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ASEAN – Open skies, outside ties

Updated On: Nov 02, 2007

Singapore’s Prime Minister Lee Hsien Loong stressed the importance for the ASEAN members to liberalise air travel and urged ASEAN members to move towards Open Skies Agreements.  

Currently, ASEAN is committed to liberalising air travel between capitals by 2008. The outlook is however, not good according to the International Air Transport Association (IATA).  Its regional vice president, Mike Barclay remarked, “We don’t see any relaxation of foreign ownership controls ... we don’t see the opportunity for airlines to operate domestic sectors in another ASEAN country… So I think there is a long way to go.”  However, one bright spark is the talks between Singapore and Malaysia to liberalise their air-travel between Singapore and Kuala Lumpur.  Both governments seem ready to open up the lucrative Singapore-Kuala Lumpur air sector to low cost carriers.

While ASEAN is having some difficulty in liberalising its internal markets, it is having more success with cooperation with China. Earlier this week, ASEAN and China launched the inaugural ministerial-level meeting on food-safety and both sides agreed to work towards common food standards. The meeting paved the way for the signing of an actual Memorandum of Understanding (MOU) on food safety at the ASEAN plus one meeting in Singapore later this month.

The meeting took place in the backdrop of the China-ASEAN Expo (CAEXPO) held in Nanning. The China-ASEAN Business and Investment Summit (CABIS) was also held concurrently. According to the secretary-general of CAEXPO and CABIS, Lin Jin Zao, 26 investment promotions were held and 182 economic cooperation agreements were signed at the CAEXPO with a total value of $6.15 billion, up 5.3% from last year.

ASEAN’s relations with three other dialogue partners need to be bolstered. Unlike the case of the ASEAN-China FTA, the ASEAN-Japan and individual ASEAN countries’ bilateral FTA with Japan have not been smooth-sailing. In fact, Thai train workers went on strike to protest against the terms of the Thai-Japan Economic Partnership Agreement (EPA) on Tuesday (30 October). Under the EPA, the cargo services of the State Railways of Thailand (SRT) would be privatised. The strike paralysed the rail network across the country and even links between Bangkok and Penang. The strike was only called off on Wednesday after talks were held between the SRT and the union.

The ASEAN-European Union Free Trade Agreement (FTA) is also proceeding slowly due to the issue of Myanmar. The European Union is balking over the possibility of the inclusion of Myanmar in any trade talks. In frustration, Malaysia Trade Minister Datuk Seri Rafidah Aziz Rafidah  blasted the critics, saying that ‘political hypocrisies’ could emanate, for example, in the case of China when the country was once condemned following the Tiananmen Square massacre in 1989 following protests for full-fledged democracy.

She noted, “Everybody including foreigners condemned China. They forget that the system changes, the government changes and attitudes change. And today, the same people who condemned China are now crawling into China to kiss their hands and feet to get business opportunities and to be friends with China because there are billions of dollars to be made…”  She hence urged for a more pragmatic approach towards Myanmar and to keep the politics out of the ASEAN-EU FTA.

ASEAN’s relations with the United States also seem to have lost its lustre. The skipping of the ASEAN Regional Forum by Secretary of States Condoleezza Rice has created the impression that Washingtonis losing its interest in ASEAN and ASEAN related institutions. A research associate at the Washington think-tank, Centre for a New American Security called for re-engagement between both sides, with ASEAN moving towards more results-oriented agreement and Washington being more proactive.  (1 November 2007)

Sources:

China-ASEAN Expo ends on high note (Jakarta Post, 1 November 2007)

PM Lee calls on ASEAN countries to fully liberalise air travel (ChannelNewsAsia, 1 November 2007)

ASEAN long way from liberalising aviation industry-IAT(ChannelNewsAsia, 1 November 2007)

Asean ministers urged to make skies freer (Straits Times, 1 November 2007)

China and ASEAN members move to harmonize food safety standards (Jakarta Post, 31 October 2007)

Keep Out Myanmar Politics In Trade Talks, Says Rafidah (Bernama, 30 October 2007)

America must re-engage Asean (Straits Times, 29 October 2007)

Train Service To Penang From Bangkok Cancelled (Bernama, 31 October 2007)