ASEAN NEEDS TO PUSH FOR INTEGRATION PROCESS TO EMERGE AS ECONOMIC POWERHOUSE By Christine Lim

KUALA LUMPUR, Sept 12 (Bernama) -- With increasing pressure to strengthen its economy in view of rising competition from China, India and other economic powerhouse, Asean will need to focus on the progress of its economic integration with its members.

The Asean Economic Community (AEC) Blueprint which was signed by the Asean
governments at the 13th Asean Summit in November 2007, outlined Asean's roadmap
in achieving economic integration, emphasising on the goals and aspirations for
an effective single market base by 2015.

This will involve free flows of goods, services, investment, capital and
skilled labour within the Asean member countries.

Prime Minister of Singapore, Lee Hsien Loong said during the Asean Economic
Ministers (AEM) meeting recently that completing the roadmap to become an Asean
Economic Community will require commitment and tough political
decisions.

The 40th meeting of the AEM was held on Aug 25-26 in Singapore.
Lee stressed that in view of competition from other Asian countries and to
attract foreign investments into the Asean countries, there is a pressing
reason for Asean to integrate its economies to emerge as a sizeable market base
of over 550 million people, a gross regional product of US$1.1 trillion and
total trade of about US$1.6 trillion.

It is expected that the AEC will improve environment for businesses and
raise the prospects of economic development in the Asean region.

During the AEM meeting in Singapore, several measures were taken towards
achieving increasing synergies in trade and a more effective investment
framework.

This materialised with the conclusion of the Asean Trade In Goods Agreement
(ATIGA) which integrates all existing Asean initiatives related to trade in
goods into one comprehensive framework.

ATIGA contains number of key features that enhance transparency, certainty
and predictability in Asean framework.

It also enhances Asean Free-Trade Agreement rules based system which is of
importance to the Asean business community.

The signing of the ATIGA is expected in December 2008.

Another important milestone achieved for the development on Asean
comp etitiveness in the services sector was the signing of the three Mutual
Recognition Arrangements (MRA) during the meeting.

The MRA was namely in the framework on accountancy services, dental
practitioners and medical practitioners.

The MRA removes barriers to trade in services through transparency of Asean
Member states'regulations and procedures to facilitate the movement of
professionals thus providing opportunities for professionals within Asean
countries to practice in other Asean countries.

The MRA also sets out the parameters to ensure standards of an Asean member
state are maintained, monitored and regulated, so that services provided are of
high quality.

The MRA will also be extended on tourism professionals, which is expected
to
be signed by the Asean Tourism Ministers during the ASEAN Tourism Forum in
January 2009.

According to the Asean Economic Community Blueprint, full services
liberalisation is targeted by 2015.

This will entail, removing all restrictions on trade in services for four
priority services sectors, ie, air transport, e-Asean (region-wide approach on
making use of information and communications technologies in business, society
and government), healthcare and tourism by 2010 and the fifth priority services
sector, logistics services, by 2013.

All restrictions on trade in services for all other service sectors will be
removed substantially by 2015.

To promote investment flow between Asean member countries, the substantive
conclusion of the Asean Comprehensive Investment Agreement (ACIA) was announced.
To be signed at the Asean Summit in Bangkok in December 2008, it will extend
benefits to Asean-based foreign investors that are investing in other Asean
member states.

The ACIA stipulates that if any country modifies their commitments that
lead
to an investor being negatively affected, the country would have to give
compensation.

The ACIA has also taken account of international best practices that would
further enhance investors' confidence in Asean.

While some success has been made due to the Asean Free-Trade Area (AFTA),
which cut trade barriers among member countries, more efforts are still needed
to promote the attractiveness of Asean as an investment region.

Malaysia's Minister of International Trade and Industry, Muhyiddin Yassin
suggested that Asean undertakes roadshows to promote its attractiveness as an
investment hub.

Muhyiddin said initiatives are being undertaken among governments in the
Asean region to push for greater liberalisation in trade.
This underscore the importance of targets set under the Asean Economic Community
for Asean in order to achieve greater liberalisation in trade.

Muhyiddin said governments have expressed intentions to push harder to take
necessary steps to ensure the timeframe set by the heads of government in
achieving the Asean Economic Community by 2015 will be achievable.

There is also a need to build strong linkages in road transportation
network
system which will also ensure free flow of goods within the Asean region in line
with the targets set under the AEC.

With all its initiatives including an integrated road and railway system,
can Asean achieve its integration process to be a vibrant economy operating
under a single market?

Lee says there must be a political will to implement the roadmap
which Asean ministers have initially agreed upon.

"Our respective governments face pressing domestic economic and political
pressures from time-to-time. We must enlist domestic support for integration
measures which will yield long term benefits to individual countries as well as
Asean as a whole."