KUALA LUMPUR, Aug 20 (AFP): Southeast Asian economic ministers meet here this week under pressure to accelerate the creation of a single trade bloc and combat the rise of China and India which are drawing away foreign investment.
Topping the agenda will be the Association of Southeast Asian Nations' (ASEAN) goal of advancing economic integration by five years to 2015, casting aside tariffs and red tape which make the unified China market more attractive to manufacturers.
Malaysia's Trade Minister Rafidah Aziz said ASEAN's six most developed members-Brunei, Indonesia, Malaysia, Singapore, Philippines and Thailand-particularly should commit themselves to fast-forwarding integration.
"The year 2015 should be our target. Of course if we can do it faster, it is better still," she told the news agency ahead of the meeting which begins Monday night and runs through to Friday.
Under the ambitious ASEAN Economic Community, there would be a free flow of trade, investments and services among member nations in sectors including transport, telecommunications and finance.
Rafidah said it was important for ASEAN to work as a grouping to ensure that the bloc evolves into a seamless production and export base.
"By seamless I mean that there is really harmonisation across the board," she said.
She also said there was a need to look into non-tariff barriers "which are causing delays in bringing products into each other's markets."
In an effort to speed up the process, officials have said that the six most developed ASEAN countries will abolish tariffs on most electronic products traded between them by next January, three years ahead of schedule.
Electronics is among 12 priority sectors that ASEAN plans to liberalise by 2010 in its quest to woo back the foreign investment that in recent years has been heading to China and India.
A senior ASEAN official warned that the more developed ASEAN countries may need to consider bringing forward even the 2015 target.
"If we push our integration late, everyone else will overtake us," he said. Foreign direct investment is increasing to India and China."
"China is now putting emphasis on the information technology sector," he added, indicating that regional economies like Malaysia which specialise in the area could soon face new competition for investment.
But Rafidah said that as ASEAN members have widely varying political and economic regimes, liberalisation cannot be pushed too hard.
"Let us not pressure ourselves," she said. "It takes time for harmonisation to come about. We have to recognise this."
Mohamed Ariff, executive director of the influential Malaysian Institute of Economic Research, has said that FDI inflow into ASEAN tipped 26 billion dollars in 2004 compared with 18 billion in 2001.
However, it has not yet reclaimed levels of 28 billion dollars seen before the 1997-98 financial crisis which devastated regional economies.
"We need a single market to compete with China for foreign investments," he said, adding that China attracts about 50 billion dollars worth of FDI annually.
Also attending the talks in the Malaysian capital will be ministers from ASEAN's dialogue partners-Australia, China, India, Japan, New Zealand and South Korea.
Japanese officials attending preparatory talks here proposed a giant 16-nation free-trade grouping embracing the 10-member ASEAN and its six partners, which would take in half the world's population.
The 16 nations last year formed the East Asia Summit which some members hope will be the first step towards an eventual European-style free-trade East Asia Community.