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AFP-Southeast Asia mulls new formul



Reply-To: "TIN KYI" <tinkyi@xxxxxxxxxxxxx>
Subject: AFP-Southeast Asia mulls new formula to open up services sector

Southeast Asia mulls new formula to open up services sector
SINGAPORE, Sept 26 (AFP) - Southeast Asian nations are expected to consider
a new formula to swiftly open up the services sector, complementing moves to
create a free-trade and investment area, officials said.
A plan to rapidly liberalise services might be tabled at this week's ASEAN
trade ministers meeting in Singapore even though economies in the region
have been cautious about opening up the sensitive field, they said.

The proposal would look into "other modalities of liberalisation," said Tay
Thiam Peng, deputy secretary of trade and regionalisation in the trade and
industry ministry of Singapore, which will host the talks.

The 10 members of the Association of Southeast Asian Nations (ASEAN) already
have a pact to open up seven priority services sectors -- air and maritiime
transport, business services, construction, financial services,
telecommunications and tourism.

Although concessions for member economies under the ASEAN Framework
Agreement on Services were more than those offered under a global pact on
services, officials say the ASEAN pact has been ineffective.

Under the proposal to be discussed by the ministers, a different formula to
liberalise services could be considered.

Speaking at a media briefing ahead of the ministerial meeting from September
29 to October 2, Tay said the plan would be tabled by an ASEAN member state,
which he declined to identify.

"Presumably, if they (the ministers) agree, it will be forwarded to
officials for discussions and follow up," Tay said.

Sources said the proposal was a follow-up to an agreement by ASEAN last year
to launch a new round of negotiation in services begining this year and
ending 2001.

The negotiations would cover all service sectors and all modes of supply,
they said.

Tay explained services continued to be a difficult area to negotiate within
ASEAN because the sector was just beginning to be negotiated at the World
Trade Organisation (WTO).

"The rules of liberalisation and engagement are not exactly clear yet," he
said.

ASEAN states are cautious because what is agreed at the grouping can form
the baseline upon which further liberalisation can be negotiated or
"extracted" at the WTO, Tay said.

"I think the exercise continues to be difficult but we will have to do it in
parallel probably with what happens in the WTO," he said.

But Tay pointed out that ASEAN member states offered more concessions to one
another than to those outside the grouping.

"I think that in the sense is the saving grace to ASEAN, whatever we offer
on a MFN (most favoured nation) basis, more will be offered to each other,"
he said.

ASEAN comprises Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the
Philippines, Singapore, Thailand and Vietnam.

ASEAN leaders decided last year that the grouping's six earlier members --
Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand --
would accelerate the realisation of an ASEAN Free Trade Area by one year to
2002.

The acceleration will be completed in stages, with each committing to
achieve liberalisation in at least 85 percent of industrial products they
had offered under the free trade plan by January 1, 2000.

This commitment to create a free trade market comprising half a billion
people with a combined gross domestic product of 700 billion US dollars
would be raised to 90 percent of the products by 2001 and 100 percent by
2002.

Vietnam, Laos, Myanmar and Cambodia have been given a few years of
flexibility to achieve the free trade goal. The target date for Vietnam is
2006 and for Laos and Myanmar is 2008 and Cambodia 2010.