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ASEAN-EEC Economic Relations
Proceedings of a Conference on
ASEAN-EEC Economic Relations organized by the Institute of Southeast Asian Studies ASEAN Economic Research Unit 6-8 August 1981 Singapore
Edited by Narongchai Akrasanee
and Hans Christoph Rieger
ASEAN ECONOMIC RESEARCH UNIT INSTITUTE OF SOUTHEAST ASIAN STUDIES
The Institute of Southeast Asian Studies was established as an autonomous organization in May 1968. It is a regional research centre for scholars and other specialists concerned with modern Southeast Asia. The Institute's research interest is focused on the manyfaceted problems of development and modernization, and social and political change in Southeast Asia. The Institute is governed by a twenty-two-member Board of Trustees on which are represented the National University of Singapore, appointees from the government, as well as representatives from a broad range of professional and civic organizations and groups. A ten-man Executive Committee oversees day-to-day operations; its ex-officio chairman is the Director, the Institute's chief academic and administrative officer.
The responsibility forfocts and opinions expressed in this publication rests exclusively with the contributors and their interpretations do not necessarily riflect the views or the policies if the Institute or its supporters.
Published in 198:! by Institute of Southeast Asian Studies Heng Mui Kcng Terrace, Pasir Panjang Singapore 0511 ©Institute of Southeast Asian Studies ISBN 9971-902-17-8 Printed by Kim Hup Lee Printing Co. Pte. Ltd. ~ Singapore
Contents Page FOREWORD
v
BUILDING BRIDGES AND OPENING DOORS by Narciso G Reyes
1
1:
TRADE
ASEAN-EC Trade Relations: by Narongchai Akrasanee
An Overview
10
Trends of EC Protection and the Prospects of ASEAN Trade by Jean Waelbroeck
52
Issues Relating to the EC's Imports of ASEAN Primary Products by Hugh Corbet
92
ASEAN Manufactured Exports in the EC Markets: An Empirical Assessment of Common and National Tariff and Non- Tariff Barriers Confronting Them by Rolf J Langhammer
125
A Constant-Market-Shares Analysis of ASEAN Manufactured Exports to the EC by Pitou van Dijck and Harmen Verbruggen
194
II: INVESTMENT EC Investment in ASEAN by Chia Siow Yue
256
EC Investment in ASEAN and the Transfer of Technology: The Malaysian Experience by Chee Peng Lim
314
ASEAN-EC Joint Ventures: A Case Study of Promoted Firms in Thailand by John C S Tang and Wilson T Ho
346
Page
APPENDICES 1.
Text of the Co-operation Agreement Between Indonesia, Malaysia, Philippines, Singapore and Thailand -- Member Countries of the Association of Southeast Asian Nations - and the European Economic Community
370
2.
Selected Bibliography
377
3.
List of Participants
381
4.
List of Abbreviations
386
Foreword
Economic
relations
between
the
countries of the Association of Southeast
Asian Nations (ASEAN) and the countries of the European Community (EC) have Merchant adventurers, a long history as well as great future potential. colonialists, traders, and foreign investors from Europe have in the last two centuries brought about a continuous exchange of goods, interests and ideas with Southeast Asia. the
Southeast
Singapore
and
Belgium,
Asian
Luxembourg 1
countries
Thailand
Denmark,
In more recent times, mutual co-operation among the
on
France,
Netherlands,
of
one
Indonesia,
hand
and
Malaysia,
the
European countries of
Federal Republic of Germany,
and
the
U.K.
Philippines,
Ireland,
on the other _have led
Italy, to the
creation of two economic groupings, ASEAN and the EC, dedicated to the idea of mutual benefits through trade.
The EC is ASEAN's third most important
trading partner, and, although the proportion of ASEAN 's trade with the EC is declining slightly, groupings
the exchange of goods and services between the two
is still increasing
ASEAN is important for Pacific
rim.
important
The
factor
rapidly
both in
terms of volume and
value.
EC investors as the fastest growing area of the
political stability
contributing to
this
that
has
emerged
attraction
as
in
ASEAN
is an
well as an important
reason why ASEAN as a grouping can expect to achieve more at the economic bargaining table than may be commensurate with the relatively low importance of ASEAN trade for the EC. Although not
always
investment methods
of
is
likely
to
be
beneficial
develop
automatically
according
to
potential.
Lack
knowledge
about
operation
missed chances. ar.d
trade
and
of
styles
of
negotiation
for
both sides it does
comparative available are
advantage
or
opportunities,
frequent
causes
of
Dissemination of information, exchange of views and ideas
the analysis of potential opportunities are therefore important factors
for
trade
expansion
and
consequent
welfare
increases.
It
is
for
this
reason that research and academic exchange and co-operation have an important role to play. Recognizing this fact,
the ASEAN Economic Research Unit of the
Institute of Southeast Asian Studies in Singapore is undertaking a research project on ASEAN-EEC Economic Relations.
In each phase of this three-year
project a number of scholars from the ASEAN region as well as from Europe are asked to prepare studies on specific aspects of these relations and to submit them for discussion at a conference involving academics, businessmen and diplomats from a large number of countries from the two groupings.
The
first of the three conferences planned was held in Singapore from 6 to 8 August 1981, and the present book is the outcome of the research presented there. By
way
of
introduction
we
Secretary-General of ASEAN, H.E.
reproduce
Narciso G.
the
address
Reyes.
by
the
We would like to
express our gratitude for the encouragement provided by his presence at the conference. The conference papers themselves are arranged in two groups. first deals with trade and the second with investment.
The
In an overview of
ASEAN-EC trade relations, Narongchai Akrasanee presents an ASEAN point of view.
His counterpart from the EC, Jean Waelbroeck then takes a closer
look at the trends of protection in the EC and the prospects for ASEAN trade in the light of these trends. deal
with
the
potential
for
Hugh Corbet and Rolf Langhammer then
ASEAN 's
manufactured goods respectively.
exports
of
primary
products
and
Pitou van Dijck and Harmen Verbruggen in
their constant market shares analysis of ASEAN manufactured exports to the EC come
to
the
tentative
conclusion
that the competitiveness of
ASEAN
manufactured products is gaining ground in the markets of the EC. In the section on investment, Chia Siow Yue places EC investments in ASEAN
in
a
quantification,
historical a
picture
and of
global
perspective.
growing
investments
Despite of
the
difficulties EC
in
of
ASEAN
emerges, although Japanese and U.S. investors appear to be increasing their respective policies
shares.
that
are
While more
or
the
ASEAN
less
open
to
countries foreign
follow direct
industrialization investment,
this
does not necessarily mean that all the potential benefits from such investment are being reaped.
Chee Peng Lim analyses this in the case of EC in-
vestments in Malaysia while John Tang and Wilson Ho provide an analysis of Thai-European
joint-venture
undertakings
in
Thailand.
There
can,
of
course, be no question of covering these very complicated matters exhaustively within
the covers of a single book.
But the contributions on the
technology transfer effects of EC investments in Malaysia and Thailand may serve
as
indications
of
further
research
that
needs
to
be
done
in
this
field as well as in the other ASEAN countries. This
applies
to
the
book
as
a
whole.
We are
presenting here
interim results of an ongoing
research endeavour and anticipate a further
publication
two
from
each of
the
phases of the project that are yet to
follow. A rather surprising result of the 1981 ASEAN-EEC Economic Relations Conference was the fact that the expected dividing line between economists from ASEAN and from the EC did not become manifest in the course of the deliberations.
Another
dividing line appears to be
that between the economists on makers on
the
other.
the one hand
and
While economists expect
far
more
important:
the political decisionthe
reduction
of
trade
barriers and the opening of economies to investments from abroad to lead to increases of welfare both for the ASEAN countries and the countries of the EC,
the pressures on political decision-making of those who are already in
positions
of
power
appear
to
be
strengthening
protectionist
tendencies.
While the power of business and trade unions is highly organized, the power of the consumer is highly dispersed and cannot be brought to bear with the same force on those who decide on economic policies.
This fact seems to
point to a need for more political science research on the factors of economic co-operation and for more public relations efforts on the part of the economists. The making
this
editors
would
publication
like
to
possible,
thank in
all
those
particular
contributors at the August 1981 conference.
who the
participated participants
in and
We would like to extend our
gratitude to the staff of the Institute of Southeast Asian Studies who have assisted in one way or another to bring out this publication.
Bangkok, 12 June 1982
;\;arongchai Akrasanee
Singapore, 12 June 1982
Hans Christoph Rieger
1
Building Bridges and Opening Doors Narcisco G. Reyes
ASEAN (the Association of Southeast Asian Nations) and the EC (the European Community) are two groups of nations, one in Asia, the other halfway across the world in Europe, with a combined population of more than 500 million people; - both committed to full, voluntary co-operation; constituting areas of relative stability at a deeply troubled time in history; together representing a tremendous potential for good in the world. In
this
context,
the
convening of
this
Conference
is timely
and
most welcome. I feel greatly honoured to have been invited to participate in this important Conference, together with such a distinguished group of scholars and experts from Europe and Asia.
Various aspects of ASEAN-EC economic
relations will be discussed in depth during the next three days. useful
at
this
opening
exchanges
of
views,
described
as
the
session,
to
recall
ASEAN-EC
as
part
the
brief
Dialogue
of
the
context of
history
in
the
It may be
of
the
what
light
of
is the
ensuing
commonly distinctive
concerns and characteristics of the two co-operating communities. Structurally, ASEAN and the EC present a study in contrast.
The
European Economic Community was formally established by the Treaty of Rome in
1957
with
centralized
supra-national objectives.
community
institutions
and
well
defined
It has since become a model for structuring, as
well as a reference point for evaluating the performance of other regional organizations.
ASEAN,
on
the
other
hand,
began
life
as
a
loose
inter-governmental association under the Bangkok Declaration of 1967, and while
its
institutions
expanding
activities
have they
evolved
in
have
response
to
the
remained
highly
in
terms
needs
of
its
decentralized,
geographically and sector ally. With Declaration,
its
basic
ASEAN
aims
expressed
co-operation
in
general its
initial
in
stages
the
Bangkok
was
largely
2
exploratory.
Strong centralized
institutions were felt to be unnecessary,
perhaps even inimical, Organizational cautious
to the fostering of the substance of co-operation. flexibility became a hallmark of ASEAN; it followed a
approach
to
institutional
change.
It
took
nine
years
before
co-operation was deemed substantial enough to justify the setting up of a central ASEAN Secretariat, and all of ten years before an appropriately articulated committee structure was established. A fundamental distinction, of course, arises from the fact that the EC
is
an
association
of
industrialized,
economically developed
countries,
while ASEAN exemplifies the growing trend towards economic co-operation among developing countries. From this standpoint, ASEAN-EC economic relations may be regarded as an aspect of the ongoing, albeit periodically stalemated North -South Dialogue. ASEAN took a keen interest in the EC at an early stage in its own development. The possibility of forging closer co-operation with the EC was discussed by the ASEAN Foreign Ministers at their Fourth Meeting in Manila in March 1971, and soundings were subsequently made with the EC Commission. In April the following year the Ministers approved the establishment of
a
Special
institutionalized
Co-ordinating joint
ASEAN
Committee Dialogue
with
(SCCAN) the
EC.
to
conduct
an
To
facilitate
the
Committee's work, the ASEAN Brussels Committee (ABC), comprising ASEAN diplomatic representatives accredited to the EC, was also established. number
of
meetings
culminating in
the
with
the
EEC
establishment of
Commission a
formal
were
Dialogue
creation of the ASEAN-EC Joint Study Group (JSG).
related
matters, issues,
broadened
such as the
market access,
scope
of
the
in
held,
1975 with
the
The first annual meeting
of the Joint Study Group was held in July 197 5. trade
subsequently
A
While it discussed mainly
commodity price stabilization and
dialogue
in
subsequent
to include industrial and development co-operation.
meetings
was
A further
step was the initiation in 1977 of a dialogue between the ASEAN Ambassadors in Brussels and the Committee of Permanent Representatives (COREPER) of the
EC
Council
of
Ministers.
ministerial meeting.
Their
discussions
laid
the
groundwork
for
a
3
The
first
ASEAN-EC
November 1978.
Ministerial
Meeting
was
held
in
Brussels in
Besides reaffirming their support for a New International
Economic Order and agreeing to co-operate in future international meetings such as the North-South Dialogue, the Ministers agreed on the desirability of placing relations between the two groups on a firmer formal
Co-operation
Agreement.
basis through a
As an indication of its growing interest
in ASEAN, the EC established a Commission of the European Community for South
and
consultations,
Southeast ASEAN
Asia
in
Bangkok
in
designated
Thailand
as
late
1979.
To
facilitate
the country co-ordinator
for
the ASEAN-EC Dialogue. Finally, after extensive preparatory work, the ASEAN-EC Co-operation Agreement was signed at the Second ASEAN-EC Ministerial Meeting in Kuala Lumpur on 7 March 1980.
The main emphasis of the Agreement is on economic
co-operation and development. a
Joint
Declaration
The Meeting also issued two other documents:
outlining
the
modalities
of
economic
and
technical
co -operation, and a Joint Statement on political issues. The ASEAN-EC Co-operation Agreement provides for the formation of a Joint Co-operation Committee (JCC) to promote and keep under review the various
ASEAN-EC
co-operation
activities.
The
first
Joint
Co-operation
Committee Meeting was held in Manila in November 1980; the second meeting is scheduled to be held in Brussels in mid-October this year, immediately following the Third ASEAN-EC Ministerial Meeting in London.
Between Joint
Co-operation Committee Meetings, ongoing consultations are conducted by the Contact Group comprising officials from the ASEAN Brussels Committee and the European Commission.
A Joint Working Group on Trade Issues, set up
during the First Joint Co-operation Committee Meeting, is also functioning. Besides the ASEAN Brussels Committee, similar ASEAN Third -Country Committees were established in three EC capitals:
the Bonn ASEAN Committee
(BAC), the ASEAN Paris Committee (APC) and the ASEAN London Committee (ALC). Like the ASEAN Brussels Committee they are composed of the ASEAN Ambassadors in these capitals. Co-ordination is maintained among these ASEAN Committees in the EC. Since 1972, the ASEAN- EC Dialogue has acquired substance.
ASEAN
enjoys the EC' s Generalized System of Preferences which has recently been
4
extended for another ten years.
While not all of ASEAN 's requests for GSP
improvements have been met, the improved market access extended to ASEAN under the EEC Generalized System of Preferences has been a positive factor in ASEAN-EC trade relations. In the field of trade promotion, ASEAN has received EC financial and technical
assistance
information
for
seminars,
trade
missions,
buyers'
missions,
participation in trade fairs and exhibitions. Trade various
Promotion
Assistance met in
ASEAN proposals
for
export
promotion
in-store
and
market
promotion,
and
An ASEAN-EC Working Group on
Bangkok last September
EC assistance.
and
approved
ASEAN has also concluded
negotiations for the establishment of an EC-assisted ASEAN Trade Promotion Centre in Rotterdam. To promote industrial co-operation, the EC sponsored two successful ASEAN-EC Industrial Conferences, the first in Brussels in April 1977; the second in Jakarta in February 1979.
The first Joint Co-operation Committee
Meeting agreed that future conferences should be organized on a sectoral basis,
with
industries,
priorities
energy
given
industries,
to
chemical
electrical
and
industries, electronic
engineering
industries,
and
resource-based industries. The assistance,
EC
has
such as
also
extended
in -plant
to
ASEAN
various
training programmes,
forms
training in
of
technical
management
and technology transfer, and training programmes for teachers. A Working Group set up by the First Joint Co-operation Committee Meeting
agreed
non-conventional agriculture
and
on
various
energy, natural
forms
of
environment, resources.
co-operation science
In
March
and this
in
the
fields
technology, year,
a
of and
two-year
EC-assisted programme in science and technology consisting of fellowships, experts seminars and studies was approved for implementation in the Autumn, the full cost of the project having been allocated. To enhance development co-operation, the EC is prepared to assist ASEAN in projects in fields as diverse as agriculture and transport.
The
EC continues to support ASEAN projects such as the Regional Collaborative Programme on Post-Harvest Technology for Grains, the Regional Study on the
5 Commercialization of Timber Resources, and Aquaculture Development.
It has
also indicated its readiness to support such projects as the Study on Land Transportation, a Regional Survey on Transport, a Pest Control Programme, and
a
Regional
development
Fisheries
assistance
Project o
could
be
It
is
hoped
rationalized
that
and
funding
for
consolidated
such
into
a
Development Fund o ASEAN has been seeking to develop significant financial co-operation with the EC.
The EC has responded to the extent of agreeing to arrange for
a Seminar on Access to European Capital Markets. that
it
would
consider
It has also indicated
assisting in securing financing in
European capital
markets for ASEAN industrial projects. The role of private enterprise has not been overlooked o In both ASEAN and the EC, the private sector is being encouraged to set up its own framework of co-operation o
ASEAN has sought wide participation for its
private sector in ASEAN-EC Dialogue activities o on
Industrial
Co-operation
have
provided
a
The ASEAN-EC Conferences
forum
for
the
discussion
of
joint ventures between ASEAN businessmen and their counterparts in the ECo The Second Conference in 1979 was attended by 776 participants, of which 305 were from the EC, representing some of Europe's most important industries and financial institutions. This rather sketchy resume recounts what may be described as the preparatory
period
guidelines,
formulating
initiating
studies
of and
ASEAN-EC a
co-operation,
basic
training
a
agreement,
programmes,
time
setting
conducting
for
laying down
up
committees,
seminars,
holding
meetings, exchanging visits, getting to know one another. These intention They nature,
various
steps,
on both sides
include
a
hopefully
actions
to develop
lengthening suggestive
list of
and
decisions
denote
a
mutually beneficial economic of
more
projects,
mainly
impressive
of
a
developments
sincere relations.
preparatory to
follow o
Taken together, they provide a kind of framework and elements of a basis for more meaningful and substantial economic co-operation. While giving due credit to these useful preliminary steps, however, some observers consider
the
basis
being
laid
as
tenuous,
the framework
6
being
fashioned
relations
as
inadequate
marginal,
and
considering
their
the
impact
urgency
on of
ASEAN-EC ASEAN's
economic
trade
and
development needs, the complexity of the problem of giving substance to the rhetoric
of
the
Dialogue,
and
the
magnitude
of
the
economic
stakes
involved. The professed desire to expand ASEAN-EC trade is a case in point. As a percentage of ASEAN total trade, ASEAN trade with the EC accounted for an average of about 14 per cent in the three-year period from 1977 to 1979. On the other hand, trade with ASEAN accounted for only about 1.14 per cent
of the EC total trade.
Much of the EC trade is internal.
In 1980, for
instance, 58.42 per cent of EC total trade was between its own members, fostered by the advantage of a customs union and the additional inducements of
proximity
significantly, On
top
and
familiarity.
ASEAN has
of
it,
To
to cope
protectionist
increase
such
as
trade
trends,
fairs,
promote
ASEAN products
in
manifested
seminars
which
exports
to
the
EC
with this formidable built-in constraint.
barriers, compound the problem for ASEAN. projects
its
may
tariff
and
non-tariff
They tend to negate well-meaning and
have
trade
little or
missions,
intended
to
no
real prospect of
the
field
entering or successfully competing in the EC market. is
It
building
becoming
bridges
in
increasingly the
form
obvious
of
additional
increased contacts may not be enough.
in
that
studies,
of
trade,
discussions
and
It will also be necessary to open
the doors of the EC market a little wider to ASEAN exports. This
is
just
one
of
the
crucial
issues
that
challenge
the
statesmanship, the political will and the capacity of the ASEAN-EC Dialogue partners
to
realize
the
full
potential
of
their
ensuring a better future for their two communities. the
fields
of
industrial
co-operation
and
economic
relations
in
Other major issues in
co-operation
for
urgently await the same high order of attention and action.
development These issues
have been deferred or skirted rather than confronted during the preparatory period of ASEAN-EC Dialogue.
They should constitute part of the agenda for
the next stage of ASEAN-EC co-operation. I am
sure
that
your
learned discussions will help illuminate vital
7 aspects of that agenda. this
important
Conference
I congratulate you for your initiative in holding and
wish
you
success
in
your
deliberations.
PART 1
TRADE
10
ASEAN-EC Trade Relations: An Overview Narongchai Alcrasanee This essay discussion
provides on
trade
an
overview
relations
and
between
a
framework
the
within
Association
of
which detailed Southeast
Asian
Nations (ASEAN) and the European Community (EC) may be carried out.
The
emphasis will be more on ASEAN's point of view of the trade relations. The EC is ASEAN 's major trading partner after Japan and the United States.
The EC accounts for about 14 per cent of the total ASEAN trade on
both the export and the import sides.
This proportion has remained fairly
constant over the last few years, implying that ASEAN 's trade with the EC has been increasing in line with total ASEAN trade, which has been growing very rapidly by world standards.
