The ASEAN Leaders agreed to accelerate the integration of 11 priority sector under the Framework Agreement for the Integration of Priority Sectors and 11 ASEAN Sectoral Integration Protocols reaffirming ASEAN’s commitment to fast track the integration towards the ASEAN Economic Community (AEC) that ASEAN Leaders agreed to establish by 2020. The AEC is envisaged as a single market and production base with free flow of goods, services, investment, skilled labor and freer flow of capital.

The 11 priority sectors are electronics, e-ASEAN, healthcare, wood-based products, automotives, rubber-based products, textiles and apparels, agro-based products, fisheries, air travel and tourism. These sectors were selected on the basis of comparative advantage in natural resource endowments, labour skills and cost competitiveness, and value-added contribution to ASEAN’s economy.

These selected sectors accounted for more than 50% of intra-ASEAN trade in 2003. In value terms, the priority sectors contributed US$48.4 billion and US$43.4 billion of intra-ASEAN exports and imports, respectively, in 2003.

Attached to each protocol is a roadmap to serve as the basis for economic integration of each of the priority sectors. These roadmaps were prepared with active involvement of the private sector. The roadmaps aim to (i) enhance the competitiveness of ASEAN; (ii) strengthen regional integration efforts through liberalization, facilitation and promotion measures; and (iii) promote private sector participation. The roadmap includes specific measures that are of direct relevance to each sector, as well as common measures that cut across all priority integration sectors to be implemented with timelines from now on to the year 2010.

According to the roadmaps, import duties for products under the priority sectors will be fully eliminated by 2007 for ASEAN-6 and 2012 for the new members of ASEAN or 3 years earlier than the original target under the ASEAN Free Trade Area (AFTA). Approximately 4,000 tariff lines or about 40% of total tariff lines in ASEAN are included in the fast track integration. Apart from tariff elimination, the roadmaps will also focus on trade and investment facilitation measures. Among others, the ASEAN Single Window will be developed, including the electronic processing of trade documents at national and regional levels. Product standards and technical regulations will be harmonized, mutual recognition of test reports and certification will be concluded to reduce the transaction costs of doing business in ASEAN. ASEAN nationals traveling within ASEAN will be exempted from visa. Movement of business people, experts, professionals and talents will be facilitated.

It is expected that implementing the measures in the roadmaps will not only accelerate the integration of ASEAN but also serve as a showcase for more sectors to be included in the accelerated integration programme. This initial exercise is critical in paving the way for the deeper economic integration of ASEAN and to achieve the objective of the ASEAN Economic Community by 2020 or earlier. It is also critical in preparing ASEAN in the light of the various free trade area negotiations being pursued with China, India, Japan, Australia and New Zealand and Republic of Korea.

ASEAN Secretariat

Vientiane, 29 November 2004