Date: 18 May 2007
Time: 3:00 PM - 5:00 PM
Venue: Global Distance Learning Center, Asian Institute of Management
The Role of Think-Tanks and Private Institutions
in Building an ASEAN + 3/6 Economic Community
Opening Statement
Dr. Stefan Friedrich, Head of Team Asia of Konrad Adenauer Stiftung, Headquarters gave the opening statement. He laid down the following specific issues to be tackled upon the Video Conference: Liberalization and Globalization (Today’s Trend), Economic and Political Integration, Regional Developments and 10 Economies in Asia moving as ONE in 2015.
Presentations: Asian Perspectives
Singapore
Mr. Eduardo Pedrosa
Secretary-General
Pacific Economic Cooperation Council (PECC)
Focus: Asia Pacific Perspective on Regional Economic Integration with emphasis on the Economic Outlook for the Asia Pacific, Developments in the Trade Regime and Regional Institutions.
Under the Economic Outlook for the Asia Pacific, the East Asian GDP Growth (Trade Weighted Average) will have 5% growth in two years 2007-2008. The ASEAN will not likely to return to earlier highs but will still have decent growth since 1980’s which is at 9.1% and in the next two years (2008-2009) it will decrease to 5.3%. On the matter of Current Account Balance the East Asia have lots of surpluses, about 60% China Exports are all going to U.S. and 25% U.S. Imports comes from all multinationals. Based on the IMF Direction of Trade Statistics (DOTS) data the ASEAN Exports to China rapidly increased in the past 5 years (2001-2005), while the ASEAN Exports to U.S. decreased and the performance of China’s Exports via U.S. is very impressive. KEY: On the State of the Region: Regional Institutions Survey: There is an immediate call for Political Commitment. We need Political Will.
Dr. Dennis Hew
Senior Fellow
Institute of Southeast Asian Studies (ISEAS)
Focus: ASEAN Economic Integration
There is a need for the ASEAN regions to have Economic Integration since China and India is becoming very powerful and the rest of the regions are being left behind. As of 2004, China is getting all the FDI inflows rather than the developing countries do. In the AFTA, there is a bigger challenge in the Non-Tariff Barriers and it is being tackled. The opening up of ASEAN Investment Area (AIA) to all the ASEAN regions is also a big concern. 2010 is the target year for a 0% Tariff for the fast-track integration of 12 Priority Sectors (Wood-based products, Automotives, Rubber-based product, Textiles & Apparels, Agro-based Products, Fisheries, Electronics, E-ASEAN, Healthcare, Air-Travel, Tourism and the newly added sector Logistics). The European Economic Community (EEC) is not a possible model for ASEAN but it contributes important lessons such as in the process of institutional development. One of the major challenges facing ASEAN Integration is regarding the slowed down performances of the 12 Priority Sectors due to lack of Coordination and Implementation. There’s an urgency today to really move forward having faced with such challenge. The draft of the ASEAN Charter is expected to be released and reviewed this November 2007, which suppose to envision the solutions to the challenges ASEAN regions are facing to be able to attain prosperity in the year 2015. KEY: Definitely, ASEAN is not like the European Market and it can be a much better Market.
Mr. Rodolfo Severino
Visiting Senior Research Fellow
Institute of Southeast Asian Studies (ISEAS)
Focus: ASEAN + 3/6
Currently, the South East and North East Asia’s Intra-regional trade had grown 57%-58%, which is above the NAFTA and close to EU. There are two forces driving Regionalization particularly in the Market, which is the Appreciation of Yen and China in the Production Chain. There are also other forces for regionalism such as the Mutual Antagonisms, Mutual Suspicions, Rivalry, Korean Nuclear Issues, China-U.S., Taiwan, Japan-U.S. Alliance and Japan-Korea territorial disputes. Regarding the Currency Reserves, it should be channelled on the regions for its progress. And the distinctions between ASEAN+3 and EAS should evolve first before defining what each does best. KEY: Finally, to contain the tensions, Regionalization then is a must and building Cooperation equates to a good Quality of Life.
Dr. Charles Adams
Professor
National University of Singapore - Lee Kwan Yew School of Public Policy
Focus: Financial Flows
There are three major points in the Financial Flows that is subject to attention; #1.The Region needs more Capital Account Liberalization, #2. Much importance on Banking Securities (Inter & Intra Integration) of Financial Sectors and #3 The Change of mind set of Policy Makers regarding the REGIONALIZATION such as in Policy Implementation and Financial Integration. In the facilitation of capital flows there are concerns that is also important such as the Risk Management, Expansions of Investments, Strengthening of Financial Sectors through Capital Account Liberalization and Financial Services Liberalization. Financial Institutions indeed have a big role in producing Financial Services. KEY: We need to be ambitious for this goal and the policy makers should focus on Financial Liberalization.
Jakarta, Indonesia
Mr. David Parsons
Senior Adviser
Kadin Indonesia (Jakarta Chamber of Commerce and Industry)
Focus: Integration of the Electronics Sector and the Role of Business
Electronics has a total of 60% Intra-ASEAN Trade. It does really matter in the supply supports, which was proven in the imports and exports of electronics in the year 2004-2005 which increased globally. There will be a Time Table for 2010 for Customs Procedures in battling the Customs Issues on the Supply Chain such as the Corruptions. However, the Electronics Mutual Agreement is downgrading due to poor infrastructure and transportation, lack of growth and investments from foreign investors. The border measures and supply chains are not much of a problem but we need to look at the Competition building dynamisms or the Competitive Issues.
