Database on Basic Documents of Japan-ASEAN
Relations
Department of Advanced Social and
International Studies,
STATEMENT ON BOLD MEASURES
6th ASEAN
1. The financial and economic crisis has severely affected the ASEAN economies and business dynamism in the region. In order to regain business confidence, enhance economic recovery and promote growth, the ASEAN Leaders are committed to the realisation of the ASEAN Free Trade Area (AFTA). In addition, the Leaders agreed on special incentives and privileges to attract foreign direct investment into the region. To enhance further economic integration of the region, the Leaders also agreed to further liberalise trade in services.
Acceleration of AFTA
2. To accelerate the ASEAN Free Trade Area
(AFTA), the Leaders agreed that the six original signatories to the Agreement
on the Common Effective Preferential Tariff (CEPT) Scheme for the ASEAN Free
Trade Area (AFTA) - Brunei Darussalam,
3. Individually, each country would commit to achieve a minimum of 85% of the Inclusion List with tariffs of 0-5% by the year 2000. Thereafter, this would be increased to a minimum of 90% of the Inclusion list in the 0-5% tariff range by the year 2001. By 2002, 100% of items in the Inclusion List would have tariffs of 0-5% with some flexibility.
4. Member Countries also agreed to deepen, as soon as possible, tariff reduction to 0% and accelerate the transfer of products, which are currently not included in the tariff reduction scheme, into the Inclusion List.
5. The new members of ASEAN shall maximise their tariff lines between 0-5% by 2003 for
Short-Term Measures to Enhance ASEAN Investment Climate
6. In the area of investments, each ASEAN country has agreed to extend additional special privileges to qualified ASEAN and non-ASEAN investors in the manufacturing sector, for applications received from 1 January 1999 to 31 December 2000 and approved thereafter. These incentives cover the following seven areas:
minimum three year corporate income tax exemption or a minimum 30% corporate investment tax allowance;
100% foreign equity ownership;
duty-free imports of capital goods;
domestic market access;
minimum industrial land leasehold period of 30 years;
employment of foreign personnel; and
speedy customs clearance.
Details of these measures are available in the attached ANNEX.
7. Highlights of the new measures offered by individual ASEAN countries include the following:
Brunei Darussalam will allow 100% foreign equity in high-technology manufacturing and export-oriented industries.
Lao PDR offers duty exemption on imported capital goods required by the promoted investment projects.
8. Under the Framework Agreement on the
ASEAN Investment Area signed on 7 October 1998 in
ASEAN Industrial Cooperation (AICO) Scheme
9. To provide greater scope for industrial cooperation in the region, Member Countries agreed to waive the 30% national equity requirement under the AICO Scheme during the period 1999-2000.
Launching the Second Round of Negotiations on Services
10. In the area of trade in services, the Leaders have agreed to initiate a new round of negotiations beginning 1999 and ending 2001. The negotiations will be expanded beyond the seven priority sectors, identified at the Fifth ASEAN Summit, to cover all services sectors and all modes of supply.