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Tuesday, October 11, 2005
Asean free trade seen to hurt local makers
By Jessica B. Natad
Sun.Star Staff Reporter
Aside from establishing economic ties with China and Japan, the Association of Southeast Asian Nations (Asean) is also working on comprehensive economic partnerships (CEPs) with India, Korea, Australia and New Zealand.
According to Trade and Industry Undersecretary Thomas Aquino, some of the provisions of the CEPs with the said countries, as well as with Japan and China, are trade in goods and services, investments and the reduction of tariffs on trade.
He told members of the Cebu Chamber of Commerce and Industry, in a consultation on the World Trade Organization at the Waterfront Cebu City Hotel and Casino, that the Asean has also chosen 11 priority integration sectors (PIS) to accelerate integration of the Asean into a unified market and production area.
The PIS include trade in goods and services, investment, trade and investment facilitation and promotion, customs procedure, logistics, movement of business persons, skilled labor and talents and intellectual property rights.
The Asean comprises Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
Better
Aquino said the faster the Asean integrates itself into a unified market and production area, the better its chances of attracting foreign direct investment.
An Asean Free Trade Area (Afta) will also benefit the Philippines’ exporting industry and manufacturing industries.
The Afta is one of the objectives in the establishment of the Asean Economic Community, which the Asean characterized as a single market and production base with free flow of goods and services, investments, skilled labor and capital.
In an interview, Justin Uy, president of mango processing company Profood International Corp., told Sun.Star Cebu that the Afta is beneficial to local companies like Profood, which imports raw materials from Asean-member countries.
He said his company is now importing packaging materials from Thailand, Singapore and Malaysia at 10 percent to 15 percent tariff.
Philippine Chamber of Commerce and Industry vice president for the Visayas and chief executive officer of Cebu Oversea Hardware (COH) Carlos Co agreed with Uy’s statement. However, he said Afta would have negative effects on local manufacturers.
Disputes
“Afta is a boon to importers but a bane to local manufacturers,” Co said.
COH imports lamp-shades, furniture and tiles, among others from Asean-member countries.
Meanwhile, Aquino said the Asean has set up new institutional mechanisms such as the Asean Consultation To Solve Trade and Investment Issues (ACT) and the Asean Compliance Board (ACB) to help resolve emerging trade disputes due to the Afta.
The ACT involves the setting up of a web-based advisory mechanism for trade complaints. Unresolved trade disputes under ACT go to the ACB, a consultative mechanism for resolving trade disputes.
(October 11, 2005 issue)
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