FRAMEWORK FOR COMPREHENSIVE ECONOMIC PARTNERSHIP BETWEEN THE ASSOCIATION OF SOUTH EASTASIAN NATIONS AND JAPAN

WE, the Heads of State/Governments of Brunei Darussalam, the Kingdom  of Cambodia, the Republic of Indonesia, the Lao People's Democratic Republic ("Lao PDR"), Malaysia, the Union of Myanmar, the Republic of  the Philippines, the Republic of Singapore, the Kingdom  of Thailand  and  the Socialist Republic of Viet Nam, Member States of the Association of South East Asian Nations (collectively, "ASEAN" or "ASEAN Member States", or individually, "ASEAN Member State"),  and  Japan  gathered today for the ASEAN-Japan Summit;

RECALLING the Joint Declaration made at the  ASEAN-Japan  Summit held on 5 November 2002 in Phnom Penh, Cambodia to  implement  measures for the realisation of a Comprehensive Economic Partnership ("CEP"), including elements of a possible Free Trade Area ("FTA") which should be completed as soon as possible within 10 years, and to establish a Committee to consider and draft a framework for the realisation of the CEP between ASEAN and Japan ("ASEAN-Japan CEP");

INSPIRED by the significant progress made in ASEAN-Japan relations which has spanned 30 years of an economic partnership that has been expanding over a wide range of areas;

DESIRING to minimise barriers and deepen economic linkages between ASEAN and Japan; lower business costs; increase intra-regional trade and investmen t; increase economic efficiency; create a larger market with  greater opportunities and larger economies of scale for the businesses  of  both ASEAN and Japan; and enhance our attractiveness to  capital  and  talent;

SHARING the view that the ASEAN-Japan CEP should benefit from, and should be complementary to the economic integration of ASEAN, and considering that achievement of the ASEAN Free  Trade  Area  ("AFTA") will enhance the value of ASEAN as a regional market  and  attract investment to ASEAN and that it is desirable that the Common Effective Preferential Tariff ("CEPT") Scheme among ASEAN Member States be implemented on a timely basis;

BEING confident that the establishment of an ASEAN-Japan  FTA covering trade in goods, services and investment will create a partnership between ASEAN and Japan, and provide an important mechanism for strengthening co-operation and supporting economic stability in  East  Asia;

RECOGNISING the important role and contribution of the  business  sector in enhancing trade and investment between ASEAN and Japan and the need to further promote and facilitate  their  co-operation  and  utilisation of greater business opportunities provided by the  ASEAN­ Japan CEP;

RECOGNISING the different stages of economic development among ASEAN Member States and between ASEAN and Japan, and the need to facilitate the increasing participation of the Kingdom of Cambodia, Lao PDR, the Union of Myanmar and the Socialist Republic of Viet Nam, (collectively, "the newer ASEAN Member States") in the ASEAN-Japan CEP·,

REAFFIRMING the rights and obligations of the respective countries under the Marrakesh Agreement Establishing the World  Trade Organization ("WTO Agreement"), and other multilateral, regional and bilateral  agreements and arrangements;

RECOGNISING the catalytic role that regional trade arrangements can contribute towards accelerating regional and global liberalisation and as building blocks in the framework  of the multilateral  trading system;

HAVE DECIDED AS FOLLOWS:

Objectives

The objectives of the ASEAN-Japan  CEP are to:

(a)                       strengthen economic integration between ASEAN and Japan through the creation of a  CEP;

(b)                     enhance the competitiveness of ASEAN and Japan in the world market through  strengthened  partnership  and linkages;

(c)                      progressively liberalise and facilitate trade in goods and services as well as create a transparent  and  liberal  investment regime;

(d)                     explore new areas and develop appropriate measures for further co-operation  and economic integration;  and

(e)                      facilitate the more effective economic integration of  the newer ASEAN Member States and bridge the development gap among the ASEAN Member  States.

Basic Principles

ASEAN  and Japan will adhere to the following  principles:

(a)    The ASEAN-Japan CEP should  involve  all  ASEAN Member States and Japan and include a broad range of  sectors focusing on liberalisation, facilitation and co­ operation activities, noting the principle of reciprocity, transparency  and mutual benefits to both ASEAN and  Japan;

(b)     The integrity, solidarity and integration of ASEAN will be given consideration in the realisation of the ASEAN-Japan CEP·,

(c)    The ASEAN-Japan CEP Agreement should be  consistent with the rules and disciplines of the WTO  Agreement;

(d)    Special and differential treatment should be provided to the ASEAN Member States in recognition of their different  levels of economic development. Additional  flexibility  should be accorded to the newer ASEAN Member   States;

(e)     Flexibility should be given to address the sensitive sectors in each ASEAN Member State and Japan;  and

(fJ Technical co-operation and capacity building  programmes should also be considered.

