PRIMARY OBJECTIVES AND YARDSTICKS

- Promote Trade and Investment through elimination of Trade Barriers

- Market Integration of more than 500 million people

- Job and value creation from Trade and Investments

- Cooperate with APEC (established in 1989) to promote Trade and Investments

PRIMARY INSTRUMENTS OF AFTA

- Common Effective Preferential Tariff or CEPT (from PTA, AIC)

• Include 98% of all products of original 6 by 2003 with Cambodia by 2010

• 1% permanently excluded for non-trade reasons

• Zero Duties by 2010 for original 6 and others by 2015, except sensitive agricultural products remaining at or below 5%

• Temporary Exclusion List in November 2000 for flexibility

- ASEAN Industrial Cooperation of AICO (from AIJV)

- ASEAN Investment Area or AIA

- Framework Agreement on Trade in Services should receive more attention

- Mutual Recognition Arrangements on product-related standards and regulations, etc.

ASEAN PERFORMANCE VS. YARDSTICKS

- Intra-ASEAN Trade from $44.2B in 1993 to $95.2 B in 2000 annual growth of 11.6%

- ASEAN Trade with other regions grew at faster pace due to APEC and EC activities

- Two Decades of ASEAN Investments built regional capacity now shifting to China

- Moderate horizontal integration of large scale manufacturing operations like automobiles, processed food, and electronics exported intra and extra ASIAN

- Hampered by inadequacy of intra-ASEAN Trade support facilities like shipping, telecommunications, product and customs harmonization

- Need liberalize and promote regional shipping, telecommunications, other services

- Need to expand intra-ASEAN utility linkages for power, energy, telecommunications, RORO ports, etc.

- Need to have competitive services and utilities to produce competitive goods

PHILIPPINE PERFORMANCE

- CEPT rates today are between Thailand at 6.0% and Indonesia at 4.2%

- Closure and Downsizing since 1995 = 85,000 jobs lost

- Multinational operations relocated elsewhere

- Need competitive infrastructures for power, sea transport and ports, agricultural support systems, etc.

- Need to modernize bureaucracy and judiciary for competitive services

- Need for massive technology transfer to farms and urban communities like China

- Need to promote export orientation – exports per capita very low excluding OFW’s

- All reform programs must be realistic, fast-tracked, time-bound to attract investors

AFTA AND CHINA

- New Opportunities – New Markets to promote Trade and Investments (Jobs)

- More highly competitive than ASEAN experience

- Better chances to export globally

- Let us find out where and how we fit.

- Let us consider private sector assessments.