The ASEAN Economic Ministers, The Honorable Pehin Dato Abdul Rahman Taib, Minister of Industry and Primary Resources of Brunei Darussalam; H.E. Dr. Arifin M. Siregar, Minister of Trade of Industry of Indonesia; The Honorable Dato Seri Rafidah Aziz, Minister for International Trade and Industry of Malaysia; H.E. Mr. Rizalino S. Navarro, Secretary of Trade and Industry of the Philippines; H.E. BG (Res) Lee Hsien Loong, Deputy Prime Minister and Minister for Trade and Industry of Singapore; and H.E. Mr. Supachai Panitchpakdi, Deputy Prime Minister. of Thailand met with the Japanese Minister for International Trade and Industry, H.E. Mr. Kozo Watanabe in Manila on 24 October 1992.
The Meeting was the first bilateral meeting between the ASEAN Economic Ministers (AEM) and Japan’s MITI Minister and was co-chaired by H.E. Mr. Rizalino S. Navarro, Secretary of Trade and Industry of the Philippines and Chairman of the AEM and H. E. Mr. Kozo Watanabe, Minister for International Trade and Industry of Japan.
Paying attention to the continued economic growth-of the region, the Ministers exchanged views on current global and regional issues relating to trade, investment and other areas of cooperation between ASEAN and Japan. The Ministers also considered various policy measures to further expand the free flow of trade and investments between Japan and ASEAN and to contribute- to the strengthening of the multilateral trading system and continued prosperity in the region.
REVIEW OF INTERNATIONAL ECONOMIC AND TRADE DEVELOPMENTS
The Ministers examined the recent economic trends and developments affecting the growth of the Asia Pacific region. The Ministers were of the view that the prospects for economic growth for the region was good and they expected the dynamic growth of the countries in the region to continue in the next few years. The Ministers recognized the importance of strengthening the multilateral trading system and promoting closer economic linkages which would encourage market-oriented policies conducive to further growth of the region.
The Ministers exchanged views on the present status of the Uruguay Round of Multilateral Trade Negotiations (URMTN) and reaffirmed their strong commitment for an early and successful conclusion of the Round.
The Ministers recognized that the successful conclusion of the Round with a balanced and comprehensive package for liberalizing market access on goods and services would increase growth in world trade, dampen protectionist pressures, and generate greater global economic reforms.
ASEAN Free Trade Area (AFTA)
On the establishment of the ASEAN Free Trade Area (AFTA), the Minister agreed that the ASEAN’s initiative to further liberalize the ASEAN markets will contribute to the strengthening of the multilateral trading system. In this regard, the MITI Minister reiterated Japan’s support of AFTA while expressing the hope that the ASEAN market would become more attractive and conducive to expansion of trade and investment through efforts to reduce and remove its barriers. The MITI Minister proposed that seminars organized by ASEAN, with MITI providing cooperation on all levels, be held in Japan early next year to promote better understanding of AFTA among the Japanese private sector. The participants agreed to continue policy dialogue to discuss AFTA.
North American Free Trade Agreement (NAFTA)
On the newly established North American Free Trade Agreement (NAFTA), the Ministers exchanged views on its possible trade and investment creation and diversion effects and expressed their hope that NAFTA would not turn into a regional economic bloc. In this regard, the Ministers emphasized that NAFTA should be GATT – consistent and should contribute to the economic growth, not only of NAFTA members, but the other countries as well.
Asia-Pacific Economic Cooperation (APEC)
The Ministers reaffirmed their commitment to foster greater cohesion in the Asia Pacific region through APEC. The success of APEC in sustaining market-oriented growth through advancing global and regional trade liberalization will forge even closer ties among APEC members. The Ministers recognized the necessity of active involvement and close coordination between Japan and ASEAN specifically in the area of regional trade liberalization which would be the main focus of the next APEC Ministerial Meeting.
The Ministers noted that regional arrangements should be outward-looking, GATT – consistent and support the processes of broader trade liberalization. The Ministers were also of the view that, as long as they are consistent with these principles, sub-regional arrangements could enhance the process of globalization, thus leading to increased investment and trade cooperation.
