ASIA FOCUSAccords on goods trade, investments may be signed by December, reports Emilyn Yap in Singapore
Asean is poised to conclude two agreements by the end of this year that will further facilitate trade and investment in the region.
The Asean Trade in Goods Agreement (ATIGA) and the Asean Comprehensive Investment Agreement (ACIA) have been substantively concluded and both could be signed by December, said Lim Hng Kiang, Singapore's Minister for Trade and Industry, at a press briefing on Tuesday, held as part of the 40th Asean Economic Ministers' Meeting in Singapore.
ATIGA improves on the current Asean Free Trade Area (Afta) Common Effective Preferential Tariff scheme by integrating all existing Asean initiatives on trade in goods into one framework that is more user-friendly for traders. ATIGA will also help countries move beyond tariff reforms to trade facilitation.
"These include the elimination of non-tariff barriers, harmonisation and simplification of customs procedures and development of common product certification standards. They will save businesses time and money, and increase business opportunities, especially for SMEs," said Prime Minister Lee Hsien Loong in a speech on Tuesday morning.
Asean's total trade in goods grew 15% year-on-year to reach US$1.62 trillion last year. Of this, intra-Asean trade rose 14.6% to make up US$404.3 billion.
"The outlook for 2008 is promising as total Asean trade in the first quarter of 2008 posted an annual growth of 31.8%, which is more than twice the average year-on-year growth during the same period in the previous three years," said a joint media statement on Tuesday.
The second agreement, ACIA, is also an improvement over two existing ones - the Asean Investment Area (AIA) and Asean Investment Guarantee Agreements. ACIA will cover the liberalisation, facilitation, protection and promotion aspects of investment.
Under the ACIA, for instance, countries modifying commitments that negatively affect investors will have to offer compensation. There was no such provision under the AIA agreement. "This is a very important feature of (ACIA)," said Mr Lim, as it shows that "Asean will be increasingly a rules-based regime".
ACIA also grants immediate benefits to both Asean investors and Asean-based foreign investors. Under the AIA agreement, the latter would have benefited only by 2020.
Asean recorded foreign direct investment flows totalling $61.5 billion in 2007, a peak since 1998 and a 20.7% jump year-on-year. The EU and Japan were some of the key investment sources.
Published in Business Times (Singapore) on Aug 27
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