Since trade is a very important component
of the ASEAN economies, it follows that ASEAN 's trade with the EC has significantly contributed to the development of ASEAN. On the other hand, to a very large economy like the EC,
appears insignificant.
ASEAN
The EC' s exports to and imports from ASEAN have
never exceeded two per cent of its total exports and imports.
However,
ASEAN 's exports to the EC are highly specialized and the EC relies heavily on ASEAN for such items as rubber, cattle feed.
The pattern of
of
tapioca
and
tapioca,
tin, palm oil, and
trade becomes even more specialized when bro-
ken down according to country. sellers
timber,
copra
Thailand and the Philippines are the major respectively
to
the
EC.
Indonesia
and
Malaysia are more important to the EC as importers, but they are also major suppliers of rubber, timber, tin and palm oil. tured goods and electronics to the EC.
Singapore exports manufac-
More recently ASEAN textiles have
made a breakthrough in the European market with such success that the EC has set limits on textile imports from ASEAN.
Other ASEAN manufactured
goods are also beginning to appear in the European market.
*
The author wishes to thank Mr Sophon Khanti-Akom for research assistance and the Delegation of the European Communities for South and South-East Asia in Bangkok for its co-operation.
11
While
trade
with
ASEAN
is
still
relatively
insignificant
for
the
EC, the specialized nature of the trade has. already caused some conflicts. For example, the EC has imposed a quota on Thai tapioca exports to the EC. A quota on textiles has also been set through the Multi Fibre Arrangement. However,
the EC has very well
recognized
the significant role played by
ASEAN in both economic and political areas, and has made efforts to maintain
and
promote
good
economic
relations
with
ASEAN.
This was first
carried out through a dialogue, and later culminated in a formal economic agreement signed in November, 1979,1 The following sections will first present the economies of ASEAN and the EC and then discuss their external economic relations. tions,
including
In section 3 the focus will be on ASEAN-EC trade relainstitutional
arrangements
which
trade between the two groups of countries.
are
aimed
at
promoting
The last section will discuss
the problems and prospects of ASEAN-EC trade relations.
ECONOMIES OF ASEAN AND THE EC
The member countries of ASEAN and of the EC are all considered to belong to the
Western
group
economic system.
of
economies
following
the
free-enterprise,
market-
The economies are open in the sense that foreign trade
and investment are important economic activities which are vigorously promoted.
But here the similarity ends.
In more detail it will be shown that
the two economic groups are very different.
lt witt, however, be ar'E,ued
that the differences have made the two groups complementary and that consequently trade relations are expected to continue to expand. The
ASEAN
countries
countries in the world.
are
among
the
fastest
growing
developing
The high growth rates have been sustained through
the 1970s, during the time when the world economy was faced with a series of
oil
shocks
and
international
financial
instabilities
(Table
The
1).
strength of the ASEAN economies is due to the availability of resources, land as well as minerals, in four ASEAN countries and the export-oriented strategy of all
the
five
countries,
particularly Singapore.
Later
it will
be shown, however, that the ASEAN economies are not without problems.
In
"""'
TABLE 1
~"-:)
ASEAN Economies - Some Basic Indicators, 1978
ASEAN
Indonesia
Malaysia
Phi I ippines
Singapore
AREA (' 000 sq. km.) %of ASEAN total
3,172 100.0
2,027 63.9
330 10.4
300 9. 5
-
1
514 16.2
POPULATION (million) %of ASEAN total
241.7 100.0
136.0 56.3
13.3 5.5
45.6 18.9
2.3 0.9
44.5 18.4
116.2 100.0 481
-
49.0 42.0 360 7.8
14.5 12.5 1,090 7.8
23.3 20.0 510 6.3
7.6 6. 7 3,290 a. 5
21.8 18.9 490 7.6
---
31.0 33.0 9.0 36.0
25.0 32.0 17.0 43.0
27.0 35.0 25.0 38.0
2.0 35.0 26.0 63.0
27.0 27.0 18.0 46.0
Thailand
GNP {US$ billion) ASEAN total GNP per capita (US$) GOP Real Growth 197Q-78
%of
SHARE OF GOP (%) Agriculture Industry Manufacturing Services
IMPORTS Total (US$ billion) % of ASEAN total Imports as %of GNP
37.3 100.0 32.1
6.9 18.5 14.2
5.9 15.9 40.7
5.3 14.2 22.9
13.8 36.9 179.2
5.4 14.4 24.8
EXPORTS Total (US$ billion) % of ASEAN total Exports as %of GNP
36.1 100.0 31. 1
11.5 31.8 23.7
7.4 20.5 51.0
3.4 9. 5 14.7
9.8 27.1 127.3
4.0 11. 1 18.3
Sources:
World Bank, World Develorment Reportf 1980; Chia Slow Yue, ed., ASEAN Economic CO-operal on: ~roceea n~s of the ASEAN Economic · -----~ Research Unit Workshop, (Singapore: IS As, 1981>.
13
fact,
while the economies continue to grow rapidly they have also become more vulnerable to instability which, in turn, will affect ASEAN foreign
trade strategy in the future. ture,
Among the ASEAN countries there are variations in economic strucas revealed by Table 1. With a population of about 140 million,
Indonesia is the largest ASEAN country. capita income. lation and
It, however, has the lowest per
Singapore appears at the other end, with the smallest popu-
the highest per
capita income.
Malaysia has a population of
13-14 million and is the most prosperous ASEAN country after Singapore. Thailand and
the
Philippines share
size and income levels.
much similarity in terms of population
It may be noted that none of the ASEAN countries
is considered to be a poverty country by international poverty standards. With
the exception of
Singapore,
the ASEAN economies are still
based on the primary sector, with a few primary commodities accounting for most of the major economic activities. ASEAN are rice, crude oil.
The major primary commodities of
maize,
rubber, timber, palm oil, tin, copra, sugar and all ASEAN countries have been industrializing very
However,
rapidly, with manufacturing value added within the range of 20 per cent of GDP except for Indonesia. The resource
pattern
of
ASEAN
endowment and
petroleum,
economic
can
be
constraints.
explained
With
the
largely
by
availability of
mineral and forestry resources, and with the population mostly
concentrated in Java,
Indonesia has to develop its resources for export in
order to import food to feed its development needs. concentrate Thailand
production
on
and
Singapore is an island city state, and thus must
trading,
the
its population and capital goods to satisfy
manufacturing,
Philippines
have
allow
them
to
hence
food
processing industries.
exchange
for
Malaysia
is
specialize oil
and
relatively
and
relatively
other
low
man-land
in agricultural products,
other the
most
goods
for
self-sufficient
their
is
activities.
ratios,
particularly
The surplus food
capital
service
which
food,
then exported
development
economy
among
and in
needs. ASEAN
The pattern of production in Malaysia is determined firstly by its own need, and secondly by its potential to develop certain sectors for
countries.
14
export.
Like other ASEAN countries, Malaysia needs to import capital goods
for its development needs. It is clear from the above that the common feature of the ASEAN economies is the foreign trade orientation, as may be seen from Table 1. Singapore is the most trade-oriented economy, followed by Malaysia. In the other three ASEAN countries, the ratio of foreign trade (exports plus imports) to GNP works out at about 40 per cent in 1978, with the proportion continuously rising.
As ASEAN economies continue to grow in the 1980s, it
is expected that the significance of foreign trade to the ASEAN economies will also continue to grow.
The pattern of cur rent development and future
problems and prospects will be discussed
in more detail in the concluding
section of this paper • A comparison of basic economic indicators of the EC from Table 2 with those of ASEAN from Table 1 reveals a very interesting contrast between the two groups.
In terms of population, the EC is about the same size
as ASEAN.
But the EC country with the lowest per capita income (Ireland)
still
higher
has
a
per
capita
highest per capita income
income
(Singapore).
than
the
ASEAN country
with
the
The average per capita income of
the EC in 1978 was US$6, 938, or 14 times the ASEAN average. year the total GNP of the EC was 15 times the GNP of ASEAN. a much richer group of countries than ASEAN.
In the same Thus the EC is
The only country in ASEAN
which comes close to the EC level of economic development is Singapore ,2 While the EC is much richer than ASEAN, its real growth rate in more recent times has been much lower than that of the ASEAN economy, averaging between 2 and 3.7 per cent during the period 1970-78, compared to the average of 6-8 per cent for ASEAN.
It is true that the EC economy has
a much larger base, and a comparison of its growth rate with that of ASEAN is not very meaningful.
Nevertheless, it must be admitted that the EC has
entered a period of slow growth, which will have important implications on its foreign trade with the rest of the world. As countries.
is
well
known,
the
EC
consists
entirely
of
industrialized
Thus, the share of industrial value added in GDP is very high,
ranging between 34 ·and 48 per cent, while the share of agriculture is very
TABLE 2 EC Economies- Some Basic Indicators, 1978
Belgium
Denmark
France
1,529 100.0
31 2.0
43 2.8
547 35.8
249 16.3
70 4.6
301
19.7
259.5 100.0
9.8 3.8
5.1 2.0
53.3 20.5
61.3 23.6
3.2 1.2
'· 798.5 100.0 6,938
89.1 5.0 9,090 3.3
50.6 2.8 9,920 2. 7
440.3 24.5 8,260 3.7
587.3 32.7 9,580 2.4
2.0 37.0 26.0 61.0
n.a.
n.a. n.a. n.a.
5.0 37.0 27.0 58.0
EC
Nether I ands
U.K.
3 0.2
41 2. 7
244 16.0
56.7 21.8
0.4 0.2
13.9 5.4
55.8 21.5
11.1 0.6 3,470 3.4
218.7 12.1 3,850 2.8
4.2 0.2 10,540 n.a.
116.9 6.5 8,410 3.2
280.7 15.6 5,030 2. 1
3.0 48.0 38.0 49.0
n.a. n.a. n.a. n.a.
7.0 42.0 n.a.
n.a. n.a. n.a.
51. I
n.a.
4.0 34.0 n.a. 62.0
2.0 36.0 25.0 62.0
FRG
Ireland
Italy
Luxembourg
AREA { 1 000 sq. km. > % of EC total
POPULATION {million) % of EC total GNP
(US$ billion) % of EC total GNP per capita (US$) GOP Real Growth 197D-78
-
SHARE OF GOP Agriculture Industry Manufacturing Services
--
IMPORTS Total (US$ billion) % of EC total Imports as % of GNP
460.9 100.0 25.6
48.4 10.5 54.3
14.8 3.2 29.2
81.8 17.7 18.6
120.7 26.2 20.6
7. 1 1. 5 64.0
56.4 12.2 25.8
n.a.
--
53.1 11.5 45.4
78.6 17.1 28.0
EXPOOTS Total (US$ billion) %of EC total Exports as % of GNP
459.1 100.0 25.5
44.9 9.8 50.4
11.9 2.6 23.5
76.6 16.7 17.4
142.1 31.0 24.2
5.7 1.2 51.4
56.0 12.2 25.7
n.a.
50.2 10.9 42.9
71.7 15.6 25.5
Source:
World Bank, World Development
R~~ort,
--
1980.
""""
(.Jt
16 low (see Table 2).
Apart from industry, services are the most important
economic activities in the EC. On the whole, the EC economy is very open, with exports and imports measured at 51 per cent of GNP in 1978.
Among the EC countries the ratio
of foreign trade to GNP ranges from 35 per cent for France, 44 per cent for Germany,
53
per
cent
for
the
United
Kingdom,
88
per
cent for
the
Netherlands, and 115 per cent for Ireland. FOREIGN TRADE OF ASEAN AND THE EC
Balance of Payments Foreign economic activities of
ASEAN have consistently yielded balance of
payments surpluses (see Table 3).
In most years the surplus was derived
from
in
the
capital
account.
Only
derived from the trade account.
recent years
was
the
It should be pointed out that the service
account of ASEAN was always in deficit during 1970-79. balance,
surplus also As for
trade
Indonesia and Malaysia were usually in surplus, whereas the other
three ASEAN countries had trade deficits. Of the five ASEAN countries, Indonesia, Malaysia and Singapore are in good
balance-of-payments positions and have large
reserves.
Thailand
and the Philippines tend to have more balance-of-payments problems.
This
has been due to the need to import large amounts of oil and petroleum products and the lack of large -scale resource development projects to attract capital inflow. Balance-of-payments of the EC have fluctuated very widely.
During
the 1970s the EC had seven years of surplus and three years of deficit. The
surplus in
almost
US$20
1978 was as billion.
large as
A close
the deficit of
look at
Table
balance in goods and services was in surplus for
1979,
amounting to
4 reveals that while the most years except 1974,
the size of the surplus varied from a low of $4.5 billion in 1976 to a high of $32.3 billion in 1978. in deficit and
The unrequited transfers, however, were always
have been growing steadily, reaching $20.3 billion in 1979.
Thus, whenever the surplus in goods and services falls to a low level the EC ends up with a sizeable deficit in the cur rent account.
The EC capital
TABLE 3 Balance of Payments of ASEAN (US$ millions)
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
-1,017
-1,211
-726
274
90
-2,196
-747
271
n.a.
n.a.
-397
-410
-730
-I ,246
-1,864
-1,806
-1,988
-2,453
n.a.
n.a.
242
240
319
455
489
361
226
258
n.a.
n.a.
-1,172
-1,381
-1,137
-516 -1,284
-3,642
E. Direct Investment (net)
284
389
560
707
I ,311
1,620
1,499
1,371
n.a.
n.a.
F. Long-term capital (net)
492
458
799
756
1,122
2, 779
3,518
2,702
n.a.
n.a.
G. Other capital (net)
608
1,047
983
917
1,096 -1,150
-476
-544
n.a.
n.a.
212
514
1,205
1,863
2,032
1,604
3,065*
2,819*
A. Trade Balance B. Net factor service Income from abroad
c.
Net unrequited transfers
D. Current account balance (A+B+C)
Overall Balance (A to G)
*
From UN ESCAP, Economic and Social Survey of Asia and Recent Economic Development, 1979-1980.
Source:
World Bank, World
I~btes,
Second Edition, 1980.
!b~ ~~flfLc~
2,244
-393
-2,509 -1,924 -4,476* -2,698*
1980;
,....
"
>-'
TABLE 4
00
EC Balance of Payments (net flows) (US$ millions)
1970
1971
1972
1973
1974
1975
1976
1977
A. Merchandise (f.o.b.)
4,761
8,317
8,799
6,377
-3,284
9, 776
-838
8,402
22,023 -6,318
B. Services
2,429
3,128
3,390
2,967
2,286
1,448
5,318
5,303
10,300
c.
Unrequited transfers Private transfers Official transfers
-4,235 -5,403 -6,528 -8,128 -1,745 -2,475 -2,862 -3,866 -2,490 -2,928 -3,667 -4,262
D. Current Account Balance (A+B+C)
2,956
6,042
E. Capital of non-monetary sector
4,231
5,085 -1,388
F. Capital and gold of monetary sector
-10,079 -13,700
5,660
1978
1979
12,485
-9,681 -10,266 -11,191 -12,681 -16,722 -20,305 -4,224 -4,024 -4,554 -4,264 -5,333 -6,749 6,637 -8,417 -11,389 -13,557 5,458 -6,242
1,216 -10,679
959
-6,711 5,646
8,238
4,480
5,607
-3,658
-9,658
5,219
-8,112
1,025
15,601 -14, 139
9,242 -1,097
-6,161
167 -18,931 -18,089
18,645
G. Contra-entry to net SDRs allocations
1,188
1,014
999
0
0
0
0
0
0
1,447
H. Error and Omissions
1, 704
1, 559
-1,614
204
980
1,547
898
8,664
3,585
208
Note:
196Q-1977 1978 1979
Source:
EUROSTAT, Balance of Payments 197Q-79.
EUA =US$ 1.12 EUA = US$ 1.27 1 EUA = US$ 1.35
19
account balance is relatively smaller and has not fluctuated as much as the goods
and
services
account.
It
may be concluded,
therefore,
that the
balance of payments of the EC is determined more by the performance of trade in goods and services.
Thus, it is seen that when there was an oil
shock and world recession resulting in the fall in the surplus of goods and services balance, such as in 1974 and 1979, the EC would have balance-ofpayments problems.
It should also be pointed out that the EC balance-of-
payments recovered from the oil shock of 1973 very quickly, with surpluses in 197 5, 1977 and 197 8.
It is not known, however , whether the EC balance-
of-payments could recover from the oil shock of 1979-80 just as quickly.
Composition of Trade ASEAN's foreign trade is clearly distinguished between exports and imports. In the case of exports, primary commodities have accounted for more than 70 per cent, with the proportion standing at 72 per cent in 1977-78 (see Table 5).
In contrast, manufactured imports accounted for 60 per cent of total
ASEAN imports in 1977-78 (see Table 6).
Between 1973-74 and 1977-78 the
proportion of ASEAN manufactured exports increased slightly from 23.7 per cent to
24.9 per cent,
whereas
the proportion of manufactured
imports
declined from 65.1 per cent to 60.4 per cent (see Tables 5 and 6).
This
change in the trade pattern has been due to the growing capability of ASEAN to export manufactured goods and the need to import more oil by some ASEAN countries.
Separating trade in oil and petroleum products from the trade
statistics would clearly reveal this trend. Major commodity exports of ASEAN are concentrated in only a few products.
Indonesia
petroleum and and
palm
Indonesia's. copper
exports
petroleum products,
oil.
Malaysia's
six
commodities,
forestry products,
major
export
list
is
namely,
rubber, almost
crude
coffee,
the
same
tin as
The Philippines' major exports are sugar, copra, coconut oil,
concentrates and
diversified,
basically
with
tapioca, and tin.
the
forestry
more
products.
important
ones
Thailand's exports are more being
rice,
rubber,
maize,
Singapore's exports are also very diversified, but with
TABLE 5
"0
0
Commodity Composition, Share and Growth Rate of ASEAN s Total Exports and Exports to EC by Broad Commodity Groups (Percentages) 1
1973
1977
1973
1971
/74
1977 /78
/74
/78
/74
/78
Percentage increase from 1973/74-1977/78 Total EC
Food and Live Animals
14.5
15.7
16.1
24.8
15.6
23.4
103.7
205.5
Beverages and Tobacco
0.8
0.7
2.2
1. 5
41.3
32.4
66.3
30.3
Commodit~
SITC
0
Composition
Total
1973
EC
EC 1 s Share
2
Crude Material excl. Fuels
27.1
19.9
34.7
26.0
17.9
19.4
37.1
48.5
3
Mineral Fuels etc.
25.9
30.6
5.2
4.6
2.8
2.3
120.9
77.3
4
Animal and Veg. Oils and Fats
5.0
4.9
11.0
s.s
31.0
26.6
85.4
58.9
5
Chemicals
2.2
1. 7
1. 5
0.5
9.8
4.2
45.8
-37.5
6
Basic Manufactures
11.3
9.6
15. 1
15.7
18.8
24.4
58.9
106.2
7
Machinery and Transport Equip.
6.9
9.4
7. 1
8.5
14.5
13.4
155.2
135.9
8
Misc. Manufactured Goods
3.3
4.2
5.6
7.8
23.6
27.5
136.3
175.8
9
Goods not Classified
3.0
3.3
1. 5
1.8
6.8
a. 1
104.9
146.8
Q-4 Primary Commodities
73.3
71.8
69.2
65.7
13.3
13.6
83.5
88.2
5-8 Manufactures
23.7
24.9
29.3
32.5
17.4
19.4
96.6
I 19.2
100.0
100.0
100.0
100.0
14.0
14.9
87.3
98.2
Q-9 Total Source:
UN Commodit~ Trade Statistics (various issues); Sfaf1sfical Office of fhe EC (EUROSTAT).
TABLE 6 Commodity Composition, Share and Growth Rate of ASEAN's Total Imports and Imports from EC by Broad Commodity Groups (Percentages)
Commodity Composition SITC
Total 1977 /74 /78
1973
1973 /74
EC
1977 /78
EC's Share 1973 1977
/74
/78
Percentage Increase from 1973/74-1977/78 Total EC
Food and Live Animals
10.7
9.4
5. 1
4.2
7.3
6.8
54.6
45.9
Beverages and Tobacco
o.8
0.8
1.6
1.8
33.1
35.4
81.2
93.8
2
Crude Material excl. Fuels
6.8
6. 7
1. 7
1.3
3o9
3.1
71.3
36.3
3
Mineral Fuels etc.
14.4
20.0
1.2
0.5
1.2
0.4
145. I
-23.8
4
Animal and Veg. Oils and Fats
0.9
0.9
0.3
0.2
5.5
3.7
86.4
24.7
5
Chemicals
10.4
9.1
22.3
18.1
32.6
30.5
53.3
43.5
6
Basic Manufactures
19.8
16. I
16.2
13.8
12.4
13. I
42.8
50.4
7
Machinery and Transport Equip.
