Trade Liberalization
In preparation for the Third ASEAN Summit in December 1987, the Committee on Trade and Tourism (COTT) held a series of meetings to consider trade liberalization measures that would provide a breakthrough in enhancing and strengthening intra-ASEAN trade cooperation. These efforts which began at the Special Meeting of COTT in Bangkok in November 1986, culminated finally in the formulation of a package of new initiatives on trade. The new initiatives which were reviewed and improved by the ASEAN Economic Ministers at their Nineteenth Meeting in Singapore in July 1987 and finally endorsed at their Informal Meeting in Singapore in October 1987, were later adopted by the ASEAN Heads of Government in Manila in December 1987.
Under the new initiatives on trade to intensify efforts towards significant expansion of intra-ASEAN trade, ASEAN would implement a package of measures for the improvement of the Preferential Trading Arrangements (PTA) over the next five years (1988 - 1992) with allowance of seven years (1988 - 1994) for Indonesia and the Philippines in view of their different levels of economic developments and tariff structures. These measures are to:
a) reduce exclusion lists of individual member countries to not more than 10% of traded items and to not more than 50% of intra-ASEAN trade value and achieve greater harmonisation of the exclusion lists;
b) phase in new items from the exclusion lists into the PTA with a minimum Margin of Preference (MOP) of 25%;
c) deepen to 50% the MOP items currently in the PTA;
d) reduce the ASEAN content requirement in the Rules of Origin from 50% to 35% on a case-by-case basis for a period of 5 years. With respect to Indonesia, the ASEAN content requirement will be reduced from 60% to 42%. After the said period of reduction, it shall be reviewed with a view to reverting to original levels; and
e) implement immediate standstill of Non- Tariff Barriers (NTBS) and negotiate rollback of NTBs after the Manila Summit Meeting.
To ensure proper implementation of the improved PTA and to enable the individual member countries to make necessary adjustments, the ASEAN Economic Ministers would as decided by the Manila Summit, review the progress of implementation annually during the 5-year period. At the end of the period, ASEAN would examine the possibility of further improving the PTA by placing a larger portion of intra-ASEAN trade under the PTA both in value and in number of items traded, deepening the MOP for items already under the PTA, further improving the Rules of Origin and achieving a more extensive rollback of NTBs on a preferential basis.
For the implementation of the improved PTA, the ASEAN Economic Ministers signed two documents during the Manila Summit. These are the Protocol on Improvements on The Extension of Tariff Preferences Under the ASEAN Preferential Trading Arrangements and the Memorandum of Understanding On Standstill And Rollback On Non-Tariff Barriers Among ASEAN Countries.
New initiatives on intra-ASEAN cooperation in commodities and the need for closer CO- operation in Trade in Services were also adopted by the Manila Summit. For the enhancement of cooperation in the area of commodities, the Heads of Government agreed that ASEAN should take joint action to address problems of structural surpluses, seek greater market access, develop indigenous resource-based industries, and intensify research and development programmes. ASEAN should also encourage greater intra-ASEAN trade in commodities by the private sector and trade corporations of ASEAN, the establishment of producer associations, regional trade associations and commodity exchanges as well as strengthening ASEAN positions in international economic fora.
Following the Manila Summit, COTT held two meetings in Singapore in February 1988 and Manila in June 1988 to finalize the Programmes for the implementation of the improved PTA. Some member countries have implemented their 1988 programmes involving the reduction of the exclusion lists and deepening of MOP on 1 April 1988. The others will be implementing their programmes soon, but the PTA concessions will be implemented retroactively to I April 1988. The programmes for 1989 onwards were being drawn up by the individual member countries, and in line with the decision of the Manila Summit to accord more transparency and predictability, the full programmes on the improved PTA had been publicised in ASEAN countries for the benefit of the private sector.
Further to the commitments by ASEAN member countries to implement standstill of non- tariff barriers affecting ASEAN products of interest to and being traded in ASEAN, COTT had drawn up the Procedures For Implementing The ASEAN Memorandum of Understanding On Standstill and Rollback of Non-Tariff Barriers. COTT had also started the process of negotiations on the rollback of the NTBS.
