VZCZCXYZ3028
RR RUEHWEB

DE RUEHJA #0424/01 0630214
ZNR UUUUU ZZH
R 030214Z MAR 08
FM AMEMBASSY JAKARTA
TO RUEHC/SECSTATE WASHDC 8188
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS
RUEHKO/AMEMBASSY TOKYO 1612
RUEHBK/AMEMBASSY BANGKOK 8349
RUEHPF/AMEMBASSY PHNOM PENH 0510
RUEHML/AMEMBASSY MANILA 3192
RUEHHI/AMEMBASSY HANOI 0591
RUEHNE/AMEMBASSY NEW DELHI 1641
RUEHBY/AMEMBASSY CANBERRA 2102
RUEHWL/AMEMBASSY WELLINGTON 2376
RUEHAK/AMEMBASSY ANKARA 0140
RUEHBS/USEU BRUSSELS
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEHRC/USDA FAS WASHDC
RUEKJCS/SECDEF WASHDC
RHEHNSC/NSC WASHDC

UNCLAS JAKARTA 000424 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR EAP, EAP/RSP, EAP/MTS, EAP/MLS, EAP/EP 
DEPT FOR EB/IFD/OMA 
DEPT ALSO FOR OES/IET AND OES/ETC/TED 
USAID FOR LCHILES 
BANGKOK FOR USAID/KISSINGER/PARISH 
CAMBODIA FOR USAID 
MANILA FOR USAID 
HANOI FOR USAID 
TREASURY FOR IA-SETH SEARLS 
COMMERCE FOR 4430/ KELLY 
SINGAPORE FOR BAKER 
 
E.O. 12958: N/A 
TAGS: ECON PHUM PREL PGOV KDEM ID BM
SUBJECT: ASEAN REACHES OUT TO INDONESIAN BUSINESS LEADERS 
 
¶1. Summary. Sundram Pushpanathan, Principal Director of the ASEAN 
Secretariat's Bureau for Economic Integration and Finance, presented 
 
SIPDIS 
ASEAN's plan for economic integration by 2015 at an Indonesian 
business forum.  According to Pushpanathan, the ASEAN foreign 
ministers have expressed strong support for the ASEAN Economic 
Community (AEC) and plan to mobilize additional resources for the 
ASEAN Secretariat to support the integration process.  Pushpanathan 
also noted that ASEAN plans to take a more coherent approach to 
negotiating trade and investment accords and to enforcing existing 
ASEAN agreements.  Pushpanathan and the business leaders agreed that 
the private sector must ultimately drive the economic integration 
process. End Summary. 
 
ASEAN Secretariat Launches AEC Awareness Campaign 
--------------------------------------------- ---- 
 
¶2.  On February 28, Sundram Pushpanathan, Principal Director of the 
ASEAN Secretariat's Bureau for Economic Integration and Finance, 
presented ASEAN's plan for economic integration by 2015 to a group 
of local business representatives.  The event, entitled "ASEAN 
Economic Community: Benefits and Role of Business," was sponsored by 
the Singapore Chamber Indonesia and Globe Asia, a local business 
publication.  Pushpanathan noted that the event was the first in a 
series of ASEAN speaking engagements aimed at promoting awareness 
and support for the AEC in Indonesia.  As Indonesia constitutes 
roughly half of ASEAN's population and over 35% of ASEAN's economy, 
the success of the AEC will be determined largely by the level of 
Indonesia's support. 
 
AEC Gains Momentum 
------------------ 
¶3.  According to Pushpanathan, all ten ASEAN foreign ministers have 
expressed strong support for the AEC and plan to mobilize additional 
resources for the ASEAN Secretariat in order to ensure that ASEAN 
meets its 2015 target.  In the short-term, ASEAN is focusing on 
harmonizing standards in the cosmetics industry, and implementing 
the ASEAN Single Window, which will speed customs processing. 
Progress on creating a free flow of goods and services within 12 
priority sectors (electronics, e-ASEAN, healthcare, wood-based 
products, automotives, rubber-based products, textiles and apparels, 
agro-based products, fisheries, air travel, tourism and logistics) 
is also on track, according to Pushapnathan.  The "ASEAN Six" 
(Brunei, Indonesia, Malaysia, Philippines, Singapore, and Thailand) 
plan to reduce tariffs in these categories to zero by 2010, with 
full liberalization of the electronics and auto sectors expected to 
occur first.  Pushpanathan was less optimistic about ASEAN's plans 
to liberalize financial flows, noting that this issue is in the 
early stages of debate among the member countries. 
 
¶4.  Pushpanathan also noted that ASEAN plans to take a more coherent 
approach to negotiating its myriad trade and investment agreements. 
ASEAN has initiated consultations or concluded negotiations on 
economic agreements with China, Japan, Korea, India, Australia, New 
Zealand, and the European Union.  A number of Gulf States, Pakistan, 
and Russia have also approached ASEAN to explore the possibility of 
economic agreements.  (Note: The United States signed a Trade and 
Investment Framework Arrangement with ASEAN in 2006. End note.) 
ASEAN countries also maintain a number of bilateral trade and 
investment agreements.  Differences in rules of origin used for 
these agreements have caused considerable confusion for businesses 
operating in the region.  As a result, Pushpanathan noted that ASEAN 
plans to implement a uniform approach to negotiating agreements 
moving forward. 
 
¶5.  According to Pushpanath, ASEAN will also increase enforcement of 
existing economic agreements among member countries.  ASEAN member 
countries have fully implemented only 30% of the 126 existing ASEAN 
economic agreements.  The ASEAN Secretariat plans to monitor 
implementation progress and present this information at the leaders 
meetings in order to increase pressure on delinquent members. 
Pushpanathan also stated that for all ASEAN agreements, ASEAN would 
apply only "pre-agreed" flexibility for member countries, meaning 
that ASEAN will not permit any implementation delays that members 
failed to negotiate prior to the signing of the agreement.  However, 
he did not discuss whether ASEAN would apply penalties for 
non-compliance. 
 
Increased Business Engagement in AEC 
------------------------------------ 
¶6. Local business leaders at the well-attended event revealed a 
significant interest in learning more about progress on the AEC. 
Pushpanathan and the business leaders agreed that the private sector 
must ultimately drive the economic integration progress given their 
stake in the process and the inability of political leaders to move 
quickly in the absence of strong support.  Business leaders and 
ASEAN agreed on the need to establish additional mechanisms to share 
information and solicit views on economic integration progress and 
prospects.  Pushpanathan also urged the business participants to 
utilize ASEAN's dispute settlement mechanism, through their 
respective governments, to settle intra-ASEAN business disputes and 
raise awareness of issues impeding economic integration. 
 
HUME