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FOR IMMEDIATE RELEASE October 5, 2000 |
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U.S. Businesses Meet with ASEAN Economic Ministers Executives stress need for regional economic integration
"A continued commitment to reform and restructuring is vital to sustainable economic growth in this region," said Ken Richeson, Executive Director of the US-ASEAN Business Council. "This commitment, coupled with regional economic integration, is ASEAN's comparative advantage in the competition for foreign investment. As other large, developing markets open up their economies, deregulate, and liberalize, the competition for this capital can only be expected to increase." Citing a U.N. report released on October 3, Richeson pointed out that net flows of foreign direct investment (FDI) into ASEAN last year totaled US$16 billion, or about 17% of the US$96.1 billion total FDI that went to developing countries in Asia. In dollar terms, this is the lowest level of investment in ASEAN since the early 1990s, and the lowest, as a percentage of the total investment flows into Asia, since the 1980s. By contrast, FDI flows into China last year, at US$40 billion, accounted for 42% of such capital flowing into Asia. This is a sharp turnaround from the beginning of the 1990s, when ASEAN was the recipient of 61% of the investment flowing into Asia, with only 18% directed to China. "Implementation of AFTA is central to this region's
ability to attract large-scale capital inflows," said Gerald Kania, President of
ASEAN operations for Ford Motor Company. "By itself, no ASEAN country has the market
size and economies of scale to justify major manufacturing investments; only by looking at
ASEAN as a region - with ten countries and 500 million people -- does large-scale,
high-value added investment make economic sense." Kania added that Ford, General
Motors, and DaimlerChrysler have a combined US$250 billion worth of global annual
purchases, but at present, only 0.2% (about US$300 million) of this procurement is sourced
from ASEAN. "With AFTA implementation, this could rise to 5%, for example, or about
US$12 billion per year, and by 2006, an integrated ASEAN auto market could double in size,
reaching about 2 million units per year." Dennice Wilson, Managing Director with Federal Express, noted that "No longer can business survive with a 3-4 day service around the world. Businesses want and need worldwide 12-36 hour commitments, door to door, regardless of commodity, value or weight of their products. They not only need speed; they need reliability, time definite service. They do not want us to move their shipments overnight only to find them stalled in a country's gateway." Federal Express, along with UPS and other air express carriers, is involved in Project ACCESS, which aims to create a partnership with the ASEAN customs administrations to achieve the implementation of world-class standards of efficiency and service in the expedited clearance of international express business. The companies are currently working with Malaysia on a pilot project under this initiative. Tally Goodson, Vice President & General Manager, Asia, for FreeMarkets Inc., discussed electronic commerce and the business-to-business e-Marketplace. "Electronic Commerce provides a new and unique means for promoting economic growth and expanding trade between ASEAN and the U.S. It will permit businesses - especially small and medium-sized enterprises (SMEs) -- to extend their reach into the global marketplace without the need to establish a physical presence. It will open up otherwise unavailable export and bidding opportunities." He said. "For companies doing procurement over the Internet, there is access to a vastly expanded pool of potential suppliers, allowing decision makers to take advantage of accurate, real-time data and pricing information." FreeMarkets recently opened an ASEAN regional office in Singapore, and provides an on-line reverse auction service that matches buyers and sellers with bidding and procurement opportunities. "In short, e-commerce allows more sellers access to more buyers more quickly, cheaply, and efficiently." Goodson added. "It is critical that each country within ASEAN take the necessary steps to ensure that they have the infrastructure to support the growth of electronic commerce and other Internet applications," said Steve Parker, Managing Director of Verizon Communications. Parker, who also made a presentation at the dialogue, noted that telecommunications sector deregulation and liberalization will be the basis of competitiveness in the new economy. "There is no question that as electronic commerce proliferates worldwide, the economic well-being of countries will be closely tied to their ability to support advanced applications. Although tremendous progress has been made in undertaking telecommunications regulatory reform throughout ASEAN, a major challenge that the region faces will be in implementing these reforms expeditiously," he added. In a presentation on the region's pharmaceutical industry, Russell Bloem, Bristol-Myers Squibb Vice President for the Asian Region, noted that in addition to addition to extending and enhancing human life, pharmaceuticals save health care dollars by helping avoid lengthy hospitalization or costly invasive measures. "The annual costs for treatment of a given ailment by drugs is a fraction of the average costs of treatment by hospitalization," said Bloem. He added that a vibrant pharmaceutical market requires national treatment; non-conditional purchase, pricing, listing, and reimbursement of imported products and ingredients; elimination of discriminatory import policies, import substitution regimes, quotas and domestic content provisions; and uniform administration, transparency, and judicial review.
US-ASEAN trade appears poised for recovery to its 1997
levels this year. During the first seven months of 2000, U.S. imports from ASEAN stood at
US$48 billion, up 8% over the same period in 1999, while U.S. exports to the region
reached US$25 billion, an increase of 16% over 1999. Two-way US-ASEAN trade totaled
US$117.8 billion last year. U.S. imports from the ASEAN region reached US$77.8 billion,
while U.S. exports to the region were slightly over US$40 billion. US-ASEAN Business Council is a private, non-profit membership organization working to promote increased trade and investment between the U.S. and the member countries of the Association of Southeast Asian Nations (ASEAN). For information on the US-ASEAN Business Council or general information on the ASEAN region, please contact John Goyer at jgoyer@usasean.org or visit the Council's Web site at www.us-asean.org. # # #
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