Academic journal article Journal of Southeast Asian Economies

The ASEAN Free Trade Area: Reaching Its Target Opening Remarks of H.E. Rodolfo C. Serverino, Secretary-General of the Association of Southeast Asian Nations, at the AFTA 2002 Symposium

Academic journal article Journal of Southeast Asian Economies

The ASEAN Free Trade Area: Reaching Its Target Opening Remarks of H.E. Rodolfo C. Serverino, Secretary-General of the Association of Southeast Asian Nations, at the AFTA 2002 Symposium

Article excerpt

I have the great honour of welcoming all of you to this conference on the ASEAN Free Trade Area. We are gathered here today to take a look at AFTA - its significance, where it is today, where it is headed, and what more it should do.

I am sure that I speak for all of us, particularly for the ASEAN Secretariat and the other sponsors of our conference, when I express my deepest gratitude to Her Excellency President Megawati Soekarnoputri for the great honour of her presence, for giving us her time, and for graciously consenting to share with us her thoughts on AFTA and Indonesia's perspective on it. I thank His Excellency Minister George Yeo for coming all the way from Singapore to give us his usual sharp insights into AFTA and the state - and the imperatives - of regional economic integration.

Ten years ago, on the occasion of the fourth ASEAN summit meeting in Singapore, ASEAN's economic ministers signed the agreement on the Common Effective Preferential Tariffs for the ASEAN Free Trade Area. The agreement embodied the commitment of the then six ASEAN member-states to set up a free trade area in the region within fifteen years. This meant reducing most tariffs on trade within the region to 0-5 per cent, in accordance with an agreed schedule. This act signified a remarkable prescience on the part of ASEAN's member-states. They knew even then that they must integrate their economies if they were to be competitive, if they were to stand a chance of flourishing, of withstanding competition, in an increasingly competitive world. And this was at the height of the Southeast Asian countries' economic surge, before globalization became the buzzword that it is today.

Before long, ASEAN found fifteen years to be too conservative. The world was not going to stand still for AFTA. So, in 1995 ASEAN moved the target year forward by five years, to 2003. Faced with the challenge of the financial crisis of 1997-1998, the ASEAN leaders decided to advance the target further, to the beginning of 2002.

The first of January this year, therefore, marked a big milestone for AFTA and in ASEAN's history. The first six signatories to the AFTA agreement - Brunei Darussalam, Indonesia, Malaysia, the Philippines, Singapore and Thailand - which are Southeast Asia's leading trading nations, have dropped tariffs to 0-5 per cent on most of the products traded among them, in accordance with the tariff-cutting schedules to which they had previously committed themselves. The lowering of tariffs to minimal levels was accompanied by a massive expansion of intra-regional trade - from US$44.2 billion in 1993 to US$97.8 billion in 2000. The average tariff on intra-ASEAN trade is now down to 3.2 per cent. In 1999, ASEAN's leaders agreed to eliminate all import duties among the first six members by 2010 and by 2015 for the newer members. …

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