Japan’s Policy to Expand Imports
The Ministers noted that ASEAN was Japan’s third largest trading partner, accounting for 13 percent of Japan’s global trade in 1991. On the other hand, Japan was ASEAN’s largest trading partner accounting for 1 1 per cent of ASEAN’s total trade and supplying 14 percent of ASEAN imports. The Ministers acknowledged the importance of further expanding trade relations between ASEAN and Japan. The MITI Minister explained in detail the policy measures to expand imports such as the Foreign Access Zone (FAZ) and Business Support Center. The MITI Minister also explained Japan’s 10.7 trillion yen comprehensive economic measures which aim to expand Japan’s domestic demand and are expected to contribute to a stable development of the world economy.
The ASEAN Ministers welcomed this initiative and expressed the hope that they would take advantage of these measures particularly in ASEAN’s development as the manufacturing export base to Japan. The MITI Minister assured that his Ministry would provide active support to. this end.
Japan’s Generalized System of Tariff Preferences (GSP)
On Japan’s Generalized system of Tariff Preferences, the ASEAN Ministers agreed that it was a vital tool in promoting ASEAN’s exports to Japan. In this regard, the ASEAN Ministers expressed their appreciation to the Government of Japan for extending the GSP until 2001 and acknowledged its efforts in further liberalizing the quota ceilings for certain products. The ASEAN Ministers further urged Japan to favorably consider those outstanding requests by ASEAN to improve the Japanese GSP scheme.
ASEAN Centre Activities and Other Programs
The participants agreed to work together to encourage the private sector to make good use of the activities of the ASEAN Promotion Centre, various JETRO programs and other existing programs to promote export of manufactured goods which meet the market needs of the importing countries.
INVESTMENT AND INDUSTRIAL COOPERATION
In explaining the current situation and future prospects of Japanese foreign direct investments (FDI), the MITI Minister pointed out that Japanese FDI to the ASEAN countries, while having recently declined, had increased its share in the total Japanese FDI and would trend upward again in the medium to long-term. He added that Japanese FDI tended to increase in the sectors of higher value-added and supporting industries. The MITI Minister also reassured the ASEAN that the region remains a priority area for Japanese investments and encouraged member countries to further improve the region’s investment climate by expanding infrastructure, developing appropriate technology transfer, and maintaining a pool of trained and skilled personnel.
The MITI Minister stated that MlTl would actively cooperate to help develop supporting industries and to advance the industrial structure of the ASEAN countries. The Ministers agreed on the importance of promoting dialogue between public and private sectors of Japan and the ASEAN countries and of continuing effort on human resource development.
The ASEAN recognized the investment patterns emerging from recent economic trends in Japan and with this consideration, submitted a four-point proposal for the enhancement of ASEAN-Japan investment and industrial cooperation.
Specifically, ASEAN requested (1) the ASEAN-Japan Experts’ Group meeting to consider and review the progress of the implementation of the ASEAN-Japan Development Fund (AJDF) as well as the additional needs of ASEAN, in accordance with Article 13 of Framework of the AJDF and Guidelines for implementation agreed in July 1988; (2) the institution of a program for improving intellectual property protection and the system for industrial standardization and quality control in ASEAN which would be necessary for smoother technology transfer to ASEAN countries; (3) the establishment of a comprehensive program for developing small and medium-sized enterprises (SMES) in ASEAN, and (4) the application of MITI’s Green Aid Plan to provide technical support that will lead to the improvement of the overall investment condition of ASEAN member countries.
The MITI Minister introduced MITI’s policy measures for preventing industrial pollution, its comprehensive program to deal with global environment problems designed to address environment, energy and economic growth concerns together and its specific actions to realize the “New Earth 21 ” concept based on development of innovative technology and technology transfer to developing countries. The MITI Minister stated that MITI was prepared to apply the “Green Aid Plan” which provides to ASEAN countries incentives for economic development compatible with environmental problems from the viewpoint of industry and trade ministers.