EU foreign policy boss lands in Iran for talks

EU foreign policy chief Federica Mogherini has arrived at the head of an EU delegation to Iran. The short trip, designed to boost trade and regional peace after last year’s nuclear deal, is not to everyone's liking.

Deutsche Welle, 16 April 2016

Mogherini talks Saturday with Iranian Foreign Minister Mohammad Javad Zarif and other ministers about EU-Iran economic ties, the security situation in Syria, the opening of an EU mission in Tehran and issues including Iran's use of capital punishment and refugee flows.

"This visit is an important step towards building cooperative relations between the EE and Iran on the areas where there is mutual interest and to have frank discussions on the issues where differences remain," Mogherini said.

The 24-hour trip comes days after Italy’s Prime Minister Matteo Renzi became the highest-ranking European leader to visit Tehran since July’s nuclear accord.

The US, UK, China, France, Russia and Germany agreed in 2015 to lift sanctions in return for Tehran accepting curbs to prevent it acquiring nuclear weapons.

U.S. Secretary of State Kerry meets with
EU High Representative Mogherini at the
Nuclear Summit in Washington

Energy, banking and the WTO

According to the European Commission, the EU's executive, the EU is also interested in discussing future energy imports from Iran.

Tehran is also thought to be interested in closer cooperation with the EU on energy and also trade issues, notably possible membership in the World Trade Organization (WTO).

An EU official told reporters Saturday that Brussels is “willing to play a supportive role” in Iran’s bid to join the WTO. But the EU wants Iran to do more to fight money laundering and terrorism financing, which are impediments to foreign investment, the official said.

The trip comes after Iran raised concerns about banking sanctions, with officials saying the West - particularly the US - is creating obstacles to its access to the global financial system.

The governor of Iran's Central Bank said Friday in the US that the international community was not sticking to its promises. "The impact that we were expecting to get is not what we see, at least on a tangible basis," Valiollah Seif told a forum at the Council of Foreign Relations in Washington.

Seif, in the US capital for the IMF-World Bank spring meetings, pointed to a reluctance by European banks to engage with Iran for fear of falling foul of US sanctions.

"They have been asked not to work with Iranian banks, and they're afraid," he said.

Industry commissioner Elzbieta Bienkowska, transport commissioner Violeta Bulc and energy commissioner Miguel Arias Canete will be among those travelling with Mogherini. They will meet Foreign Minister Mohammad Javad Zarif, parliament speaker Ali Larijani and the secretary of the Supreme National Security Council, Ali Shamkhani, an EU statement said.

An Iranian woman casts her ballot
to vote in February's elections

Migrants

Europe is struggling to cope with an influx of migrants and asylum seekers, including Afghan migrants from Iran.

Iran hosts around 3 million refugees from neighboring Afghanistan.

“Migration is a very important theme for discussion,” a senior EU official said.

Mogherini is expected to brief the bloc's 28 foreign ministers about the visit on Monday at talks in Brussels.

Not all on board

Critics attacked the visit for appearing to legitimze Tehran's poor track record on huma rights, among other things.

The British Parliamentary Committee for Iran Freedom (BPCIF), for example, said in a statement that: "[the trip] is highly inappropriate considering the regime's domestic repression and destructive policies abroad."

It said that "during the 'moderate' administration of Hassan Rouhani, nearly 1000 people were executed in Iran last year alone, including juveniles in violation of international law. At least 47 journalists and social media activists were reportedly detained in the country as of January 2016, according to reports by the UN Special rapporteur for Iran and Amnesty international."

The EU did not request a meeting with Iranian civil society representatives because of the shortness of the visit, a senior EU official said on condition of anonymity. Iranian President Hassan Rowhani went at short notice to Ankara and was also unable to meet the EU delegation, the Iranian press reported.

"Our objective remains to reassure everyone - particularly in the financial sector - that re-engaging with Iran is possible now," an EU official said.

Regional conflicts

An EU official said that Mogherini - who personally helped negotiate the nuclear deal - will also seek to advance diplomatic efforts on Syria and Yemen, two regional conflicts where Iran plays a role.

jbh/ (dpa, AFP)

People's Daily lays out China's motive in founding AIIB

Want China Times, Staff Reporter 2015-03-19

The UK, Italy, France and Germany strain against Uncle Sam's bonds of
"friendship" and "brotherhood" to get at a cake offered by China,
with the word "benefits" on top. (Cartoon/CFP)

An opinion piece published on the official WeChat account of the overseas edition of the Communist Party mouthpiece People's Daily has outlined the motivation behind Beijing's efforts to set up the Asian Infrastructure Bank (AIIB).

Germany, France and Italy have now followed in the footsteps of the United Kingdom to apply to be founding members of the bank against the advice of the United States, pushing the number of countries taking part in the initiative to 31.

Many international news organizations have interpreted the AIIB as an attempt by Beijing to challenge the status of the US in the international community. The People's Daily commentary said China had no other option but to do so due to the unequal treatment of emerging and developing economies in existing institutions such as the IMF and World Bank.

