ASEAN Studies Options For Trade Cooperation 
International Herald Tribune
October 8, 1991
Michael Richardson

The fast-growing countries of Southeast Asia opened a key conference Monday amid increasingly vocal appeals to form a regional free-trade area to compete with the European Community and North America.

Launching a two-day meeting of economics ministers from the Association of South East Asian Nations, Prime Minister Mahathir bin Mohamad of Malaysia called for "bold and concrete recommendations" to push regional economic cooperation "forward and fast."

He added that such action was "crucial if ASEAN is to survive as a viable organization in view of the dramatic changes that are occurring worldwide."

Mr. Mahathir said that ASEAN could face increasing competition for trade and investment as the free-market system took hold in the Soviet Union, Eastern Europe, China and parts of Latin America and Africa that had formerly espoused socialist economic policies.

ASEAN officials expressed concern that the expected formation of a free-trade area linking the United States, Canada and Mexico, and the creation of an EC market by 1993, would divert trade and investment away from Southeast Asia.

ASEAN links Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand.

Speaking at the end of the closed-door discussions Monday, Rafidah Aziz, the Malaysian minister of international trade and industry who is chairman of the meeting, said "bold initiatives" had been agreed.

She declined to disclose details, saying that results would be announced Tuesday.

Analysts said that different levels of development and conflicting national interests among the ASEAN countries also made it difficult for the group to follow Western Europe and North America toward economic union.

Annual per capita GNP in ASEAN ranges from U.S. dollars 555 in Indonesia - the fifth-largest nation in the world - to U.S. dollars 17,000 in Brunei, an oil-rich sultanate. Average economic growth for the ASEAN countries was 7.1 percent in 1990.

Economics ministers from the six countries were considering several proposals, including a plan put forward by the Philippines for an EC-style economic treaty and a Thai proposal to turn the ASEAN market of 320 million consumers into a free-trade area within 15 years.

Before the ministerial meeting began Monday, Commerce Minister Amaret Sila-On of Thailand said that Thailand's free-trade plan had received a "mixed" reaction.

Malaysia and Singapore have openly supported the proposal. But analysts said that Indonesia, which has by far the biggest domestic market in ASEAN, is worried that some of its industries may not be ready yet to compete against more efficient producers in other Southeast Asian countries.

Indonesia has put forward a proposal for more gradual tariff cuts in selected areas to promote preferential trade within ASEAN.

Under both the Thai and Indonesian plans, existing national tariffs for trade with the rest of the world would remain unchanged.

Heads of government of ASEAN will meet in Singapore in January to consider recommendations from the economics ministers.

Mr. Mahathir said ASEAN's record of achievement in economic cooperation had been "dismal." If the group was to enter the 21st century "as an economic and political force that will be respected by others," he added, it would have to take painful decisions now to avoid being overtaken by events.

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