Deal puts integration plan back on track

Investors are expected to look favorably at the Association of Southeast Asian Nations’ (ASEAN) integration commitment following an end to a standoff that could have derailed a regional agreement, a Trade official said on Monday. Moving forward, ASEAN members will now focus on improving "connectivity infrastructure" to complement the lowering of tariffs, the official said at the close of an economic ministers’ retreat in Malaysia. The statement came after Thailand promised at the meeting to ratify the ASEAN Trade in Goods Agreement (ATIGA) in time for the regional bloc’s summit in April. The commitment arose after Bangkok ironed out a side deal with Manila on allowing the latter to postpone rice tariff cuts until 2015 in exchange for the duty-free entry of 367,000 tons of Thai rice as long as the commodity is competitively priced. Thailand’s ratification of the ATIGA will "send a signal to the investing world that in ASEAN, we are substantially hitting integration commitments," Trade Assistant Secretary Ramon Vicente T. Kabigting said in a telephone interview on Sunday. The Philippines implemented the ATIGA at the start of the year under Executive Order 850. While the ATIGA merely streamlines tariff commitments under the ASEAN Free Trade Area (AFTA) scheme and does not require new obligations, trade facilitation and a clear schedule of tariff cuts have been tagged as its "value-added", Kabigting said. "In the meantime, the benefits of old [tariff reduction] targets under AFTA are being exchanged," he added. To bolster integration efforts, ASEAN economic ministers agreed at the meeting to focus on improving logistics and behind-the-border processing of goods, he said. The leaders welcomed recommendations from the Economic Research Institute for ASEAN and East Asia to revise the integration scorecard — a monitoring instrument — to instead focus on trade and investment facilitation, transport and logistic services, Kabigting said. The scorecard seeks to measure members’ compliance to the blueprint for an ASEAN community by 2015 which covers not just economic integration but also convergence in security and sociocultural matters. "ASEAN has recognized that there are inefficiencies behind the borders," Kabigting said. Aside from Thailand and the Philippines, ASEAN consists of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Singapore, and Vietnam.