After 2008, the G8 countries — the US, UK, France, Germany, Japan, Italy, Canada and Russia — came to the realization that their "wealthy nations club" was not enough to save them from the effects of the global financial crisis and they needed to include emerging and developing countries, including China, to sort out the crisis, which led to the convening of the G20, the piece said. This had little or no effect on the fundamental manner by which the world economy was governed, as implemented by the IMF, the World Bank and the WTO, as the US and the G8 nations were still the dominant voices, the commentary said.

Attempts to reform the IMF in 2010 by giving emerging and developing countries more clout were blocked by the US, which left a gap in representation in the global economy which China believes the AIIB can fill, the piece said.

Other multilateral development funds in Asia have been unable to keep up with development trends in the region and there has long been a need for a new organization to resolve issues with the Asian and Chinese economies, the piece said.

The Asian Development Bank has shown its political colors with the US "Asia Pivot" strategy, the piece said, adding that the bank, founded in 1966 and led by the US and Japan, is in decline and that it is inconsistent in the loans it gives to Asian countries, making it difficult for some of them to get the funds they need.

The piece also said that the AIIB differs from the World Bank and the Asian Development Bank in terms of its functions, as the latter two are aimed at reducing poverty, whereas the former is aimed at building infrastructure and supporting the social and economic development of Asian nations.

China also likely hopes to benefit financially from regional infrastructural development, including large-scale transnational highways and railway networks, the piece said. China is currently capital rich, but there is not enough demand for infrastructure projects domestically, so infrastructure investments in other Asian countries are a good way to assert its influence in neighboring countries, as well as finding a purpose for surplus funds.

According to Asian Development Bank figures, Asian countries will require around US$8 trillion in infrastructure investment up to 2020, which will provide China with good investment opportunities, according to the article. China has a great deal of experience in infrastructure construction and this will likely mean a good return on investment, the piece said.

If China shares the dividends of its economic transformation it will also improve relations between countries in the region, the piece said. Many countries in the region are undergoing similar reforms to China, but they lack funds, skills and experience, all of which China can help to provide.

The launch of the bank will also lead to the further internationalization of the renminbi, the piece said.

Related Article:

France, Germany, Italy to join China-led infrastructure bank

Dutch seal shelter to open in Canada

RNW, 26 March 2011

A Dutch seal shelter is to open a second a second facility in Canada hoping to sway public opinion to ban seal hunts completely.

The shelter, based in the northern province of Groningen, will open the facility in Nova Scotia. It set up its first facility in Canada three years ago. A Canadian volunteer is currently being trained in the Netherlands.

The news comes on the same day that the Canadian authorities set the quota of seals to be killed this year at nearly 500,000, a 20 percent increase over last year. Since 2007, annual quotas have risen every year.

Hunted for their fur and meat, most seals are clubbed to death. Worldwide, some 900,000 seals are killed every year, more than half of them in Canada.

Earlier this month, Lenie 't Hart, who founded the Groningen seal shelter 40 years ago, announced she was retiring.

Related Article:

Canada increases seal hunt quota

Seal hunters kill a seal

EU seal pelts import ban dispute goes to WTO court

Canada's seal ban appeal goes to WTO panel

Canada, which has argued that its annual seal hunt
is conducted humanely, is challenging the European
Union's ban on the import of seal products. A WTO
dispute panel will be assembled to hear the case.
((Andrew Vaughan/Canadian Press))

Indonesia's Broadcast Freedom Must Be Safe From China’s Meddling

Jakarta Globe, John Riady, March 28, 2010

Earlier this week, government authorities closed down Radio Era Baru, a radio station in Batam. The official reason: shortage of radio frequencies. Another view is that the closure is related to China’s opposition of the radio station’s links to and funding by the Falun Gong movement. In a letter addressed to the Ministry of Foreign Affairs, China warned of damage to Indonesia-China relations should the radio station not be shut down.

Whether or not a shortage of frequencies was merely a pretext remains to be investigated, but there is ample reason to be skeptical. The station was denied a license in 2007. If the shortage was real, why was it allowed to broadcast for the last three years? When its license was denied, why wasn’t a reason provided and why did claims of a shortage appear after public uproar? Many stations operate without a license. Why single one station out? Why not reorganize the frequencies during those three years, as was done in Jakarta a few years back? The radio station’s legal appeal has reached the Supreme Court and a decision is expected soon. Why deploy police to clamp down on broadcast freedom on the eve of a decision that might render such an extreme intervention unnecessary?

If the allegation against China is true, China’s intervention is offensive and the decision from Indonesian authorities is shameful. This is a critical issue and needs to be addressed using legal and quasi-legal remedies. Legal remedies can address the issue domestically, but to sanction China, more creative quasi-legal remedies are needed. Allow me to explain.

Legal Remedies

The argument is that the government’s closing of the radio station for reasons related to its links with Falun Gong violates Indonesia’s constitutional right to expression (Article 28) and is thus unconstitutional. A potential problem is that since Article 28 has not been litigated much, it is unclear what the boundaries of this freedom of expression are.

To solve this, the courts should look to international law for guidance, in particular the Universal Declaration of Human Rights and the International Covenant of Civil and Political Rights, which Indonesia has ratified. Given the near universal acceptance of the declaration, at least some of its provisions have reached the status of “customary international law.” This means that all countries, even those not members of the UN, can now be bound by those provisions.

