The Association of Southeast Asian Nations (ASEAN) was
established In 1967 as a loosely structured inter-governmental
organization, which provided a framework for discussing problems that
required a regional solution. For a long time, the reduction of regional
political tensions remained the main concern of ASEAN. Serious efforts
towards promoting intra-regional co-operation began in 1976 with
emphasis on trade liberalization and industrial co-operation. But apart
from a few cases, involving the regional economies and collective
external bargaining, the record of economic co-operation has been poor,
because of different levels of economic development of the member
countries, mutually competitive exports.. inward• looking industrial
policies and heavy dependence on the industrialized countries for
investment, technology and trade. So far, there have been only three
intra-ASEAN agreements to promote market sharing and a pooling of
resources: the preferential trade arrangements, the industrial
complementation agreement, designed to develop links in certain
industries to achieve greater economies of scale, and the industrial
joint venture agreement, which provides preferential treatment for
products of joint ventures involving the companies of at least two ASEAN
member countries. However the joint venture scheme has had only limited
success because of delays in implementation, while the scope of the
preferential trading arrangements has been limited by the consensus
approach in solving outstanding issues and by the concern of
higher-tariff member countries to protect domestic production and
employment. As a result, tariffs have been reduced only on
intra-regional trade of selected non-sensitive items. Most of the items
covered in the preferential trade agreements have low trade content and
minimal trade potential. The arrangements have also been difficult to
manage because of problems of administering the rules of
origin.
