Meeting Summary
THEME: “CLOSER ECONOMIC PARTNERSHIP”
1.Theme
Businesspersons from ASEAN and Japan met in Manila, Philippines on October 9 - 11, 2003 for the 29th ASEAN-Japan Business Meeting (AJBM), focusing on the theme of Closer Economic Partnership.
2.Opening Session
CHAIRPERSON AND CO-CHAIRPERSON
CHAIRPERSON:
Mr. Cesar E.A. Virata, Representative of the Philippine National Committee for the AJBM (Corporate Vice Chairman & CEO, Rizal Commercial Banking Corporation).
CO-CHAIRPERSON:
Mr. Isao Kaneko, Chairman of Committee on Asia-Japan Relations of Keizai Doyukai (President & CEO, Japan Airlines Group)
SPEAKERS
(1)
Opening Remarks by Mr. Cesar E.A. Virata, Representative of the Philippine National Committee for the AJBM (Corporate Vice Chairman & CEO, Rizal Commercial Banking Corporation).
(2)
Mr. Isao Kaneko, Chairman of Committee on Asia-Japan Relations of Keizai Doyukai (President & CEO, Japan Airlines Group)
(3)
Welcome Remarks by Ambassador Tomas I. Alcantara, Co-Representative, Philippine National Committee (Presidential Advisor & President, LIMA Land, Inc.)
(4)
Responding Remarks by Mr. Kakutaro Kitashiro, Chairman of Keizai Doyukai (Chairman, IBM Japan, Ltd.)
(5)
Message from H.E. Macapagal Arroyo, President of the Republic of the Philippines, read by Hon. Alberto Romulo, Executive Secretary of Republic of the Philippines
(6)
Message from H.E. Junichiro Koizumi, Prime Minister of Japan, read by H.E. Mr. Kojiro Takano, Japanese Ambassador to the Philippines
(7)
Keynote Speech by The Honorable Alberto Romulo, Executive Secretary of Government of the Philippines
(1) Opening Remarks by Mr. Virata :
The Ministerial meetings have decided to forge lately an even more comprehensive and closer economic partnership in view of both regional and global competition. For the past few years and up to the present, the flow of investments to ASEAN from Japan has slowed down to a great extent. China has been the main destination of foreign investments. Hence, the need for the integrative forces of the ASEAN Free Trade Agreement to make investors, especially the Japanese, to continue to reap the benefits of ASEAN productivity and its growing consolidated market.
Mr. Virata also thanked Mr. Richard Gordon, Philippine Secretary for Tourism, who hosted the Welcome Reception / Dinner on the first day. Secretary Gordon discussed the various promotional activities being done by the Tourism Department to promote Philippine tourism. He also mentioned the various ways in which Japan and the ASEAN countries could cooperate in boosting regional tourism.
(2) Opening Remarks by Mr. Kaneko :
It is extremely important for the private sector to work aggressively on the governments for the strengthening of the economic partnerships between the ASEAN countries and Japan, and for the early implementation of the ASEAN - Japan Comprehensive Economic Partnership.
(3) Welcome Remarks by Amb. Alcantara :
Mr. Alcantara extended a warm welcome to all the foreign delegates to the 29th AJBM. He also thanked all the generous sponsors who have made the meeting possible.
(4) Responding Remarks by Mr. Kakutaro Kitashiro
Mr. Kitashiro asked that all ASEAN nations work together to ensure political stability, enhance security, including the eradication of terrorism, and improve the overall business environment, including the strengthening of transparency and ethics. China is emerging as the major destination for foreign direct investment. The ASEAN governments may be able to introduce a more favorable environment for inward investment. The strengthening of Japan - ASEAN economic partnership is important to vitalize both economies.