The ICCPR’s guarantee of the right to expression is broad enough to be used in this case. Article 19 states that “Everyone shall have the right to freedom of expression; this right shall include freedom to seek, receive and impart information and ideas of all kinds … through any other media of his choice.”

While the ICCPR does allow the limiting of expression when necessary for the protection of “national security,” it was held that it does not allow nations to prohibit speech just because it advocates the ideology of a political enemy. China should take note.

The treaty’s operative principles imply that countries have positive and negative obligations — this would include having in place licensing procedures that are consistent with the principle of free expression and that prohibit the use of police to crack down on violations.

These two legal remedies — our Constitution and the ICCPR—should provide generous grounds for the protection of Era Baru’s rights. However, these measures do not facilitate possible Indonesian sanctions against China. Domestic courts and ICCPR remedies have no teeth against other countries. For this, we turn to quasi-legal measures.

Quasi-Legal

The idea here is to use trade sanctions to compel trading partners to adhere to principles that they have agreed to in nontrade agreements, in this case the Universal Declaration of Human Rights. This would require framing freedom of press and censorship not as an issue of free press but rather a violation of WTO rules on free trade of “market access” and “national treatment.”

In a case where China censored its press by prohibiting foreign media companies from operating in China, the WTO panel concluded that these measures were inconsistent with China’s obligation under the national treatment and market access clause of the General Agreement on Trade and Tariffs.

The idea of framing violations of free press in terms of violations of trade law has gained more and more acceptance. The European Union passed a proposal that would require member countries to classify any Internet censorship as a barrier to trade, and would require that the issue be raised in any trade negotiations.

Linking trade with press law is similar to the way in which trade is linked to environmental and labor standards — we do this all the time.

In light of the Asean-China Free Trade Agreement, this is a crucial point. Even though this trade agreement is separate from the WTO, there are significant parallels. China has much to gain from the establishment of a free trade area. If it is to reap the benefits of trade, it must not be allowed to pick and chose. Free trade comes in a package. With access to an enlarged market to which China is able to export its goods, it must also eliminate barriers to trade, which includes censorship and violation of free press.

Many in Indonesia complain that its domestic industries are not ready to compete with China. Proponents of trade argue that only when they are forced to compete will they then be ready. Now it is China’s turn to complain that they are not ready for free speech. To this we should say: sink or swim.

We need a thorough investigation to determine the real reasons for the radio station’s closing. If it turns out to be true that the closure was related to pressure from China, a strong stance needs to be taken. A free press at home can be protected using legal remedies. As for getting our point across with China, we need to resort to trade law.

John Riady is lecturer at the Pelita Harapan Universit y Law Faculty and editor at large at GlobeAsia. He can be reached at john@globeasia.com.

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Asean to consider sustainable growth

The Bangkok Post, WICHIT CHANTANUSORNSIRI, 8/04/2009 at 12:00 AM

How best to co-ordinate fiscal stimulus programmes and set the foundations for sustainable economic growth will be high on the agenda for Asean finance ministers meeting this week in the seaside resort of Pattaya.

Over six months after the crisis began with the near-failure of the US financial system, some promising signs have emerged that the massive monetary and fiscal stimulus programmes enacted worldwide are beginning to bear fruit.

But Somchai Sujjapongse, the director-general of the Fiscal Policy Office, said the key was to ensure that stimulus funds have a lasting, beneficial impact on jobs, productivity and future growth.

"The leaders fortunately have moved in the right direction, and are looking at how not only to build up employment, but how to ensure sustainable growth once the current crisis passes," he said.

The global financial crisis has taken centre stage at the Asean meetings this year. While regional economies have escaped the bank collapses that have plagued the US and Europe, growth across Asia has plummeted with the sharp decline in export demand.

The meetings started yesterday with the arrival of finance and central bank deputies from Asean, Korea, Japan and China, with the 13th Asean Finance Ministers' meeting on Thursday. Country leaders will meet in Pattaya through the weekend, with the programme to close on Sunday with the Asean Global Dialogue conference, featuring the leaders of international organisations such as the United Nations, the World Bank, the International Monetary Fund, the World Trade Organisation and the UN Conference on Trade and Development.

Officials hope to further progress on plans to upgrade the Chiang Mai Initiative bilateral swap programme into a larger, multilateral pool to serve as a financial lifesaver against future crises. They want to increase it by 50% to $120 billion.

China, Japan and Korea will provide 80% of the funds for the pool, with the remainder financed by Asean. The five largest Asean economies - Singapore, Malaysia, Indonesia, the Philippines and Thailand - will contribute $4.5 billion each, with Laos, Burma, Cambodia, Vietnam and Brunei the rest.

Discussions will include details of pool operations, with officials tentatively agreeing that countries could borrow for terms of 90 to 360 days at interest rates set at LIBOR plus 150 basis points.

Dr Somchai said Thailand, which holds the Asean chair this year, will push for an Asean infrastructure fund to channel the region's savings into infrastructure investments across the region.

Finance Minister Korn Chatikavanij proposed each country contribute to the fund based on their readiness, with financing from direct budget allocations, foreign reserve holdings or even private sector investments.

