I am an investor, shirt-maker and 100% exporter, and would have loved to talk about my experience of exchanging fabrics, semi-finished materials and finished products within ASEAN under the AFTA program.

However, my markets are Europe and the United States, covered by the quota-system of the Multi Fiber Agreement (MFA), which is coming to an end in 2005. I am confident that I will still be able to supply those markets after 2005, but I will also have to focus on new markets. Given the growing demand for quality shirts in Asia in general and in ASEAN specifically, this could be a market for me, provided I am protected against low imports from countries like Bangladesh, Sri Lanka or China – countries outside ASEAN – at least for a certain period.

This brings me to the topic of today’s symposium. However, before I am going to lose friends, let me clearly state that:

1. I am not an expert on AFTA and AICO and you will have to bear with me, if I have a simplistic view on the kilos of agreements that have been signed between the ASEAN countries

2. I am in favor of the WTO and its rules and

3. I support the basic ideas behind the globalization drive.

But let me also state that globalization can only be acceptable, if the developed and the developing countries equally benefit from the concept of ‘access to markets’. In my view, we are still far away from the situation of equal sharing of benefits. The situation has been aggravated for the ASEAN countries due to China’s membership in the WTO.

Consequently, ASEAN will have to stand together against the pressures from outside and make full use of AFTA and AICO in order to:

a. create a block which will be in a better position to negotiate conditions for free trade with the WTO

b. negotiate for a possible new time frame for tariff reductions of the ASEAN market against the outside world. ASEAN may even consider negotiating for tariff increases with the firm commitment to reduce the rates within a specific time frame and a promise to introduce effective anti-cartel laws in all ASEAN countries and

c. to close the development gap between countries like Indonesia and Laos with the rest of ASEAN. With the enlargement of the association, ASEAN needs to strategically manage the increasing diversity of views and differences within the regional grouping and strengthen its institutions. And,

d. gain time to build up companies in ASEAN, servicing the large ASEAN market as its home market and exporting outside ASEAN, eventually being able to compete with other globally active companies.

During the visit of President Macapagal-Arroyo to Japan recently, she proposed the setting up of the largest free trade zone in the world encompassing the economies of ASEAN together with Japan, China and Korea. The President has expressed confidence that these processes, which are still in the conceptual stage, will steadily move forward so that in ten years we could have an East Asian Free Trade Area.

While I appreciate the President’s vision to create a free trade area that includes one third of the world’s population, I still believe that ASEAN will have to consolidate its industry potential first, before it fully competes with China, Japan and Korea.

In order to achieve a cohesive ASEAN bloc with a common industrial policy and vision, ASEAN needs a political leadership that is internationally accepted and is applying good governance, doing away with the philosophy of patronage. The ASEAN countries need to stand united (including Singapore and Brunei if they do not undermine the protective tariff structure to the outside world) and will have to stop outsmarting each other in trade and investment promotion.

I guess that many of you would not have expected such comments from a foreign businessman. There are obviously more likely candidates in some Federations. But I am not for protectionism, am not talking about protecting antiquated industries against foreign competition. I do believe in ASEAN. I have invested not only in the Philippines, but also in other ASEAN countries. I am not advocating measures against the WTO, but I see the need to bargain for time. However, the bargaining will have to be done by leaders that will see to it that the promises made in terms of time frames and actions to be taken will be fulfilled.

The ASEAN vision 2020 articulates a forward-looking and ambitious goal which aims for the ‘free flow of goods, services and investments, a free flow of capital and freedom of basic human rights within the region.’

If I see as European the model of the European Union and ASEAN, ASEAN never intended to emulate the European model of economic integration. In Europe, the road to a single market has not been smooth nor has been without challenges.

The European Union faces this dilemma of deepening and enlargement, issues that can confront ASEAN today.

I do realize, however, that ASEAN is not really united yet and that the regional bloc still has to iron out some kinks that are preventing AFTA from becoming a free trade area in the true sense of the term. It is sad that DTI Secretary Roxas has to order a study to find out who among the member countries of ASEAN are making it easy or difficult for Philippine exports to enter their markets! The study is aimed at identifying tariff and non-tariff barriers to Philippine-made goods in each of these markets.

But this is exactly the challenge: with the possible exception of Singapore and Brunei, it should be possible to create an active bloc with a common exterior tariff system. The group has so many things in common, has an attractive market size and – given the extra time – could develop its key industries into viable sectors that can then compete with the rest of the world.

Thanks for your attention.