Pakistan Institute of Development Economics



Noordin Sopite, Chew Lay See and Lim Siang Jin (eds.). ASI:.””AN at the OOSSToads: Obstacles, Options and Opportunities in Economic Cooperatjon. Malaysia: Institute of Strategic and International Studies (ISIS) 1987.577 pp.Price: (hardbound edition) USS 25.

The Association of Southeast Asian Nations (ASEAN) was established In 1967 as a loosely structured inter-governmental organization, which provided a framework for discussing problems that required a regional solution. For a long time, the reduction of regional political tensions remained the main concern of ASEAN. Serious efforts towards promoting intra-regional co-operation began in 1976 with emphasis on trade liberalization and industrial co-operation. But apart from a few cases, involving the regional economies and collective external bargaining, the record of economic co-operation has been poor, because of different levels of economic development of the member countries, mutually competitive exports.. inward• looking industrial policies and heavy dependence on the industrialized countries for investment, technology and trade. So far, there have been only three intra-ASEAN agreements to promote market sharing and a pooling of resources: the preferential trade arrangements, the industrial complementation agreement, designed to develop links in certain industries to achieve greater economies of scale, and the industrial joint venture agreement, which provides preferential treatment for products of joint ventures involving the companies of at least two ASEAN member countries. However the joint venture scheme has had only limited success because of delays in implementation, while the scope of the preferential trading arrangements has been limited by the consensus approach in solving outstanding issues and by the concern of higher-tariff member countries to protect domestic production and employment. As a result, tariffs have been reduced only on intra-regional trade of selected non-sensitive items. Most of the items covered in the preferential trade agreements have low trade content and minimal trade potential. The arrangements have also been difficult to manage because of problems of administering the rules of origin.

Khwaja Sarmad

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