Countries could tap the fund to finance domestic infrastructure programmes, with the Asian Development Bank serving as a guarantor for bond issues.

Ministers will also discuss ways of facilitating trade and investment across the region to create an Asean Economic Community (AEC) by 2015.

"Investment and market liberalisation will be the highlight of the meetings," Dr Somchai said.

Capital market integration will also be on the agenda, with ministers hoping to endorse an implementation plan ultimately aimed at building up the region's markets by facilitating cross-border securities listings and investment.

Asean finance ministers will also discuss policies and issues raised at the G20 meetings held earlier this month in London, a conference attended by China, Japan, Korea and Indonesia as members and Thailand as Asean representative.

Dr Somchai said Asean ministers will also discuss co-operation in the region's life and non-life insurance sectors, including regulatory standards, customs procedures and work towards the creation of an Asean "Single Window" to facilitate customs clearance as well as initiatives to guard against money laundering and terrorist financing.

Financial sector liberalisation will also be discussed. This will be the fifth round of negotiations towards sector liberalisation under the AEC framework, and the Asian Development Bank has agreed to perform a "financial landscape assessment" to help assess the readiness of different markets for liberalisation.

Capital account liberalisation is on the agenda, aiming to reduce barriers to portfolio investment and foreign direct investment, either through outright capital controls, taxes or other barriers.

Taiwan on road to joining ASEAN: Philippines

Non-confrontational policies, commitment to economy may help Taiwan enter organization

By Joseph Yeh, Taiwan News, Staff Reporter, 2009-03-27 12:48 AM

Taiwan News It is possible for Taiwan to join the ASEAN family in the future as long as its government continues to adopt a non-confrontational policy with China and to strengthen a barrier-free and close economic cooperation with East Asian countries, said Margarito Teves, secretary of the Philippines Department of Finance in Taipei yesterday.

"At the moment we have ASEAN plus three (China, Japan, South Korea), and ASEAN plus six that includes New Zealand, Australia and India. There is a possibility of the ASEAN plus seven that includes Taiwan," Teves said.

The Philippine Finance Secretary noted that the process is probably going in that direction for Taiwan with the continuing policies of President Ma Ying-jeou's in terms of his non-confrontational approach with China and the removal of trade restraints and barriers.

"You are building the blocks to move in this direction," he said, "and the ASEAN countries including the Philippines are also corresponding to these building blocks in terms of economic agreements first, so the series of moves will eventually result (in the inclusion of Taiwan)."

Teves made the above comment in response to a question made by an attendee during his speech held at the think tank Taiwan Institute of Economic Research yesterday in Taipei.

The attendee asked if Teves can foresee Taiwan joining the ASEAN plus three forums in the near future.

During his speech in the TIER, Teves gave a briefing on the Philippine and ASEAN responses to the global financial crisis.

He noted that his government has proposed a comprehensive economic resiliency plan in order to help the country amid the worldwide economic downturn.

"We are in the midst of the global financial storm, but the Philippines has remained true to the course we began years ago to further strengthen our economic buffers and hopefully we will emerge from the economic turbulence better and stronger."

The Philippine Finance Secretary who joined a special meeting of the ASEAN plus three finance ministers last month shared with the attendees of his speech the results of that meeting.

During the special meeting held in Thailand's southern resort island Phuket on Feb. 22, participating finance ministers agreed to speed up the process of operationalising the Chiang Mai Initiative Multilateralization, a regional foreign reserve pool in case of currency flow shortage.

The ministers had reached an agreement during the meeting that, US$120 billion, instead of US$80 billion as initially proposed, will be injected into a reserve pool, with each participating country injecting a sum of foreign capital to help each other in a scenario of financial crisis.

Teves said that the exact size of the fund quota for each participating country and details of a management mechanism will be the issues to be discussed in the next meeting.

Related Article:

WTO membership should qualify Taiwan for ftas with ASEAN: MOFA

BRIICs, world leaders in trade openness and growth

Riyadi Suparno, THE JAKARTA POST, PARIS | Fri, 03/20/2009 12:03 PM

The world’s largest high-growth emerging economies are falling into the trap of protectionism amid the global crisis and they seem to forget that they have been prospering as a result of their relative openness to international trade and investment, according to an OECD report.

The report by the Organization for Economic Cooperation and Development (OECD) released in Geneva Thursday focuses on the world’s largest high growth emerging economies of Brazil, Russia, India, Indonesia, China and South Africa, which the organization calls the BRIICs.

The organization noted in the report that the mistaken notion that the current economic crisis was the result of free trade and market failure had led to an anti-market backlash and calls for protectionism, including among BRIIC countries.

Douglas Lippoldt, acting head of Development Division at the Trade and Agricultural Directorate at OECD, told reporters in Paris on Thursday that “times of crisis are also times of opportunities.”

“Trade protectionism is not the way to tackle the current crisis. All countries, including OECD members and BRIICs, should try more than ever to keep the international market open in order to improve economic prospects for all,” he said.

The report shows that all the six BRIIC countries were champions of free trade and market liberalization, but their openings to the market — except for China — have stalled.

In Indonesia, trade liberalization measures imposed by the International Monetary Fund following the financial crisis in 1997-98 have not been reversed, but there has been creeping protectionism in agriculture, textiles and steel, mainly through tariff barriers.

