The December 1995 ASEAN Summit endorsed in principle the concept of an ASEAN Investment Area (AIA), in which barriers to intra-regional investment would be lowered and removed, regulations would be liberalized, streamlined, and made more transparent, and incentives would be offered to boost regional investment. The basic concept is to substantially increase the flow of investment into ASEAN from both ASEAN and non-ASEAN sources by enhancing the region's competitiveness.
The AIA will encompass three broad principles, namely, cooperation, facilitation, and liberalization. ASEAN officials have indicated that the AIA may be modeled along CEPT lines, wherein different sectors would be opened to investment and national treatment on different time frames, depending on each country's particular situation.
An initial list of temporary exclusions, covering the agriculture, forestry, and mining sectors, was adopted at the AIA Ministerial Meeting in Thailand in October 2000. Under the AIA agreement, seven members have agreed to remove their temporary exclusion lists for ASEAN investors in manufacturing by2003. Full realization of the AIA with the removal of temporary exclusion lists in manufacturing agriculture, fisheries, forestry and mining is scheduled by 2010 for the ASEAN-6, and by 2015 for the new members (Cambodia, Laos, Myanmar, and Vietnam).
The main approaches on the AIA are as follows:All industries are to be opened up for investment, with exclusions to be phased out according to schedules
- National treatment is granted immediately to ASEAN investors with few exclusions
- Elimination of investment impediments
- Streamlining of investment process and procedures
- Enhancing transparency
- Undertaking investment facilitation measures