RECOMMENDATIONS
OF THE HIGH-LEVEL TASK FORCE
ON ASEAN ECONOMIC INTEGRATION
INTRODUCTION
1. The
realization of a fully integrated economic community requires implementation of
both liberalization and cooperation measures.
The Task Force while focusing its recommendations relating to
liberalization and facilitation measures in the area of trade in good, services
and investment, acknowledges on the need to enhance cooperation and integration
activities in other areas. These will involve among others, human resource
development and capacity building; recognition of educational qualifications;
closer consultations on macroeconomic and financial policies; trade financing
measures; enhanced infrastructure and communications connectivity; development
of electronic transactions through e-ASEAN; integrating industries across the
region to promote regional sourcing; and enhancing private sector involvement.
ASEAN
ECONOMIC COMMUNITY
2. As a step towards the realization
of ASEAN Economic Community for trade in goods, services and investment, the
HLTF took into account the experience of other Regional Trading Arrangements (RTAs), ASEAN’s own experience, the development perspective
in ASEAN and also the views contained in the following documents:
(i)
ASEAN Vision 2020, the
(ii)
ASEAN Competitiveness Study;
(iii)
ASEAN Economic Community: Concept
Paper by ISEAS; and
(iv)
ASEAN
3. The HLTF is of the view that the elements
of the AEC in the area of goods, services and investment have been elaborated
in ASEAN Vision 2020, HPA and RIA, and recommends that the AEC should be:
(i)
The end-goal of economic
integration as outlined in the ASEAN Vision 2020;
(ii)
Characterized as a single market
and production base, with free flow of goods, services, investment and skilled labour, and freer flow of capital by 2020; and
(iii)
Approached on a progressive basis
with clear timelines by strengthening existing initiatives and building new
initiatives to enhance economic integration.
RECOMMENDATIONS
4. Recognizing that not all
ASEAN member countries can meet the recommended deadlines, the HLTF recommends
that flexibility be allowed in its implementation to enable those member
countries that are ready to proceed first.
5. The HLTF
recommends that cooperation under the current economic initiatives be further
strengthened in the following areas:
(i)
By end-2004, finalize the
improvement to the CEPT Scheme Rules of Origin (ROO) by:
§
Making it more transparent,
predictable and standardized and taking into account the best practices of
other RTAs including the WTO ROO; and
§
Adopting substantial
transformation as alternative criteria for conferring origin status.
(ii) Ensure
transparency on Non-Tariff Measures (NTMs) and
eliminate those that are barriers to trade:
§
Establish ASEAN Database of NTMs by mid-2004;
§
Set clear criteria to identify
measures that are classified as barriers to trade by mid-2005;
§
Set a clear and definitive work programme for the removal of the barriers by 2005; and
§
Adopt the WTO agreements on
Technical Barriers to Trade; Sanitary and Phyto-Sanitary
and Import Licensing Procedures and develop implementation guidelines
appropriate for ASEAN by end-2004.
Customs
(i)
Ensure full implementation of the
(ii)
Adopt WTO agreement on Customs
Valuation and develop implementation guidelines appropriate for ASEAN by
end-2004;
(iii)
Adopt service commitment (client
charter) by ASEAN customs authorities; and
(iv)
Adopt the Single Window approach
including the electronic processing of trade documents at national and regional
level.
Standards
(i)
Accelerate the completion and
implementation of the Mutual Recognition Arrangements (MRAs)
for the five identified priority sectors (electrical and electronic equipment,
cosmetics, pharmaceuticals, telecommunications equipment and prepared
foodstuff) within 2004/2005; and other sectors with significant potential for
trade;
(ii)
Set specific targets for the
harmonization of standards and technical regulations to trade focusing on
sectors with significant trade value and those with potential for trade in the
future; and
(iii)
Develop ASEAN technical
regulations, where possible, for national applications.
(i)
Set clear targets and schedules of
services liberalization for each sector and each round towards achieving free
flow of trade in services; and AEM to provide specific mandate in every round of
services negotiations. The end date to achieve free flow of trade in services earlier than 2020;
(ii)
Accelerate services liberalization
in specific sectors earlier than end-date by countries which are ready, through
the application of the ASEAN-X formula;
(iii)
Complete MRAs
for qualifications in major professional services by 2008 to facilitate free
movement of professional/skilled labor/talents in ASEAN;
(iv)
Promote the use of ASEAN
professional services through the establishment of a “Professional Exchange” by
2008;
(v)
Recognise the AEM as the coordinator for services liberalization
across all sectors; and
(vi)
Each country to be represented by
senior officials who are authorized to negotiate on behalf of the government.
(i)
Speed up the opening of sectors
currently in the sensitive list to TEL, using the ASEAN-X formula, beginning
2004;
(ii)
Encourage and promote companies to
relocate within ASEAN and where appropriate, special incentives should be
given;
(iii)
Institute a mechanism to monitor
the specific activities and timelines undertaken by each country vis-à-vis
their submitted planned actions/activities on annual basis;
(iv)
Establish a network of ASEAN free
trade zones (FTZs) so that companies could structure
their manufacturing processes across different ASEAN countries to take
advantage of their comparative strengths; and in the process increase
intra-ASEAN trade and investment.
