1.  Draft Ministerial Declaration on the AFTA-CER Closer Economic Partnership

     A memo was sent to member-agencies last 21 February 2002 in response to a DTI request for comments. Copies of      comments were received from DENR, BSP, TC, DOT, BOC and DOTC. Comments were on the goals and fields of      cooperation. DENR also commented on the working groups and work programme, while BSP also commented on      Business Views (role of the Business Advisory Council).

     The NEDA comments are that the fields of cooperation and initial work program conform to the policy framework      and strategies of the MTPDP, particularly Chapters 3 (on competitiveness of industry and services) and 4 (on ICT).      The comments of member agencies are presented in matrix form in the folder.

2.   First Meeting of the ASEAN WG on Trade and Investment in

     Minerals (Phnom Penh, 3-4 April 2002)

     DENR suggested the inclusion of this agenda item as it anticipates active participation in the Meeting, to be held      back-to-back with the Fourth ASEAN Senior Officials Meeting on Minerals. DENR identified four principal areas for      discussion, as: (a) establishment of a minerals database; (b) training; (c) trade and investment in minerals; and (d)      environment-friendly mining.

     On (a), DENR favors internationally used data standard, a distributed system of data exchange, data      confidentiality, and inclusion of non-energy minerals. On (b), DENR suggests one trainee per year and one expert      every two years to be committed to the ASEAN training program supported with necessary budget allocation. On      (c), DENR believes that trade and investment in minerals should be open to both ASEAN and non-ASEAN investors,      the issuance of short term permit (e.g., Exploration Permit) instead of a long term permit (e.g., FTAA), investment in      downstream mining activities, standardization of terminology and ore classification, and an ASEAN intra-trading      scheme. On (d), DENR prefers that each member clarify its concept of sustainable development in relation to      mineral resources development, and for the conduct of a study on current initiatives in mineral producing member      countries.

MEETING NO.5, DECEMBER 4, 2001:

1.  Results of the ASEAN Summit (Bandar Seri Begawan, 5-6 November 2001)

     a. 7th ASEAN Summit – The Leaders agreed that not only are appropriate fiscal and monetary policies crucial, but          must also be accompanied by a renewed commitment to structural reforms. They endorsed the Mid-Term          Review of the Hanoi Plan of Action, and agreed to review the ASEAN Secretariat’s terms of reference to          strengthen its role and functions. They also welcomed the decision of the 33rd AEM Meeting in Hanoi last          September 2001 to commission an ASEAN Competitiveness Study to be undertaken by a well-known          international consulting firm. The competitiveness study will form part of the Roadmap for ASEAN Integration.          Agreements were also reached on the following: (i) to speed up negotiations on liberalizing intra-ASEAN trade in          services; (ii) to start negotiations on mutual recognition arrangements for professional services; (iii) to develop          concrete plans in the fields of energy, tourism, agriculture, transportation and communications; (iv) to convene          regular ASEAN Business Leaders Summits in conjunction with ASEAN Summits; (v) to set up an ASEAN Business          Advisory Council and conduct of trade fairs; (vi) to support a new development round of multilateral trade          negotiations. Pres. Arroyo called on the ASEAN member-countries to ensure that their macroeconomic          fundamentals remain sound in the face of the global economic slowdown. She also expressed support for the          conduct of a competitiveness study for the region which would identify the comparative and competitive          advantages of certain industries vis-à-vis other regions. She also emphasized the need for greater political will          and full government support to realize the e-ASEAN initiative.

