Despite Protectionism, ASEAN Eyes Single Market

Southeast Asian nations on Sunday said they are still aiming to set up a European Union-style economic community by 2015 despite concerns that the global slump has led to a rise in trade protectionism.

The 10-member Association of Southeast Asian Nations plans to have a free flow of goods, services, investment and skilled labor within five years, although it has fallen short so far in most of the sectors targeted for accelerated integration.

"The crisis has somewhat affected our progress ... there is a tendency to be more protective," Malaysian Trade Minister Mustapa Mohamed told reporters at the end of a two-day meeting of economic ministers from ASEAN nations, which comprise more than 500 million people.

He said satisfactory progress has been made in only four of 11 priority sectors targeted for accelerated integration: tourism, air travel, textiles and the automotive sector.

Some countries also failed to meet goals to eliminate non-tariff barriers, harmonize product standards and accelerate custom clearance, he said.

But it still has met most of its overall integration targets, and ministers this weekend renewed their commitment to speed up trade liberalization to create the ASEAN Economic Community as planned by 2015, Mustapa said.

"We need to put our house in order," he said. "We have not been able to achieve a perfect score but we have come a long way. The shortcomings are not fundamental, the (2015) goal is going to be achievable."

Skepticism remains about ASEAN's ability to achieve complete economic integration and insure that its diverse membership, which have occasional disputes among themselves, can cohere effectively.

A wide economic gulf divides its six more developed nations — Malaysia, Indonesia, Singapore, Brunei, Thailand and the Philippines — and its four newer members, communist Vietnam and Laos, military-ruled Myanmar and Cambodia.

ASEAN Secretary-General Surin Pitsuwan stressed the need to fuse the disparate economies into a single market to be competitive.

While ASEAN economies were bouncing back from the global slump, foreign investment, especially from the U.S., has dipped, he said.

An ASEAN ministerial delegation will tour the United States in May to woo investors and expand trade ties but the bloc has not decided whether to join a proposed U.S.-backed Asia-Pacific free-trade region, he added.

The proposed Free Trade Area of Asia-Pacific comprising 21 economies ranging from the U.S. to Russia was envisaged as an alternative if global world trade talks failed but analysts have said it is premature for progress on such a broad pact.