Special marketing efforts should be undertaken for ASEAN-based
companies; and
(v)
Undertake more effective joint
ASEAN facilitation and promotion measures and develop new sources of inward
FDI, particularly from potential countries such as
D. Intellectual Property
Rights (IPRs)
6. ASEAN IPR
cooperation beyond trademarks and patents by including cooperation in copyrights
information exchange and enforcement by 2004.
E. Capital Mobility
7. To facilitate trade and investment flows, expedite the
implementation of the Roadmap for Integration of ASEAN in Finance.
ii. New
Initiatives and Measures
8. The Special Informal AEM agreed to
accelerate 11 priority sectors for integration to be coordinated by the
following countries.
(i)
(ii)
(iii)
(iv)
(v)
(vi)
9. The approach recommended for the
integration of these priority sectors be premised on:
(i)
Combine the economic strengths of
ASEAN Member Countries for regional advantage;
(ii)
Facilitate and promote intra-ASEAN
investments;
(iii)
Improve the condition to attract
and retain manufacturing and other economic activities within the region;
(iv)
Promote out-sourcing programme within ASEAN; and
(v)
Promote the development of “Made in ASEAN”
products and services.
10. Roadmap should be developed for each of the
priority sectors and be implemented with the active involvement of the private
sector, beginning 2004.
11. Possible measures proposed for the goods
sector:
(i)
Zero internal tariffs;
(ii) Immediate
removal of barriers to trade;
(ii)
Faster customs clearance and
simplified customs procedures; and
(iii)
Accelerated development of MRAs and harmonization of products standards and technical
regulations.
12. Integration of services sectors be implemented through:
(i)
Accelerated liberalization of
these priority sectors by 2010;
(ii)
Accelerated development of MRAs; and
(iii)
Promote joint ventures and
cooperation, including in third country markets.
13. Facilitate
mobility of business people and tourists through:
(i)
Visa exemption for intra-ASEAN
travel by ASEAN nationals by 2005
(ii)
Harmonizing
the procedures for issuing visas to international travelers in ASEAN by 2004; and
(iii)
Developing ASEAN agreement to
facilitate movement of business persons and skilled labour
and talents by 2005.
iii. InstitutionAL
STRENGTHENING
14. To streamline the decision-making process
and ensure effective implementation of all ASEAN economic initiatives, the
following measures are recommended:
(i)
Re-affirm the AEM as the
coordinator of all ASEAN economic integration and cooperation issues;
(ii)
Issues of policy in nature to be
resolved by AEM/AFTA Council/AIA Council;
(iii)
Technical/operational issues to be
resolved by SEOM and the various committees/working groups;
(iv)
Decision-making process by
economic bodies to be made by consensus, and where there is no consensus, ASEAN to consider other options
with the objective of expediting the decision-making process.
(v)
By end-2004, establish an
effective system to ensure proper implementation of all economic agreements and
expeditious resolution of any disputes. The new system should provide for
advisory, consultative, and adjudicatory mechanisms as follows:
·
Establish a legal unit within the
ASEAN Secretariat;
(Advisory - the legal unit will provide legal advice
on trade disputes)
·
Establish the ASEAN Consultation
to Solve Trade and Investment Issues (ACT);
(Consultative - the ACT is the ASEAN equivalent of the EU
SOLVIT mechanism to provide quick resolution to operational problems)
·
Establish the ASEAN Compliance
Body (ACB); and
(Adjudication - modeled after the WTO Textile Monitoring
Body and make use of peer pressure)
·
Enhanced ASEAN DSM to make it more
practical.
(Adjudication – amend the ASEAN DSM to ensure expeditious
and legally binding decision in resolving trade disputes)
The proposed concept, elements and flow chart of the new
system appear as ANNEX 1.
(vi) Enhance the
capability of the ASEAN Secretariat to conduct research and analytical studies
related to trade, investment and finance.
15. To promote better appreciation and
understanding of ASEAN economic issues among business/investor community and
public sector agencies, the HLTF recommends the following:
(i)
Conduct out-reach programmes annually at both national and regional level;
and
(ii)
Consult regularly with private
sector representatives at national and regional level to address issues of
concern/interest relating to the implementation of ASEAN economic initiatives.
16. The
recommendations to address the development divide and accelerate economic
integration of CLMV:
(i)
Expand the coverage of the AISP
products; and
(ii)
Implement IAI projects through
mobilization of resources from within ASEAN.
CONCLUSION
17. The HLTF recommends that a review be made after one year of its
implementation and the Secretary General of ASEAN to submit an annual progress
report of its implementation to the AEM.