30.0
30.3
42.5
51.8
21.5
26.2
71.1
116.3
8
Misc. Manufactured Goods
4.9
4.9
6.9
5.3
21.5
16.5
75.6
35.3
9
Goods not Classified
1.3
1.8
2.2
3.0
24.8
25.5
141. I
147.3
Q-4 Primary Commodities
33.6
37.8
9.9
8.0
4.5
3.3
98.2
43.7
5-8 Manufactures
65.1
60.4
87.9
89.0
20.5
22.6
63.0
79.3
100.0
100.0
100.0
100.0
15.2
15.3
75.9
77.2
0
Q-9 Total
Source:
UN Commodity Trade Statistic? {various Issues); Statistical Office of the EC (EUROSTAT).
i':) ~
22
petroleum products and rubber being the most important ones (see Appendix Table 1). On the import side, machinery is the most important group of pro-
ducts for all
ASEAN countries.
Imports of petroleum products are par-
ticularly important to Thailand and the Philippines. ASEAN countries also
import petroleum products,
While the other three this merely reflects the
intra-product trade characteristic of petroleum (see Appendix Table 1). Tables
7 and
8 show
the
commodity
imports of the EC in 1973-74 and 1977-78.
composition of exports and In contrast to the commodity
composition of ASEAN's trade, exports of the EC consist mostly of manufactured goods whereas imports have a large proportion of primary commodities. Machinery accounted
and for
transport
equipment,
basic
manufactures
and
chemicals
almost 70 per cent of total EC exports during the
1970s.
Besides these, food and live animals and mineral fuels are the other major exports of the EC.
The export of primary products was due to the intra-
regional trade pattern of the EC. explains
why
imports of chemicals,
This intra-regional trade pattern also basic manufactures and
machinery and
transport equipment accounted for about 50 per cent of the EC' s imports (see Table 8).
The proportions of imports of food and live animals, crude
materials, and mineral fuels were also very high, accounting for about 40 per cent of the total imports during the 1970s.
At the aggregate level,
the commodity composition has changed very little over the period 1973-74 to 1977-78.
Even mineral fuel imports remained at more or less the same
proportion.
Direction of Trade
Tables 9 and 10 present the direction of ASEAN exports and imports based on the
1979 trade statistics.
It is clear
that Japan is the most important
trading partner of ASEAN, accounting for 27.1 per cent and 22.1 per cent of ASEAN exports and
imports
respectively. 3
It
is followed
by the United
States, with export and import shares of 17.7 per cent and 16.1 per cent respectively.
The 'EC
is
the
third
largest
trading
partner
of
ASEAN,
TABLE 7 Commodity Composition, Share and Growth Rate of EC's Total Exports and Exports to ASEAN by Broad Commodity Groups (Percentages)
Commoditl Composition SITC
Total 1973 1977 /74 /78
1973 /74
EC
1977 /78
EC•s Share 1973 1977 /74 /78
Percentage increase from 1973/74-1977/78 Total EC
Food and Live Animals
9.0
8.8
13.5
3.9
2.4
o. 7
80.8
-64.9
Beverages and Tobacco
1. 5
1. 5
1. I
2.0
1. 9
1.4
87.9
123.8
2
Crude Material excl. Fuels
3.7
2.9
o. 7
0.6
0.3
0.2
42.3
3.9
3
Mineral Fuels etc.
4.8
5. 5
0.6
0.5
0.2
0.1
113.0
8.8
4
Animal and Veg. Oils and Fats
0.6
0.4
0.2
0.2
0.6
0.5
51.5
16.3
5
Chemicals
11.9
10.7
15.5
13.7
2. I
1.4
67.8
9.0
6
Basic Manufactures
24.3
21.6
13.5
13.0
0.9
0.6
65.0
18.3
7
Machinery and Transport Equip.
33.4
35.3
49.3
55.2
2.3
1. 7
95.8
37.8
8
Misc. Manufactured Goods
9.5
10.2
4.5
5. 5
0.7
0.6
98.1
51.5
9
Goods not Classified
1. 3
3.1
1. 1
5.4
1.4
1.8
347.6
508.3
Q-4 Primary Commodities
19.6
19. 1
16. 1
7.2
1.3
0.4
81.0
-44.8
5-8 Manufactures
79. 1
77.8
82.8
87.4
1. 7
1. 2
82.4
29.9
100.0
100.0
100.0
100.0
1. 6
1. 1
85.5
23.1
0
Q-9 Total Source:
UN Commoditl Trade Statistics (various issues); sfaf1st1cal office of the EC (EUROSTAT>.
J'..:) (.;:)
TABLE 8
1'\:) ~
Commodity Composition, Share and Growth Rates of ~EAN 1 s Total Imports and Imports from ASEAN by Broad Commodity Groups (Percentages)
Commodity Composition SITC
1973
0
Total
1971
1973
EC
1971
EC' s Share
1973
1977
Percentage Increase from 1973/74-1977/78 Total EC
/74
/78
/74
/78
Food and Live Animals
12.7
12.5
20.0
25.1
1.8
2.4
76.3
130.2
Beverages and Tobacco
1.3
1.2
1.4
2.2
1.3
2. I
74.9
186. 1
/74
/78
2
Crude Material excl. Fuels
10.4
7.9
31.9
27.7
3.5
4. I
35.2
58.9
3
Mineral Fuels etc.
16.7
17.1
1. I
2.6
o. 1
0.2
84.0
357.2
4
Animal and Veg. Oils and Fats
1.0
0.7
11.4
8.3
13.1
14.0
25.0
33.8
5
Chemicals
7.8
7.7
1. 1
o. 5
0.2
0.1
75.0
-8.6
6
Basic Manufactures
20.7
18.7
16.2
15.4
0.9
1.0
61.7
73.4
7
Machinery and Transport Equip.
19.9
22.2
11.2
9.1
o. 7
0.5
99.5
49.2
8
Misc. Manufactured Goods
8.4
9.6
5.5
8.6
0.8
1. 1
104.4
188.5
9
Goods not Classified
I. 1
2.4
0.2
0.5
0.3
0.3
276.7
263.8
Q-4 Primary Commodities
42.1
39.4
65.8
65.9
1.8
2.0
67.9
83.6
5-8 Manufactures
56.8
58.2
34.0
33.6
0.7
0.7
83.0
81.4
100.0
100.0
100.0
100.0
1.2
1.2
78.9
83.3
Q-9 Total Source:
UN Commodity Trade Statistics (various issues); Statistical Office of the EC (EUROSTAT).
TABLE 9 Direction of Exports of ASEAN Countries, 1979
(In million US$ and percentages)
USA
Japan
EC
Indonesia Value Percentage Percentage of ASEAN
3,171 20.4 35.9
7,189 46.1 53.1
1,180 7.6 16.7
338 2.1 20.1
94 0.6 7.9
398 2. 5 18.4
2,219 14.2 27.0
1,820 11.7 14.8
15,579 100.0 31.2
Malaysia Value Percentage Percentage of ASEAN
1,873 17.0 21.2
2,644 23.9 19.6
1,978 17.9 28.0
419 3.7 25.0
423 3.8 35.6
580 5.2 26.8
2,118 19.2 25.8
2,431 22.0 19.8
11,044 100.0 22.1
Ph I I I pp I nes Value Percentage Percentage of ASEAN
1,383 30.2 15.6
1,208 26.4 8.9
925 20.2 13.1
227 5.0 13.5
134 2.9 11.3
360 7.9 16.7
186 4. 1 2.3
875 19.1 7.1
4,577 100.0 9.2
Singapore Value Percentage Percentage of
AS~~N
1,846 13.7 20.9
1,392 10.4 10.3
1, 769 13.1 25.1
457 3.3 27.2
441 3.2 37.2
292 2.1 13.5
2, 739 20.4 33.4
5,710 42.4 46.4
13,456 100.0 26.9
Thailand Value Percentage Percentage of ASEAN
571 10.8 6.4
1,094 20.7 a. 1
1,201 22.7 17.1
238 4.4 14.2
95 1.8 8.0
531 10.1 24.6
949 18.0 11.5
1,470 27.8 11.9
5,285 100.0 10.6
ASEAN Value Percentage Percentage of ASEAN
8,844 17.7 100.0
13,527 27.1 100.0
7,053 14. 1 100.0
1,679 3.4 1oo.o
1,187 2.4 100.0
2,161 4.3 100.0
8,211 16.4 100.0
12,306 24.7 100.0
49,941 100.0 100.0
To
From
Source:
FRG
IMF, Qlrectlon of Trade Yearbook, (Washington, 1980).
UK
Nether- ASEAN lands
Rest of the World
Total
I'-' (.;)1
TABLE 10 Direction of Imports of ASEAN Countries, 1979
To
USA
Japan
EC
FRG
lndonesi a Value Percentage Percentage of ASEAN
1,053 14.6 14. I
2,101 29. I 20.5
1,068 14.7 16.8
453 6.2 20.1
Malaysia Value Percentage Percentage of ASEAN
I I 161 15.4 15.5
1, 775 23.5 17.3
1,339 17.7 21.0
Phi lipplnes Value Percentage Percentage of ASEAN
1,508 23.0 20.2
1,480 22.6 14.4
Singapore Value Percentage Percentage of ASEAN
2,548 14.2 34.1
Thailand Value Percentage Percentage of ASEAN
1,204 16.7 16.1
ASEAN Value Percentage Percentage of ASEAN
Cl)
UK
Total
Netherlands lands
ASEAN
202 2.7 11.5
119 1.6 21.6
838 11.6 13.6
2,166 30.0 13.4
7,226 100.0 15.6
472 6.2 20.9
493 6.5 28.1
59 0.7 10.7
1, 121 14.8 18.1
2,166 28.6 13.4
7,562 100.0 16.3
910 13.8 14.3
294 4.5 13.0
208 3.2 11.8
106 1.6 19.2
380 5.8 6.2
2,285 34.8 14.1
6,563 1oo.o 14. 1
3,006 16.8 29.3
2,011 11.2 31.6
655 3.6 29.1
621 3.4 35.3
184 1.0 33.3
3,335 18.7 53.9
6,986 39.1 43.2
17,886 100.0 38.5
1,894 26.3 18.5
1,035 14.3 16.3
381 5.3 16.9
233 3.2 13.3
84 1.2 15.2
509 7. 1 8.2
2,571 35.6 15.9
7,213 100.0 15.5
7,474 10,256 16. 1 22.1 100.0 100.0
6,363 13.7 100.0
2,255 4.9 100.0
I, 757 3.8 100.0
552 1.2 100.0
6,183 13.3 100.0
16,174 34.8 100.0
46,450 100.0 100.0
From
Source:
""
(In mill ion US$ and percentages)
IMF, Direction of Trade Yearbook, Washington, 1980.
Rest of the World
27
accounting for about 14 per cent of both ASEAN 1 S exports and imports. 4 Among ASEAN countries the pattern of trade varies.
In terms of
exports, Indonesia and Malaysia sell more to Japan than to other countries; Singapore and the Philippines sell more to the U.S., whereas Thailand now It is Indonesia 1 s exports to Japan,
sells proportionately more to the EC. mostly petroleum,
which have made Japan the most important importer of
ASEAN s goods. 1
The direction on the import side is more uniform, with Japan being the top supplier in almost all cases except the Philippines (see Table 7). Even in the case of the Philippines, imports from Japan are now very close to imports from the United States, the Philippines 1 leading trading partner for a long time.
It should be noted that Singapore is the biggest importer
among ASEAN countries, accounting for almost 40 per cent of ASEAN 1 s total imports.
This fact has contributed to Japan being ASEAN 's top supplier.
After Japan, the U.S. and the EC take turns in being the second most important supplier to ASEAN countries. Indonesia, Malaysia and Thailand buy slightly more from the EC than from the U.S. whereas the Philippines and Singapore buy much more from the U.S. than from the EC.
Tables 9 and 10 indicate that intra-ASEAN trade
accounted for only 16.4 per cent and 1.3 • .3 per cent of total ASEAN trade on the export and import sides respectively. In contrast to ASEAN, which does not have much trade within the group at present, the EC trades largely within the Community, as shown in Tables ll and 12. exports and
The intra-community trade in 1979 was 53.6 per cent for
50.4 per cent for
imports.
increased from .33-34 per cent in 1958. exports
mostly
to
other
European
Interestingly,
these proportions
OJtside the Community, the EC
OECD
(Organization
for
Cooperation and Development) countries and the United States. loping countries took between
6.8
Countries) and
per
Economic The deve-
16.6 per cent of the EC's exports in 1979, divided
cent
for
OPEC
(Organization
of
Petroleum
9.8 per cent for other developing countries.
Exporting
The ASEAN
countries, to be discussed in more detail later, took about 1 per cent of the EC 's exports.
/'..:)
00
TABLE 11 Structure of EC Exports by Country and Region 1958 and 1979 (Percentages) Exports of To
Denmark 1979 1958
Denmark
FRG 1958
1979
0.8 10.4
0.9 17.2
0.2 3.4 2.0 6.3 4.9
48.7
25.2
Ireland 1958 1979
Ital¥ 1958 ~979
Nether I ands 1958 1979
Belt unv'Lux. 195 1979 1.6 11.6 10.7 0.4 2.3 20.7
1.2 22.5 19.2 0.3 5.3 16.2
5. 7
8.1
UK
EC
1958
1979
1958
m9
2.4 4.2 2.4 3.5 2.1 3.1 1.9
2.4 9.9 7.2 6.0 3.4 7.2 5.8
2.0 7.5 4.6 1.2 3.1 5.4 4.9 5.7
1.6 13.0 10.1 1.3 6.1 7.3 7.4 6.8
o. 5 11.4 5.4 9.8 7. 7
o.1 2.2 0.8
o. 7 8.9 8. 1
0.8 14.3 5.3 0.1
0.8 18.9 14.8 0.4
0.4 o.s 0.8 78.8
2.3 5.3 5.6 46.4
2.6 19.0 4.9 0.5 2.7
1.8 30.5 10.7 o.s 5.3
2.1 2.3 6.8
4.6 3.4 6.5
15.0 11.9
15.5 8.4
28.0
52.8
83.5
77.6
31.6
49.4
56.5
72.6
52.8
72.8
19.6
41.8
34.3
53.6
20.7
11. 1
12.7
1.9
4.7
18.7
15.3
13.2
8.9
11. 1
8.8
10.3
16.4
15.5
15.5
6.6 0.7 1.3 0.6
5.9 0.8 0.3 0.4
4.9 o. 7 1.0 0.3
5.9 0.7 0.1 0.1
4.9 1.0 o.8 o. 7
9. 7 1.2 0.3 0.8
6.5 0.7 1. 1 0.6
5.6 o.8 0.4 o. 7
2.8 0.3 0.6 0.3
9.4 1. 1 0.6 0.6
3.7 0.3 0.6 0.2
8.8 5.8 0.6 7. I
9.5 1.8 1.4 2.0
7.8 2.3 0.6 2.5
6.0 0.8 1. 1 o. 7
3.0
2.2
FrBnce Ireland Italy Nether I ands Bel g I um/Luxemb. United Kingdom
20.1 3.0 0.3 5.3 2.2 1.2 25.9
17.7 4.9 0.5 5.2 3.9 1.9 14.9
7.6 0.3 s.o 8.1 6.6 4.0
12.7 0.4 7.8 10.0 8.5 6. 7
Total IntraComnun I ty trade
58.0
49.0
34.5
Other European OEI::O countrIes
17.6
28.1 4.9
FRG
France 1958 1979
USA Canada Japan AustralIa
9.3 o. 7 0.2 0.3
2.3 0.5
7.3 1.2 1.0 1.0
LOGs OPEC Others
9.7 2.3 7.3
11.3 3.9 7.4
22.3 4.8 17.5
14.3 6.1 8.2
48.4 21.3 27.1
22.4 7.8 14.7
1.6 0.3 1.3
7.8 3. 7 4.2
27.9 7.5 20.4
20.6 10.8 9.9
18.1 4.5 13.7
10.3 4.6 s. 7
18.B 3.3 15.5
10.4 4.1 6.4
33.8 7.0 26.8
21.6 8.0 13.6
28.5 7.8 20.7
16.6 6.8 9.8
Centrally planned economies
3.8
2.8
s.o
6.1
3. 7
4.6
0.2
1. 1
4.7
4.2
2.0
2.1
3.8
2.2
3.1
2.9
3.8
4.1
Rest of world and unspecified
0.5
0.3
2.6
1.4
1.3
0.6
6.2
1.4
5.-1
1. 7
2.6
2.1
1.9
1.0
10.8
2.8
4.8
1.5
World (excl. EC)
42.0
51.0
65.5
51.7
72.0
47.2
16.5
22.4
68.4
so. 7
43.5
27.4
47.2
27.3
80.4
58.2
65.7
46.4
World (incl. EC) 100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.(1
100.0
100.0
Source:
o. 7
EC, ].nnual Economic Report 198o-81, Annex Table 30.
TABLE 12 Structure of EC Imports by Country and Region, 1958 and 1979 (Percentages)
FRG
Denmark
Imports of From
1958
1979
19.8 3.4
Ireland
France
Ital~
1958
1919
1958
1979
1958
1979
1958
~979
3.4
1.6
0.6 11.6
o. 7 18.0
7.6 0.1 5.5 8.0 4.5 4.4
11.4 0.4 8.9 12.8 8.2 6.0
o. 7 4.0 1.6
o. 7 6.8 4.7
0.1 2.4 2.5 5.4 3.6
0.6 10.1 6.1 9.0 5.6
2.2 12.1 4.9 0.1
0.9 2.9 1.8 56.4
2.4 4.0 2.4 54.4
Nether I ands
1958
1979
0.9 17.2 14.1 0.2
0.7 19.5 2.8 0.1 1.8
0.9 24.2 7.3 0.5 3.6
2.6 2.0 5.5
4.2 3.6 4.0
17.9 7.4
Be I~ I urn/Lux.
19 8
1979
1958
0.5 17.2 11.6 0.1 2.2 15.7
0.5 22.0 15.7 0.4 4.1 16.6
12.2 7. 7
7.4
8.0
EC
UK
1979
1958
1979
3. I 3.6 2.7 2.9 2.0 4.2 1.6
2.2 11.8 8.0 3.4 5.1 5.9 4.4
2.0 8.3 4.3 0.9 2.6 5.3 4.5 5.1
1.2 13.0 8.8 0.9 6.0 8.9 6.5 6.0
Denmark FRG France Ireland Italy Nether I ands Belg1 um/Luxemb. United Kingdom
1. 7 7.3 3.8 22.8
19.7 4. 7 0.2 3.4 6.3 3.8 11.9
Total IntraConmunlty trade
59.0
50.0
33.4
49.3
26.2
50.1
68.3
75.4
29.3
44.2
50.0
56.4
54.7
67.3
20.1
40.8
33.0
50.4
Other European OECD countr 1es
19.5
25.7
17.6
14.9
8.6
9.8
4.4
5.1
12.5
10.5
7.8
7. 5
8.2
6.5
14.1
15.7
12.7
12.1
USA Canada Jap1m Australia
9.1 0.3 1. 5
o.o
5.2 0.5 2. I 0.2
13.6 3.1 0.6 1.2
6. 5 1.0 2.6 0.4
10.0 1.0 0.2 2.4
7.6 o. 7 1.9 o. 5
7.0 3.0 I. I 1.2
7.3 o.8 2.4 0.1
16.2 1.4 0.4 3.0
6.8 1.0 1.1 o. 7
11.3 1.4 0.8 0.2
8.4 o.8 1.9 0.2
9.9 1.4 0.6 1. 7
6.6 0.8 I. 7 0.3
9.3 8.2 0.9 5.4
11.7 2.6 3.3 1.0
11.2 3.7 0.7 2.7
7.B 1.2 2.2 0.5
LDCs .L....:........ X .+m..
lJ
lJ
I:{x .. +m .. ) j l) 1]
+
o.s
+ 76.4
Basic Chemicals
Petroleum Coal Pro-
Nc:n-1-tltalli c Mineral Pro-
ducts
ducts
- 11.6 ... 20.3
- 44.7 +100.0
- 49-4 + 39.8
+100.0
- 16.9 + 50.1
+100.0
-
+ 100.0
+ 99.1
+
+
+ 99-9 +100,0
- 51.5 - 71.1
+ 100,0
+100.0
+
97.4
+ 35.5
+100.0 +100,0
- 68.3
+ 100,0
+100,0
- 77 .o
+
99.~
+ 75.1
- 65.4 - 50.2
17.6 89,8
+ 98.6
+
3-4 - 30.1
+
95.8
+ 91.0
+
96.3
+ 45.7
- 83.1 + 84.6
+ 100,0
+ 89.6
-
+ 74.8
-
- 69.3 +100.0
+100,0
- 22.5
+ 27.3
- 17.0
+ ·n.6
- 13.3
- 11.7
+100.u
+ 99-4 +100,0
-
-
+ 62.7 + 26.3
-
+ 48.4 + 3.9
-
- 15.6 + 26,6
+100,0 +100,0
-
- 56.2 + 16.4 - 19.6 + 3.2
- 48.9 +100,0
+ 29.0
+ 97.1 +100.0
r(x .. +m .) j lJ lJ
+100.0
- 24.9
-
Sourre:
calculated fran \.hited Naticns, Cctmrunity Trad: Statisti03, Series D, various issues.
l
(x .. -m .. )
1+~
r(x .. +m.J j lJ lJ
-
+ +
- 47.6
j r ...
