1. The First Meeting of the AEM-MITI Economic and Industrial Cooperation Committee was held on 23 November 1998 in Bangkok under the co-chairmanship of H.E. Dr. Supachai Panitchpakdi, Deputy Prime Minisier and Minister of Commerce of Thailand, and H.E. Mr. Kaoru Yosano, Minister of International Trade and Industry of Japan. The Meeting was attended by delegates from the ASEAN countries and Japan. The representative from Cambodia attended the Meeting as Observer. The Meeting was also attended by representatives from the ASEAN Secretariat, and Japan Overseas Development Cooperation (JODC).

2. The Meeting adopted the Terms of Reference (TOR) as in Annex 1 to serve as a basis for the work and direction of future cooperation under the purview of this Committee. The Meeting agreed that the work of this Committee should take into account the current economic and financial circumstances and needs of the region.

3. The Meeting noted that various measures have been taken by the individual ASEAN countries and Japan to address the economic crisis and to restructure their respective economies. Given the close interdependence of trade as well as investment between ASEAN, and Japan, the Meeting agreed that there is urgency for two sides to work closely and concertedly to stimulate the real sector and to restructure ASEAN industries on a longer term basis in order to revitalize and improve the efficiency, productivity and international competitiveness of these industries.

4. The Meeting was pleased to note that the various measures taken by ASEAN, at the national level, and through international efforts, have brought about a more stable exchange rate situation in the region. The Meeting agreed that, in addition to the need to maintain greater exchange rate stability, there is an urgent need to further stimulate demand, both domestic and external, and make credits available for the real sector to induce faster recovery process in the region.

5. ASEAN and Cambodia welcomed the announcement of Emergency Economic Measures announced by Japan on 16 November with over 20 trillion yen package which include 1 trillion yen cooperative measures for Asian countries. They expressed their confidence the Japanese economy would quickly recover and help lead the region's economies to faster recovery.

Improvement of ASEAN's Competitiveness

6. The Meeting expressed the view that foreign direct investment (FDI) will play an important role in strengthening the ASEAN's competitiveness. The Meeting further agreed that liberalization of markets both trade and investment would help the region to attract higher levels of FDI.

7. ASEAN reiterated its commitment to accelerate the regional integration efforts through AFTA, AICO, AIA and liberalization in the service sector. ASEAN expressed its intention to ensure that all investors, ASEAN and non-ASEAN, will be able to make maximum use of opportunities provided by the above arrangements. Japan expressed full support of these arrangement and indicated its readiness to provide necessary assistance in the implementation of these ASEAN's cooperation programmes, including promoting them to the investors in Japan.

8. The Meeting recognized that it is important to improve the business environment, such as development of physical infrastructure and harmonization of accounting systems, company registration laws and customs procedures. In this regard, the Meeting agreed to establish a joint government-private sector dialogue, which would include investment-related agencies in ASEAN, Cambodia and Japan, to discuss issues of the regional economic integration and the business environment.

9. The Meeting recognized that it is important to develop a set of market prospects of major industries in order to enhance confidence in investing in the region. The Meeting strongly urged the Expert Groups of major industries such as automobiles, consumer electronics, agro-industry, and chemicals to initiate the necessary work for this purpose.

Enhancement of Industrial Cooperation

10. Japan emphasised its intention to continue with active industrial cooperation in the fields of finance, human resources development, technology transfer and structural reforms, in order to assist the region's industrial restructuring efforts. ASEAN welcomed Japan's commitment to the region and noted the significance of mutual benefit in such cooperation.

11. The Meeting agreed to work together to facilitate smooth financing for industries in the region. In this regard, Japan explained its US$30 billion initiative and other measures such as expanded Export-Import Bank loan and the new yen loan scheme under consideration, incorporated in the Emergency Economic Package. The Meeting also shared the view that facilitation of policy-based financing and further utilization of trade/investment insurance are critical not only for the region's recovery, but also provide a basis for mid-to long-term development. To this end, the Meeting agreed to work together in strengthening the industrial and trade financing systems of the region and instructed SEOM-MITI to look into the need to establish an Expert Group on Trade and Industry Financing for the purpose.

