Expansion of Asean industrial scheme proposed

Members of an Asean working group have proposed the expansion of the coverage of Asean Industrial Cooperation (AICO), an intra-regional product swapping scheme, to make it attractive even beyond the effectivity of the Asean Free Trade Agreement (AFTA).

Industry sources said the proposal was made during the recently concluded meeting of the working group here in the Philippines.

The coverage of AICO, based on the proposal, should be expanded to include infrastructure.

AICO is an industrial cooperation scheme intended to promote joint manufacturing and industrial activities between Asean-based companies. A huge come-on in getting into the scheme is the preferential tariff rates of a minimum zero to five percent applied on the products involved in the swap.

Upon the effectivity of the AFTA in 2003, when tariff wall among the member countries is supposed to come down to between zero and five percent, the AICO would also lose its attractiveness.

Thus, the Asean working group is studying ways to extend the life of AICO by expanding its coverage and further lowering the effective tariff from the current zero to five percent.

The working group had also proposed the possibility of lowering the required Asean minimum content for car manufacturers availing of the AICO scheme.