In Brazil, there was virtually no trade liberalization in the years since tariff reductions were introduced in the late 1980s and mid-1990s.

In South Africa, external trade liberalization has stalled since the 1990s and skepticism about liberalization has set in.

India is by far the most protected country among the BRIICs, with relatively higher average tariffs.

Russia is now in the process of accession to the WTO, but negotiations have been protracted and “stop-go” with no indications of being concluded in the near future.

OECD suggested that BRIICs pursue market openings through multilateral mechanisms under the WTO rather than through preferential free trade agreements because FTAs may only create complications for business and for the development of multilateral rules.

OECD also noted that these six BRIIC countries excelled in opening their borders to global trade, but were still struggling to liberalize their own domestic trade and investment, or what the OECD called the behind-border reforms.

Domestic reforms in service regulations, regulation of technical standards, intellectual property rights, public procurement rules, customs administration and competition rules are a key challenge in all the BRIIC countries.

In Indonesia, the biggest problems still include labor rigidity and impediments to investment, both domestic and foreign investment.

OECD picked these six emerging countries and made an update on them in this report on the BRIICs because of their growing and leading influence in the world economy.

The BRIIC concept is an extension of the idea of the original BRIC group. Goldman Sachs predicted that Brazil, Russia, India and China (the BRICs) would become a larger force in the world economy over the next 50 years and could become larger than the G6 (US, Japan, UK, Germany, France and Italy).

OECD then included Indonesia and South Africa in recognition of their economic size, relative to other OECD members.

Leaving aside oil-rich Saudi Arabia and two other large emerging OECD economies (Mexico and Turkey), the BRIICs are by far the largest economies in the developing world in transition, and the only countries in this category with gross national incomes of over US$200 billion per annum.

The economic expansion within all the six BRIIC countries is in line with the influx of multinational investment, as well as their incremental growth over recent years.

The report by the Organization for Economic Cooperation and Development (OECD) released in Geneva .

ASEAN free trade deal flawed, says Opposition

The Age,  Philip Hopkins,  March 14, 2009 

AUSTRALIA has given away more than it has received in the ASEAN free trade agreement, according to the Opposition trade spokesman Warren Truss. 

Under the FTA, Australia will reduce 96.4 per cent of its tariffs to zero by next year compared with 47.6 per cent now. By 2025, tariffs will be eliminated on 96 per cent of Australian exports to the region. 

Mr Truss said market access for some key Australian industries would never be improved. 

Australian tariffs on agricultural imports would be cut to zero immediately, but Australian farmers would still face big tariff barriers. 

"Rice has been excluded from any tariff reduction commitments or improved market access by Indonesia, Malaysia and the Philippines," Mr Truss said. 

Maize had been excluded by Indonesia, which with Malaysia had excluded wine and spirits; Vietnam excluded 41 mineral lines; and Malaysia would continue to restrict access to milk. 

"Most of the signatories made no concessions on sugar at all," he said. 

Mr Truss said the only tit-for-tat tariff cuts had been in manufacturing, such as passenger cars and textiles, clothing and footwear, but improvements in access for services were few. 

National Farmers' Federation chief executive Ben Fargher said the rice and sugar restrictions were disappointing. Access for these commodities was difficult to crack. 

However, he said a key advantage was that the FTA prevented backsliding by ASEAN countries on tariffs. 

Under World Trade Organisation rules, technically they could increase tariffs above 200 per cent. "That is not likely to happen," he said. That should give exporters, particularly beef and dairy, confidence. 

He said the deal would keep the ASEAN market more liberal just as Europe was reimposing some agricultural subsidies. 

http://www.dfat.gov.au 

http://www.nff.org.au

`Challenges make ASEAN more relevant'

The Jakarta Post,  Tue, 03/10/2009 2:45 PM  

Southeast Asian leaders have reiterated their commitment to an integrated community at the 14th ASEAN Summit that concluded in the Thai resort town of Cha-Am two weeks ago. The summit saw the adoption of the bloc's security and socio-cultural community blueprints, which added to the 2007 economic blue print. Concerns have risen that ASEAN leaders will face challenges over their "ambitious ideas", owing to the differences in the levels of democracy and prosperity in their countries, and compounded by the global economic turmoil that has thrown even wealthier member states into recession. Dewi Fortuna Anwar, a renowned Indonesia researcher from the Indonesian Institute of Sciences (LIPI), spoke recently with The Jakarta Post's Lilian Budianto about the problems and challenges in forming the ASEAN community amid the global crisis. The following are excerpts from the conversation. 

Question: How do you see the relevancy of the ASEAN economic community and how it may progress amid the current economic turmoil, with some member states adopting unfavorable measures to protect their own markets? 

Answer: The current global crisis might interrupt the timeline of the ASEAN economic community. Under the economic community, trade liberalization will become an obligation. But on the other side, when every country faces economic difficulties, its leaders will instinctively protect their own markets, either within ASEAN or the bloc's traditional markets of Japan and Europe. That's why one of the provisions in the ASEAN economic community is a pledge against protectionism. So the commitment is one of the efforts to have members refrain from resorting to protectionism. 