61.6
+ 100.0
- ~9-7
where xij denotes the exports of an EC-country i to A5EAN in the manufacturing sector j and II].j denotes the imports of an EC-co~~-i fr~ ASEI\N in the manufacturing sector j.
71.0
+ 84.7
-
I
+ 69.3
+ 100.0
-
X (xi/mi/ j
46.9
+
+100.0 + 99.3 + 64.2
96.7
+ 61.2
--.---. ritmij
-
-
+100.0
['" ., :•v·.
RCAij-
:·1adlinery and other Manufactured GJods
- 54o2 - 66.0
5.6
-
Transport El:}uiptent
+ 99·5 ... 52.1
-
0,6
Ferrous and Noo-Ferrous 1-tltals
85.5 80,0
- 40.1
I
+ 97.0 + 52.8
v·., ...,,•.,
l.f _ _ < x +m.. 1)1]
_J_ _
r (x .+m } ji]ij I
I
I
APPENDIX TABLE 6
Structure of Revealed ~ative Advantages a of EC vis-a-vis ASEAN Countries in Manufacturing Industries 1 1968 and J977
~
i
~s
Indonesia Malaysia Philippines
Thailand
Singar::ore
s
Food 1 Beverages, 'Ibba.cco
1968 1977
- 32.8 - 60.0
48.5 - 25.0
- 37 .o - 50.2
28.4 46.7
- 16.1 - 43.4
Textiles
1968 1977
-
100.0 3.9
52.9 - 48.1
83.0 12.9
14. 1 - 18.4
79.8 - 90.5
Clothing, Footwear
1968 1977
- 84.2
28.6 - 86.1
100.0 - 95.7
- 49.5 - 71.2
100.0 - 99.6
Wood, Paper, Printing
1968 1977
- 12.3 - 58.5
- 83.0 - 87.2
-
2.3 - 78.0
- 51.5 - 69.9
- 23.7 - 53.3
Rubber
1968 1977
100.0 100.0
31.5 10.9
100.0 100.0
100.0 31.0
100.0 13.2
Basic Chemicals
1968 1977
- 17.5 - 14.0
- 38.0 - 30.9
6.8 13.9
- 15.7 89.8
33.2 91.2
Petroleum,Coal 1968 Products 1977
- 81.7 100.0
16.5 100.0
100.0 100.0
- 50.7 100.0
100.0 100.0
96.1 100.0
99. 1 22.3
2.7 76.8
- 67.7 - 51.5
-
Non-M=tallic Mineral Products
1968 1977
100.0 100.0
100.0 87.6
100.0 100.0
Ferrous and Non-Ferrous M=tals
1968 1977
- 36.3 - 77.2
- 58.6 - 73.6
88.1 - 12.3
Transport Fquipnent
1968 1977
100.0 96.1
98.9 99.3
32.3 85.9
96.6 32.0
100.0 100.0
Machinery and other Manufactures a See footnote
1968 1977
99.4 96.4
99.4 55.7
96.1 63.4
84.0 2.4
99.0 76.3
Sourre:
I
I
(a) in Appendix Table 5.
See Appendix
Table 2.
-
I
I
APPENDIX TABLE 7 Trarts fran Indonesia in CSP tariff items
856 60.2
85 15.3
1 0,2
229 7.1
2960 49.9
Semi-sensitive indwtrial products (except textiles)
in lcx:o lli$ in percent of total EC i.rrp:>rts fran Indonesia in CSP tariff items
796 66.6
317 88.5
41 18.7
308 57.0
1430 94.0
-----
Nan-sensitive industrial products (except textiles)
in lCX:O US$ in percent of total EC i.rrp:>rts from Indonesia in GSP tariff items
2852 45.2
165 2,6
3128 5.2
1889 15.2
523 3.4
Sensitive textiles
in lCX:O US$ in percent of total EC i.rrp:>rts fran Indonesia in GSP tariff items
84 0.9
4 2.4
---
---
Semi-sensitive textiles
in lCX:O lli$ in percent of total EC i.rrp:>rts fran Indonesia in GSP tariff items
20 166.7
--
--
----
in lCX:O US$ in percent of total EC imports fran Indonesia in GSP tariff items
33 40.7
2 100.0
1 100.0
Sensitive agricultures (tcba= type Virginia, = a butter, carmed ananas)
in lcx:o lli$ in percent of total EC imports fran Indonesia in GSP tariff items
92 32.9
--
--
Semi-sensitive agricultures (raw tcbacro)
in lCX:O US$ in percent of total EC imports fran Indonesia in GSP tariff i terns
4499 74.2
Nan-sensitive agricultures
in lCX:O US$ in percent of total EC imports fran Indonesia in GSP tariff i terns in lCX:O US$ in percent of total EC inports fran Indonesia in GSP tariff items
b Total agricultures, semi-manufactures and manufactures
I
I
EC
---
Sensitive industrial products (except textiles)
Nan-sensitive textiles
Denrnarl'
i; 34497
54-1
a The data have been ronverted fran European Units of Ac=unt (EUA) into US$ by the rate US$1 = 0.837 EUA. b Discre;>ancies between the sum of the individual categories and the total figures are du= to rounding. --
Source:
--
- ---------------------
Microfidle data provided by the Statistical Office of the European Ccrrmunities.
-
----
------
-
I
APPENDIX TABLE 11
EC Imports from Malaysia under the CSP, by CSP Categories, 1978 Category
CSF-J:eoeiving :imports
West Gennany
Franoe
Italy
Benelux
Ireland
{](
I
Denmal:k
EC
Sensitive industrial prowets (exoept textiles)
in lCXXJ US$a in percent of total EC i.np:Jrts fran Malaysia in CSP tariff items
1461 3.8
358 2.3
59 2.1
174 4.0
15102 26.2
513 37.9
949 47-7
18619 15.2
Semi-sensitive inilistrial products (except textiles)
in lCXXJ US$ in percent of total EC i.np:Jrts fmn Malaysia in CSP tariff items
7750 58.8
1465 60.5
550 41.5
2507 57-5
7127 80.1
67 65.7
337 83.6
19804 64.1
Non-sensitive inilistrial products (except textiles)
in lCXXJ US$ in percent of total EC :imports fmn Malaysia in GSP tariff items
13202 14.5
1704 5.6
752 4-5
2578 2.2
10165 27.6
66 16.3
1711 51.1
30179 10.2
Sensitive textiles
in lCXXJ US$ in percent of total EC imp::>rts fmn Malaysia in CSP tariff items
4959 18.9
1598 15.3
27 2.7
1099 32.6
9296 12.6
in lCXXJ US$ in percent of total EC imp::>rts fran l'Blaysia in CSP tariff items
1454 290.2
329 77
-------
1614 14.9
Semi-sensitive textiles
-------
45 22.1
75 76.5
23 30.3
1925 107.9
Non-sensitive textiles
in lCXXJ US$ in percent of total EC :imports fmn l'Blaysia in G3P tariff items
2 3.6
1 100.0
----
----
Sensitive agricultUJ:es (td::>acoo type Virginia, ooooa butter, canned ananas)
in lCXXJ US$ in percent of total EC irrp:Jrts fran Malaysia in CSP tariff items
906 22.5
---
----
59 10.9
Semi-sensitive agricultUJ:es (raw td::>acco)
in lCXXJ US$ in percent of total EC :imports from Malaysia in CSP tariff items
--
---
--
--
---
Ncn-sensitive agricultUJ:es
in lCXXJ US$ in percent of total EC imp::>rts fran :r.llaysia in CSP tariff items
35567 66.1
10199 51.1
11905 60.7
55412 69.0
109387
Total agricultures,b semi-manufactures and manufactures
in lCXXJ US$ in percent of total EC :imports fran Malaysia in GSP tariff items
65302 28.7
15654 19.7
13265 24.7
60730 28.0
I
--
a 'rhe data have been cx:nverted from European Units of llcoount (EUA) into I.E$ by the rate t.E$1 = 0. 837 EUA. b Discrepancies be~ the sun of the individual categories and the total figures Souroe:
----
103 100.0
---
11225 98.7
---
245 245.0
12435 76.8
---
--
--
---
--
83.8
625 23.8
6229 90.5
229 324 73.1
154666 60.3
1476 25.9
10593 65.5
321627 37.6
'
aJ:e due
Mic:roficne data provided by the Statistical Offioe of the Eurc:pean Canrunities.
to rounding.
1
I 1DE 6.6
--
APPENDIX TABIE 12
EC Imp:lrts fran PhiliJ;pines under the CSP, by CSP Categories, 1978
Category
CSP-reaeiving lltp:lrts
i'est Cennany
France
Italy
Benelux
!
UK
j
Ireland
r:erunark I
l
EC
Sensitive Industrial products (exCEpt textiles)
in lOCO U3$a in peroant of total EC imports fran PhilifpineS in CSP tariff items
2578 14.0
1058 16.9
801 29.5
1246 11.0
4474 36.1
56 10.9
49L
Semi-sensitive industrial products (exCEpt textiles)
in lOCO US$ in peroant of total EC imports fran Philippines in CSP tariff· items
7865 76.0
1101 51.2
2544 86.8
2707 77.2
2493 69.7
60 63.8
569 68.7
17333 73-9
Nan-sensitive industrial products (exCEpt textiles)
in lOCO US$ in percent of total EC imports fran Philippines in CSP tariff items
14430 52.9
1153 4.6
503 15.5
4883 38.5
3676 12.6
13 6.3
409 24.8
25074 25.2
Sensitive textiles
in lOCO US$ in perCEnt of total EC imports fran Philippines in CSP tariff items
3134 10.8
425 12.1
--
--
---
1671 10.1
80 20.7
663 30.6
5970 10,1
Semi-sensitive textiles
in lOCO US$ in perrent of total EC imports fran Philippines in CSP tariff items
698 51.9
638 67.4
---
--
--
528 53·5
56 71.8
5 19.2
Nan-sensitive textiles
in lOCO US$ in perCEnt of total EC lltp:lrts fran Philippines in CSP tariff items
189 100.5
407 93.1
----
76 95.0
32 30.5
---
33 100.0
737 67.3
Sensitive agricultuxes (tobacco type Virginia, ==a butter, carmed ananas)
in lCXXl US$ in perCEnt of total EC :inp:>rts fran Philippines in CSP tariff i terns
6698 57.9
168 9.9
---
1549 22.4
3928 52.7
--
--
1151 70.3
1 3493 43·9
Semi-sensitive agricultures (raw tobacco)
in lOCO US$ in perCEnt of total EC imports fran Philippines in CSP tariff items
13 59.1
---
----
--
6 8,5
---
----
Non-sensitive agricultures
in lOCO US$ in perCEnt of total EC imports fran Philippines in CSP tariff items
38137 66.2
2546 47.6
7598 64.9
22254 74.6
13866 57.8
266 63.8
1540 87.8
86204 66.0
Tbtal agricultuxes, b semi -manufactures and manufactures
in lOCO US$ in peroent of total EC imports f:rcm PhiliJ;pines in CSP tariff items
73742 47o4
7497 16.5
11445 49.2
32714 45.7
30673 32.5
532 31.3
4863 55.5
161461 40.3
'
I
1 :J7')4 20.5
1926 46.4
I
'
a 'Ihe data have been =nverted fran Eurcpean lhits of !\C=unt (EUA) into US$ by the rate US$1
= 0. 837
--
EUA.
b Discrepancies between the sun of the individual categories and the total figures are d.le to rounding. SourCE:
73.5
Microfidle data provided by the Statistical OffiCE of the Euror:;ean Ccmmm.ities.
19 16. 7.
1
N'PENDIX TABlE l3 EC Imports fran Singapore tmder the a>P, by ffiP Categories, 1978
Category
GSP-reoeiving imports
west cennany
Sensitive industrial products (except textiles}
in lOCO US$a in r;eroent of total EC :Lnports fran Singapore in G>P tariff iterrs
1992 4.0
Semi-sensitive industrial products (except textiles}
in lOCO US$ in r;eroent of total EC imports fran Singapore in G>P tariff iterrs
Non-sensitive industrial products (except textiles} Sensitive textiles
Franoe
Italy
4o2
860 2.5
24205 40.4
5694 38.9
in lOCO US$ in r;eroent of total EC imports fran Singapore in G>P tariff iterrs
29126 46.7
4178 27.7
in lOCO US$ in r;eroent of total EC imports from Singapore in G>P tariff iterrs
1760 4.1
297 1.6
in lOCO US$ in r;eroent of total EC imports fran SingilfX)re in G>P tariff items
108 76.1
in lOCO lli$ in r;eroent of total EC imports fran Singapore in G>P tariff items
Sensitive agricultures (td:Jacoo tyr:e Virginia, coooa butter, canned ananas}
in lOCO lli$ in r;eroent of total EC imports fran SingilfX)re in G>P tariff items
Semi-sensitive agricultures (rav- td:Ja=l Non-sensitive agriculhlres
Semi-sensitive textiles
Non-sensitive textiles
2172
Benelux 252
UK
Irel:":l.c'
Do.Jlllla1:1P tariff iterrs
---
---
--
--
----
----
----
---
'in lOCO US$ in r;ercent of total EC imports fran Singapore in G>P tariff items
2958 89.4
3278 124.3
1295 46.0
---
26 29.9
--
164 12.8
425 30.0
--
--
--
--
--
--
--
170 6.9
--388 19.2
--
--
8144 69.8
! Total agricultures,b semi -manufactures and
manufactures
in lOCO US$ in percent of total EC imports fran Singapore in mP tariff items
60149 27.3
12676 25.6
8298 12.8
18099 15.0 '
a The data have been converted fran European !hits of Acoatmt (EllA) into lE$ by the rate U3$1 = 0.837 EUA. b Discrepancies between the sun of the individual categories and the total figures are due to rounding.
Souroe:
Mic:rofidle data p:rovidad by the Statistical Offioe of the European Ccmnunities.
49360 34.0
1673 29.0
1547 48 4491 30.8 23.1
APPENDIX TABLE 14 EC Irrp::>rts fran 'lhailand under the alP, by alP Categories, 1978 Category
alP-receiving :i.nlJOrts
Sensitive industrial products {except textiles)
a in lCXX) US$ in percent of total EC imports fran 'lhailand in alP tariff items
Semi-sensitive industrial products {except textiles)
West Cennany
France
Italy
Benelux
Ireland
Denmark
EC
1998 31.9
529 44·7
71 38.2
409 38.4
404 33.8
1 8.3
108 41 .1
3520 34.6
in lCXX) tE$ in percent of total EC imports fran 'lhailand in alP tariff items
16103 60.6
2274 63.2
2572 93·7
5778 75.8
6253 78.2
16 80.0
4065 92.2
37116 70.0
Non-sensitive industrial products {except textiles)
in lCCD US$ in percent of total EC imports fran 'lhailand in alP tariff items
7328 40.7
2002 21.5
725 17.5
2558 48.2
6575 31 .8
178 103.5
802 78.5
20180 34.4
Sensitive textiles
in lCCD US$ in percent of total EC imports fran 'lhailand in alP tariff items
5086 15.5
1337 18.6
--
--
308 4.1
1624 15.4
65 17.8
3073 34.3
11493 13.1
Semi-sensitive textiles
in lCCD US$ in percent of total EC imports fran 'Ihailand in alP tariff items
1167 50.0
75 24.4
----
---
208 45.4
2 28.6
22 31.0
1476 22.1
Non-sensitive textiles
in lCCD US$ in percent of total EC imports fran 'lhailand in alP tariff items
2212 97.9
288 57.5
96 24.1
4996 70.6
3B 94.0
--
10
32 78.0
8006 75.0
Sensitive agricultures {tcbacco type Virginia, = a butter, carmed ananas)
in lCCD US$ in percent of· total EC imports fran 'Ihailand in alP tariff items
18107 79.3
71 2,8
---
1406 6.9
2354 12.3
323 89.5
2433 78.8
24693 36.0
Semi-sensitive agricultures {raw tcbacro)
in lCCD US$ in percent of total EC imports fran 'Ihailand in GlP tariff items
---
---
----
---
---
--
Non-sensitive agricultures
in 1000 US$ in percent of total EC imports fran 'Ihailand in GlP tariff items
12166 87 .o
10891 79.6
3076 15.8
4354 71.4
4444 60.5
7 50.0
1090 87.1
36022 58.2
in lCCD US$ in percent of total EC :inp:>rts fran 'lhailand in alP tariff items
64228 51.3
17467 45.6
6538 12.8
19810 35.8
22234 32.8
601 63.1
11625 60.9
142507 39.8
b Total agricultures, semi-manufactures and : manufactures
--
--
: a 'Ihe data have been cx:nverted fran European units of Account {EUA) into tE$ by the rate tE$1 = 0.837 EUA. I
UK
b Discrepancies between the sun of the individual categories and the total figures are due to rounding. Source:
Microfiche data provided by the Statistical Office of the EuroJ?=an O:mnunities.
--
--
--
APPENDIX TABlE 15 utilizaticn Degree of G:>P Ceilings versus Dutiable EC !rnp:)rts fran ASEAN, 1978, by G:>P Categories
Category
GSP Ceilings in Percent
Underutilization (-)
DJ.tiable Irrports
of total EC !rnp:)rts
resp. Overutilization a (+) of GSP Ceilings
from
from the Beneficiaries
AS~
ASEAN-LOC Utilization Ratioc
in GSP Tariff Items in millicn in percentage of the ceilings U3$d (absolute te:rms) Sensitive industrial products (except textiles)
18.2
-
59.4
18.1
383.5
1.02
Semi-sensitive industrial products (except textiles)
31.2
-
77.7
8.3
87.0
2.01
--e
--e
311.5
1.23
23.2
10.0
8.3
0.80
67.7
1. 70
8.0
1. 77
-
Sensitive textiles
e
Semi-sensitive textiles
45.2
I
Sensitive agricultures (to-
40.9
I - 134.0
+
I
38.2
I
bacx:::o type Virginia, cocoa
butter, canned ananas) Semi-sensitive agricultures (raw tobacco)
11.9
+
10.9
162.7
a GSP-receiving imports from all beneficiaries minus the ceiling b Total imports from ASEAN in GSP tariff items minus actual preferential imports from ABEAN (GSP imports) c Defined as the ratio between the percentage share of preferential EC imports fiall ASEAN (in G:>P tariff items) and the corresponding percentage share for all GSP-beneficiaries. d
Data cx:nverted from EUA into US$
e Ceilings for sensitive textiles are only recorded in te:rms of quantities. Since the share of G:>P imports in total EC imports from GSP-beneficiaries in sensitive textiles arrounted to 7.1 percent only, the ceiling has prc:bably been fully exhausted. Source:
See Appendix Table
14.
