[asia-apec 114] KdP: IT - Differences over farm sector shadow ASEAN talks

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   [1]The Indonesia Times
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              Differences over farm sector shadow ASEAN talks

   By Anil Penna

   JAKARTA (AFP) -- Trade ministers from the Association of Southeast
   Asian Nations (ASEAN) meet here Wednesday to try and resolve
   differences over opening up the sensitive farm sector which threaten
   to undermine their ambitious free-trade effort.

   The meeting of the AFTA Council will review progress towards the
   creation of an ASEAN Free Trade Area (AFTA) by 2003 and discuss how to
   speed up the process of economic integration, officials said.

   But the talks seem set to be dominated by differences over
   liberalising the farm sector which cropped up at a preparatory meeting
   here Monday when Indonesia and the Philippines backpedalled and called
   for a go-slow approach.

   The main sticking point is liberalising trade in rice, the Asian
   staple, and sugar which ASEAN giant Indonesia, supported by the
   Philippines, believes are "highly sensitive" products, officials said.

   "There are products considered sensitive or highly sensitive by some
   countries," said ASEAN Secretary General Ajit Singh.

   "At this meeting, they will be considering this 'highly-sensitive'
   list in determining the phasing-in period and the ending date for
   these products (to be included in the free-trade agenda)," he said.

   The seven-nation grouping has set a separate timetable for opening up
   trade in unprocessed agricultural products that are considered
   sensitive because it could hurt the livelihood of farmers in importing
   nations.

   Under the timetable, the "sensitive" products are to be phased into
   the free-trade effort by no later than 2010, seven years after the
   creation of AFTA, which will lower tariffs on all other products
   traded in the region to zero-to-five percent.

   The inclusion of unprocessed farm products in the tariff reduction
   scheme has been a thorny issue for ASEAN, which groups Brunei,
   Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.

   Barring trade-driven Singapore and oil-rich Brunei, ASEAN members have
   a sizeable rural base and face pressure from powerful domestic lobbies
   opposed to opening up the farm sector too quickly.

   Rahardjo Jamtomo, director-general of the ASEAN department at the
   Indonesian foreign ministry, said Indonesia proposed to begin
   phasing-in rice and sugar only on January 1, 2010 and end the process
   10 years later.

   He said Indonesia's level of economic development dictated that it go
   slow, acknowledging that members had been unable to come to "same
   terms" over the issue.

   Thai delegate Krirk-Krai Jirapaet warned that the credibility of
   ASEAN's free-trade push risked being undermined by any delays in
   implementing the tariff-reduction schedule.

   "The length of time must be reasonable," he said. "If you say you want
   to go for free trade in 100 years' time, it doesn't make sense. You
   say you go for free trade in 25 years' time, it also doesn't make
   sense because most of the free trade elements will mature in 10 years
   or 15 years at most."

   Thailand is the world's largest rice producer and would benefit from
   tariff reductions on the commodity.

   Other coutnries also have their own "sensitive" products, with
   Malaysia recently adding pineapple to its list of such commodities
   besides raw timber and tobacco while the Philippines wants to open its
   doors more slowly to imports of chicken and poultry products.

   But Malaysia was agreeable to the 2010 deadline, officials said.

   The differences over farm products apart, ASEAN secretary-general Ajit
   Singh said the road to AFTA was "fairly smooth and well mapped-out".

   Member-countries have enacted laws revising their tariff schedules up
   to 2003 and arrangements to bring the free trade area into existence
   are well-entrenched, he said.

   The trade ministers will discuss how to accelerate AFTA by
   "maximising" the number of items on which tariffs can be 1 percent
   tariffs by 2003, and discuss movement towards opening up the services
   sector such as financial services, tourism and telecommunications, he
   said.

   ASEAN, with a collective external trade of 700 billion dollars, is the
   world's fourth largest trader afer the United States, Japan and the
   European Union. AFTA would be one of the world's largest free trade
   areas.
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                      ) COPYRIGHT THE INDONESIA TIMES