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annex 1
MECHANISM
OF THE DISPUTE SETTLEMENT SYSTEM
Advisory
Mechanism
ASEAN
Consultation to Solve Trade and Investment Issues (ACT)
(i)
The ACT is adapted from the EU SOLVIT mechanism. It is a network of government agencies (one
from each country) to allow the private sector to cut through red tape and
achieve speedy resolution of operational problems encountered, thus helping to
create a pro-business environment in ASEAN.
(ii)
Private individuals and businesses faced with operational problems
related to countries’ ASEAN commitments, either at home or in other ASEAN
countries, can highlight these problems to the ACT in their country (Host
ACT). For problems encountered within
the home country, the Host ACT will direct the problem to the appropriate
government agencies, and ensure that a proposed solution is sent to the
individuals/businesses within 30 calendar days.
(iii)
For problems encountered in other ASEAN countries, the Host ACT will
forward the problem to the other countries’ ACT (Lead ACT). The Lead ACT will be responsible for
directing the problem to the appropriate government agencies in its country,
and ensuring that a proposed solution is sent to the individuals/businesses via
the Host ACT within 30 calendar days. To
minimise delays, communication between Host and Lead ACTs should be via electronic means, for instance an online
database accessible to all member countries.
(iv)
If the proposed solution does not resolve the problem highlighted, the
private individuals/businesses can request that their government raise this
issue to the other dispute settlement mechanisms described below.
ASEAN
Legal Unit
(i)
The ASEAN Legal Unit will be staffed by qualified lawyers specialising in trade laws employed by the ASEAN
Secretariat. The unit will offer legal
interpretation/ advice on potential trade dispute issues upon request from
countries. The advice is purely advisory
and non-binding in nature.
(ii)
The ASEAN Legal Unit would play a useful role in screening out issues
that are operational/technical in nature which could
be resolved through bilateral consultations, rather than being surfaced to the
ASEAN Compliance Monitoring Body or the Enhanced ASEAN Dispute Settlement
Mechanism. The ASEAN Legal Unit will
also be responsible for providing legal advice and secretariat support to the
ASEAN Compliance Monitoring Body and enhanced ASEAN Dispute Settlement
Mechanism.
Consultative
Mechanism
ASEAN
Compliance Monitoring Body (ACMB)
(i)
The ACMB is modelled after the Textile
Monitoring Body of the WTO, and makes use of peer adjudication, which is less
legalistic and offers a speedier channel, to help countries resolve their
disputes.
(ii)
In cases of non-compliance by one or more ASEAN Member Country/Countries
in any ASEAN economic integration agreement, ACMB members from countries not involved
in the dispute will upon request, review and issue findings on the case within
a stipulated timeframe. The case findings of the ACB are not
legally-binding. However, any opinion
pointing to non-compliance should lead to the offending ASEAN Member
Country/Countries to seriously consider measures to rectify the
non-compliance. Moreover the ACMB’s findings would be tabled as inputs to the DSM should
the case be raised to the DSM.
(iii)
Subject to agreement by both Parties, Member Countries who do not wish
to avail of the ACMB after going through the ACT can go directly to the ASEAN
DSM panel.
(iv)
AEM had earlier directed SEOM to work out a Terms of Reference for this
monitoring body.
Conciliation
and mediation processes
(i)
Upon mutual voluntary agreement, member countries can at any time,
engage in conciliation and mediation procedures to resolve their dispute before
it is surfaced for adjudication at the enhanced ASEAN Dispute Settlement
Mechanism.
(ii)
Proceedings under these conciliation and mediation procedures, including
respective positions taken by parties to the dispute during the proceedings,
shall be confidential.
(iii)
The ASEAN Secretary General may, acting in an ex officio capacity, offer
good offices, conciliation and mediation procedures.
Enforcement
Mechanism
Enhanced
ASEAN Dispute Settlement Mechanism (DSM)
(i)
To ensure that binding decisions can be made based solely on legal
considerations, changes should be made to the procedures of the existing ASEAN
DSM to depoliticise the entire process.
(ii)
The enhanced ASEAN DSM would be modeled after the WTO DSM, which have already established a proven track record in resolving
trade disputes. It would include the
following key features: (i) having panels of three
independent professionals from countries not involved in the disputes
(including non-ASEAN countries) to rule on the disputes and administer the
appellate process. To ensure de-politicisation of the processes, ASEAN should replace the
AEM with an appellate body comprising of well-qualified, independent and
experienced professionals as the appeal body for the panels’ decisions, and
adopt the existing WTO DSM panel selection procedures, including the listing of
qualified individuals who can serve as panelists and members of the appellate
body (maintained by the WTO Secretariat); (ii) strict and detailed procedures
and timeline governing each stage of the dispute settlement process (adopted
from the WTO DSM procedure) to ensure speedy progress towards a fair outcome,
and (iii) effective mechanisms, including the possibility of imposing sanctions
on non-compliant countries, to ensure full implementation of the DSM
rulings.
FLOWCHART OF MECHANISMS AND PROCESSES OF THE ASEAN
DISPUTE SETTLEMENT SYSTEM
Click here to view the flowchart
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