Introduction

1. At the Fifth AEM-CER Consultations in Chiang Mai, Thailand in October 2000, the Ministers agreed to work towards a Closer Economic Partnership (CEP) which takes into account relevant recommendations of the Angkor Agenda: Report of the High Level Task Force on the Feasibility of an AFTACER Free Trade Area and other issues relevant to the closer integration of ASEAN-CER countries. In this regard, they agreed that:

  1. Senior Officials shall elaborate on the potentials and parameters of the CEP, beginning in 2001;
  2. In their discussions, particular attention should be placed on development assistance in the form of technical assistance and capacity building measures to ASEAN members in areas that have been proposed by the Task Force representatives from the New Members of ASEAN ;
  3. Capacity-building initiatives be undertaken on a number of items of export interest to ASEAN Members given some current trade issues concerning non-tariff barriers such as SPS and technical barriers to trade;
  4. Senior Officials shall report on the outcome of their work to the 8th AEM-CER consultations in the year 2001; and
  5. The ASEAN Secretariat be tasked to coordinate such work.

2. In order to fulfil the ministerial mandate, it is important to maintain the momentum developed between ASEAN and CER through six years of close economic cooperation under the AFTA-CER Linkage and the work of the High Level AFTA.CER Task Force. This CEP framework encompasses areas of cooperation previously identified under the Linkage where joint activities continue to be undertaken, for example on standards and conformance, food standards, SPS and quarantine procedures, customs, tourism, transport, investment, intellectual property rights, competition policy, new economy/le-commerce and the identification and elimination of trade and investment barriers. It could also include cooperative activities in areas such as small and medium enterprises (SMEs), science and technology, and financial cooperation.

Principles

3. Given the importance of trade and investment for the twelve AFTA-CER economies and of the existing trade relationship between the regions, the fundamental principles underpinning further regional economic integration are;

  1. Open, transparent and competitive markets are the key drivers of economic efficiency, and contribute to wealth creation and consumer welfare;
  2. A recognition of, and adherence to, the respective commitments to the spirit, rights and obligations of existing membership of global, regional and bilateral agreements and forums; and
  3. The CEP process should take into account the different levels of development of participating countries.

Goals

4. To sustain and deepen economic links, the goals of the Closer Economic Partnership will be to:

  1. Deepen and broaden cooperation in all economic fields;
  2. Promote greater trade and investment flows regionally and globally;
  3. Contribute to trade and investment facilitation through minimising impediments, reducing costs, and related capacity building;
  4. Improve business competitiveness;
  5. Narrow the developmental gap and deliver tangible benefits to all participating countries; and
  6. Promote transparency of regulations and cooperation among relevant authorities.

Fields of cooperation under the CEP

5. Building on the existing dialogue on trade and economic issues, the fields of cooperation under the CEP will include:

Trade and Investment Facilitation

The extensive work of the past six years under the AFTA-CER Linkage will continue to seek to reduce costs to business associated with technical barriers and regulatory and administrative requirements. This will be underpinned by technical assistance initiatives aimed at assisting newer ASEAN members to build the capacity necessary (including skills and infrastructure), to promote the freer flow of goods, services and investment between the regions.

Capacity Building

Technical advice and assistance will continue to be provided by AusAID and NZODA guided, inter-alia, by: decisions taken under the AFTA/CER framework and in support of the key goals of the CEP; the general endorsement of ASEAN for facilitating the integration of its newer members; and the identified needs of ASEAN countries in trade and investment related areas, including SPS, customs, standards and conformance, and enforcement of intellectual property rights.

Trade and Investment Promotion

One of the key goals of the CEP is to promote trade in goods and services, and the attractiveness of ASEAN and CER as investment destinations. Liberalisation could form part of the work programme of the CEP with initial emphasis placed on addressing non-tariff barriers with a view to preventing these from inhibiting flows in merchandise and services trade. It would also maximise the advantages of regional economic integration.

New Economy

The CEP will provide for collaboration among participating countries to reduce the digital divide in the region through the minimisation of regulatory and other barriers with a view to exploiting the full potential of information communication technology and e-commerce for economic growth .

Work in this area should encourage the development of intellectual property regimes to protect IPRs and support innovation and economic growth.

Closer cooperation to address new obstacles, particularly as the degree of regional economic integration deepens, such as anti-competitive practices.

Other Areas of Cooperation

The work programme under the CEP should be reviewed periodically with a view to exploring further areas of cooperation which conform to the principles and goals of the CEP framework.

Process to Develop the CEP

6. The CEP must advance substantively beyond the present level of cooperation under the AFTA-CER Linkage and serve as a building block for greater economic integration. The work programme of the CEP under the above fields of cooperation will be developed on the basis of consensus and implemented taking into account the different levels of development of the participating countries, using a multi-track approach where some areas of cooperation could be advanced sooner than others. The AEMCER process will periodically monitor and review the progress on the implementation of the CEP .

7. The initial work programme of the CEP appears as attachment.