International Trade Issues
On trade and other economic relations With third countries and international organizations, ASEAN member countries continued their Cooperation in determining and strengthening ASEAN positions.
The member countries maintained their Close consultations at ASEAN Senior Trade officials (ASTO) meetings on the developments and prospects of the Uruguay Round and consolidated their common positions on issues of interest. At various meetings with the dialogue partners, ASEAN was also active in engaging in intensive exchange of views on commodity of interest and work closely for a successful New Round.
ASEAN had identified its priority interests in this Round of MTN which include agriculture, tropical products, safeguards, dispute settlement, tariffs and non-tariff measures, subsidies and countervailling measures and natural resource-based products. ASEAN would also press for the developed countries to adopt the Principle of Special and Differential Treatment to all developing countries throughout the negotiation.
On international commodity issues, ASEAN's major concerns were market instability, low and declining prices, tariff and non-tariff barriers which had adversely affected the ASEAN economies. In this regard, ASEAN stressed the need to implement the elements of the UNCTAD Integrated Commodity Programme and the Common Fund and also to find alternative measures to bring about recovery and renewed growth in the commodity sector.
On International Natural Rubber Agreement (INRA), ASEAN urged the developed countries to work closely with the producing countries for an effective functioning of INRA II. As regards International Sugar Agreement, ASEAN maintained the need to renegotiate the Agreement so as to include economic provisions relating to international trade in sugar.
ASEAN also took up with its dialogue partners the worsening problems in the international monetary and financial situation and called for concerted economic policies to sustain global economic recovery for the benefits of both developed and developing countries.
During the year under review, ASEAN held formal dialogues with Australia, Canada, Japan and the US. A Ministerial Meeting between ASEAN and the European Community was also held. Consultations with New Zealand and Australian trade officials on trade and other economic issues also took place.
Tourism
The Sub-Committee on Tourism (SCOT) held its Twentieth Meeting in Singapore in June 1987 and its Twenty-First Meeting in. Manila in January 1988. The Twenty-First SOCT Meeting was held in conjunction with the ASEAN Tourism Forum (ATF) 1988. A Meeting of Heads of ASEAN Tourism Organizations (NTOS) was also held following the Twenty-First SCOT Meeting.
During the year under review, ASEAN member countries continued their cooperation to increase intra-ASEAN travel and strengthen the promotion of the ASEAN region as a major destination for intra-ASEAN and inter-ASEAN travel. A tremendous growth was recorded in the ASEAN tourist industry in terms of visitor arrivals and tourist receipt generated by majority of the member countries.
The major development in intra-ASEAN tourist cooperation was the decision of the Third ASEAN Summit to declare 1992 as "Visit ASEAN Year", which would take place in conjuction with the 25th Anniversary of the formation of ASEAN in June 1992. The years 1988-1992 would be preparatory and promotional period to encourage intra-ASEAN travel and for the member countries to develop and implement cultural, sporting, and trade activities, in support of the Visit ASEAN Year.
The annual ASEAN Tourism Forum held in Manila on 23 - 28 January 1988 was the major ASEAN cooperation in the marketing of ASEAN as a travel destination. The theme of ATF'88 was "ASEAN Challenge: Unity in Diversity" which aimed at confronting the challenge of regional co. operation in the highly competitive tourism industry and at identifying cooperative strategies that would harness the region's diverse attributes towards a unified regional attraction. A total of 659 registered participants representing various tourism industries and organizations. in ASEAN and non-ASEAN countries took part at the Forum. These included 146 buyers and 252 suppliers of the tourism services.
The ASEAN Foreign Market Study on France, Scandinavia and Italy was completed in July 1987 under UNDP's Third Inter Country Cycle Programme. Its findings and recommendations had been analysed and assessed by the Twenty-First SCOT Meeting in January 1988. The study was expected to become a useful guide to attract more tourists from France, Italy and the three Scandinavian countries to the ASEAN region. Under the Fourth Inter Country Cycle Programme (1987 - 1991), the ASEAN Tourism Research, Development and Marketing Project Document was signed in November 1987. The excuting agency, the World Tourism Organization, is currently shortlisting consultants for Phase 11 of the project. Both the study and the tourism development project were funded by the United Nations Development Programme (UNDP).
For more information, please refer to the project details