The pledge might sound normative, but the fact they made that point is something of great significance. Because as you see, many people have asked Indonesia to protect its own market *because it is considered too liberal*, and this is against the backdrop of the ASEAN agenda to integrate the whole regional market. This will signal huge difficulties of integration aims ahead. However, the important thing is that leaders realized such a challenge and they made a call to each other to go against protectionism. 

During the ASEAN Summit, leaders were split over the idea of protectionism. Malaysian Prime Minister Abdullah Ahmad Badawi said it was something normal. Thai PM Abhisit Vejjajiva has also called on Thais to buy local products on several occasions. What do you think? 

All countries will do that now. There will be some conflicts when leaders are faced with commitment to the ASEAN integrated community and at the same time trying to protect the domestic market. As long as it does not go against WTO rules, countries will find some way to protect their markets - through the national standards system, or by restricting entry points or importable products. It will happen and it will not help the integration process. 

The longer the crisis, the slower we are in implementing the ASEAN economic community. This might put us in a difficult situation because we do not want to see the collapse of our domestic market as the idea of the ASEAN community is prosperity for all. If it threatens losses for one country and gains for another, then there will be some sort of resistance to the ASEAN economic community. That's why we must seek balance between the regional market agenda and national competitiveness. The point is we have to avoid a trade war where one country closes down its market to others. 

This might lead the bloc into a spiraling trade war that will be a lose-lose situation for all. What all countries should do now is enhance the quality of local products to compete with imported ones. This can be a blessing in a disguise, because one of the weaknesses in Southeast Asian economies is they are too dependent on exports. When the economies of other countries do well, then they do well too, but they are very vulnerable to global demand. 

What about the security and socio-cultural blueprints? 

I don't think there will be much improvement in those areas. In the security sector, there could be some improvement, but not in politics. In security, we can develop an idea of cooperation to tackle security threats, most of them non-traditional threats. But it will be hard in politics, as you might see instead degradation in democracy within the ASEAN bloc. Many countries in ASEAN are undergoing democratic crises and deficits. 

Thailand is an example. We have seen Thailand grow as a successful democratic model, but after the military coup and the prolonged political crisis, the sustainability of the democracy system in ASEAN is put under question. Besides the Thai crisis, we have an untouchable monarchy in the bloc, the political woes in Myanmar, and human rights and the Rohingya *boatpeople* crisis. ASEAN's impotence in resolving these issues shows the ASEAN mechanism has yet to work well. Democracy consolidation has failed. 

Do you think ASEAN will be able to proceed better with economic cooperation, compared to security and socio-cultural cooperation? 

We have the parameter for success and failure for economic cooperation. The rise of intra-ASEAN trade can be measured from year to year, investment from ASEAN countries, the rate of people-to-people exchange and the number of skilled workers. But in politics and socio-cultural terms, it is more intangible. The various political systems in ASEAN make it harder to cooperate. 

But, I don't agree that ASEAN should only focus on economic cooperation. We have committed to building the ASEAN community based on economic, security and socio-cultural pillars and there must be some balance between them. 

The three pillars have to go together. If not, we will just become trading nations. 

A market is not a community. When you go shopping in a market, you do not build a community with sellers there. Markets don't create that kind of community. 

Why do think leaders still have to press ahead with political cooperations despite so many failures in bringing about changes in the bloc? 

We might say that ASEAN is a failure in many things, but that doesn't mean we should forget about it. The challenges are harder in politics and security because they involve high political issues with a great level of sensitivity. In the economy, we have some common goals, such as lowering tariffs and opening up the markets. But when it comes to politics, with goals of enhancing democracy, we might face challenges from countries with great political sensitivity. 

However, it has to be remembered that those are the challenges that make ASEAN relevant. If everything is good, we do not need ASEAN. Why do you need an organization? You create an organization because you have a problem. ASEAN was created in 1967 to cope with challenges belonging to that period; but as time went by, the challenges became different. In 1967, we did not talk about democracy, but in 2001-2009 up to the 21st century, human rights and democracy issues, including good governance and the environment, will become more important, and even if we do not have ASEAN, neighboring countries will have a forum where they can talk about these issues.

RI widely accused of price dumping

The Jakarta Post, Jakarta | Tue, 03/10/2009 2:44 PM  

More than 20 countries have accused Indonesia of "dumping" its export products on the international market, a Trade Ministry official says. 

"Countries that have lodged reports include India, South Africa, Thailand, New Zealand, Australia, the Philippines, several countries in the European Union (EU), Malaysia, the US, Turkey, Canada, Peru, Argentina, Egypt, Brazil, Colombia and South Korea," Trade Ministry trade security and monitoring director Martua Sihombing said, as quoted by Antara recently. 

Dumping is the practice where a manufacturer exports products to another country at prices below those charged on the market in its home country or even below home production costs, while anti-dumping measures are those adopted to counter such practices (for example, by imposing additional import duties). 

"Dumping accusations have become somewhat of a trend in the current economic climate," Martua said. 

A list of 20 products Indonesia has been accused of dumping includes paper, toilet paper, stationary, aluminum, dry batteries, tires, steel, textiles, ready-to-wear garments, synthetic fibres, pharmaceuticals, bicycles and motorcycles, he said. 