         On BIMP-EAGA, Pres. Arroyo proposed a two-stage approach to revitalize BIMP-EAGA: (a) confidence-building          stage (2001-2002); and (b) consolidation stage (2003-2004). The first stage involves: (i) strengthening security          cooperation to restore investor confidence; (ii) resumption of air and sea transport services and projects on          fisheries, power and oil; and (iii) acceleration of efforts to harmonize Customs, Immigration, Quarantine and          Security procedures to ensure the freer flow of goods and services and promote tourism. The second stage          involves: (i) further development and expansion of projects in the first stage; (ii) promotion of an EAGA food          supply network for China and Northeast Asia; (iii) establishing a regional airline to service BIMP-EAGA; (iv) joint          tourism marketing and promotions; and (v) establishment of a BIMP-EAGA Venture Capital Fund. Pres. Arroyo          also pushed for the following initiatives for the revitalization of BIMP-EAGA: (i) focused government intervention,          i.e., exert greater political will to attract private sector investments particularly in infrastructure; (ii) strengthened          security cooperation, e.g., information exchange; (iii) review institutional mechanism of BIMP-EAGA to improve          the environment for investments; (iv) develop SMEs; and (v) central project facilitation unit to focus on          undertaking doable and pragmatic priority projects.

     b. ASEAN+3 Summit – The Leaders resolved to strengthen cooperation on responding to the impact of the          economic slowdown and narrowing the development gap in the region. They also discussed the possibility of          establishing an ASEAN+3 Secretariat, as well as the proposals of the ROK-initiated East Asia Vision Group Report          (as the establishment of an East Asian Free Trade Area and convening of an East Asia Summit and East Asian          Forum). Pres. Arroyo commended China for maintaining the value of the renminbi during the period after the          financial crisis and not devaluing as a means to boost exports.

     c. ASEAN+1 Summit – The ASEAN-China Summit identified five priority areas for cooperation, as: (i) agriculture; (ii)          information technology; (iii) human resources development; (iv) investments; and (v) Mekong River basin          development. Pres. Arroyo welcomed the study (Forging Closer Economic Relations in the 21st Century)          prepared by the ASEAN-China Expert Group on

         Economic Cooperation which recommended, among others, to establish an ASEAN-China free trade area. She          expressed her appreciation for China’s support for Philippine agriculture modernization efforts, and invited          China to assist in the development of BIMP-EAGA. On the ASEAN-Japan Summit, the Philippines thanked Japan          for its assistance to ASEAN on information and communication technology. The Leaders welcomed the          establishment of an experts group to study a closer economic partnership between ASEAN and Japan. ASEAN          also expressed its appreciation to Japan for offering new IT projects at the ASEAN Promotion Center in Tokyo. On          the ASEAN-ROK Summit, the Philippines conveyed ASEAN’s appreciation for ROK’s initiatives in information and          communication technology, as the ASEAN Secretariat’s intranet applications project and ASEAN+3 ICT-specific          Business Forum. The Philippines also proposed the establishment of an ASEAN-ROK promotion center for trade,          investment, tourism and IT, and a revival of the ASEAN-Korea Business Council.

2.  ASEAN Investment Area

     a. Shortening of the TEL Ending Date to 2010 for non-ASEAN investors in Manufacturing, Agriculture, Fishery, Forestry          and Mining – The 4th PCAAC-TBEC Meeting endorsed the BOI proposal not to agree to advance the ending date          of the TEL from 2020 to 2010, since the Philippines TEL applies only to ASEAN investors. Thus, there is no legal basis          to suspend the nationality requirement. However, the 4th AIA Council Meeting (Hanoi, 14 September 2001)          agreed to accelerate the full realization of the AIA (i.e., eliminate exceptions to free entry and national          treatment) for non-ASEAN investors to 2010 for the first six ASEAN members. The Meeting noted the Philippines’ TEL          submission which is applicable only to ASEAN investors. The Philippines has to consult its capital and inform the          Chairman of the AIA Council as soon as possible. Since it will take some time to legislate amendments to EO          226, BOI suggested that a letter be sent to the AIA Council stating the following: (a) the TEL is applicable to          ASEAN investors only; (b) the proposed amendment of investment incentive laws would take sometime to be          legislated; and (c) we can only agree to the acceleration of the ending date if we are allowed to transfer our          TEL to SL.