APPENDIX TABLE 16
Doviatims between GSP-Ceilings, Actual GSP Trade, and the Total Exp::>rt Capacity of GSP Peneficiaries in Products Relevant to ASEl\Na, in 1978
Product
a:::T--Nurrber
I
!SEAN Country Affec-
ted by the Butoir
I
Total Ceiling
I
Butoir
IASEAN
Country NonD.Jtiable Exports (GSP Trade)
ASEAN
Country D.Jliable Exports
I Non-D.ltiable Exp::>rts of all Beneficiaries (GSP-Trade)
I
Dutiable Exp::>rts of all Benefician.es
in millim EUA or in tons (if indicated) Protective Gloves Basketwork, :"JickeiWork
4203 BI
Thailand
17.369
2.605
5.089
2.935
23.618
22.51 9
4603
Philippines
15.205
3.041
6.962
3.411
16.009
9.152
Woven Fabrics of Regenerated Textiles Fibres Nets and Netting madeofTwin,Cordage and Rope
5607 B
'!hail and
5905
Knitted Gloves do
6002 do
230 tons
115tons
693 toos
937 tens
2268 tons
4766 tons
Philippines
5 tens
2.5 tons
40 tms
20 tons
239 tons
90 tons
Philippines
35 tons do
17.5 tons do
112 tons
81 tons
91 tons
91 tons
606 tons do
4592 tens do
Malaysia
do
'lhailand
do
do
Urt>rellas Articles of Precious Mo!tal
6601
Singapore
9.027
1. 354
2.401
0.709
8.739
7-428
7112 A
'lhailand
5.484
2.742
5.151
2.240
13.783
12.190
Electrical Capacitors, Fixed or Variable
8518
Singapore
9.131
1 ,826
3.382
~.097
23.618
22.519
do
do
do
83 tons
51
tons
a 'Ihese products were denaninated as being relevant to ASEAN, where ASEl\N =tries were the major suppliers sition of MFN Tariffs on GSP Irrports from ASEAN Exhausted "Butoirs" (Maximum Arrount) for a Single ABEAN-country
Exhausted Ceilings for all Beneficiaries combined
Sensitive Products (Subject to InterEC Al !£cation Quota)
Semi-Sensitive Products (No Inter-EC Allocation Quota)
Sensitive Products (Subject to InterEC Al~cation Quota)
Sam-Sensitive Products (No Inter-EC Allocation Quota}
1977 In:bnesia
-
Malaysia
--
Philippines
12.6
-
Singap:>re Thailand
--
ASEAN
2.1
All G:>P bene-
--
ficiaries
'lbtal Exhausted GSP-ceilings
1978
1979
1977
1978
1979
1977
1978
1979
1977
1978
1979
1977
1978
1979
---
----
--
-
-
--
2.8
15.3
29.5
14.4
4.6
29.5
17.2
19.9
--
4.4
1.8
2.2
2.4
7.6
11.1
16.7
9.4
13.3
24.5
17.6
8.5
0.3
0.6
7.5
1.5
6.4
3.0
38.9
24.6
19.0
--
26.3
7.9
12.2
0.1
0.1
1 •1
5.6
8.3
0.5
32.0
16.3
13.8
12.0
41.0
29.4
0.1
3.5
7.1
40.4
21.0
31.4
52.5
65.5
67.9
21.4
13.8
10.9
0.6
1.2
4.0
10.0
10.4
7.9
34.1
25.4
22.8
-
--
-
2.7
4.8
3.0
7.4
6.5
4.5
10.1
11.3
7.5
--
---
-
---
9.9
i
i
I I
I
a Excluding agricultures and textiles b Called tariff-quota which are as follONs for all sensitive products: Benelux 10. 5% of the a:mnunity ooiling, Denrnal:k 5%, Franoo 19%, West Cennany 27.5%, Ireland 1%, Italy 15%, UK 22% peramt. -
·--·-
~
~~
-
-
--
-
Source: Calculated fran data provided. by the West German Ministry of Econ::>mics.
~
-
~-
-
-
---
~-----·-
APPENDIX TABlE 18 EC Ceiling Allocaticn Rule for "Sensitive" CSP Qxxis Versus the Actual Patterns of Importsa fran ASE.AN, 1978 , EC
· fV"ember State I
l
Original Allocation Rule (in percent)
Adjusted ~ocation Rule
27.5
France
19.0
33.00 15.24
Italy Benelux
15.0 10.5
12.04 8.44
United Kingdom
22.0 1.0 5.0
'Denmark
!=:en~i..tive
'lbtal
West Gennany
Irelarrl
Actual Pattern of EC Imports
36.5 13.3 11.2
from Ac:EAN 1 q7R GSP-Receiving Trade
Items
47.3 7.7
12.9
1.8 5.7
26.40
21.5
25.4
0.84 4.04
0.8 3.8
o. 7
--
--
11.4 --
100.0
100.0
I
I
~
I
'Ibtal
100.0
100.0
I a Totai EC imports of sensitive agricultures, textiles and other semi-manufacture s and manufactures fran ASE.AN, exoopt tariff item 44.15 (plywood) where-due to traditicnally strcng extnrt flews fran Singapore and Malaysia to the UK--the UK received a quota of 84.5% instead of the nonnal 22.0%. b 80% of the ccmnuni ty ceiling are allocated according to the original allocation :rule, whereas the remaining 20% (cx::mnunity reserve) are allocated according to the actual traoo pattern.
In this respect, ho.rrever, the EC has imposed another
restriction insofar as EC narber states can claim an additional quota cnly up to a limit of 40% of the original qoota. For the case of 1978 it is assured that the two rrenbers with the highest discrepancy between original qoota and actual .irrp)rt pattern (West Germany and the UK) eadl drew' 40% of their original quota en the ccrorrunity reserve and that the (negligible) remaining 0.2 percentage points have been equally diviood arrong the other five EC-states' respective groupings (Benelux). It is irrplicitly assurood that the nertler states did not reallocate their original quota
be~
eadl other in 19 78.
APPENDIX TABLE 19 a:;p Induced Fiscal Gainsa for ASEAN-Countries ("Aid Effect") in millicn US$, by GSP-categories, 1978
r
Indonesia Highest
Category
Actual ];X)~tial gain gam
Mala: sia
PhiliP2_ineS Singa};lare 'Ihaila:nd Highest Highest Highest Highest Actual ];X)tential Actual r:otential Actual ];X)tential Actual ];X)tential gain gain gain ~ain gain gain gain gain
ASFliN
Actual gain
Sensitive irrlustrial products(except textiles)
0.5
8.2
2.3
12.9
1.3
8.8
3.8
13.2
0.4
4.3
8.3
Semi-sensitive i.rrlustrial products {except textiles)
0.3
7.0
1. 8
11.0
1. 5
8.8
4.1
8.3
3.3
9.4
11.0
Non-sensitive industrial products (except textiles)
0.7
9.6
2.4
6.8
2.0
7.7
5.1
16.9
1. 6
5.9
11.8
Sensitive textiles
0
-
1.4
-
0.9
-
0.4
1.7
Semi-sensitive textiles
0
-
0.3
-
0.3
-
0
0.2
-
0.8
Non-sensitve textiles
0
-
0
0.1
0.2
-
1. 1
1.1
1.2
Sensitive agricultures (tobacco type Virginia,coroa butter,canned a:nanas)
0
-
1.5
-
1.6
5.2
0
-
3.0
6.3
6.1
Semi-sensitive agricultures (raw tobacco)
0.8
-
-
-
0
-
-
-
-
-
0.8
Non-sensitive agricultures
5.3
21.3
15.6
15.6
5.9
27.0
0.6
3.2
2.4
6.7
29.8
Total
7.6
46.1
25.3
46.3
13.6
57.7
14.0
41.6
13.7
33.7
74.2
4.4
a l\ctual GSP trade of a:n ASEAN country multiplied by the average tariff preference margin of each GSP category. b Hyp:lthetical GSP trade of a:n ASEAN country assuming a full utilization of the maxirm.nn-anount provision (butoir) multiplied by the average tariff preference margin for eadl GSP category. Source:
Eurostat-roicrofiches; Axel Bornna:nn et al., Das Allg-emeine ZOllpraferenzsystem der EG (Hamburg ~ltarchiv GtbH, 1979), Table 43, p. 135; o.vn calrulations.
APPENDIX TABLE 20 Non-Application of Community Treatmenta vis-a-vis ASEAN Suppliers in Manufactures, 1976 - 79
Start of the Protective Measure (Month/Year)
I
ASEAN-Country Affected
1 EC-Country
!
ApplyingJ Product 'the Protective · Concerned Measure
Latest Date of Expiry
l
4/1978
Belgium/Netherlands/Luxembourg (Benelux)
Women's, girl's and infant's outer garments
End 1978
Nightdresses Shirts
End 1978 End 1978 End 1978
5/1978
II
Ireland
5/1978
'I
Ireland Ireland
5/1978 Philippines
Shirts and shirt blouses
2/1979 3/1979
Ireland
Shirts
Ireland
Brassieres
4/1979
UK
Trousers
5/1979
Ireland
Dresses
End September 1979 End September 1979
8/1979
France
Gloves
~d
8/1979
Benelux
Trousers
UK
Gloves
End 1979 End 1979
France
Textile fabrics
End 1977
Benelux
Men's shirts
End 1977
Ireland
Outer garments
End 1978
France
Textile fabrics
End 1979
10/1979
7/1977
I
11/1977 7/1978
Malaysia
10/1978
10/1978
Singapore
10/1979
l
End 1979 End 19,79
September 1979
Ireland
Trousers
End 1978
Benelux
Yarns
End 1979
UK
Textile fabrics
End 1976
10/1976
France
Textile fabrics (synthetic fibres)
End 1976
5/1977
France
Fabrics made End 1977 from cotton or synthetic fibres
3/1978 6/1978
France France
ditto
End 1978
Outer garments for women,girls and infants
End 1978
France Ireland
Trousers
End 1978
7/1978
Shirts
11/1978
Benelux
Textile fabrics
Bnd 1978 End 1978
2/1979
Textile fabrics
End September 1979
5/1979
France Ireland
Shirts
End September 1979
5/1979
France
Tiles
End September 1979
7/1979
UK
Textile fabrics
End September 1979
8/1976
Thailand 6/1978
UK
Shirts
10/1979
France
Tiles
End September 1979 End 1979
10/1979
France
Textile fabrics
End 1979
8/1979
a Non-application of Community treatment according to Art. 115.1, EEC treaty means that a product originating in a third country may not be imported by the EC country claiming for the regulation via other EC countries where this product is in free circulation. The prohibition of so-called indirect imports is a supplement to individual import licencing of EC members. Source:
Official Journal of the
Eur~Communities,
current issues.
APPENDIX TABlE 21 lrrq;lort Liamcing of Individual EC-Countries vis-a-vis
ASEAN in Textiles and Clothing by Ntmber of Casesa, 1977 - 79
-~-------
\ Indcnesia
I
Malaysia
I Philippines
I SingafX)re
I 'lhailand I
Singapore 'VEst Gennany
1
1
1
I
ASEAN
11
3
France
5
3
4
4
16
Italy
1
1
1
5
8
UK
3
3
2
5
13
Netherlands/ Belgium/Luxerrbourg
1
1
6
8
4
4
1
3
26
55
I:enmai:k
2
Ireland EC
0
12
8
a Prolongations of licences allocated in the past are excluded.
Source:
Official Joumal of the Europ:;an Ccmmmities, current issues.
9
APPENDIX TABLE 22 Deviations in Per Capita Import Quota in Textiles vis-a-vis ASEAN Countries in 1977 (Indices: Highest Country Quota= 100)
ASEAN Country Affected
Product
EC Importing Country
Malaysia
Fabrics
UK
Malaysia
Outer garment
37
France
100
Under garment· France I
UK Singapore
Thailand
Singapore
Thailand
Souroo:
Under garment
Outer garment
Outer garment
Fabrics
See Appendix Table 20.
100
France
Benelux Thailand
EC Country Per Capita Import Quota
West Germany
88 100
92 100
France
38
UK
23
Denmark
100
UK
60
West Germany
50
Ireland
14
UK
100
Ireland
40
Denmark
100
Italy
29
West Germany
26
Benelux
23
Ireland
10
UK
7
France
4
194
A Constant-Market-Shares Analysis of ASEAN Manufactured Exports to the European Community Pitou 11an Dijck and Harmen Verbruggen
INTRODUCTION The
main part of world trade in manufactures is concentrated within the
group of OECD countries.
For non-OECD market economies, the markets of
high-income countries are the main outlets for their export manufactures. During the more than two and a half decades in the post-war era, up to 1973, the OECD countries experienced high rates of growth in per capita income. Growth, international specialization and international trade were stimulated by successive rounds of trade liberalization measures. Indeed, the share of imports in domestic demand and the share of exports in production increased gradually, especially in the EC member states. During this period, labelled by Herman Kahn "La Deuxieme Belle Epoque", the developing countries too experienced a steady growth in their exports of manufactures to the OECD countries, rounds
had
countries. seventies.
favoured
in spite of the fact that the trade liberalization intra-OECD
trade
over
imports
from
developing
General Schemes of Preference were not yet in force before the Although OECD imports from developing countries increased by
about 15 per cent a year during the sixties, the share of these countries in total OECD imports decreased during this period. After
1973,
the
international
cally and many a trend was reversed. loping countries,
and
especially in
some
so-called
"Newly
situation
changed
drasti-
Per capita income growth in deve-
middle-income countries,
growth performance of OECD countries. cially
economic
exceeded
the
The export growth rates of espe-
Industrializing
Countries"
(NICs)
far
sur-
passed the average growth of manufactures in world trade, and consequently the share of developing countries in world trade in manufactures increased, and so did their share in OECD imports of manufactures. Governments and
*
The authors would like to thank Jeroen Fles for his dedication in gathering and processing trade data, and Professor Hans Linnemann for his valuable comments.
195 economic agents in the OECD countries became increasingly reluctant towards further
liberalization
attempts,
especially
with
respect
to
"sensitive
industries" that faced strong competition from new competitors. Not~ithstanding
the deterioration of the economic situation in the
OECD countries since 1973 and the reversal in the trends' mentioned above, the
OECD
exports
markets
in
the
eighties.
are
still
seventies,
Analysis
of
the
and
main
will
developing
outlets
continue
countries 1
for to
developing countries' be
export
so
throughout
performance
the
clearly
shows that the number of items in which these countries have a revealed comparative decade.
advantage
has
been
increasing
substantially
during
the
past
The share of these countries in apparent consumption in the OECD
countries is low, but increasing in nearly all sectors.
Their share in the
entire market for manufactures of EC countries, Canada, the United States of America and Japan together increased from a 1.1 per cent level in 1970 to 1.3 per cent in 1972/73 and 1.7 per cent in 1974/75.
Their shares in
the EC market for the same periods are 1.4 per cent, 1.5 per cent and 1.7 per cent respectively .1 The number of developing countries aiming at enlarging their export income from the sale of manufactures in world markets has increased. has
caused
changes
in
industrialization
and
trade
policies
in
This these
countries in order to strengthen the international competitiveness of their domestic industries or sectors. the
to attract
foreign firms to invest in their export
Now that growth in demand in OECD countries is slowing down and
reluctance
to
trade
liberalization
in
sensitive
industries
is
increasing, while the number of developing countries producing manufactures for
world
markets
is
growing,
strong
international
competitiveness
and
favourable trade arrangements are of utmost importance to stimulate further growth
of
·reason
it
manufactured is
of
exports
interest
to
in
the
investigate
developing developing
countries. countries 1
formance in manufactures to developed market economies. Constant-Market-Shares 1
(henceforth
CMS)
analysis,
this
For
this
export per-
By means of a study
focuses
on
ASEAN S manufactured exports to countries in the EC during the period 1970-77.
196 ASEAN EXPORTS IN PERSPECTIVE
Firstly, we shall discuss the growth record of trade in manufactures between OECD countries and developing countries in general, and that of the ASEAN-EC trade flows in particular, for the period 1968-77. average
growth
rate
of
OECD
imports of
manufactures
The yearly
from
the
world
(including intra-OECD trade) in the period 1968-77 was 18.3 per cent in cur rent values. 2
EC imports from
the world,
including intra-EC trade,
increased by 18.9 per cent a year during this period, as a consequence of which
the
share
of
EC
imports
in
total
OECD imports of
manufactures
increased from slightly less to slightly more than 50 per cent (see Figures 1 and 3). The annual growth rate of OECD imports of manufactures from developing countries during the same period was 21.2 per cent, and 18 per cent for the EC.
Thus, while the share of developing countries in OECD imports
increased, this was not the case for the EC; the share of the EC in OECD imports from developing countries decreased somewhat (see Figures 2 and 3). In figure 2, the value of manufactured imports of the OECD countries from developing countries and from ASEAN is prese.nted.
The ASEAN share in OECD
imports from developing countries increased from
1. 3 per cent in 1968 to
3.8 per cent in 1977, and its share in EC imports from developing countries increased from 2. 9 per cent in 1968 to 10.2 per cent in 1977.
The increase
of ASEAN shares was even more pronounced when trade in non-ferrous metals (SITC 68) is excluded.
In this case, the increases were from 0,8 per cent
to 5.6 per cent and from 2.3 per cent to 28.8 per cent respectively. On the supply side of the ASEAN-EC trade link, Table 1 presents a
breakdown of ASEAN manufactured exports by destination in the OECD market. For all the ASEAN countries together, the EC became more important as an importer of manufactured exports in the period under review, while the relative importance of the USA and Japan declined.
However, as Table 1
shows, there are important differences in this respect among the individual countries.
Also, due to the sometimes low absolute amounts involved, the
percentages changed considerably from year to year. Table 2 indicates that there were major changes m the shares of
197
current US$
FIGURE 1
109
X
OECD imports of manufactured products frQID the world ------
EC imports of manufactured products from the world
400
300
200
100
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977 Year
198
current US$ X 109
FIGURE 2
40 OECD imports of manufactured products from LDC's Idem, minus SITC 68 EC imports of manufactured products from LDC' Idem, minus SITC 68
30
/ 20
I
I
/\ \
/ \
I
/
/ I
\
/.
\
i
/.
\
I.
I 10
..
.,...
2
-·-·- -·-· .
,..
,...,.,·
/
/
/
i
\.
1/
\
\. ,I \1
.
/
r
.~/""
r
/----/ /
.;'
/
.,.,....-....- /
.~//
i
. //
./
/
/
----------.....······ ·························
/
/
/
········ ·····""····.... ····... ...·····.......... ........
·.··..........···················
································
··········
1.6 EC imports of manufactured products from ASEAN Idem, minus SITC 68
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977 Year
199
FIGURE 3
share
.....................
EC share in OECD manufactured imports from the world EC share in OECD manufactured imports from LDC's
0.6
··················· ... ...
······ ···... ...
... ... ················· ...
0.4
··............................
···················
................... ·························
0. 2
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977 Year
200 TABLE 1 ASEAN Countries' Manufactured Exports by Destination in OECD Markets in Percentages of ASEAN Countries' Manufactured Exports to the OECO
1970
'73
1
77
1
70
'73
'77
73
1 77
22.5
2~.8
31.5
27.2
38.6 47.5
31.3 26.9
17.5
1
70
1
Indonesia
57.7
43.7
45.6
20.2
Malaysia
22.6
27.7
27.4
40.5
6.0
9.0
23.0
82.5
70.1 57.1
7.5 16.1
Singapore
33.6
35.6
36.4
57.4
53. 1 1o.o
2.5
Thailand
23.8
28.5
39.7
59.3
30.8 28.9
Ph i I i pp i nes
Data source for all tables and figures: imports, Series C, various Issues.
Re s t
J a p a n
U S A
E C
19.8
1
70
73
77
3.4
100
5.5 6.8
7.6
100
9.2
4.0 4.8 10.7
100
6.3
7.8
6.5 5.0 15.8
100
14.2 35.7
21. 1
2.7 4.9 10.3
100
by commodities, market summaries:
TABLE 2 Percentage Shares of ASEAN Countries in Total ASEAN Manufactured Exports to EC Markets
:oc '70
'73
'77
Indonesia
13.7
8.5
10.5
Malaysia
46.3
27 .o
24.5
3.7
3.5
10.2
Singapore
20.6
47.4
37.5
Thailand
15.7
13.6
17.3
ASEAN
100
100
100
Philippines
1
2.2
OECD, Trade
2.3
1
Total
201 individual ASEAN member states in total ASEAN manufactured exports to the While the shares of Thailand and Indonesia were rather stable over the
Ee.
period 1970-77, Malaysia's share was virtually halved and that of Singapore a
experienced
Philippines
The
doubled.
threefold
nearly
increase
its
in
ASEAN share. Finally, we shall deal with the composition of ASEAN manufactures According to traditional trade theories, it might
exported to Ee markets.
be expected that ASEAN will have a comparative advantage in resource-based Here we
labour -intensive products.
and
goods)
Ricardo
(so-called
goods
will not focus on the factor intensities of ASEAN manufactured exports, and product the
export
fluctuations
large
in
prices
in
in
peculiarities
reveal
to
only
resource-based
some
is especially because
This
performance.
products experienced
analysed
be
will
characteristics
world
markets during
the period under investigation. Figure 4 reveals changes in the composition of manufactured exports By far the most important product group in
supplied by ASEAN to the Ee. was
exports
ASEAN
material).
The
6
SITC
of
performance
goods
(manufactured this
classified
aggregated
highly
group
product
The share of
product
be
will
analysed
in
greater
detail
in
is
This
dominated by SITC 687 (tin), which is a semi-manufactured product. resource-based
by
chiefly
section
5.
SITe 6 in manufactured exports decreased drastically within
the eight-year time span.
At the end of the sixties, SITC 6 accounted for
about 80 per cent of total ASEAN manufactured exports to EC countries; in 1977, this was only about 45 per cent. least
important of
the
four
one-digit
SITe 5 (chemicals), which is the product
groups,
also experienced a
downward trend, its share decreasing from 5 per cent to 2 per cent.
The
other two product groups, SITC 7 (machinery and transport equipment) and SITe and
8
(miscellaneous
manufactured
articles)
both
increased
their
shares
at the end of the period both constituted about one quarter of total
manufactured exports to EC countries.