"The most common products we have been accused of dumping are made from steel and metals. This is because such products are in a volatile sector vis-a-vis imported products," he said, adding that the government would need to step in to resolve the complaints. 

Between 1995 and 2008, Martua said, around 180 accusations of dumping were lodged against Indonesia. 

"But 85 of these were dismissed because there was no proof ... We followed through with 76 of the complaints and are currently processing 19 others," he said. 

Last December, the Indonesian Chamber of Commerce and Industry (Kadin) predicted the number of dumping cases and accusations would soar this year, as countries move to protect their local industries in the global economic slowdown. 

Recently the Indonesian government was urged by manufacturers to take Australia to the World Trade Organization (WTO) after it imposed anti-dumping duties on Indonesian tissue paper. However, the government would first need to analyze all necessary legal aspects of this case before making such a decision, Trade Ministry international trade cooperation director general Gusmardi Bustami said recently. 

The Australian Customs Service imposed additional anti-dumping duties of 8 percent and 40 percent on top of the existing 5 percent tariff on tissue paper products, after it found in December that China was dumping those products on the Australian market. 

Another case involved the Indonesian Pulp and Paper Association (APKI), which lodged a protest with the Malaysian government for extending its anti-dumping duty on imported newsprint paper. 

According to APKI, Malaysia should have revoked its anti-dumping policy in September last year, after slapping on a safeguard duty since 2003. APKI argued that the anti-dumping policy could only be applied for five years based on the existing regulations of the World Trade Organization. 

However, Malaysia eventually decided to extend the policy and relaunch an investigation into the dumping allegations - which may take six months until March. (hdt)

"Unbridled greed" to blame for economic woes: Malaysian PM

Jakarta (ANTARA News) - Malaysian Prime Minister Abdullah Ahmad Badawi blamed "unbridled greed" Monday for the global financial meltdown as business people from across the Islamic world gathered to discuss the crisis. 

Badawi called for a new financial system to replace the Wall Street model as he spoke at the opening of the World Islamic Economic Forum (WIEF) in Jakarta alongside Indonesian President Susilo Bambang Yudhoyono. 

"We have inherited a system where people can trade what they do not own and the resulting inflationary pressure in the global market has caused immense damage to the economic well-being of the world`s poor," he was quoted by AFP as saying in a speech. 

"Such is the impact of unbridled greed in the financial system where there is no accountability on money lending.... The world is beginning to appreciate the need for alternative financial arrangements." 

He said Islamic finance -- which shuns interest and avoids profiting from industries such as alcohol and gambling -- was "gaining credibility as an alternative." 

"I do believe that Islamic finance has a bright future in the global financial system. This is something that we can capitalise upon," Badawi added, while noting the lack of harmonised standards in Islamic banking. 

The fifth WIEF since 2004 gathers hundreds of business leaders from across the Muslim world as well as senior officials such as Organisation of the Islamic Conference Secretary General Ekmeleddin Ihsanoglu. 

Organisers say the two-day forum at a luxury hotel in the capital of the world`s most populous Muslim country "aspires to change the global perception of the Muslim world from a conflict zone to a lucrative economic region." 

Discussions are focusing on the US-led financial meltdown, the environment and the future of fossil fuels, food security and small business development. 

All speakers at the conference extolled the virtues of Islamic finance and the need to boost food production to feed the poor in developing countries in the wake of last year`s food crisis. 

Prices soared due to a combination of factors including poor harvests, changing diets in emerging economies and growing demand for food crops for biofuel production. 

Badawi said that if the growth in world food production continued to fall "the Muslim world will not be able to feed its growing population." 

Indonesian President Yudhoyono said 22 of the 50 least developed and most indebted countries in the world were Muslim, and called for oil-exporting Islamic countries to set up a fund to support poorer Muslim states. 

Yudhoyono warned against any trend toward protectionism in the face of the global slump, and called for the completion of the latest round of World Trade Organisation (WTO) talks designed to free-up world trade. 

WTO members came close to a deal last July in Geneva but talks fell apart amid mutual recriminations between developed and developing countries. 

A new trade pact is seen as a way of preventing protectionism by binding countries to rules monitored by the Geneva-based WTO. 

"The worst thing that anyone can do is become protectionist and thus invite protectionist retaliation in a trade war in which everyone will emerge a pitiable loser," Yudhoyono said. 

"We should remain practitioners of free trade and persevere in working for a development-oriented trade regime in the WTO round of negotiation." 

Southeast Asia`s largest economy, Indonesia has denied allegations it is imposing non-tariff trade barriers by restricting imports of major goods to five ports and requiring translations of imported food labels. 

Indonesia recently successfully launched its first retail Islamic bond issue to help fund a six-billion-dollar economic stimulus package. 

Other leaders from Muslim countries at the conference included Moroccan Prime Minister Abbas El Fassi and the deputy prime ministers of Qatar and Yemen.

RP to ink deals at ASEAN summit

BY JESSICA ANNE D. HERMOSA, Businessworld Reporter, 23 February 2009 

THE PHILIPPINES is set to sign regional agreements that will free up trade and bolster economic integration at the Association of Southeast Asian Nations (ASEAN) summit this week, officials said. 