Measures for Comprehensive  Economic Partnership

The ASEAN-Japan  CEP should be realised by:

(a)                       carrying out the Measures for Immediate Implementation specified in Section 4;

(b)                     implementing programmes on Facilitation and Co-operation between ASEAN and Japan in the areas specified in Section  5; and

(c)                       implementing measures  for Liberalisation in

(1)          Trade in Goods

(2)          Trade in Services; and

(3)          Investment.

Measures For Immediate  Implementation

1. ASEAN and Japan decide to work on the following activities that could provide immediate benefits  on an accelerated  basis:

(a)    Technical assistance and capacity building to ASEAN, particularly for the newer ASEAN Member States, so as to improve their competitiveness to meaningfully participate  in the partnership  and to assist ASEAN Member States who are not members of the WTO and the World Customs Organization ("WCO") to work towards becoming  members  of the aforementioned organizations;

(b)    Trade and investment promotion  and facilitation  measures;

(c)    Trade and investment policy  dialogue;

(d)    Business  sector dialogue;

(e)    Measures to facilitate the mobility of business   people;

(f)     Exchange and compilation of relevant data such  as customs tariff and bilateral  trade statistics; and

(g)    Any other measures delivering immediate mutual  benefits.

1. ASEAN and Japan will continue to build upon existing or agreed programmes  in the areas identified above.

Facilitation  and Co-operation

1. ASEAN and Japan decide to conduct consultations from the beginning of 2004 on the areas of facilitation and co-operation, and to develop work programmes for the expeditious  implementation  of measures or activities in each of the following   areas:

(1)    Trade Related Procedures

Facilitation of trade-related procedures will  be  implemented  in such areas as co-operation on custom procedures  by computerisation, simplification and harmonisation, as  far  as possible,  to relevant  international standards.

(2)    Business Environment

Recognising that the satisfactory business environment is an indispensable part of the attractiveness to investors, each ASEAN Member State and Japan will make the effort to improve the  business  environment  and enhance co-operation in related fields.

(3)    Intellectual Property Rights ("IPR")

Japan will support ASEAN Member States in developing, improving, enhancing and implementing their IPR capabilities, and in promoting accession to IPR-related international agreements. Co-operation between ASEAN and Japan, such as information exchange, will also be  encouraged.

(4)    Other Areas  of Co-operation:

Energy

Co-operation in oil stockpiling, natural gas utilisation and promotion  of energy efficiency.

Information and  Communications  Technology ("ICT")

Co-operation in developing ICT infrastructure, Information Technology ("IT")-related legal systems, and IT-related human resource, and promoting exchanges of IT researchers  and engineers.

Human Resource Development  ("HRD")

Co-operation among  the  relevant  organisations  in each ASEAN Member State and Japan, especially in  the field of HRD for  experienced  engineers  and middle management.

Small and Medium  Enterprises  ("SMEs")

Co-operation in exchanging views on policies relating to SMEs and expanding business opportunities of SMEs.

Tourism and hospitality

Co-operation in implementing  seminars  or  information  exchange on tourism and hospitality.

Transportation  and logistics

Co-operation for efficient cargo transport system, safe and sustainable shipping and safe and efficient air transport.

Standards and conformance and mutual recognition arrangement

Exchange of information  concerning  the  standards and conformance policies, and capacity building of standardisation  organisations  m  each  ASEAN Member State.

Other possible technical co-operation  projects, including environment, automobile, bio-technology, science and technology, sustainable  forest management, competition policy, food security and financial services co-operation.

1. ASEAN and Japan will continue to develop work programmes in new areas of facilitation and  co-operation.

Liberalisation

1. ASEAN and Japan will start the consultations on the  ASEAN­  Japan CEP on the liberalisation of trade in goods, trade in services, and investment, from the beginning of 2004 by  discussing  the  basic  principles of ASEAN-Japan cumulative rules of origin and customs classification  and collecting  and analysing trade and custom data.

1. ASEAN and Japan will initiate a negotiation on  the  CEP  Agreement between ASEAN and Japan as a whole,  taking  into  account the achievements of bilateral negotiations  between  each  ASEAN  Member State and Japan, and the further progress of the ASEAN integration process. Such Agreement should be consistent with the WTO Agreement.