We may conclude, therefore, that the
share of semi-manufactured resource-based products have decreased and that "real" manufactures are being exported from ASEAN to Ee markets. Analysis at the country level reveals that SITe 6 is of particular
202
FIGURE 4 %
ASEAN exports of SITC 5, 6, 7 and 8 in percentages of total manufactured exports of ASEAN to EC (two-year moving average)
-- --
80
....
..........
SITC 5
SITC 7
SITC 6
SITC 8
..........
''
''
60
' ''
''
' ' ' , __ '
-- -,
''
' ' ', .... .......... ,,...,.__, _,.,..
--
40
-·-·
,..,.
..,.. ..,...
,,·""·~: ...................···················
20
........ -.... . . ..··· ............:-:-:... ....··
,.---~-·
.... ·····
·"" ...······
,·".······ ,."".......... ~
·-. -·- .-·-:.::::....... ·· ...............................
1969
1970
1971
1972
1973
1974
1975
1976
1977 Year
203
importance in the exports of three ASEAN countries:
Indonesia, Malaysia
SITC 5, the least important export product
and Thailand (see Figures 5-9).
group in ASEAN, was of significance only in Indonesia 1 s exports. of SITC 8 increased
for
all
ASEAN countries,
Philippines was the most dramatic.
but
The share
the increase for
the
SITC 7 shows a pronounced increase only
in the case of Malaysia and Singapore.
Thus, there are large differences
between individual ASEAN countries with respect to their export performance in the EC market in terms of total values, composition and the change in their revealed com par ati ve advantage during the seventies. THE CONSTANT -MARKET -SHARES ANALYSIS The Model By means of a CMS analysis W...,e shall now focus on the causes of differences in market performance between the ASEAN countries and competing suppliers. The CMS analysis is a method used to examine a country 1 s or a region 1 s export
performance
Basically,
relative
to
the
performance
this model indicates whether or
succeeded in maintaining its market share.
of
its
competitors.
not a country or a region has We shall apply the CMS method
to analyse the manufactured export performance of the ASEAN countries in the markets of the EC. If it is assumed that exports from a country or a region, that is the focus exports, represented as E •• , compete with all world exports, then the standard CMS model is expressed by the identity3 E' .. - E.. = rE .. +
( 1)
r
(ri - r)
~- + T
1(rij - rj)Fij + f f (E'ij - ~j - rij Ey)
where primed variables refer to the last year and other variables refer to the first year of the investigated period, and where Ei. E.j Eij
= value of focus exports of commodity = value of focus exports to market j = value of focus exports of commodity
E •• = total value of focus exports
to market
204
FIGURE 5 %
Thailand exports to EC of SITC 5, 6, 7 and 8 in percentages of total manufactured exports from Thailand to EC
-------,
' ...... '-.--.--------, ............. ..............
.......
...... '-,
80
SITC 6 ' ' , __ __
60
40
SITC 8 20
... .................... ... ···
1968
1969
1970
1971
1972
1973
.... ...
1974
...
.· ..···.·
1975
.. ·····
.... ..··.·· ······· ··· ....
1976
1977
205
FIGURE 6 %
Malaysian exports to EC of SITC 5, 6, 7 and 8 in percentages of total manufactured exports from Malaysia to EC
-- --
_,,.,..
~_.,..,..._
___ ..... _______,
\
\
\ \ \ \ \
\
80
''
''
''
\ SITC 6 \ \ \
\
\ \
\
60
\
\ ,............ "'
............................... ......
_ ~
40
/.-:-:-:-:.·.~ .. ...._
20
;.:··..· ,~:··
.-
··:.:..········~
.,.r~.:
/'
..........
1968
....
SITC .?................ ·:·;:/'' ,.. /
·,·.~·:·················· _ ... .'.:::::::::.:-::-:-.:.:::.::::-.'................. ···· ' · , . / /
1969
1970
l97l
/
1972
. . .~:~c
/
7
SITC 5 1973
1974
1975
1976
1977
206
FIGURE 7
%
Singapore exports to EC of SITC 5, 6, 7 and 8 in percentages of total manufactured exports from Singapore to EC 80
60 \ \
\
\ \
SITC 7
\
/·-·-·-·-.......
', \
/.
/
·-·-·-./·
'
'
40
\
,,
~i'· .........
I
I
I
I ·-...../.
I..... . . _ . . ..··. ..···. . .:::········ ·········... ··. \ \ . .. .··...·. I. ·.. \ .· ..... . . . ,...... . ·. .·
··.•..
\
.I
I
20
' ...........
/./
\\
\
SITC 8
·····
···················· ············
......······
·· ...
... ...
/ >~\:.···\ \
//
\
v
'\,_
.I I
6 SITC .,...,
.........
_____ _
----~
SITC 5
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
207
FIGURE 8
%
IndoNesian exports to EC of SITC 5, 6, 7 and 8 in percentages of total manufactured exports from Indonesia to EC
\
80
\
\
/
/
/
\
/
\
/~~
\
\
//
\//
// /
............ '-,
/
' ' , ___ ___ ------
SITC 6//
60
40
20
\
\
\ ., 0
~a
\
,.·-.SITC ~
"
• ...._._
7
.
························
-·-·..-·-·-•-•
.................................:.-:::.~·--:-;..::..·: :.:..:.:.:::;.:.:.:.:=:~·:~: ~.'................................ ··~~·TC 8
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977 Year
208
%
FIGURE 9 Philippine exports to EC of SITC 5, 6, 7 and 8 in percentages of total manufactured exports from the Philippines to EC
80
\ \
'
\ \ \
60
\
'
\ \ \ \
~---
1
....
\
40
\
..
.·
··········
··...
.··
I I
\
·-..
"
/
.':\.
/
' .,_
/
20
:
/
/
.,"
//
. / \/ /~.
\ \
··... ·..
: \.: _.·\ .: \
f
I
\
.:
\
......
,
',SITC 6 ....... .......
/
\
//
\
\ \
\.
\
/"'
'1-. I··..
.. ··
./SITC 8
\\
.,/
\ /
I
/I
•·· .·
--
..··
\
\
\
.........
,
/
./'.,
........... ./ '/
\..................
,:'I
.: I
.,
\
SITC 7
'-----·--·-·-·-.
I.
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
209 =
r
percentage increase in world exports from the first to the last year
=
q
percentage
increase
in world exports of commodity
from
the
first to the last year percentage increase in world exports of commodity
qj =
to market
from the first to the last year Equation ( 1) shows that the CMS model is limited in its scope in so far
as it ascribes,
in
retrospect,
a country or a region's export growth
(E' •• - E • .) to four factors, namely:
1.
a factor associated with the general growth of world exports, that is, rE •.
2.
a factor associated with the commodity composition of the focus export,
r
that is, 3.
a factor
associated with the market distribution of the focus exports,
1 J (rij
that is, 4.
(ri - r)Ei
- ri)Eij
, and finally
a factor which is composed of the sum of the unexplained residuals of the other three factors. This
attributed
residual
factor,
the so-called
to something similar
competitiveness effect,
can be
to the specific record of that country or
region in international trade.
In the CMS method of analysis, r performs
the
the norm
function of
the standard,
which
makes
it
possible to pass
relative judgment on a country's or region's export performance. The commodity composition effect and the market distribution effect need
further explanation.
modities to
these
and
relatively
effects.
A specialization in relatively h1gh-growth comfast-growing
However,
export
markets gives
positive
values
estimation of both effects starts from
the
actual commodity and market distribution of exports in the first year; the weights
applied
speaking, distribution
in
constant
equation weights
are
of expOrts change
point of fact,
( 1)
refer
inadequate during
the
to as
the
first
the
period
year.
structure
under
Strictly and
market
investigation.
In
the introduction of new export products which are not yet
exported in the first year, or a concentration on new export markets, cannot be dealt with explicitly in the CMS model described in equation ( 1).
210 The model is thus not only retrospective in character, but also static with respect to these effects. export
Equation (1)
can legitimately be rewritten by using as weights the
composition
and
market
concentration
at
period. 4 This, however, does not solve the problem.
the
end
of
the
A comparison of the
results of two analyses, one applying first year weights and one last year weights, may give an insight into a changing export structure.
As we will
show, some of this information can also be obtained by dividing the period of investigation into two or more periods. The effects
are
values
of
the
commodity
influenced
by
the
composition
sequence
and
market
of both effects
in
distribution
equation
( 1) •
There is no legitimate argument against calculating the market distribution effect first, and thereafter the commodity composition effect.
The centre
two terms at the right -hand side of equation. ( 1) become
J (rj
( la)
- r)Eij +
where
the
first
term
effect
and the second
f J(rij in
- rj)Eij ,
( la)
term,
denotes
the
the
rewritten
market
distribution
rewritten commodity composition effect.
The sum of both terms in equation (la) is by definition equal to the sum of the corresponding terms in equation (1). that
Richardson, however, has shown
the values of both effects separately may differ
substantially. 5
As
already observed, there is no substantial argument to prefer one specification to the other.
The Competitiveness Residual The CMS model "explains" the export performance from the demand side. the competitiveness residual,
Only
which comprises the unexplained share in the
export performance, includes factors on the supply side of the economy as will be elucidated
below.
Strictly speaking,
the CMS analysis should be
performed in volume terms instead of values.
This is because the use of
prices may cause distortions in all components by which trade is explained. Products
may
have
experienced
price
increases
which
may
have
caused
increases in the exported value that exceed the "normal" increase while, at
211 the same time, demand in volume terms lags behind the "normal" increase. Oil was a case in point at the end of the seventies. In the same way, the market
distribution
effect
may
be
biased
because
inflation
and
other
Differences in the overall level of protection, caused
imperfections.
trade policies and exchange rate policies, bution
of
effect.
Price
effects
within
the
problems related
to the definition and
analysis,
could
we
may influence the market districompetitiveness
residual will be
According to Richardson, who dealt comprehensively with
dealt with later. "if
by
perform
theoretical foundations of the CMS
CMS analysis on both export values and
export quantities, we should not be surprised to find cases where the commodity, market, and competitive effects were of opposite signs depending on the use of values or quantities. 6 The
fourth
petitiveness
term
residual.
of
the
formula
Strictly speaking,
a
presented
to
the
opposite.
A
country's competitiveness in the level of the
large
world
individual firm
and the scale of production.
of
and a negative term
factors
Firstly,
may
there
competitiveness non-price
between competitors
of
a
are factors at
there are macro-economic factors
Thirdly, governments may influence the producers
rates
in of
factors. quality
export orders. 7
via
Leamer and in
industrialization
strategy,
The competitiveness residual inclu-
improvements and
improvement
the terms of export financing,
Stern point to differences the development of new
the efficiency of
marketing or
in
and in the ability for prompt fulfilment of
These and other factors can also be found in Kravis' and
Lipsey's study of U.S. firms' competitiveness in world trade.8 these,
influence
the availability of primary and intermediate inputs and the
des price and in
com-
such as the level of remuneration of factors
trade policy and exchange-rate policy.
varieties,
the
(micro-economic level) such as efficiency
prices at which they are available. international
trade.
Secondly,
affecting the individual firm, of production,
number
is
positive term indicates that a
country is more competititve than rivalling suppliers, points
above
monopolization
in
distribution
and
technological
Apart from
leadership
may
reduce the role of competition in internationally traded products. The value of the competitiveness residual is not only influenced by
212 the above mentioned price and non-price factors related to competition in international trade,
but also by factors that are beyond the influence of
the exporting trade partner.
For instance, trade arrangements and regula-
tions may strongly influence a country 1 s position in importing markets vis-
a- vis
competing
trade partners.
suppliers
as
the
these
arrangements
discriminate
between
For example, the EC tends to favour ACP countries, and to
discriminate against General Scheme of such
when
the so-called Newly Industrializing Countries in its Preferences and in its bilateral trade arrangements
Multifibre
Arrangement.
Again,
so-called
voluntary
export
restraints have a negative impact on the competitiveness residual.
On the
other hand, re-exports may have a positive impact on the residual and such re-exports
may be generated
Commission
has
pointed
out
by that
trade
arrangements.
manufactures
Recently,
from
Hong
Kong
the EC and
the
Republic of Korea have entered EC markets as re-exports of ASEAN countries. Finally,
differences
in
the
relative
impact
of
changes
in
transportation
costs may also influence a country 1 s ability to compete internationally. The competitiveness residual may be interpreted as being a direct result of differences in price inflation between competing suppliers.
The
basic relation between prices and quantities can be expressed as follows:
Changes in via
the
price ratios between suppliers cause changes in
elasticity
of
substitution
in
international
trade,
market shares expressed
as
follows:
However, most CMS analyses are performed in value terms instead of volume terms,
because of lack of
reliable volume data.
Consequently, the basic
relation is one between values and prices, expressed thus: f
(~)
Pz •
213 From
this,
it
follows
international trade is increasing result
inelastic
1
1
I
competitiveness)
value terms. not
Malaysia
SITC 5
France (16%), United Kingdom* (51%>
Malaysia
SITC 6
Germany* (28%), Italy* (31%)
Ph I II pp I nes
SITC 6
Germany* (40%>, United Kingdom (35%)
Singapore
SITC 5
France (13%), United Kingdom* (62%)
Thailand
SITC 5
the Netherlands* (54%), United Kingdom* (40%>
Thai land
SITC 6
Germany* (30%), the Netherlands (40%)
An asterisk Indicates that growth of demand for Imports of the selected product group In that country was below the average growth of demand tor that group In the OECD area (the standard area). The share of the main markets In the total value ot exports ot the selected products from the selected exporting countries Is shown In brackets.
223 sists of
processed
primary products,
we shall first
analyse their
role in
ASEAN 's export performance and their impact on the overall analysis.
This
seems to be of particuldr importance here as SITC 6, which includes processed primary products, is one of the main products in the ASEAN-EC trade link; SITC 6 was also the only group with a negative commodity composition effect during the overall-period 1970-77.
ASEAN's Exports of Tin The ASEAN countries are the world's main suppliers of tin-in-concentrates and tin metal. in
Malaysia,
although
Over 50 per cent of the world production of tin is located Thailand
decreasingly,
and
Indonesia.!?
dominated
by
tin
Exports of
these
countries are,
products.
This
also
holds
for
ASEAN exports to the EC, which is the world's main tin import market (see Table 7). Two distinct methods of tin mmmg are predominant in the ASEAN countries: tively
gravel-pump mining and dredging.
labour -intensive
capital-intensive
Gravel-pump mining is a rela-
small-scale
process,
while
method.
Malaysia
and
mmmg
domestic smelting capacity to
process tin ore,
dredging Thailand
is
a
have
highly
sufficient
while Indonesia has to sell
part of its tin ore to foreign smelters. As a traded product,
tin is classified under SITC 687.1 (tin, and
alloys, unwrought) and SITC 687.2 (tin and tin alloys, worked). to
the
U.N.
International
link
between
Industrial
products,
the
International Trade
Classification, 18
manufacturing industries. tured
the
both
tin
According
Classification and items
are
assigned
the to
However, in most definitions of traded manufac-
entire
SITC
division
68
(non-ferrous
metals)
is
excluded because of its resource-based character.
This may be misleading,
as
products
the
further
outstanding
ways
industrial for
manufactured exports.
processing
developing
of
primary
countries
to
industrialize
is
one and
of
the
generate
For instance, since 197 5 Indonesia's exports of tin
has consisted largely of worked tin products, such as tin bars and wire. The typical primary-product character of tin follows from its inelastic supply, and
its
limited
market
prospects in
its substantial price fluctuations.
terms of demand increases
Therefore,
there are good reasons
224
TABLE 7
ASEAN Exports of Tin (SITC 687) to the EC as Percentage of Total ASEAN Manufactured Exports (SITC 5-8) and of ASEAN Exports of SITC 6 to the EC, 1970-77
Share in SITC 5-8
Share in SITC 6
1970
1977
1970
1977
ASEAN
56.9
21 • 1
73.7
47.2
Indonesia
72.9
73.9
97.0
89.3
Malaysia
76.9
34.9
80.4
60.4
2.1
0.2
75.3
35.7
Philippines Singapore Thailand
0.7 71.3
27.8
225 to fear that the inclusion of semi-manufactured tin products in a CMS analysis of
ASEAN
manufactured exports would
yield
misleading
results
with
respect to ASEAN 's "real" manufactured export performance. Since 1968, world tin production has remained at a fairly constant level.
World
innovations
demand
and
the
lizing actions of the
for
tin
application
stagnated of
tin
because
of
substitutes.
tin-saving Despite
International Tin Agreement since
technical
price
1956,
stabi-
international
tin prices have fluctuated considerably after World War II for a number of reasons. As illustrated in Figure 10, tin prices increased moderately from 1970 to 1973.
From 197.3 to 1977, however, the world market price for tin
increased
sharply.
The
economic
recessions
in
incidental the
price
falls
industrialized
in
1971
countries.
and
197 5 reflect
Between
1970,
the
base-year of the CMS analysis, and 1977, the last year of the analysis, tin prices increased approximately threefold. Because of the that
the
impact
of
large tin
on
changes in our
tin prices it might be expected
analysis
differs
(1970-73) from its impact in the second period
in
the
(1973-77).
first
period
It is notable
that tin, compared with the average growth rate of OECD imports of manufactures, had the lowest growth factor in the first period (0.311 compared to 0. 773) and the highest growth factor in the second period ( 1.113 compared to 0.790), which can be attributed to price increases.
However, the effect
of tin on the standard is only marginal; in 1970 the share of SITC 687 in OECD imports of SITC 6 was only 1. 5 per cent while, on the other hand, its share in ASEAN exports of SITC 6 was 73.7 per cent. The impact of tin on ASEAN 's export performance will now be studied by comparing the
results of a two-period
analysis
that
includes
tin with
those of a two-period analysis excluding tin (Tables 8 and 9). The much
more
negative commodity composition effect in pronounced
excluding tin.
in
the
analysis
that
includes
the tin
first period
is
than in the one
In the second period, tin had a strong positive impact on
the commodity composition effect.
In both periods the inclusion of tin had
a negative impact on the competitiveness effect. Now that the impact of tin on the results of the market share analysis has been investigated
in
some depth,
we shall exclude this product
FIGURE 10 Yearly average tin prices in current US$, 1950-79 30000
20000
LME
I
···············
NY MARKET
,I
I
10000 9000
!/
..
//
8000
~\
7000
~\···) "
z
6000
0 8 ...____
u H
0:: 8 w ;;s ttl(fJ
i
5000
4000
N
;:l
3000
2000
(\
1950
Source:
I
kJ
....···········
...
····.........··· ····........···
.
1000
.. .
I
1955
........·
I
1960
I
I
1965
I
1970
1975
World Bank, Commoi::lity Trade and Price Trends (1980), p. 105.
1980
TABLE 8 CMS Analysis III ASEAN (bloc), EC (bloc), SITC 1 Digit, 1970-73, 1973-77, Inclusive of SITC 687 (Tin)
1970-73 Current US$ million
1973-77
Percentage
Current US$ million
ASEAN exports
1973
562
1977
1572
ASEAN exports
1970
161 --
1973
562
Difference
1970-73
Percentage
401
100
1010
100
increase in OECD imports
124
31.0
434
43.0
commodity composition
-43
-10.8
43
4.3
18
4.6
3
0.3
302
75.3
530
52.5
Due to 1• 2. 3.
market distribution
4.
competitiveness
N N "-J
TABLE 9
N N 00
CMS Analysis IV ASEAN (bloc), EC (bloc), SITC 1 Digit, 1970-73, 1973-77, Exclusive of SITC 687 (Tin)
1970-73 Current US$ million
1973-77
Percentage
Current US$ million
ASEAN exports
1973
427
1977
1240
ASEAN exports
1970
69
1973
427
Difference
1970-73 358
100
1973-77 813
Percentage
100
Due to 1 • increase in OECD imports
54
14.0
337
41.5
2. commodity composition
-1
-0.3
-10
-1.2
4
0.9
-3
-0.3
302
78.4
488
60.1
3. market distribution 4. competitiveness
229 from our further study of the ASEAN-Ee trade link. disaggregated analysis, however,
Before embarking on a
it is necessary to add some comments on
the results of the two-period analysis just presented, that is eMS analysis IV (Table 9).
eMS Analysis IV The
difference
period
analysis
between can
be
the
results
of
summarized
the
as
first
period
follows.
and
Firstly,
the the
second general
increase in OEeD imports explains the much larger share of ASEAN 's export performance in
the second
period compared to the first.
Secondly,
the
negative commodity composition effect becomes slightly stronger during the second period.
The cause of this negative commodity composition effect was
rooted in SITe 5 and SITe 6 (excl. 68) during the first period, and in SITe 6 (excl.
88) during the second
period.
Thirdly, the market distribution
effect becomes slightly negative in the second period. (excl.
68)
Finally,
had
the
SITe 5 and SITe 6
a negative market distribution effect during both periods.
competitiveness
effect
decreases
caused by Singapore's export performance.
during
the
second
period,
In summary, ASEAN experienced a
deterioration of its export performance to Ee markets in the second period.