(5) Message from H.E. Gloria Macapagal - Arroyo :
We remain committed to the strengthening of the global trade rules and enhancing the free flow of goods and services. The equitable distribution of benefits could be achieved by opening the markets of developed countries to products where developing economies have been competitive, such as agriculture and labor mobility, and by providing capacity building to enhance the competitiveness of developing countries. Moreover, the ASEAN countries have been working hard in creating an environment conducive to private sector investments. The timetable for the establishment of an ASEAN Free Trade Area has been accelerated.
(6) Message from H.E. Junichiro Koizumi:
At the Asean - Japan Commemorative Summit that would be held in Tokyo this December, Mr. Koizumi hoped that together with the Asean leaders, they would express their joint intent to further strengthen the relationship in the 21st century by promoting the Asean - Japan Comprehensive Economic Partnership and by cooperating in such areas as the Mekong Sub-region Development Project, based on the recognition that the special relationship between Asean and Japan is the core of regional cooperation toward stability and prosperity in East Asia.
(7) Keynote Speech by The Honorable Romulo :
This week, ASEAN forged the Bali Concord II, which hopes to achieve in 17 years or in 2020 a truly integrated economic unit. The accord aims to form a true economic community that considers the different stages of economic development among the members. Highlighted in the Bali Concord II is the exchange and movement of people, which could be just as important than trade and investment. In Bali, there was also an agreement between ASEAN and Japan on how a comprehensive economic partnership can be reached. The future of the ASEAN is indeed bright and promising, with traditional barriers set aside under the spirit of mutual cooperation and understanding.
Session I
TOPIC
Updates on the Economies after the Iraq War and the SARs
JOINT CHAIRPERSONS
CO-CHAIRPERSON:
Tan Sri Datuk Zainal Abidin Sulong, Vice Representative of Malaysia National Committee for the AJBM (Chairman, Malaysian Industrial Development Authority)
CO-CHAIRPERSON:
Mr Isao Kaneko, Chairman of Committee on Asia-Japan Relations of Keizai Doyukai (President & CEO, Japan Airlines Group)
PRESENTERS
(1)
Ms. Cynthia P. Santos, First Vice President of Rizal Commercial Banking Corporation (Philippines)
(2)
Mr. H. Kusnaeni, Executive Secretary, Indonesia-Japan Enterpreneurs Association (Indonesia)
(3)
Mr. Kakutaro Kitashiro, Chairman of Keizai Doyukai (Chairman, IBM Japan, Ltd.)
(1) Ms. Santos’ comments were as follows:
The Philippine economy will grow in a steady fashion this year. Growth would be supported by the easing pressure on the fiscal balance. The budget deficit is likely to be contained, backed by continued progress in government savings and revenue collections. On the supply side, there would be broad-based support for the economy from services, manufacturing, and agriculture. On the demand side, personal consumption expenditure will show resilient growth as it has exhibited in the past 15 years. The Philippines remains as one of the most competitive destination in Asia and would remain so in the years ahead as it continues to lay down the groundwork and prepare itself for globalization.
(2) Mr. Kusnaeni’s comments were as follows:
Politically, the situation in Indonesia still shows various factors of uncertainty. Economically, the people are growing resilience. Their individual capacity has increased due to pressure from many directions. Financial institutions are surely recovering, and can therefore be expected to pull production activities by providing reasonably low interest financing. Natural resources-based products could be outsourced from Indonesia at competitive price. Indonesia could also help dispatch skilled workers to help increase competitiveness of industries in Japan and other ASEAN countries.
(3) Mr. Kitashiro’s comments were as follows:
The Japanese economy has shown a few encouraging signs as evidenced in macro-economic and business performances and a rise in stock prices. It is the first recovery without large public spending since the burst of bubble economy. Further structural reforms are therefore essential to ensure the sustainable economic recovery. The key areas are the private sector, which should serve as the agent of change focusing on profitability and cash flow, and the governments, which should act as the facilitator of change.