1. During the negotiation, those ASEAN Member States that have not concluded bilateral Economic  Partnership  Agreement  ("EPA")  with Japan will negotiate concessions bilaterally. Schedules of liberalisation concessions between Japan and those ASEAN Member States that have concluded a bilateral  EPA  should not be renegotiated  in the negotiation  of the ASEAN-Japan CEP Agreement. All schedules of liberalisation concessions will be annexed to the ASEAN-Japan  CEP  Agreement.

of the ASEAN-Japan CEP Agreement. All schedules of liberalisation concessions will be annexed to the ASEAN-Japan  CEP Agreement.

(1)   Trade in Goods

ASEAN and Japan decide to progressively eliminate duties and other restrictive regulations of commerce (except, where necessary, those permitted under Article XXIV (8) (b) of the General Agreement  on  Tariffs and Trade 1994 in Annex l A to the WTO Agreement ("GATT"))  on substantially all trade in goods in order to establish an FTA between ASEAN and Japan which will include, but will not be limited, to the following:

(a)          cumulative rules of origin;

(b)          detailed rules governing the tariff reduction or elimination programmes including principles governing reciprocal commitments;

(c)         non-tariff measures including technical barriers to trade;  and

(d)          trade remedy measures based on the principles of the WTO Agreement.

(2)   Trade in Services

ASEAN and Japan decide to progressively liberalise trade  in  services with substantial sectoral coverage consistent with the rules of the WTO Agreement. Such liberalisations should be directed  to:

(a)                      progressive elimination of substantially all discrimination between or among ASEAN and Japan and/or prohibition of new or more discriminatory  measures  with respect  to trade in services between ASEAN and Japan, (except  for  measures permitted under Article V(1)(b) of the General Agreement on Trade in Services ("GATS") in Annex  l B to the WTO Agreement);

(b)                      expansion in the depth and scope of liberalisation of trade in services;

(d)  enhanced  co-operation  in  services  between  ASEAN  and Japan   in order to improve efficiency and  competitiveness.

(3) Investment

In order to promote investment, ASEAN and Japan decide   to:

(a)                       create a liberal and competitive  environment;

(b)                      strengthen co-operation in investment, facilitate investment and improve transparency of investment rules  and regulations; and

(c)                       provide for the protection of investors and   investment.

Most-Favoured-Nation Treatment

For ASEAN Member States which are not yet members of the  WTO,  Japan will continue to apply the general Most-Favoured-Nation ("MFN") treatment as stipulated in Article I of the GATT. Japan will endeavour to provide MFN treatment under the WTO on a reciprocal   basis.

 General Exceptions

Subject to the requirement that such measures are not  applied  in  a  manner which would constitute a means of arbitrary or unjustifiable discrimination between or among ASEAN and Japan where the same conditions prevail, or a disguised restriction on trade within the ASEAN­ Japan CEP, nothing in this Framework should prevent any individual ASEAN Member State and/or Japan from adopting  or  enforcing  measures, in accordance with the rules and disciplines of the WTO Agreement, for:

(a)     the protection of the national security of each ASEAN Member State and/or Japan;

(b)    the protection of articles of artistic, historic and archaeological  value; or

(c)     such other measures which each ASEAN Member State and/or Japan deems or deem necessary for the protection of public morals or to maintain public order, or for the  protection  of human, animal or plant life and  health.

Consultation

Any differences concerning the interpretation or implementation of this Framework  should be settled amicably by consultations  and/or  mediation.

Timeframes

I. ASEAN and  Japan  will  start  consultations  on  the  ASEAN-Japan CEP on the liberalisation of trade in goods, trade in services and investment, from the beginning of 2004, as set forth in Section  6,  paragraph 1.

ASEAN and Japan will make maximum efforts to commence the negotiation on the CEP Agreement between ASEAN and Japan as  a  whole, referred to in Section 6, paragraph 2, from the beginning of 2005. ASEAN and Japan will endeavour to conclude the negotiation as soon as possible, taking into account the need to leave sufficient time for implementation.

The implementation of measures for the realisation of the ASEAN­ Japan CEP, including elements of a possible free trade area, should be completed as soon as possible by 2012, taking into account the economic levels and sensitive sectors in  each  country,  including  allowing additional five (5) years' time for the newer ASEAN Member   States.

Institutional  Arrangements  for this Framework

1. The ASEAN-Japan Committee on Comprehensive Economic Partnership ("AJCCEP") will continue to  carry  out the work  set out in  this Framework.
2. AJCCEP may establish other bodies as may be necessary to co­ ordinate and implement this Framework, including the supervision, co­ ordination and review of the implementation of other measures undertaken pursuant to this Fran1ework.

1. The ASEAN Secretariat will provide  the  necessary  secretariat support to the AJCCEP whenever  and wherever  the n1eetings  are   held.

SIGNED in Bali, Indonesia, this 8th day of October 2003 in duplicate in the English language.

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