APPLICATION
OF
THE
CMS
MODEL
AT
A
DISAGGREGATED
LEVEL
(1970-73; 1973-77) The final part of our eMS analysis of ASEAN 's export performance in EC markets is a detailed assessment of the magnitude of all effects involved at
the
level.
two-
and
three-digit
level over
Selection of products was
the
based on
two periods at their
relative importance to
individual ASEAN member countries' exports to Ee countries. large differences in
the country Because of
the composition of exports between ASEAN countries,
the selected products have been compiled according to individual countries. Table
10 shows
the
percentage
shares
of
the
selected
products in
each
country's total manufactured exports to Ee countries. Textiles,
clothing
and
wood
products
are
the
main
manufactures
1':) (.):)
TABLE 10
0
Shares of Main Products in ASEAN Countries' Manufactured Exports to EC, 1977, in Percentages
SITC
Product
541 + 551 medical products and essential oils 63 wood and cork manufactures
Indonesia
Malaysia
Philippines
Singapore
Thailand
9.5
14.5
32.2 8.9
14.9
13.9
65 textile yarn, fabrics,
made-up art I c I es
16.2
34.8
667 pearls and (semi) precious
stones 724 telecommunications apparatus
10.7
8.9
729 other electrical machinery and apparatus
8.4
18.5
18.0
8.4
14.0
8.8
17.9
44.0
17.1
19.9
Rest
41.2
24.6
33.7
40.9
20.1
Total
100
100
100
100
100
841 clothing (except fur clothing)
Note:
Manufactured exports comprise SITC 5-8, excluding SITC 68.
231 exported to EC countries. ASEAN countries,
Wood products, an important export item for all
are processed primary products and we shall first deal
with this product group before proceeding with the detailed analysis of the four effects of the market shares analysis.
ASEAN Exports of Wood Products
It should be noted that SITC 63 (wood and cork manufactures) is not the only
SITC
category
of
processed
wood.
SITC
82
(furniture)
wood-based, but is of minor importance in ASEAN's exports. comprised 9,
68) to EC countries for
Singapore and Thailand respectively.
Indonesia,
In 1977 SITC 63
fluctuated
greatly
during
the
price of plywood increased by over was
period
under
In current U.S. dollars, the
83 per cent between 1970 and
However, it experienced a sharp fall in 1975. it
World market prices of
eight-year
investigation, as can be seen in Figure 11.
subsequent years,
Malaysia, Philippines,
Within SITC 63, SITC 6312 (Plywood)
is the main product exported to the EC countries.
1973.
also
15, 14, 9.5 and 14.5 per cent of total manufactured exports
(SITC 5-8 excl.
plywood
is
still nearly
1973.
In spite of a recovery in
13 per cent lower
in
The present CMS analysis is performed in value terms.
1977 than in Consequently,
the price increases during the first period have a positive impact on the growth factor of trade in wood manufactures, while the fall in price during the second period affects this growth factor adversely -- assuming inelastic demand. During increased
by
the 148
first per
period, cent
in
in
which
value
total EC imports of SITC 63
terms,
ASEAN's
exports
manufactures to the EC increased by more than 500 per cent. half
of
this tremendous increase is accounted
for
of
wood
Approximately
by price increases and
consequently less than half of the value of the increase can be attributed to an increase in volumes exported. From 1973 to 1977 ASEAN's exports of wood manufactures increased by only 17 per cent in value terms.
This near-stagnation of export proceeds
is not solely due to the lower price level in 1977.
The poor performance
FIGURE 11 Annual qVerage price of plywood in current US$, 1963-79
500
400
PHILIPPINES
I
I
300
200
v
100 90
\
80
\ I
I
v
v
70
60
50
I
1950
Source:
)
I 1\
1955
I
1960
I
I
1965
1970
1975
World Bank, Commodity Trade and Price Trends (1980), p. 87.
1980
233 of
the
ASEAN
countries
during
the
second
period
is
mainly
relatively low growth in the export volume of wood manufactures.
due
to
a
In volume
terms the growth factor of total Ee imports of wood manufactures exceeded that of Ee imports of wood manufactures from the ASEAN countries. exporters
were
not
able
to
compensate
for
the
ASEAN
unfavourable
price
development. Summarizing, the ASEAN countries experienced very favourable prices and vast increases in export volumes during the first period, while during the
second
period
prices
declined
and
export
volumes
increased
only
moderately.
CMS Analaysis V:
Commodity Composition Effect
The commodity composition effect compares the growth of imports of a specific product on the "world" (OEeD) market with the average growth of imports of the OEeD. all
exporting
Consequently, the sign of the effect should be the same for countries,
the country level.
except
in
the case of negative export growth at
In general the commodity composition effect is only of
minor importance in explaining a country's export performance (see Tables 11 and 12). During the period
1970-73,
the commodity compos1t10n effect was
positive in all cases except SITe 541 + 551 only by Indonesia.
(chemical products), exported
A rather high and positive composition effect was found
for SITe 63 (wood and cork manufactures) in the Philippines and Singapore and especially in Malaysia and Indonesia.
SITe 667 (pearls and [semi] pre-
cious stones) from Thailand, too, experienced a high commodity composition effect.
It was in both periods the best product but one, in terms of com-
position effects.
As shown in the preceding analysis,
position effect of wood
the commodity com-
manufactures changed dramatically;
while SITe 63
experienced the highest growth factor during the first period (1.4) and the highest commodity composition effect, it experienced the lowest growth factor
(0.4)
and
second period.
the
largest
negative
commodity
compos1t10n
effect
in
the
The composition effect of SITe 65 (textile products)
was
reversed from positive to negative in the second period; and SITe 541 + 551 (medical products and essential oils)
became
more negative in the second
TABLE 11 CMS Analysis V
t..:l
(.):>
~
ASEAN-EC, SITC 2/3 Digit, 197Q-73, 1973-77, Effects at the Country Level (exclusive of SITC 68)
-lndones ia
-
Malaysia
%
US$ million
US$ mi Ilion
Phi I ippines
%
US$ mi II ion
%
Singapore US$ mi II ion
Thailand %
US$ million
Exports in 1973
17
82
19
265
42
Exports In 1970
-6
17
6
33
7
Change in 197Q-73
11
%
100
65
100
13
100
232
100
35
100
5
47 .I
15
22.7
5
36.9
28
12.1
6
17.4
0
-1.9
6
9.5
0
3.2
6
2.6
2
6.7
3. market distribut ion
1
6.6
- 0
-0.3
1
5.0
5
2.2
- 1
-2.3
4. competitiveness
5
48.2
44
68.0
7
55.0
193
83.1
27
78.2
Due to: 1. increase In OECD Imports 2•. coomod I ty composition
-
Exports in 1977
43
251
156
589
197
Exports in 1973
17
82
19
265
42
Change in 1973-77
26
100
169
100
137
100
324
100
155
100
Due to: 1. I ncr ease In OECD imports
13
50.9
64
38.1
15
11.1
208
64.1
33
21.3
2. commodity composition
-
1
-2.9
- 19
-11.4
-
3
-2.3
- 16
-4.8
-
3
-2.2
3. market distribut ion
-
1
-3.9
- 17
-9.9
-
0
-o. 1
- 11
-3.5
-
5
-3.1
14
55.9
141
83.2
125
91.3
143
44.2
130
84.0
4. competitiveness
TABLE 12 CMS Analysis V ASEAN-EC, SITC 2/3 Digit, 197D-73, 1973-77, Effects at the Product Level (exclusive of SITC 68)
SITC
541 + 551
63
65
667
US$ mi I I ion %
US$ mII II on %
US$ mII I I on %
US$ mII II on %
729
724 US$ million
%
US$ mII I Ion %
841 US$ million
%
INDONESIA Exports In 1973
12
.3
.15
.19
Exports in 1970
4
_J_
.!...!2.
.02
Change In 197Q-73
8
100
.2
100
-.04
-100
.17
Due to 1. I ncr ease In OECD Imports
4
44.9
.1
43.3
.17
377.3
.02
9.5
2. commodity composition
-0
-3.6
•I
28.6
.05
411.4
.01
3.0
3. market dlstrlbut ion
0
3.8
11.4
.33
745.5
.oo
-1.8
4. competitiveness
4
54.9
.o .o
16.7
-.59
-1334.1
.15
89.4
Exports In 1977
14
3.8
Exports In 1973
12
2
Change In 1973-77
I
Due to 1. Increase in OECD Imports
100
3.71
3.83
~
.15 100
100
3.5
10
661.3
.2
7.1
• 12
3.2
• 15
4.2
2. commodity composition
-I
-45.5
-.1
-3.8
.02
0.4
.03
o.s
3. market distribut ion
-I
-55.4
.o
1.3
-.04
-1.0
.02
o.s
4. competitiveness
-7
-460.4
3.3
95.4
3.59
97.4
3.33
94.6
100
3.68
3.52
100
TABLE 12 (continued)
541 + 551
63
65
667
US$ million%
US$ mil I ion %
US$ million %
US$ million %
724
729
841
SITC US$ million
%
US$ million %
US$ million
~
MALAYSIA Exports in 1973
49
2
Exports In 1970
11
1
Change In 197Q-73
38
100
1
100
.9
100
6.9
Due to 1. Increase In OECD Imports
9
25.1
1
78.3
.2
17.6
.4
6.3
•1
1.2
2. commodity com-
6
16.4
.8
6.5
•1
5.2
.o
0.3
.o
0.4
-1
-3.6
.1
10.8
.2
27.6
.1
1.2
.o
0.2
4. competitiveness
23
62.1
•1
4.4
.4
49.6
6.4
92.2
6.7
98.2
Exports in 1977
38
41
21
45
45
Exports in 1973
49
2
1
7
7
1. 1
7.4
7.0
~
_J_ 100
6.9
100
position
3. market dlstrlbut ion
38
100
38
100
4.2
6
15.4
5
14.4
0
0.6
0
1.3
1
2.6
0.6
0
1.0
-0
-o.5
1
2.4
96.6
19
94.3
32
83.9
31
60.6
Change In 1973-77
-11
-100
38
100
20
Due to 1. increase In OECD Imports
38
341.2
2
5.0
1
-20
-181.9
-1
-2.1
-18
-159.3
0
-11
-100.0
37
100
2. commodity composition
3. market distribut ion
4. competitiveness
TABLE 12 (continued) 541 + 551
63
65
667
US$ million %
US$ million%
US$mllllon%
US$ mill ion %
724
729
SITC US$ million
%
841
US$ mII I Ion J
US$ million
%
PH I Ll PP INES Exports In 1973
8
1.23
1.00
Exports In 1970
1
~
~
Change In 197Q-73
7
100
1.19
Due to 1. I ncr ease In OECD imports
1
11.1
.04
3.3
.04
4.1
2. commodity composition
1
7.2
.oo
0.2
.01
1.2
3. market dlstrlbut ion
0
1.5
.01
0.7
.oo
0.4
4. competitiveness
6
80.3
1.14
95.9
.90
94.3
Exports In 1977
22
Exports In 1973
8
100
.95
13
12
100
69
100
68
100
Change In 1973-77
14
100
Due to 1. Increase in OECD Imports
6
45.7
I
8.1
1
1.2
2. commodity composition
-3
24.3
0
0.7
0
0.2
3. market dlstrlbut ion
-o
1.2
0
o.1
-0
-0.2
4. competitiveness
11
79.9
11
91.1
67
98.8
,,
TABLE 12 (continued)
SITC
541 + 551
63
65
667
US$ mI I I I on %
US$ mI I I I on %
US$ mI I I Ion %
US$ mI I I Ion %
729
724 US$ mill ion
%
841
US$ mI I I Ion %
US$ mi II ion
J
SINGAPORE Exports in 1973
60
26
54
26
Exports In 1970
8
2
9
2
100
24
7
14.3
2
2. commodity composition
5
9.3
3. market dlstribut ion
-1
4. competitiveness
40
Exports In 1977
56
109
83
101
Exports In 1973
60
26
54
26
Change in 1973-77
-4
-100
83
100
29
100
75
100
Due to 1. increase In OECD imports
47
1255.2
20
24.6
42
146.4
20
26.7
2. commodity composition
-25
-669.2
3
3.3
3
12.1
4
4.9
3. market dlstribut ion
-17
-456.7
4
5.2
-4
-13.7
3
3.7
4. competitiveness
-9
-229.2
56
67.0
-13
-44.8
49
64.7
Change in 197Q-73
51
Due to 1. increase In OECD Imports
100
45
100
23
8.5
7
16.4
2
1
2.5
0
-2.0
3
13.6
1
1.3
1
3.7
78.4
18
75.4
37
81.5
20
84.4
0.8
I
100
8.9 2.7
TABLE 12 (continued) 541 + 551
63
65
667
US$ million %
US$ million %
US$ million %
US$ mIll Ion %
724
841
729
SITC US$ mi Ilion
%
US$ million %
US$ million
%
THAILAND Exports In 1973
9.0
Exports In 1970
2
Change In 197Q-73
s.8
Due to 1. I ncr ease In OECD Imports
.2
2.1
.4
2. commodity composition
•1
1.4
3. market distribut ion
.o
4. competitiveness
8.4
Exports in 1977
29
68
21
39
Exports in 1973
9
9
16
3
100
5.3
16
--!2.
5
2.7
2
12
100
8.2
4
34.3
•1
2.0
.o
0.7
2
19.1
.o
0.6
0.2
.o
0.9
-1
-8.0
-.o
-0.1
96.3
4.4
90.2
6
54.7
2.6
97.6
4.8
Change In 1973-77
20
100
59
Due to 1. Increase In OECD Imports
7
36.0
4
2. commodity composition
-4
-19.2
3. market dlstrlbut ion
-1
4. competitiveness
17
100
100
2.7
100
5
100
36
100
7.0
13
277.0
2
5.9
-2
3.0
2
34.3
0
1.0
-4.1
0
0.5
-4
-91.5
0
0.3
87.3
57
95.6
-6
119.7
34
92.8
240 period than it was in the first. In general, we may conclude that the commodity composition effect deteriorated for all products focused in our analysis, and that there were more products with a negative composition effect in the second period than there were in the first. Finally, we will compare the growth of ASEAN 's main manufactured exports to EC markets with the average growth of OECD imports in both periods.
It should be noted that the growth of ASEAN' s exports results not
only from its commodity composition effect but from all effects (see Table
13). The observed changes are rather dramatic, more so because of the decline in the average growth
rate of "world" imports.
marginal
ASEAN
cases,
manufactures
the
and
relative
textiles,
two
major
growth
rate
ASEAN
export
decreased.
and
65
especially in Thailand and
together,
countries
in
in
1977
was
the
total
8. 9 per
Wood
products,
relatively low growth products during the second period. importance,
In all but two became
This is of major
Malaysia, as the share of SITC 63
value
of
cent
for
exported
manufactures
Indonesia,
31.1
per
to
EC
cent
for
Malaysia, 13.9 per cent for the Philippines, 9.5 per cent for Singapore and 49.3 per cent for Thailand. CMS Analysis V:
Market Distribution Effect
ASEAN exports to the EC are concentrated in the largest markets of the Community, the major importing markets of ASEAN manufactures being the Federal Republic of Germany (FRG), the United Kingdom and France.
In most
cases, over 50 per cent of an ASEAN country's exports is directed to only two EC markets. In period
most
cases,
is positive,
concentrated in
the
market
distribution
effect
during
the
first
indicating that within the EC area ASEAN exports are
relatively fast growing markets.
The EC as a whole is,
during the first period, a relatively good market compared with the OECD, but it should be noted that intra-EC trade is included in our CMS analysis at the country level. outlet
for
SITC
In the first period, the EC is a relatively stagnant
729 only.
However,
in
the
second
period
the
EC
is
TABLE 13 Growth of ASEAN Exports to EC Countries as Percentage of Average Growth of "World" Trade
SITC
SITC 541 + 551
Description
medical products and essential oils
Period 70-73
Period 73-77
92
93
SITC 63'
wood and cork manufactures
165
47
SITC 65
textile yarn, fabrics, made-up articles
108
57
SITC 667
pearls and (semi)-precious stones
156
112
SITC 724
telecommunications apparatus
130
11 3
SITC 729
other electrical machinery and apparatus
105
108
clothing (except fur clothing)
130
118
SITC 841
N)
~ ~
242
relatively lagging behind OECD imports in SITC 724, 729 and 841, but the differences in import growth factors between OECD and EC are only marginal. In table 14, we compare the growth factors of imports of selected product groups from ASEAN countries in the main EC importing countries with the growth factors of imports of these products in the Community as a whole and in the OECD. The share of the main importing markets in the total value
of
ASEAN
countries'
exports
of
the
markets is given in the second column. the
highest
growth
factor
of
selected
items
to
Community
A dot indicates that the market has
imports
of
the
selected
item
within
the
Community. On
the
relatively slow period,
but
whole, growth
with
the
Denmark,
Ireland,
markets for
the
exception
of
Italy and
selected
Italy,
the
Netherlands are
imports during
these
countries
the
are
first
of
minor
importance as outlets for ASEAN products.
The United Kingdom was a major
fast growing import market for ASEAN.
During the second period, three
important markets for ASEAN exports -- France, Italy and the United Kingdom -- had a rather poor import performance, while the FRG, another major ASEAN outlet, experienced relatively fast growth in its imports. As ASEAN exports are mainly focused on the larger EC sub-markets, it follows that during the second period under investigation (1973-77), ASEAN exports
experienced
a
decline
in
the
value
of
the
market
distribution
effect because of the poor performance of these importing countries in the period.
In
Thailand,
the
negative effect observed
became even more pronounced in the second period. Malaysia.
Singapore,
distribution second.
effect
in
Indonesia and the
first
the
period
for
first
period
This was the same for
Philippines
and
the
all
a
negative
of
the
had
a
effect
positive in
the
This also applies to ASEAN as a whole. However,
ir.
both
periods
the
impact
market
distribution
effect on the overall ASEAN trade performance in EC countries was limited. A striking feature of ASEAN 's export performance in EC markets is the rather
pronounced
change
in
the
ranking
of
markets
of
destination,
according to their market share in ASEAN exports at the product level. exports
were
rather
concentrated,
as
has
been
implies that the changes were indeed considerable.
pointed
out
above,
As this
In fact, these changes
TABLE 14 Growth Factors of Imports in Main EC Markets from ASEAN Countries
SITC 541 + 551
197Q-73
Exporting countries
Main markets
Market shares
SITC 63
Growth factors
Main markets
Market shares
SITC 65 Growth factors
Main markets
Market shares
Growth factors
TH
GE NE
27 39
1.8 I. 1
GE BL
39 16
1.0 I. I
MA
UK
90 5
1.3 1.2
UK
NE
84 7
I. I 0.6
NE
89 8
1.3 I. 1
FR IT
38 30
1.3 2.3
GE UK
37 35
1.8 1.3
IR Sl IN
UK FR
NE
72 13
0.8 0.8
PH
World World
EC OECD
0.9 o.8
EC
OECD
1.5 1.4
EC OECD
1.0 0.9
1'.:>
....
(,)0
TABLE 14 (continued)
1'-.::1 ~ ~
Growth Factors of Imports in Main EC Markets from ASEAN Countries
SITC 724
SITC 667
1970-73 Exporting countries
Main markets
TH
GE FR
Market shares 63 21
Growth factors
Main markets
Market shares
SITC 729 Growth factors
73 24
2.9 1.3
UK
IT
95 4
o.a
74 9
2.9 1.4
UK
FR
42 26
o.a
UK
96
2.9
lJ
*"'
Factors In Thailand of Concern to European Investors and Extent of Importance
Degree of Importance factors of concern
1. 2. 3. 4. 5. 6. 7.
s.
9. 10. 11. 12. 13. 14.
15. 16. 17. 18.
Political stability In the host country. Generally good labour relations. Well specified government policy on foreign Investment. Availability of low cost labour. Availability of specific types of raw materials. Favourable attitude of the local publ lc toward foreign Investment. Polley stabl llty. Steady growth of national Income. Adequacy of lnfrastructural facilities Favourable balance of payments conditions and stable-external value of the national currency. Availability of local financial capital. Availability of skilled workers. Growing market tor the products manufactured. Investment Incentives provided by the host government 14.1 Income tax exemption 14.2 Tariff protection 14.3 Exemption or reduction of duties on Imported material 14.4 Favourable conditions tor foreign exchange remittances Efficient government service to foreign Investors. Availability of auxiliary Industries and ancillary services In the host country. Existence of knowledgeable local Investment partners. Others (Please specify and ran~ degree of Importance).
