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ASEAN sets priorities ahead of single market

ASEAN economic ministers have agreed on the priorities that all the grouping’s 10 member states should focus on this year, as part of efforts to step up preparedness for the implementation of the ASEAN Economic Community (AEC) in 2015

Bagus BT Saragih (The Jakarta Post)
Singapore
Fri, February 28, 2014

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ASEAN sets priorities ahead of single market

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SEAN economic ministers have agreed on the priorities that all the grouping'€™s 10 member states should focus on this year, as part of efforts to step up preparedness for the implementation of the ASEAN Economic Community (AEC) in 2015.

The agreement was made at the conclusion of the 20th ASEAN Economic Ministers Retreat in Singapore on Thursday.

The priorities are raising awareness on the implementation of the so-called single market, '€œoperationalizing'€ the ASEAN Framework for Equitable Economic Development, strengthening regional cooperation for small and medium enterprise development and developing a regional framework for public-private partnerships.

'€œSeveral agreements and protocols that will further deepen market integration, particularly in easing the flow of services, as well as services and investment agreements with Japan and India, are also targeted to be signed within this year,'€ Myanmar'€™s Union Minister for National Planning and Economic Development Kan Zaw, the retreat'€™s chair, said during the joint press conference at its conclusion.

This year, Myanmar is taking on the ASEAN Chairmanship for the first time since it joined the regional grouping in 1997.

The Southeast Asian ministers, said Zaw, had also discussed the challenges in the implementation of the AEC Blueprint, including the pilot case studies on nontariff barriers. '€œThe ministers suggested we draw lessons from the cases resolved, institutionalize the mechanisms, publicize the successful cases and continue the exercise,'€ he said.

Newly appointed Trade Minister Muhammad Lutfi, who led the Indonesian delegation, said that he was optimistic the AEC would have a positive impact on the Indonesian people. '€œIndonesia accounts for half of the ASEAN economy. If you talk about ASEAN growth, you'€™re talking about Indonesia'€™s growth. Therefore, if the AEC benefits ASEAN, it benefits Indonesia in particular,'€ he said.

Lutfi acknowledged there were still shortcomings that urgently needed to be addressed but was nonetheless optimistic. '€œThe trend of investment is going to Indonesia. The AEC is like rain. While some tend to worry and use an umbrella, Indonesia should actually open the doors wide. Rain is a blessing that brings opportunities for us,'€ he said.

Djatmiko Bris Witjaksono, director for ASEAN cooperation at the Trade Ministry'€™s international trade cooperation directorate general, said that Indonesia still needed to negotiate some barriers, particularly when it came to commodities that affected a significant portion of the Indonesian people.

'€œRice, for example, is sensitive because it affects millions of Indonesian farmers. There are issues about production quality that we are still working on. It would be unwise to have wide-open access for rice,'€
he said.

According to the retreat'€™s joint statement, the ministers also discussed ASEAN'€™s economic outlook, Regional Comprehensive Economic Partnership (RCEP), trade facilitation and the AEC'€™s post-2015 vision.

'€œWith world trade expected to gain momentum in 2014-2015, ASEAN exports are also expected to contribute more to the region'€™s growth performance. Prospects for foreign direct investment [FDI] flows to ASEAN remain promising as more FDI is expected in a wide range of sectors such as infrastructure, finance and manufacturing,'€ Zaw said.

However, the ASEAN ministers also acknowledged that there were some downside risks that could dampen economic growth, such as capital outflows, sharp currency depreciations, emerging inflationary pressures and tightening financial conditions. '€œMaintaining ASEAN'€™s resilient macroeconomic fundamentals is key to managing these risks,'€ he said.

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