Experts noted, however, that leaders would have to balance their goals of liberalizing trade with commitments to other partners outside ASEAN and pressures to protect local industries amid the global downturn. 

At least 25 agreements and statements that range from declaring the group’s roadmap until 2015 to brokering cooperation in attaining food and energy security await the signatures of ASEAN leaders and dialogue partners. 

The summit, under the theme "ASEAN Charter for ASEAN Peoples" will be held in Cha Am and Hua Hin in Thailand from February 26 to March 1. 

"Among others, there are three major intra-ASEAN documents [that the Philippines will be signing]: the ASEAN trade in goods agreement (ATIGA), the ASEAN comprehensive investment agreement (AICA) and the seventh round of ASEAN agreement on services," Trade Assistant Secretary Ramon Vicente T. Kabigting said in a telephone interview on Saturday. 

On top of these, the Philippines will also be signing free trade deals between ASEAN and India and another involving ASEAN, Australia and New Zealand, Mr. Kabigting said. 

Under the agreement with Australia and New Zealand, the Philippines will eliminate duties on 95% of its goods by 2013 while the two Pacific economies will do the same to all their goods. 

Philippine exporters of car parts will benefit, Mr. Kabigting said, as it allows them to compete against Thai exporters who have enjoyed an earlier bilateral trade pact with Australia. 

Under the deal with India, meanwhile, the Philippines commits to remove tariffs on 71% of its goods by 2017 in exchange for India’s elimination of tariffs on 94% of their goods. 

"The usual such as rice, sugar and corn [will be on the sensitive list and face slower or no tariff reductions]," Mr. Kabigting said without elaborating. 

Asked to comment, University of Asia and the Pacific economist George M. Manzano said "With the agreements, they can send a message to the world to keep the channels of trade open [and that] if they will be more protectionist, they will suffer more." 

Philippine Exporters Confederation, Inc. President Sergio R. Ortiz-Luis, Jr. welcomed the trade pacts as these will open up "big markets". 

"But Australia is a competitor in agriculture. It remains to be seen if the Philippines will benefit from the deal. We might face difficulties," Mr. Ortiz-Luis said in Filipino last week. 

Rene E. Ofreneo, executive director of FairTrade — a coalition of civil groups concerned with trade reforms — said that the government must report to stakeholders how the country will benefit from the deals. 

For the intra-ASEAN agreements, meanwhile, the Philippines will not "incur any new tariff or non-tariff obligations", Mr. Kabigting said. 

These are streamlined and improved versions of earlier pacts and will allow for the easier movement of goods, investments and services in the region. 

"But one major value-added [under the ATIGA] is we make very certain what are everyone’s tariff commitments," Mr. Kabigting said. 

"And there is a provision on modification of concessions for members finding it hard to maintain their commitments in times of economic difficulty. It contemplates other premises for tariff modifications aside from the usual emergency measure and balance of payment concerns. But it is very disciplined and not a wide and open loophole." 

This move is but one of the actions ASEAN is taking to address the continuing global economic downturn. 

"I would expect the major focus of discussions would be the financial challenges we are facing. [President Gloria Macapagcal Arroyo] has already taken the lead to call for the conclusion of the World Trade Organization Doha talks as one of the major strategies," Trade Secretary Peter B. Favila last week said. 

The President, he added, will also be calling for continued progress on talks to create a regional standby fund to help countries experiencing liquidity problems. 

In October last year, the Philippines suggested that a larger portion of the fund — first created under the Chiang Mai Initiative after the 1997 Asian financial crisis — be disbursed when needed while Thailand had proposed to increase the fund to $250 billion from $84 billion. 

The government, however, must not solely focus on this standby fund and the trade deals at the summit, Mr. Ofreneo said. 

"If there is the Chiang Mai Initiative, [what are they doing] to strengthen social and labor integration? ASEAN should not overlook the overarching goal of a sharing and caring community," he said in a telephone interview. "Do not focus on one type of instrument." 

He pointed out that much needed to be done in terms of closing the development gap among ASEAN members and fleshing out human rights and labor rules. 

"The question is, can ASEAN rise to the challenge of revisiting the liberalization mechanism to achieve the one integrated community? There needs to be a radical adjustment when the issue now is how to preserve jobs and make sure the vulnerable in society survive," Mr. Ofreneo said. 

Mr. Kabigting, for his part said: "The President is cognizant of this economic crisis. [The government] is not a purist about liberalization. While it must be pursued, you cannot pursue it unbridled. There must be some precautions taken." 

World Trade Organization Director-General Pascal Lamy has warned against "regionalism [that hurts] multilateralism by bolstering discriminatory interests or by fostering protection behind enlarged closed markets". 

In the foreword of a WTO publication launched over the weekend titled "Multilateralizing Regionalism: Challenges for the Global Trading System", Mr. Lamy called on members to review regional agreements to see if these are likely to allow for wider and more inclusive trade deals in the future. 

For Mr. Favila, however, the ASEAN deals are "complementary with the [ones of the] WTO" and "will not in any way compete with the Doha round". 

Mr. Manzano, for his part, said that while more regional deals may "theoretically" make trade rules difficult to comply with, "we do not know if it will be significantly complicated".