SE Asian nations hasten push for integration on oil price fears
Wednesday September 28, 2005
Southeast Asian nations hasten push for integration on oil price fears
VIENTIANE (AFP) - Southeast Asian economic ministers knuckled down here Wednesday to thrash out free trade agreements (FTA), with historically high oil prices intensifying calls for greater regional cooperation.
Lao Prime Minister Bounnhang Vorachith said ministers from the Association of South East Asian Nations (ASEAN) had to identify measures to overcome the hike in oil prices, particularly the impact on agriculture.
He said those measures — needed for the overall coordination of economic integration — would be put forward to leaders from the 10-nation ASEAN group when their inaugural East Asian Summit is held in Malaysia later this year.
The cost of crude, which is hovering around 65 dollars a barrel, has pressured government budgets and impacted financial markets around the region while threatening to undercut economic growth.
Economic integration within the 10-nation ASEAN block dominates the three day meeting, alongside negotiations for FTAs with China, India, South Korea, Australia and New Zealand.
"Experience has shown that the more we are interdependent and economically integrated with the rest of the world, the more we become an attractive centre for trade, investment and tourism," Bounnhang said.
Organisers said preliminary talks for liberalising 11 sectors within the six most developed members of ASEAN — Singapore, Malaysia, Thailand, Brunei, Indonesia and the Philippines — by 2007 had gone well.
A further seven sectors, including aviation and telecommunications, are slated for liberalisation by 2010, as part of an overall plan to establish an ASEAN economic community by 2020.
"This meeting has run very smoothly," said meeting chairman Bounsom Phommavihane, adding that oil would dominate later sessions. "Oil is very important for the cost of transport and inputs for agriculture.
"We are totally dependent on world (price) fluctuations."
However, cracks have appeared in FTA talks with India. Initially an FTA was slated for January 2006 but this was deferred earlier this week after ASEAN and India failed to reach an agreement on rules regarding the origins of food.
Australia and New Zealand also took the unusual step of agreeing to foot the bill for the poorest members of ASEAN — Cambodia, Laos and Myanmar — so they can attend the next round of ASEAN-FTA talks in Canberra in October.
Bounnhang earlier complained about the cost of negotiations within ASEAN, arguing there were too many meetings which were proving too expensive.
"There is currently a proliferation of ASEAN meetings which has led to the overstretch of manpower and financial resources," he said. "In this regard, an alternative should be introduced in order to reduce the cost and increase the effectiveness for our fora."
Analysts say the economic ministers — charged with bridging the enormous wealth gaps within ASEAN — must perform a delicate balancing act of weighing up the interests of the poor with fiscal realities.
"The ministers need to focus on restoring investor confidence and shoring up fiscal positions across the region," Ernest Bower, a former president of the US-ASEAN Business Council, told AFP earlier.
He said a chief task for the delegates will be "hammering out what those countries and others will do in the wake of high oil prices and the fuel crisis."
