OPEN & OUTWARD-LOOKING REGIONAL PROCESSES
So far as relationship with India is concerned, while a compromise on the ROO has been reached after rounds of discussions, another issue that is troubling both sides, according to the ASEAN Secretary-General, relates to exclusion of goods from the liberalisation. “ASEAN cannot accept India’s proposal to exclude a long list of products from the AIFTA (1414 tariff lines). The AIFTA ending rate must be zero except for a limited number of highly sensitive products,” he said. Talking about key areas of ASEAN-India cooperation under the ASEAN-India dialogue relations, Mr. Ong stressed on science and technology with focus on IT. “IT will also feature as a component in India’s capacity building assistance to the CLMV countries (Cambodia, Lao PDR, Myanmar and Viet Nam) to narrow the development gap within ASEAN,” he said.
AS: Sir, almost about three years back, on the first day of your taking over as the Secretary-General of ASEAN on January 6, 2003 in your brief introductory speech you underlined inter alias three crucial aspects of ASEAN’s future strategy that you would like to follow: (1) to Continue to enhance the integration process of ASEAN by implementing far-reaching initiatives such as the Initiatives for ASEAN Integration, Hanoi Plan of Action, and Roadmap for Integration of ASEAN; (2) to Deepen regional economic integration and liberalisation through programmes such as the AFTA, ASEAN Investment Area, AFAS, AICO and e-ASEAN; (3) to Ensure ASEAN remains outward looking through engagements with its Dialogue Partners. How would you like to evaluate the progress of ASEAN in achieving these major objectives in last three years?
SG: I would say ASEAN has made satisfactory progress during the first three years of my tenure as the Secretary-General of ASEAN since 2003.
ASEAN’s cooperation commitment is now manifested in the ongoing concerted efforts of all parties concerned to build, by the year 2020, an ASEAN Community comprising three pillars, i.e. the ASEAN Security Community, the ASEAN Economic Community and the ASEAN Socio-Cultural Community. The roadmap for this community building endeavor is in the Vientiane Action Programme (VAP), adopted at the 10th ASEAN Summit in Vientiane in 2004. And in addition to measures for building the three pillars, the VAP also includes measures for narrowing the development gap within ASEAN.
Member Countries now want to transform ASEAN from an informal political association into a rules-based collective and to give ASEAN a legal regime to operate in. To this end, an Eminent Persons Group (EPG) on the ASEAN Charter is examining ASEAN, and looking into the future, to 2020 and beyond. The EPG will recommend what should go into an ASEAN Charter. Its recommendations will be submitted to the 12th ASEAN Summit in the Philippines in December 2006. After that, a high-level task force of officials will be formed to start drafting an ASEAN Charter, taking into account the EPG’s ideas.
AS: When it comes to the question of developing nations, what globalisation means to you? What is ASEAN’s strategy to help such developing nations assimilate this new process that would lead to more trade and more economic profits for them?
SG: From the perspective of developing countries, globalisation has shrunk the world and exposed them to increased economic competition, and new transnational challenges such as rapid technological advances, international terrorism, communicable diseases, etc. Globalisation means openness. We must change our mindset and ready each of our societies to adapt to the fast pace of doing things. Since ASEAN Member Countries are from the developing world, ASEAN’s strategy is to consolidate and build a strong, unified, competitive and prosperous ASEAN Community, and to promote dialogue and cooperation at all level, not only in Southeast Asia, but also in East Asia and beyond.
AS: At the ASEAN Business and Investment Summit (ABIS) in Kuala Lumpur on 10th December, 2005 you have referred to ASEAN’s commitment to conclude Free Trade Agreements with the dialogue partners. As such commitment has to come both ways, what ASEAN expects from its partner-countries to conclude a meaningful FTA? So far India is concerned what are the major focus subjects that ASEAN expects the Indian government to address to?
SG: ASEAN is pursuing a two-pronged economic strategy: One, internal economic integration within ASEAN; and two, external cooperation with its Dialogue Partners. ASEAN economic integration is on track and proceeding satisfactorily. ASEAN’s external economic cooperation is being pursued through the various FTA negotiations.
For FTAs, ASEAN is no longer interested in pursuing the traditional FTA (trade in goods only). As a matter of policy, ASEAN FTAs must be comprehensive and must include liberalisation of trade in goods, trade in services, investment and economic cooperation components. By and large, our objective is to have FTAs that meet the requirements of key rules of the WTO.
From ASEAN’s perspective, a meaningful FTA must facilitate trade and investment between the signatory parties. Thus for trade in goods, the Rules of Origin (ROO) must not too restrictive or complicated. ASEAN advocates that its Dialogue Partners, which are interested in concluding FTAs with ASEAN, accept this principle. Otherwise, why trouble ourselves with FTAs.
India had originally proposed a very restrictive ROO which in ASEAN’s view will negate tariff liberalisation under the AIFTA. After long negotiations, a compromise on the ROO has been reached between ASEAN and India. The details are being worked out.
Another issue troubling both sides is exclusion of goods from the liberalisation. ASEAN cannot accept India’s proposal to exclude a long list of products from the AIFTA (1414 tariff lines). The AIFTA ending rate must be zero except for a limited number of highly sensitive products.
