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The Association of the Southeast Asian Nations (ASEAN) is
moving rapidly towards a more integrated economy, with some 80 percent
of total products in the region having been exempted from all tariffs
since Jan 1, an official says.
"We aim to achieve full-pledge economic integration by 2015 so we must
continue to cut tariffs on products and services," Herry Soetanto,
director general for international trade at the Indonesian Trade
Ministry, said Wednesday in Cebu, the Philippines.
He said that tariffs would be lifted on the remaining 20 percent of
products by 2010.
"All of the remaining products are sensitive as they are considered
strategic for the security of member countries. For instance, we
consider rice, sugar, cigarettes and alcohol as being sensitive, so we
continue to impose high tariffs on them."
The exemption from tariffs, Herry explained, applied to products that
had at least 40 percent ASEAN content.
"Take, for instance, the automotive industry. Now, Proton from Malaysia
can export its cars to Indonesia with a tariff of less than 5 percent,
or even no tariffs at all," Herry said.
Given the current progress, Herry said he was optimistic that the
target of creating a viable economic community by 2015 would be
realized.
ASEAN has agreed to form a European-style economic community by 2015,
five years earlier than originally planned, uniting the 10-member
region into a single market for the free flow of goods, services and
investment.
Last December, ASEAN countries inked four agreements to speed up
economic integration. The first agreement was the protocol to the ASEAN
Framework Agreement on the Integration of Priority Sectors.
Member countries also agreed to eliminate tariffs on 3,523 product
lines on Jan. 1 of this year.
Apart from the elimination of tariffs, members will also implement
measures to simplify customs procedures; strengthen cooperation on
standards and conformity; and enhance facilitation of travel and
movement of people within ASEAN.
Foreign direct investment (FDI) into ASEAN during the first quarter of
2006 soared by nearly 90 percent to US$7 billion compared to the same
period last year. It rose by 48 percent to $34 billion in 2005, with
the manufacturing sector being the top FDI recipient.
Indonesia attracted some $6 billion of last year's FDI inflows to the
region, coming a poor second to Singapore's $20 billion.
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