1. The ASEAN Investment Area (AIA) Council met on 14 September 2001, preceded by the First Meeting of the AIA Council-Business Sector Forum with US and Japanese business organizations on 13 September 2001 in Ha Noi, Viet Nam. The Council discussed, among other investment issues, the global investment condition, trends and development of FDI flows in the region, reviewed the status of implementation of the AIA agreement and the investment activities of the Hanoi Plan of Action endorsed by the ASEAN Leaders three years ago.
Acceleration of the AIA for Non-ASEAN Investors
2. The Council reviewed the effect of the ASEAN Investment Area. Under AIA, investors from inside and outside ASEAN would be free to invest in manufacturing, agriculture, forestry, fisheries and mining sectors and their investments extended national treatment, with each country making certain exceptions. The AIA agreement set the deadline, for the elimination of the exceptions in 2010 for ASEAN investors and 2020 for non-ASEAN investors.
3. In order to attract larger volumes of FDI into ASEAN, the Council agreed to accelerate the full realization of the AIA for non-ASEAN investors in the manufacturing, agriculture, forestry, fisheries and mining sectors. Full AIA realization would be advanced from 2020 to 2010 for the first six ASEAN members and to 2015 for the newer members. This means that the exceptions to free entry and national treatment would be fully eliminated by these deadlines.
ASEAN Competitiveness Study
4. With competition for foreign direct investment intensifying, the Council agreed on the need to conduct a comprehensive study on the competitiveness of South East Asia, especially against the backdrop of NAFTA, the EU, and the impending Free Trade Area of the Americas (FTAA). The study would identify the comparative and competitive advantages of the types of industry vis-à-vis other regions, and make policy recommendations, to enable South East Asia to develop competitive industries that are regionally integrated, so as to enhance ASEAN’s ability to attract FDI into the region. The Council agreed that Member Countries will contribute to fund the study and that it should be completed by the time the AIA Council meets in Kuala Lumpur in the second quarter of 2002.
Greater Public-Private Sector Alliances
5. The First AIA Council-Business Sector Forum was conducted on 13 September 2001, with the aim to forge greater public-private sector alliances and to actively involve the private sector in the AIA process. Two separate consultation fora were held with high-level representatives from the US and Japanese business sector organizations, respectively. The business organizations included representatives from the US-ASEAN Business Council, American Automotive Association, Keidanren, Japan Electronics Industry and Technology Association, and Japan Automotive Manufacturers Association. Specific investment matters such as on further strengthening the AIA process and in making ASEAN a competitive global investment location were discussed.
6. Given the success of the First Forum, the Council looked forward to holding the Second AIA Council-Business Sector Forum next year to discuss key issues of FDI and investment operations in ASEAN.
Signing of the Protocol to enhance the Framework Agreement on the ASEAN Investment Area
7. The Protocol to enhance the Framework Agreement on the ASEAN Investment Area was signed today. The Framework Agreement was signed on 7 October 1998. The Protocol shortened the end date for the Temporary Exclusion List of the manufacturing sector to 2003 instead of 2010 for the original six member countries and Myanmar. Lao PDR, Cambodia and Viet Nam will have no later than 1 January 2010 to phase out the Temporary Exclusion List of the manufacturing sector. The protocol also expands the coverage of the AIA agreement to include agriculture, fishery, forestry and mining sectors, and services incidental to manufacturing and these sectors.
Review of Other Investment Activities
8. The Council reviewed the progress made in the implementation of the AIA Agreement and the investment portion of the Hanoi Plan of Action. Since 1999, a total of 45 regional level investment activities have been collectively implemented. Among the key achievements made in the last twelve months, under the AIA process, included the following:
- Review of the Hanoi Plan of Action (HPA)
- Drawing up Individual Actions
- Enhancing Greater Transparency
- Promotion of Investment Opportunities in the New ASEAN Member Countries
- Bridging the Development Gap
9. The Fourth AIA Council Meeting was chaired by H.E. Tran Xuan Gia, Minister, Ministry of Planning and Investment, Viet Nam and attended by:
H.E. Pehin Dato Abdul Rahman Taib, Minister, Ministry of Industry and Primary Resources, Brunei Darussalam;
H.E. Kong Vibol, Secretary of State of Economy and Finance and Vice-Chairman of the Council for the Development of Cambodia;
H.E. Rini M.S. Soewandi, Minister, Ministry of Industry and Trade, Indonesia;
H.E. Soulivong Daravong, Minister, Ministry of Industry and Handicraft, Lao PDR;
H.E. Dato’ Seri Rafidah Aziz, Minister, Ministry of International Trade and Industry, Malaysia;
H.E. Brigadier General David O. Abel, Minister at the Office of the Chairman of the State Peace and Development Council, Myanmar;
H.E. Thomas G. Aquino, Undersecretary, Department of Trade and Industry, Philippines;
H.E. BG (NS) George Yong-Boon Yeo, Minister, Ministry of Trade and Industry, Singapore;
H.E Chaturon Chaisang, Minister attached to the Prime Minister’s Office, Thailand;
H.E. Rodolfo C. Severino, Jr. Secretary-General of ASEAN, and their respective delegations.