ASEAN takes the long-term view of such economic partnership with India. Our political leaders must grapple with short-term expediency. However, officials can be creative and innovative to facilitate the process forward.
AS: To what extent ASEAN attaches importance to economic reforms being pursued by countries like India in framing out FTAs?
SG: ASEAN attaches importance to economic reforms undertaken not only by India but also by China and all other rigid economies which do not capitalise on the opportunities in the market place. In Asia we are witnessing two giant economies, China and India, together accounting for almost half of humanity, emerging simultaneously with great momentum and optimism. Both must continue to liberalise their economies to achieve higher economic growth.
With the rise of China and India, ASEAN can provide an attractive bridge between the huge economies. There are already signs of the emergence of Asia-wide production networks, which are driven by a manufacturing supply chain between ASEAN and China, and a services supply chain between ASEAN and India. Because of geography and established comparative advantages in resources, commercial facilitation, and intermediate production, ASEAN economies has and can play a significant role in the regional production network.
AS: India is considered as a major global player in Information Technology which is again considered as a very powerful tool for empowerment of people. ASEAN also talks about empowerment of people- empowerment in terms of economic power, education, healthcare, social security etc. Against this backdrop, how India could be an IT partner ASEAN? Is there any ASEAN-India IT cooperation agreement exists today or any such thing is being thought of?
SG: One of the key areas of cooperation under the ASEAN-India dialogue relations is science and technology with focus on IT. We have been working on a number of projects in the area of e-learning and information security system. IT will also feature as a component in India’s capacity building assistance to the CLMV countries (Cambodia, Lao PDR, Myanmar and Viet Nam) to narrow the development gap within ASEAN. All these initiatives are covered under the ASEAN-India Plan of Action to implement the ASEAN-India Partnership for Peace, Progress and Shared Prosperity, a visionary document for ASEAN-India relations in the 21st century concluded at the 3rd ASEAN-India Summit in Lao PDR in November 2004.
At the 4th ASEAN-India Summit in Kuala Lumpur in December 2005, the ASEAN leaders welcomed the proposal of the Prime Minister of India to hold an ASEAN-India technology summit to serve as an interface for government, R&D institutions and the private sector; an IT seminar to elaborate on IT cooperation between ASEAN and India; and an IT ministerial and industry forum for pooling of resources, negotiating collaboration and bridging the digital divide. ASEAN welcomes these proposals, which will strengthen our cooperation in the IT field and could contribute to the leap needed for ASEAN to realise the ASEAN Community by 2020.
AS: There is no denying the fact that ASEAN is playing a pivotal role in strengthening not only its member-countries but emerging as one of major planks of a poverty-free, secured Asia. Against this backdrop, how would you like to respond to Indian Prime Minister Manmohan Singh’s concept of Asian Economic Community? If you consider it an achievable proposition, what preconditions you think would like to set to attain this goal?
SG: Poverty eradication is one of the core issues that ASEAN is tackling in building the ASEAN Community. It will also contribute to enhancing ASEAN’s economic competitiveness. We have in place the Framework Action Plan on Rural Development and Poverty Eradication (2004-2010) to guide us in tackling this core issue with the assistance of our Dialogue Partners and other external partners. Within ASEAN, we have realised that narrowing the development gap will be critical for ASEAN’s integration and the building of the ASEAN Community by 2020. Hence, we have included this in the Vientiane Action Programme (VAP), which is our six-year roadmap to build the three pillars of the ASEAN Community and to narrow the development gaps.
Similarly, under the ASEAN Plus Three process, we have acknowledged that narrowing the development as well as technological gaps between ASEAN and the Plus Three countries (China, Japan and Republic of Korea) will be important if we wish to build the East Asian community of the future. We are implementing initiatives and projects under the process for this purpose.
As for the proposal of an Asia Economic Community, we believe that we have to take a step-by-step approach of building the first circle, which is the ASEAN Community; strengthening the second circle of ASEAN Plus One dialogue relations with Australia, China, India, Japan, Republic of Korea, and New Zealand; developing further the third circle of the ASEAN Plus Three process and the dialogue via the East Asia Summit (EAS). We can develop these circles in parallel and as they evolve and strengthen, we venture further.
AS: How would you like to look at the prospects of East Asian Community, bringing together ASEAN, China, Japan, Korea, and also Australia and New Zealand about which Indian Prime Minister has thrown some light in the East Asia Summit on December 12?
SG: We have already agreed to the building of the East Asian community under the ASEAN Plus Three process when the ASEAN leaders adopted the 26 short, medium and long-term measures of the East Asia Study Group (EASG) in 2002. The EAS is one of the medium and long-term measures recommended by the EASG.
The Prime Minister of India has made several proposals in terms of cooperation and developing appropriate institutions for promoting cooperation under the EAS, which the ministers and officials will be studying this year. While the EAS is a dialogue forum, certainly there is a good rationale to pursue some of the ideas and proposals put forward by the Leaders at the EAS, such as energy cooperation, addressing terrorism and transnational crime and combating infectious diseases. The success formula will be to develop the EAS at a pace comfortable to all.
His Excellency Ong
has assumed the charge of the Secretary-General, ASEAN, in January