ASEAN needs to reduce or eliminate other forms of non-tariff barriers to retain its attractiveness to major trading partners and investor nations, particularly the three East Asian countries, Malaysia's Ministry of International Trade and Industry (MITI) said on Thursday.

These non-tariff barriers or obstacles to trade are marginalizing the gains to ASEAN in duty elimination and incentives offered to investors, the ministry said in a statement.

"It is imperative ASEAN member states implement their commitments to reduce and eliminate import duties, open up their services and investment sectors, harmonize regulatory and registration processes and other measures. The implementation of these commitments would help the region's economic integration as outlined in the ASEAN Economic Community (AEC) Blueprint," it said.

The implementation of the commitments would also enable businesses within the region to expand intra-ASEAN trade and investment flows, the ministry said.

ASEAN should also accelerate its services liberalization in order to stay credible and to increase its draw of foreign direct investment (FDI), MITI said.

The current pace of progressive liberalization is not fast enough, as services need to catch up as an enabler to facilitate the speedy movement of goods across borders, the ministry said.

"The opening up of intra-ASEAN trade in services provides tremendous business opportunities for ASEAN's services providers. Malaysian companies are already taking advantage of the liberalization in sectors such as construction, healthcare, tourism and education," it said.

In addition to regional integration initiatives, MITI said the implementation of the ASEAN-China, ASEAN-South Korea, ASEAN-Japan free trade agreement (FTA) and the soon to be implemented FTA with India, Australia and New Zealand provides the perfect complement to regional integration initiatives by working towards making ASEAN an attractive location for FDI inflows, and offering a wide regional market for its members and other trading partners.

In 2007, the intra-ASEAN investment stood at US$8.2 billion. The inflow of FDI also saw expansion in ASEAN's global trade to US$1.6 trillion in 2007.

Intra-ASEAN trade, which on average comprises one quarter of annual total ASEAN trade, increased from US$352.8 billion in 2006 to US$404.3 billion in 2007 translating to a 14.6 percent growth.

(Xinhua News Agency February 6, 2009)