     b. Phasing-out of the TEL for the Manufacturing Sector by 2003 for ASEAN investors – The 4th PCAAC-TBEC Meeting          approved the BOI proposal to suspend the nationality requirement for ASEAN investors for incentive purposes, to          the extent allowed by the Constitution and relevant laws (EO 226 as amended by RA 7888). Under RA 7888, the          Board may recommend to the President the suspension of the nationality requirement in cases of ASEAN projects          or investments by ASEAN nationals, regional ASEAN or multilateral financial institutions, including their subsidiaries          in preferred projects, etc., and in the case of a regional complementation project for the manufacture of a          particular product which seeks to rake advantage of economies of scale, provided that such activities are          allowed by the Constitution and relevant laws. Under the proposed amendments to EO 226 BOI is suggesting          that an ASEAN citizen be considered as a Philippine national, as one of the qualifications of a registered          enterprise, provided that the investment is made in an activity where the Constitution does not specifically          require Filipino participation.

     c. Final TEL and SL for Services Incidental to Manufacturing – The 4th PCAAC-TBEC Meeting approved the BOI          proposal to delay its submission, since some of the services fall within the Philippine definition of manufacturing          instead of ASEAN CCI definition of services incidental thereto. Member-agencies were requested to submit          comments to BOI on the following: (i) initial Philippine SL for services incidental to manufacturing using CPC          codes 881 to 885, using the six ASEAN-CCI criteria as guide/reference; and (ii) whether publishing/printing services          presently limited to mass media, which is closed to foreign investors, should be expanded. On (i), the ASEAN          Secretariat has clarified that services would be limited to those under CPC codes 881 to 885. Thus, BOI is now in          the process of aligning the Philippines SL for services following the codes. The TC expressed concurrence with the          proposed SL. On (ii), BOI confirmed that the publishing/printing services incidental to manufacturing may refer to          publication of product labels, brochures or accompanying literature, and not to mass media publication.

3.  Results of the 23rd ASEAN Ministers of Agriculture and Forestry Meeting (Medan, 3- 5 October 2001)

     The following were the agreements/highlights of the 23rd AMAF Meeting: (a) current competitiveness enhancing      efforts need to be boosted further, particularly cooperative programs under AMAF; (b) submit the Report on the      Mid Term Review of the Hanoi Plan of Action to the ASEAN Leaders Summit in November 2001; (c) satisfaction with      progress in strengthening collaboration with third parties, e.g., the Philippine initiative on “ASEAN IPM Knowledge      Network;” (d) conduct of studies to improve and operationalize the ASEAN Food Security Reserve System and      development of the ASEAN Food Security Information System, initially focusing on rice, to be financed by Japan; (e)      fast-track WTO accession of Cambodia, Lao PDR and Vietnam; (f) more proactive role in WTO agricultural trade      negotiations, closer consultations and coordination in development of strategies, and convene an AMAF      high- level experts group to map out a common ASEAN strategy for the Doha Ministerial; (g) strengthen      coordination in addressing market access issues in developed country markets, i.e., EC (on discriminatory tariffs on      canned tuna) and Australia (on import restrictions on fresh tropical fruits); (h) support the ASEAN-SEAFDEC      Conference on Sustainable Fisheries for Food Security in the New Millennium (Bangkok, 19-24 November 2001); and      (i) support the creation of the FAO Trust Fund to augment FAO resources.

     The First AMAF+3 identified six areas of collaboration: (a) poverty alleviation and food security; (b) R&D in food,      agriculture, fisheries and forestry; (c) HRD; (d) coordination and cooperation in international and regional issues; (e)      agriculture information networking; and (f) trade facilitation. The following criteria were adopted in deciding on      projects:

     (a) projects should be regional in nature and of benefit to member-countries; (b) sharing basis with flexibility to      new members; and (d) proposals should be approved by the participation should be at least two ASEAN members      and any one of the +3; (c) cost-SOM-AMAF+3. Thailand was assigned to coordinate the Japan-assisted study on the      East Asian Rice Reserve System, and another Japan-assisted project on improvements to the ASEAN Food Security      Information System.

