAN agreements were the ASEAN Framework (amendment) Agreement for the Integration of Priority Sectors, the ASEAN Sectoral Integration (amendment) Protocol for the Integration of Priority Sectors, the Protocol to Implement the 5th Package of Commitments under the ASEAN Framework Agreement on Services (AFAS) and ASEAN MRA (Mutual Recognition Agreement) on Nursing Services.

The accords with China were the Agreement on Trade in Services of the Framework Agreement on Comprehensive Economic Cooperation between ASEAN and the People's Republic of China and the Second Protocol to Amend the Framework Agreement on Comprehensive Economic Cooperation between the ASEAN and PROC.

A third agreement between ASEAN and China -Protocol to Amend the Trade in Goods of the Framework Agreement on Comprehensive Economic Cooperation between ASEAN and PROC- was also completed but the ASEAN and Chinese economic ministers deferred the signing because the 10 ASEAN leaders wanted to witness its signing ceremony when the summit is finally held in Cebu next January, according to Favila.

The Protocols on Priority Sectors capture is contained in the second phase of the existing measures in Phase I Roadmaps, changes to timelines and expansion of product coverage for tariff elimination. ASEAN countries will abolish duties on 3,253 tariff lines on January 2007.

Apart from duty elimination, ASEAN countries will also implement measures to simplify customs procedures, strengthen cooperation on standards and conformance, and enhance facilitation of travel and movement in ASEAN.

"The signing of the protocols reaffirms ASEAN commitment to accelerate economic integration and enhance overall competitiveness of the ASEAN countries," Favila said.

In its effort to further facilitate intra-ASEAN trade, ASEAN member countries have agreed to adopt Product Specific Rules (PSR) for 2,011 products of the Priority Integration Sectors, according to Ramon Vicente Kabigting, director of the Philippines' Bureau of International Trade Relations.

These PSR will give flexibilities to ASEAN exporters and manufacturers to choose the most convenient rule, that is, either use the 40 percent Value Added Criterion or PSR in meeting the original criteria in order to be eligible for the CEPT rate, he added.

Various measures are also being undertaken to further integrate intra-ASEAN trade, including the elimination of non-tariff barriers (NTBs) between member countries in three packages beginning 2008 and will be fully eliminated by 2010.

Favila said the agreements signified the clear and serious intention of the 10 ASEAN members to fully integrate their economies as part of the moves to fast-track implementation of the ASEAN Economic Community (AEC) similar to the European Economic Community. The agreements with China, on the other hand, will speed up implementation of the ASEAN-China Free Trade Agreement.

Kabigting also said the agreement with biggest impact on the Philippines was the Mutual Recognition Agreement on Nursing Services that will allow ASEAN member nations, particularly the Philippines, to export nursing services to each other. This is expected to benefit thousands of nursing students who plan to work in any of the ASEAN nations, he said.

Another agreement with a direct impact on the Philippines was the Agreement on Trade in Services of the Framework Agreement on Comprehensive Economic Cooperation between ASEAN and China, as it means that the Philippines has entered the Early Harvest Program of the ASEAN-China. This also means that the Philippines and China can start exporting some products to each other under a zero-tariff regime, Kabigting said. - Gregg M. Rubio