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October 7, 2003 -
Article By Lydia Lim, The Straits Times, October 7, 2003
Set up under a landmark pact, the body will examine economic quarrels in a fixed time-frame and issue a binding decision
For the first time, Asean will have a dispute settlement panel with the power to issue binding decisions when disagreements crop up between member states.
The panel, to be set up under a landmark agreement that the leaders of the 10 Asean countries are expected to sign today, will deal with economic disputes.
Asean secretary-general Ong Keng Yong told The Straits Times that the panel will have a fixed time-frame to examine the arguments from any two disputing parties.
'It should then make a decision and that decision is binding. That is the direction we are moving in,' he said.
Although Mr Ong did not say so explicitly, it was apparent he found the current dispute settlement method far from ideal.
It is a time-consuming system in which officials try to settle differences that arise. If they cannot, the matter is referred to senior officials and then to the ministers.
At the end of the process, there is still no way to enforce the decision reached, Mr Ong noted.
Details such as the makeup of the panel and the time-frame for settling disputes are still to be worked out, but the move is significant as Asean works towards developing a single regional market for goods and services by 2020.
Sceptics have cast doubt over whether such an aim is achievable, give Asean's track record.
In the past, it set targets on lowering tariffs and other barriers to the movement of goods and services, only to have individual countries drag their feet on the implementation because they wished to protect their domestic industries.
This has limited the effectiveness of earlier initiatives such as the Asean Free Trade Area.
Besides the dispute settlement mechanism, Asean is also moving to remove non-tariff barriers that impede the flow of goods and services across borders.
Mr Ong said that the grouping has identified 11 sectors where deregulation will be accelerated.
These include several that Singapore views as growth industries for its economy, namely health care, infocomms and technology and air services.
Again, the nub of the issue is implementation, Mr Ong said.
He said: 'We want to clear the bottlenecks and ease regulatory processes. Many of the ideas are already there but because of patchy implementation, the situation is one of uncertainty and confusion for businessmen.
'We want to make things more predictable.'
Emphasising the importance of economic integration to Asean, Mr Ernest Bower, president of the US-Asean business council, said yesterday that if American companies see that the region is pushing ahead with integration, they will increase investments in Asean.
If not, they will maintain their current investment level and put new companies in bigger markets such as China, he predicted.
Mr Bower, whose council groups 400 US companies with a combined investment of US$50 billion (S$87 billion) in the region, said: 'As long as Asean moves forward with integration, this is an excellent market.'
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