(4) Discussion
During the discussion period, views were exchanged by the various delegates on their respective country’s situation. Thailand talked about the issue of exports and basic grass roots of business cooperation, which are the thrusts for Thailand’s future development. Also, the Japanese delegates noted that Japan’s economic recovery now is not driven by government spending, which makes it different from the past two recoveries. Japanese public debt is mainly financed by domestic savings.
4.Remarks by the ASEAN Secretary General
Mr. Ong Keng Yong, ASEAN Secretary General, spoke as guest speaker at the Luncheon. He mentioned that ASEAN - Japan economic and business relationship is solid, with Japan as an important trading partner of ASEAN. ASEAN recognizes the strategic role of Japanese capital and business as an important driving force for greater economic integration in South East Asia. ASEAN looks forward to continuing its working relations with the private sector towards realizing the goals of ASEAN - Japan Comprehensive Economic Partnership.
Mr. Ong Keng Yong furnished AJBM a copy of the framework for the ASEAN - Japan Comprehensive Economic Partnership.
5.Session II
TOPIC
Closer Economic Partnership: ASEAN - Japan
JOINT CHAIRPERSONS
CO-CHAIRPERSON:
Mr. Cesar E.A. Virata, Representative of the Philippine National Committee for the AJBM (Corporate Vice Chairman & CEO, Rizal Commercial Banking Corporation).
CO-CHAIRPERSON:
Mr. Takemoto Ohto, Vice Chairman, Committee on Asia-Japan Relations of Keizai Doyukai (Chairman, Nichirei Corporation)
PRESENTERS
(1)
Ms. Wong Chian Voen, WCI Consulting Pte/White & Case LLP (Singapore)
(2)
Khun Staporn Kavitanon, Vice Chairman, Bangkok Bank (Thailand)
(3)
Mr. Nobuyoshi Yamanaka, President & Representative Director, Emerson Japan, Ltd. (Japan)
(1) Ms. Wong’ comments were as follows:
The FTA is not meant to be the solution to a company's problems, but it could be part of the solution, a crucial element in the company's cost calculation and operational strategy. For some companies, an FTA may offer direct market access benefits for their business and make it possible for them to expand the scope of their business. For other companies, an FTA may affect business decisions in various aspects, including investment, business development, operations, resource allocation, logistics, distribution, sourcing, and personnel utilisation. Companies would have to determine how they can use the FTA to their advantage.
(2) Mr. Kavitanon’ comments were as follows:
ASEAN has gradually recovered from the devastating impact of the 1997 crisis, and there seems to be a renewed awareness of the need for re-focusing on "regional economic cooperation" as the logical choice for accelerating regional economic growth. The existing economic structures of ASEAN and Japan are mutually complementary. There should be ways for better and closer business cooperation and partnership. However, business people should not wait for an official mandate, as there are still many ways and channels by which the private sector could cooperate with each other.
(3) Mr. Yamanaka’ comments were as follows:
As an investment outlet, it appears that Asean does not appeal as attractive as China or India because there is no one single market under one system for the whole of ASEAN. There is no single point of contact for various consultation, negotiation, and/or coordination for matters within ASEAN. Mr. Yamanaka proposed three mutual programs : to establish one single point of contact, to promote and execute more exchange of people, and to take a "nothing sacred" approach and reduce tariff of all products, including agricultural products.
(4) Discussion:
During the discussion period, views were exchanged on the respective roles of both ASEAN and Japan in forging closer economic partnership. While there are areas of convergence of interest, there are also areas where Japan and ASEAN still have to adjust to each other. Business people should continue pursuing what could be done further, as well as communicate with each of the respective governments, so that the common goals of Japan and ASEAN would be achieved at a faster rate.
The challenge for AJBM lies in finding ways to create value-added through increased collaboration that will benefit the regional business community. It is the framework of the CEPA between ASEAN and Japan that the private sector should adopt as guideline to attain lower cost of production and increased profitability.
Aside from investing further in ASEAN original production, Japan should open more its market to foreign products, including agricultural goods.