Regarding the Credibility Gap Issues, like in the terms of the business sectors, ASEAN actually don’t think on the same line and they are being left behind. To bridge this gap Coordination among ASEAN regions must be process. Since the ASEAN regions are getting pressures from China and India so there is a need for Transparency and Domestic Competitiveness. It is important to have Public Assessment and share Informations on the Business Sectors, Dynamisms of Integration and Building on the Institutions’ Policies and Competitiveness. KEY: There is the Knowledge but there is a need for an ACTION.
Tokyo, Japan
Dr. Douglas Brooks
Senior Research Fellow
Asian Development Bank Institute (ADBI)
Focus: Trade Facilitation
From the Doha Round, Trade facilitation expressed concern for greater transparency, efficiency, and procedural uniformity of cross-border transportation of goods. It works toward implementing current standards and requirements while creating the next generation of facilitation measures applicable to e-commerce and global corporations; it also focuses on eliminating Red Tape, Corruptions etc. KEY: In the developing Asia (ASEAN+3) Trade Costs and Infrastructure plays an important role and will surely make a huge difference in uplifting the 10 Economies.
EU
Dr. Jacques Pelksman
Assiciate Fellow
Centre for European Policy Studies
There are seven major requirements that will make AEC effective: have a treaty (AFTA has none), with domestic obligations, legal dispute settlement, realize and enforce radical customs reform, pursue complex removal of technical barriers, strictly enforce all WTO codes, selective services liberalisation and free up investment. If all of these will be realized then it will result to credible performances in the Region.
EU is light years away from ASEAN. Looking at their differences ASEAN have disputes settlement and its Codes are too broad and elaborations still continue to happen. While EU have direct legal hierarchy and its Codes are all exact and fixed.
KEY: In Economic Regionalism, a treaty results in a lot of consequences.
Open Forum
Dr. Wilfrido Villacorta
Former Deputy Secretary General of the ASEAN
In reaction to Dr. Pelkmans, he has the credibility in having a presentation about Integration since he had a 10 yrs experience working in ASEAN. His presentations was Holistic, focusing on Economic Aspect and Realistic since EU was 10 years ahead of ASEAN and it has a different nature because it evolves in a Greco-Roman Culture that makes a big difference between EU and ASEAN.
The question is this: Is there a necessity for Substantial Leadership? Let’s just take the example of Japan. It is obviously Asia’s Regional Leader however it has protectionism, its historical past affects its relationship with other regions, the Japan-U.S. relationship and it continues to alienate other Asian Nations such as Taiwan and Hong Kong.
Dr. George Manzano
Faculty at the University of Asia and the Pacific (UA & P)
What is the incremental result of all this Economic Integration and will Asia integrate naturally? The case now is that China is already 2nd to U.S. and becoming so powerful economically speaking. Although everyone is pushing for East Asian Integration, is it worth it? There are political dimensions that are very important in economic Integration and tariffs alone are not that important.
What model do we really like for ASEAN? There should be trade-offs between Effectiveness vs. Efficiency. Being Effective is a matter of Flexibility that explains Political Capital which equates to Credibility and Stability. The main focus here is finding the balance to optimise the flexibility. While being Efficient relates to the New Age of Integration that also involves Competition Policy, Macro and Trade Models. This directly drops down to the value of Welfare Gains.
As a reaction to Mr. Parson’s presentation: The Policy of one member has an effect to the other members and the transmissions effect is very rapid and this is a room for Policy Research Study to tackle the Externalities.
Singapore
Dr. Josef Yap
President of the Philippine Institute for Development Studies
EU is not a model for the ASEAN but the ASEAN should learn from EU the process of: narrowing goals such as in #1 Infrastructure and #2 Electronics/Technological Capabilities.
Jakarta, Indonesia
Mr. David Parsons
Answered Mr. Villacorta’s comment that Indonesia is experiencing a political barriers: Indonesia is not having political impediments but so far it is doing well in its market.
Tokyo, Japan
Dr. Douglas Brooks
Financial Flows are very urgent in this kind of goal of Regionalization since it will be an edge in creating financial services for the development of the regions.
Synthesis
Dr. Federico M. Macaranas said that integration tools are not all Economic Factors but there is also Political Regional Aspect such as (Nuclear issues N. Korea, China, Japan etc.) and there are 3 Kinds of Research given in this particular event such as the Incremental Benefits of Integration, Externality Issues (Development Gap) and Nature of Cooperation
State of the Region (2006-2007) (.pdf)
Mr. Eduardo Pedrosa
Secretary General, Pacific Economic Cooperation Council (PECC)
ASEAN Economic Integration: Developments and Challenges (.pdf)
Mr. Dennis Hew
eSnior Fellow, Institute of Southeast Asian Studies (ISEAS)
ASEAN + 3 EAS (.pdf)
Mr. Rodolfo Severino
Visiting Senior Research Fellow , Institute of Southeast Asian Studies (ISEAS)
Electronics Sector in Asia: Review of Issues for Integration (.pdf)
Mr. David Parsons
Senior Adviser, Kadin Indonesia (Jakarta Chamber of Commerce and Industry)
Trade Costs (.pdf)
Dr. Douglas Brooks
Senior Research Fellow, Asian Development Bank Institute (ADBI)
What AEC: Lessons from EU? (.pdf)
Dr. Jacques Pelkmans
Associate Fellow, Centre for European Policy Studies