19. At present, which of the above factors should be of concern to the host government. Please explain.
Very Important
Important
4
4 7 4 3 2 4 6
2 3 2 4 2 1 2 1
Not so Important 1 1
2 4 3 3 3
5
1
4
5
3 I 4
4 5 6
3 4
3 3 3 3 3 2
6
1
5 5
1
2
1
2 2 5 6
5
2
4 2
Not important at all
2
365
acceptance by the Thai public and government. through
the
authority
Board
to
of
require
reduction and
Investment,
foreign
the need
can,
investors
to
The government, of course,
but
rarely
take
on
does,
Thai
to obtain additional capital from
exercise
partners.
its Risk
local sources do
not appear to be important factors sought after by European investors when entering into obtained.
joint
ventures.
Table
10
summarizes
the
other
results
CONCLUSION This
paper
represents
an
attempt
to
current EC investment in Thailand. firms
which have
received
provide
a
better
understanding
of
The study is confined to joint-venture
promotional privileges.
The first part of the
study dealt with the nature and the characteristics of present EC investments
in Thailand.
This phase of the study
relied
almost exclusively on
secondary data provided by the Board of Investment.
A questionnaire was
also
sent
various well
as
to each of
factors that to
the selected
firms to gauge
the importance of the
motivate European investors to come to Thailand,
identify or
rank
factors
in
Thailand
that
are of concern
as to
European investors. (1) Considering the
size and the importance of the EC economies,
there exists great to Thailand. market
and
potential for
more EC investments to come
The "pulling" factors such as a growing domestic the
various
incentives
provided
by
the
Board
of
Investment seem to be effective in attracting EC investments to Thailand. (2) The majority of the promoted EC investments in Thailand are in the form
of joint ventures.
The Thai partner's acquaintance
with the local labour market as well as local market conditions and
practices
is
considered
to
be
an
important
contributing
factor for entering into such arrangements. (3) Existing
EC investments are
raw materials.
relying quite heavily on imported
This is partly due to the fact that under pre-
(.>:)
TABLE 10
0"> 0">
Reasons tor European Investors to Enter into Joint-Ventures with Thais Degree of Importance Reasons tor Joint-Venture
Very important
Important
Not so Important
Not Important at all
1.
To Increase the sales of capital goods or other intermediate Inputs to the Thai market.
4
2
2
2.
To obtain additional finance.
5
2
2
3.
To reduce risks.
2
6
4.
To match the Investment of competitors.
3
3
5.
To benefit from your Thai partner's acquaintance with the local labour market.
5
2
To benefit from your Thai partner's acquaintance with local market conditions and practices.
5
3
2
To benefit from your Thai partner's acquaintance with local governmental services.
3
2
4
To benefit from your Thai's partner's acquaintance with local financial sources.
2
2
5
6
2
6.
1. 8. 9.
To benefit from your Thai partner's acquaintance with local sources of material supplies.
10. To gain better public acceptance by the Thai people and the government • 11. Others (Please specify and rank degree of Importance). 12. Conments.
2
3
2
367
sent investment legislation t a promoted firm can obtain exemption of duties for raw material imports.
It appears that there
is considerable room for bridging the raw material gap and more detailed study of the problem should be conducted. (4) Most of the promoted EC investments are oriented towards production
for
particular to
the
the local market.
instance,
It would
appear that in this
EC investments are not contributing much
government's
efforts
to
promote
export
oriented
industries. (5) EC investors (and presumably all other investors) are concerned about
the
political
stability of
the host country.
This
is a
problem that cannot be over -emphasized, and one that is unique especially
to
Thailand.
instability
(or
the
In
appearance
the
final
thereof)
may
analysis,
political
the
Achilles'
be
heel of all the investment promotion efforts undertaken by the Thai Government.
368
NOTES
1
100 baht are approximately worth US$5.
2
United Nations, Panel on Foreign Investment in Developing Countries, Department of Economic and Social Affairs, United Nations, 1969.
REFERENCES
Ady, Peter, ed. Private Foreign Investment and the Developing World. New York: Praegers Publishers, 1971. Ho,Wilson T.
"Foreign Investment in Thailand: A Study of Promoted Joint Ventures". Master's Thesis, Asian Institute of Technology, April 1981. E~-Thailand
Investment Promotion Act, B.E. 2520. Gazette, May B.E. 2520 (A.D. 1977). United Nations, Foreign Nations, New York, 1968.
Published
in
the
Government
Investment in Developing Countries.
United
United Nations, Panel on Foreign Investment in Developing Countries. Department of Economic and Social Affairs, United Nations, 1969.
Appendices
370
APPENDIX I
Co-operation Agreement between Indonesia, Malaysia, Philippines, Singapore and Thailand -Member Countries of the Association of Southeast Asian Nations and The European Economic Community
The Governments of Indonesia, Malaysia, Philippines, Singapore, and Thailand -- Member Countries of the Association of South-East Asian Nations -- hereinafter referrred to as ASEAN, of the one part, and The Council of the European Communities, of the other part, Having regard to the friendly relations and traditional links between the member countries of ASEAN and the Member States of the Community;
Affirming their common commitment to support mutually the efforts of ASEAN and the Community to create and to strengthen regional organisations committed to economic growth, social progress and cultural development and aiming to provide an element of balance in international relations;
Inspired by their common will to consolidate, deepen and diversify their commercial and economic relations to the full extent of their growing capacity to meet each other • s requirements on the basis of comparative advantage and mutual benefit;
Affirming their willingness to contribute to the expansion of international trade in order to achieve greater economic growth and social progress;
Conscious that such co-operation will be between equal partners but will take into account the level of development of the member countries of ASEAN and the emergence of ASEAN as a viable and cohesive grouping, which has contributed to the stability and peace in Southeast Asia;
371
Persuaded that such co-operation should be realised in an evolutionary and pragmatic fashion as their policies develop; Affirming their common will to contribute to a new phase of international economic co-operation and to facilitate the development of their respective human and material resources on the basis of freedom, equality and justice;
Have decided to conclude a Co-operation Agreement and to this end have designated as their plenipotentiaries:
The Government of the Republic of Indonesia: Prof. Dr. Mochtar Kusumaatmadja, Minister of Foreign Affairs; The Government of Malaysia: Tengku Ahmad Rithaudeen, Minister of Foreign Affairs; The Government of the Republic of Singapore:
s. Rajaratnam, Minister for Foreign Affairs; The Government of the Kingdom of Thailand: Air Chief Marshal Siddhi savetsila, Minister of Foreign Affairs; The Council of the European Communities: Attilio Ruffini, President in office of the Council of the European Communities, Minister of Foreign Affairs of the Italian Republic Wilhelm Haferkamp, Vice-President of the Commission of the European Communities;
372 Who, having exchanged their full powers, found in good and due form, Have agreed as follows:
ARTICLE 1
Most-Favoured-Nation Treatment The Parties shall, in their commercial relations, accord each other most-favoured-nation treatment in accordance with the provisions of the General Agreement on Tariffs and Trade, without prejudice, however, to the provisions of the Protocol annexed to this Agreement.
ARTICLE 2
Commercial Co-operation
1. The Parties undertake to promote the development and diversification of their reciprocal commercial exchange to the highest possible level taking into account their respective economic situations.
2. The Parties agree to study ways and means of overcoming trade barriers, and in particular existing non-tariff and quasi tariff barriers, taking into account the work of international organisations.
3. The Parties shall in accordance with their legislation and in the conduct of their policies: (a) co-operate at the international level and between themselves in the solution of commercial problems of common interest including trade related to commodities; (b) use their best endeavours to grant each other the widest facilities for commercial transactions; (c)
take fully into account their respective interests and needs for improved access for manufactured, semi-manufactured and primary products as well as the further processing of resources;
(d) bring together economic operators in the two regions with the aim of creating new trade patterns;
373
(e) study and recommend trade promotion measures likely to encourage the expansion of imports and exports; (f)
seek insofar as possible the other Parties' views where measures are being considered which could have an adverse effect on trade between the two regions.
ARTICLE 3
Economic Co-operation
1. The Parties, in the light of the complementarity of their interests and of their long-term economic capabilities, shall bring about economic co-operation in all fields deemed suitable by the Parties. Among the objectives of such co-operation shall be: the encouragement of closer economic beneficial investment;
links through mutually
the encouragement of technological and scientific progress; the opening up of new sources of supply and new markets; the creation of new employment opportunities.
2. As means to such ends, the Parties shall, as appropriate, encourage and facilitate inter alia: a continuous exchange of information relevant to economic cooperation as well as the development of contacts and promotion activities between firms and organisations in both regions; the fostering, between respective firms, of technological co-operation, including mining;
industrial and
co-operation in the fields of science and technology, energy, environment, transport and communications, agriculture, fisheries and forestry.
In addition the Parties undertake to improve the existing favourable investment climate inter alia through encouraging the extension
374
by and to all Member States of the Community and by and to all countries of ASEAN, of investment promotion and protection arrangements which endeavour to apply the principle of non-discrimination, aim to ensure fair and equitable treatment and reflect the principle of reciprocity.
3. Without prejudice to the relevant provisions of the Treaties establishing the Communities, this Agreement and any action taken thereunder shall in no way affect the powers of any of the Member States of the Communi ties to undertake bilateral activities with and of the member countries of ASEAN in the field of economic co-operation and conclude, where appropriate, new economic co-operation agreements with these countries.
ARTICLE 4
Development Co-operation 1. The Community recognises that ASEAN is a developing region and will expand its co-operation with ASEAN in order to contribute to ASEAN's efforts in enhancing its self-reliance and economic resilience and social well-being of its peoples through projects to accelerate the development of the ASEAN countries and of the region as a whole.
2. The Community will take all possible measures to intensify its support, within the framework of its programmes in favour of nonassociated developing countries, for ASEAN development and regional co-operation.
3. The Community will co-operate with ASEAN to realise concrete projects and programmes, inter alia, food production and supplies, development of the rural sector, education and training facilities and others of a wider character to promote ASEAN regional economic development and co-operation.
4. The Community will seek a co-ordination of the development cooperation activities of the Community and its Member States in the ASEAN region especially in relation to ASEAN regional projects.
5. The Parties shall encourage and facilitate the promotion of cooperation between sources of finance in the two regions.
375 ARTICLE 5
Joint Co-operation Committee 1. A Joint Co-operation Committee shall be set up to promote and keep under review the various co-operation activities envisaged between the Parties in the framework of the Agreement. Consultations shall be held in the Committee at an appropriate level in order to facilitate the implementation and to further the general aims of this Agreement. The Committee will normally meet at least once a year. Special meetings of the Committee shall be held at the request of either Party.
2. The Joint Co-operation Committee Procedure and programme of work.
shall adopt its own Rules of
ARTICLE 6
Other Agreements Subject to the provisions concerning economic co-operation in Article 3(3), the provisions of this Agreement shall be substituted for provisions of Agreements concluded between Member States of the Communities and Indonesia, Malaysia, Philippines, Singapore, and Thailand to the extent to which the latter provisions are either incompatible with or identical to the former.
ARTICLE 7
Territorial Application This Agreement shall apply, on which the Treaty establishing applied and under the conditions other hand, to the territories Singapore, and Thailand.
the one hand, to the territories in the European Economic Community is laid down in that Treaty and, on the of 'Indonesia, Malaysia, Philippines,
376
ARTICLE 8 Duration
1. This Agreement shall enter into force on the first day of the month following the date on which the Parties have notified each other of the completion of the procedures necessary for this purpose, and shall remain in force for an initial period of five years and thereafter for periods of two years subject to the right of either Party to terminate it by written notice given six months before the date of expiry of any period.
2. This Agreement may be amended by mutual consent of the Parties in order to take into account new situations.
ARTICLE 9 Authentic Languages
This Agreement is drawn up in seven originals in the English, Danish, Dutch, French, German and Italian languages, each of these texts being equally authentic.
377 APPENDIX II
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*
Compiled by the staff of the library, Institute of Southeast Asian Studies.
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380 SUBHAN, Malcolm. "Southeast Asia and the European Economic Community." In The economic future of the Far East and Southeast Asia, edited by Centre d'Etude du Sud-Est Asiatique et le l'Extreme-Orient, Bruxelles [and) Leerstoel Chinese in Japanese Taal-en Letterkunde, Gent. Bruxelles, Centre d'Etude du Sud-Est Asiatique et de !'Extreme-Orient, 1973, pp. 83-95. "Thai Ambassador Thep on EEC-ASEAN: In Europa 3, no. 2 (1981): 3-5. TASKER, Rodney. "ASEAN changes partners." Review (22 December 1978): 37-38.
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Editorial in Economic Bulletin 3, no.
3
381 APPENDIX III
List of Participants Mr Aziz Mahmood Director-General ASEAN-Singapore Dr Florian Alburo School of Economics University of the Philippines Mr Francis Chan Department of Economics and Statistics National University of Singapore
Assoc Prof Paul Chan Chairman Division of Applied Economics Faculty of Economics and Administration University of Malaya Kuala Lumpur Mr Chawat Arthayukti Counsellor Royal Thai Embassy Singapore Dr Chee Peng Lim Faculty of Economics and Administration University of Malaya Kuala Lumpur
Mr Chesada Loohawenchit Lecturer Faculty of Economics Thammasat University Bangkok Dr Chia Siow Yue Department of Economics and Statistics National University of Singapore Mr Chote Soponpanich Executive Director Bangkok Bank Limited Bangkok Mr Chua Hong Wee Divisional Director Research/Public Relations Singapore Manufacturers Association
Mr Hugh Corbet Director Trade Policy Research Centre London
Drs Pitou van Dijck Economisch. en Sociaal Instituut Vrije Universiteit Amsterdam
382
Dr Dong-Se Cha Associate Researcher Institute of Southeast Asian Studies
Dr Huynh Kim Khanh Senior Research Officer Institute of Southeast Asian Studies
Dr Wolfram Dufner Ambassador Embassy of the Federal Republic of Germany Singapore
Mr Jurgen Koch South Asia Institute Heidelberg University
Mr G Facchinelli Commercial Attache Embassy of the Republic of Italy Singapore Dr Gottfried Haas First Secretary Embassy of the Federal Republic of Germany Singapore Mr Hassan Nawawi ASEAN-Malaysia Kuala Lumpur Miss Heng Hong Ngoh Assistant Vice President and Manager Economics Department Development Bank of Singapore Mr Kenneth James Associate Researcher ASEAN Economic Research Unit Institute of Southeast Asian Studies
Miss Catherine Koh Singapore Federation of Chambers of Commerce and Industry
Mr Alfred Kraft South Asia Institute Heidelberg University
Miss Janice Kwok Singapore Manufacturers Association Dr Rolf Langhammer Research Division Chief The Kiel Institute of World Economics Federal Republic of Germany
Mr Donald Lee Division of Analytical Economics Faculty of Economics and Administration University of Malaysia Kuala Lumpur Professor Lee Sheng Yi Department of Business Administration National University of Singapore
383
Dr Hank Lim Department of Economics and Statistics National university of Singapore
Professor Mohamed Ariff Faculty of Economics and Administration University of Malaya Kuala Lumpur
Mr Lim Ho Hup Director Starcrete Pte Limited Singapore
Mrs Noel Morgan Regional Director Committee for Economic Development of Australia Sydney
Dr Lim Hua Sing Research Fellow Institute of Southeast Asian Studies
Dr Linda Lim Economic Research Centre National University of Singapore
Dr Narongchai Akrasanee United Nations ESCAP Bangkok
Mr Njoman Suwidjana Research Associate ASEAN Economic Research Unit Institute of Southeast Asian studies
Dr Charles Lindsey Research Fellow ASEAN Economic Research Unit Institute of Southeast Asian Studies
Mr Nordin Yatim Department of Trade Singapore
Miss Lu Fong Choo Economic Section American Embassy Singapore
Miss Ooi Guat Tin Research Associate ASEAN Economic Research Unit Institute of Southeast Asian studies
Mr D A MacLeod Acting High Commissioner British High Commission Singapore Mr Franz Michils Charge d'Affaires Royal Embassy of Belgium Singapore
Mr Artemio Palongpalong Research Fellow Institute of Southeast Asian Studies Dr Pang Eng Fong Director Economic Research Centre National University of Singapore
384 Ms Pornpimon Santimaneerat Lecturer Faculty of Economics Thammasat University Bangkok
Dr Hans Christoph Rieger Visiting Fellow/Co-ordinator ASEAN Economic Research Unit Institute of Southeast Asian Studies
Mr Prasert Wattraseth Lecturer Faculty of Economics Thammasat University Bangkok
Dr Rustam Didong Associate Director for Research Institute for Economic and Social Research University of Indonesia
Dr Pushpathavi Thambipillai Research Officer Institute of Southeast Asian Studies Dr P B Rana Research Fellow ASEAN Economic Research Unit Institute of Southeast Asian Studies Mr Eric Rasmussen Regional Economist for Asia Chemical Bank Singapore
Mr Razak Mohd Lecturer Department of Economics and Statistics Faculty of Economics Universiti Kebangsaan Malaysia
Dr Sahathavan Meyanathan Faculty of Economics and Admini strati on University of Malaya Kuala Lumpur Mr Satavira Suvanadat Director Economic and Finance Policy Division ASEAN-Thailand Bangkok Dr Somsak Tamboonlertchai Faculty of Economics Thammasat University Bangkok Dr Manfred Steinhoff Visiting Fellow Institute of Southeast Asian Studies
Mr Bernd Reddies Representative Friedrich Ebert Stiftung Singapore
Dr Jamalludin Sulaiman Universiti Kebangsaan Malaysia
Mr Klaus Reiger Economics Department Frankfurt University
Professor K S Sandhu Director Institute of Southeast Asian Studies
385 Dr Augustine Tan MP Associate Professor Department of Economics and Statistics National University of Singapore
Mr Toh Tse Ming Executive Director Singapore Manufacturers Association
Dr Tan Loong-Hoe Research Officer Institute of Southeast Asian Studies
Mr Valentine Norman Anthony Lecturer Department of Political Science Ahmadu Bello University Nigeria
Dr John Tang Industrial Engineering and Management Division Asian Institute of Technology
Drs Harmen verbruggen Economisch en Sociaal Instituut Vrije Universiteit Amsterdam
Miss Zaleha Tamby Library Institute of Southeast Asian Studies
Professor Jean waelbroeck Universite Libre, Brussels
Dr Thee Kian Wie Research Associate LEKNAS - LIPI (National Institute of Economic and Social Research) Jakarta Mr T Thirunagaran Ministry of Foreign Affairs Singapore
Miss Tong Eng Leong Singapore Federation of Chambers of Commerce ?.nd Industry
Mr Wee Eng Lim Ministry of Foreign Affairs Singapore Professor John Wong Department of Economics and Statistics National University of Singapore Miss Aleth Yenko Research Associate ASEAN Economic Research Unit Institute of Southeast Asian Studies Miss Yang Siew Mui Assistant Director Department of Trade Singapore
386 APPENDIX IV
List of Abbreviations
AOC
ACP ~c
APC BAC BKPM CAP CCCN CCT CKD COREPER DAC DC EC ECU ECSC EEC EFTA EUA FIDA
rnG ~z
GATT GDR GNP GSP G~
I~
ISIC JCC JSG LDC LTA MFA M~
MIDA MNC
ASEAN Brussels Committee African-Carribean-Pacific (developing countries associated with the European Community ASEAN-London Committee ASEAN-Paris Committee Bonn-ASEAN Committee Badan Koordinasi Penanaman Modal (Investment Coordinating Board, Indonesia) Common Agricultural Policy Customs Co-operation Council Nomenclature Common Customs Tariff Completely knocked down Committee of Permanent Representatives of the EEC Council of Ministers Development Assistance Committee Developed Country European Community European Currency Unit European Coal and Steel Community European Economic Community European Free Trade Area European Unit of Account Federal Industrial Development Authority (Malaysia) Federal Republic of Germany (West Germany) Free Trade Zone General Agreement on Tariffs and Trade German Democratic Republic (East Germany) Gross National Product Generalised System of Preferences Gross Trade Creation International Monetary Fund International Standard Industrial Classification Joint Co-operation Committee Joint Study Group (ASEAN-EEC) Less Developed country Long-term Agreement (for cotton textiles) Multifibre Arrangement Most Favoured Nations Malaysia Industrial Development Authority Multinational Corporation
387
NEP NIC NTB ODA OECD OMA
OPEC R & D
RCA SCCAN SITC STABEX TD TNC
U.K.
u.s. UNCTAD VER VESRA
New Economic Policy Newly Industrialising (Industrialised) Country Non-Tariff Barrier Official Development Assistance Organization for Economic Co-operation and Development Orderly Marketing Agreement Organization of Petroleum Exporting Countries Research and Development Revealed Comparative Advantage Special Co-ordinating Committee (ASEAN) Standard Industrial Trade Classification Stabilization of Export Earnings Trade Diversion Transnational Corporation United Kingdom United States United Nations Conference on Trade and Development Voluntary Export Restraint Voluntary Export Self-Restraint Agreement