4.  Results of the 7th ASEAN Transport Ministers Meeting (Kuala Lumpur, 25-26 October 2001)

     The following were the highlights of the 7th ATMM: (a) finalization of transport cooperation agreements, as      implementation of the Framework Agreement (FA) on Facilitation of Goods in Transit Protocols 1, 6 and 9 and      eventual signing of the MOU on Air Freight Services, FA on Multimodal Transport, FA on Facilitation of Inter-State      Transport and Protocols; (b) approval of the third package of commitments for the air (setting up of airline offices      and appointment of general sales agents) and maritime (transport of international passengers and cargo without      restriction) transport sectors under the ASEAN Framework Agreement on Services; (c) implementation of the Hanoi      Plan of Action Transport Action Agenda/Successor Plan of Action in Transport, as cooperation and harmonization      of transport facilitation for goods in transit, multimodal transport operation and transport infrastructure project      development.

     The Philippines informed the Meeting that: (a) its final position on the FA on Multimodal Transport will be      communicated to the ASEAN Secretariat by the end of the year; (b) its final position on the FA on Facilitation of      Inter-State Transport will be communicated by 16 November 2000; (c) it will inform the ASEAN Secretariat      accordingly on its position on the ASEAN MOU on Air Freight Services; and (d) it has reservations on the revised final      draft of the Kuala Lumpur Declaration on ASEAN Air Freight Servies. DOTC submitted the following agreements for      approval: (a) ASEAN MOU on Air Freight Services; (b) Kuala Lumpur Declaration on ASEAN Air Services; and (c)      ASEAN FA on the Facilitation of Inter-State Transport.

5.  Agenda Forecast for First Semester of 2002

     The agenda forecast include the ASEAN-Japan FTA, FA on Multimodal Transport, AFTA-CER Closer Economic      Partnership and Acceleration of the Ending Date of 2020 for the Manufacturing Sector, among others.

MEETING NO.4 SEPTEMBER 4, 2001:

1.  Policy Recommendations of the ASEAN Chambers of Commerce and Industry In Response to the Current Economic      Situation.

2.  Preparations for the 33rd ASEAN Economic Ministers Meeting (Ha Noi, 7-15 September 2001)

3.  Post Clearance Audit System

4.  The 9th Meeting of the ASEAN Directors-General of Customs (13-14 July 2001, Manila) discussed the subject, among      others. The Directors-General noted that Malaysia, Singapore, Thailand and Vietnam had established their      post- clearance systems and undertaken field audits. A long-term expert had been dispatched to other ASEAN      customs administrations to review their plans and systems and make appropriate recommendations. The      Directors- General also noted that work was being undertaken to develop a manual on post- clearance audit,      which would include the best practices of developed countries and case studies, to serve as reference to ASEAN      customs authorities.

5.  Sectoral Mutual Recognition Arrangement for Telecommunications Equipment – The First ASEAN      Telecommunications Ministers Meeting (13-14 July 2001, Kuala Lumpur) supported and urged the speedy      implementation of the Sectoral MRAs for Telecommunications Equipment adopted at the Sixth ASEAN      Telecommunications Regulators Council Meeting in Brunei in October 2000. The MRAs will put in place a      region- wide acceptance or recognition of conformity assessment procedures for telecommunications equipment,      thereby facilitating market access in each other’s market. The e-ASEAN Framework Agreement provides for the      implementation of the ASEAN Sectoral MRAs.

6. RP-Singapore WG on ASEAN Information Infrastructure – The same Telecommunications Ministers Meeting also      established five working groups under the Telecommunications Senior Officials Meeting to advance ASEAN      cooperation in telecommunications and IT. One of the WGs is on the AII, with the Philippines and Singapore as      coordinating countries.