12. The Meeting recognized that it is essential to develop well-trained workers with relevant skills to strengthen the region's industrial base, and to upgrade skills and increase the number of engineers, technical personnel and managers for producing competitive products for export. In this regard, the Meeting agreed to support closer cooperation among HRD institutions and engineering universities in ASEAN, and Japan as well as securing employment and development of HRD through on-the-job and workplace training programmes.

13. The Meeting recognized the importance of supporting industries and SMEs as the region's industrial base and a key to improving ASEAN's competitiveness. They agreed to work together on the development of supporting industries and SMEs through seminars, training courses, dispatch of experts and capacity building, and to enhance industrial cooperation among SMEs and related enterprises which can be promoted through industrial network. In this regard, the Meeting agreed to establish an Expert Group on SI/SMEs and Rural Industrialisation.

14. The Meeting agreed that while safeguarding the existing markets against further decline, it is also essential that new markets be fully explored with a view to achieving economic recovery during a decline in domestic demand. Japan expressed its intention to cooperate on export promotion of the region through assistance for developments of new markets and new products. The Meeting welcomed Japan's expression of its intention and expressed its hope for Japan to take economic stimulus measures to result in increase in imports from ASEAN.

Development Cooperation Assistance to New Member Countries

15. The Meeting welcomed the significant achievements of the new member countries in their accession into the ASEAN family. In this regard, the Meeting noted the work being done under the Working Group on Economic Cooperation in Cambodia, Laos and Myanmar and recommended that the new member countries of ASEAN and Cambodia be assisted further in the implementation of their respective economic integration policy.

16. The Meeting recognized the importance of the transition of the new member countries of ASEAN into a market economy and agreed to cooperate in assisting the new members as well as Cambodia in this process. In this regard ASEAN announced its willingness to continue to cooperate with Japan and the new members as well as Cambodia in the furtherance of their economic integration into the market economy. Japan also announced its willingness to carry out the feasibility studies on the special market economy zones in model cities, such as Savannakhet in Laos and Koh Kong in Cambodia.

17. The Meeting recognized that effective cooperation focusing on priority areas as contained in the ASEAN Vision 2020 is essential in improving business environment and infrastructure development in the new member countries and Cambodia and agreed that ASEAN and Japan would cooperate in promoting trade and investment through the development of infrastructure in energy such as electricity and transport network and development of West-East Corridor in the Mekong region.

18. The Meeting recognized the importance of human resources in real sectors in the development of an economic base of new member countries and Cambodia, and agreed to deepen intra-regional relationships through the development of industries in these countries by utilizing JETRO programmes and the dispatch of experts and training schemes.

19. The Meeting agreed to cooperate actively with international institutions, such as ADB, and through relevant multilateral frameworks such as the Greater Mekong Sub-region, and West-East Corridor of Mekong Basin in Vietnam, Laos, Cambodia and North-eastern Thailand within the ASEAN Mekong Development Cooperation, in supporting the economic integration of new member countries and Cambodia.

Work Programme for AMEICC Including Review of Expert Groups' Activities

20. The Meeting agreed on the work programme of AMEICC which appears as ANNEX 2. Recognizing the importance of these activities, the Meeting instructed SEOM-MITI to finalize the appropriate structure of Expert Groups and their concrete work programme including their time frame.

Others

21. The Meeting agreed to report to the next AEM the result of this Meeting. The Meeting agreed to hold the second meeting back-to-back with the next AEM-MITI Consultation to be held in conjunction with the 31st AEM Meeting in Singapore in 1999. The Meeting also agreed that, if the need arises, an additional meeting may be convened in the first half of 1999.