6. Session III
TOPIC
Expanding Business Partnership
JOINT CHAIRPERSONS
CO-CHAIRPERSON:
Mr. Gerald Sanvictores, Co-Representative, Philippine National Committee for AJBM (Partner, SGV & Co.)
CO-CHAIRPERSON:
Mr. Akihiko Kaji, Vice Chairman, Committee on Asia-Japan Relations of Keizai Doyukai (President, JALPAK Co., Ltd.)
PRESENTERS
(1)
Mr. Rafael G. Villareal, Executive Director, Motor Vehicle Parts Manufacturer Association of the Philippines
(2)
Mr. Yongkiat Kittapanich, Vice Chairman, Bangkok Spring Industrial Co. Ltd. (Thailand)
(3)
Mr. Tamotsu Iba, Vice Chairman, Committee on Asia-Japan Relations of Keizai Doyukai (Adviser, Sony Corporation)
(1) Mr. Villareal’ comments were as follows:
The motor vehicle parts and components industry is one of the export industries that the Philippine Export Development Council is keenly supporting in order to boost the country'' drive for competitiveness. Only by developing a strong and competitive domestic production base can the industry serve both its domestic and export makers and support a sustainable export growth. Cross-border cooperation either through joint ventures or technical assistance agreements be established with Japanese automakers for specific auto parts that can be produced in the Philippines.
(2) Mr. Kittapanich’ comments were as follows:
The Thai automotive industry is encountering competition problems from other manufacturers. Aside from Germany, Japan, and Taiwan who are leaders of product differentiation and high value, the Thai automotive industry has to compete with countries like China, Indonesia, and Vietnam who have lower production costs. One of the accelerators to the global competition is a bilateral free trade agreement. ASEAN should put more efforts in market integration in order to create a bigger market. It is important that the AFTA be adopted first before the FTA takes into effect outside ASEAN countries. Governments should approach ASEAN members to facilitate preparation for the AFTA.
(3) Mr. Iba’ comments were as follows:
There is a growing rate of internet access and a number of cell phone subscribers around the world these days. In some countries in East Asia, internet users have been moving to broadband network because of rapid development and deployment of digital technologies. In the broadband network era, it is essential to establish business applications fully using Information Technology. In Asia, there are already some successful applications. In this relation, mobile equipments such as cell phone will be a strong business tool. Diversity, values and communities in East Asia would also play an important role as a basis of new business applications and a new model of economic growth from Asia.
(4) Discussion:
During the discussion period, it was noted that emphasis should be given to scale merits and specialization in order to develop the automotive industries. Economic integration of ASEAN should be accelerated, especially in the field of automotive industries. It was also stressed that the cost of telecommunication should be lowered to further develop the Information Technology industry.
7. Closing Session
During the Closing Session, an agreement was reached to adopt the Joint Statement for the early implementation of the ASEAN-Japan Comprehensive Economic Partnership Agreement. It was also agreed that the 30th ASEAN-Japan Business Meeting (AJBM) would be held in Japan on October 27 - 29, 2004. Furthermore, it was agreed that Mr. Cesar E.A. Virata, together with the incoming Steering Committee Chairman, would contact the Vietnam National Committee to propose that the Steering Committee Meeting be held in Vietnam in May or June to discuss the preparations for the 30th AJBM.
The body was also informed that Thailand has graciously agreed to host the 31st AJBM meeting in 2005.
Japan assumed the Chairmanship of the AJBM, with Mr. Shoei Utsuda, President & CEO of Mitsui & Co. Ltd, as the Chairman of Committee on Asia - Japan Relations of Keizai Doyukai. Mr. Cesar E.A. Virata, the current Chairman of the AJBM Steering Committee, transferred the Chairmanship to Mr. Khun Staporn Kavitanon, Representative of the Thailand National Committee of AJBM (Vice Chairman of Bangkok Bank).
The delegates also expressed their appreciation to the 29th ABJM host, the Philippines, as well as to the interpreters/translators and the Secretariat.