ASEAN Economic Ministers Meet in Brunei
Aug. 22 – The 45th Association of Southeast Asian Nations (ASEAN) Economic Ministers Meeting (AEMM) was held in Brunei this past Monday. Upon arrival the ASEAN ministers held a joint press conference at which they expressed their happiness about the strong economic performance and resilience of ASEAN in 2012.
Specifically, the ministers noted that all 10 member economies, as a whole, grew by 5.7 percent and also preserved its level of foreign direct investment (FDI) at US$108.2 billion during a time where global FDI inflows have significantly declined.
In addition, the ministers discussed how the integration of the ASEAN member states was progressing, especially on the issues of trade in goods, services and investment. Other issues that were discussed included regional cooperation on matters relating to small and medium enterprises, intellectual property, competition policy, consumer protection and public-private sector engagement.
During the meeting, the ministers also further spoke of the Regional Comprehensive Economic Partnership (RCEP) – an initiative to combine the 10 member states of ASEAN with the group’s six free trade agreement (FTA) partners (namely, Australia, China, India, Japan, South Korea and New Zealand). Taken together, this group of nations would account for 40 percent of the world’s trade and has a combined GDP of around US$17 trillion.
The goal of the RCEP is to create a comprehensive trade agreement that will facilitate economic integration between all the countries involved. The main negotiating issues involved are trade in goods and services, investment, economic and technical cooperation and dispute settlement. Negotiations are expected to conclude by the end of 2015.
Potential benefits of the RCEP include a simplified FTA with standardized rules of origin regulations. It also seeks to regulate common incentives, which will thus allow businesses to make easier use of tax incentives available throughout the different countries without having to check back with each individual country regarding specific regulations.
“India firmly believes that greater economic integration among participating countries will boost economic growth, enhance flow of trade and investment, create employment opportunities and bring down the development gaps among the countries,” noted Indian Union Minister of Commerce and Industry Shri Anand Sharma, who was also in attendance at the meeting.
Sharma also commented on the inherent complexity involved in combining so many different nations and trade agreements into a coherent whole. As a result, he further affirmed that India will have to be flexible during the negotiations in order to help facilitate an agreement. For example, one area of contention is the need for India to greatly reduce its tariffs (in contrast, Singapore currently has near zero tariffs).
Furthermore, established during the meeting was the Trade Negotiating Committee as well as Working Groups for Trade in Goods and Trade in Services and Investment.
The next meeting of the Trade Negotiating Committee will be held in Brisbane, Australia, this September.
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