A Trade Negotiations Department source, who will participate in the two-day unofficial meeting and who asked for anonymity, said discussions were expected to focus on basic agreements covering both goods and services.

There are plans to increase the right of Asean investors to hold as much as a 70-per-cent stake in general service businesses in member countries by 2010. These include restaurants, hotels, banks, healthcare services and shops.

At present, Asean member countries each have different rules for foreign and local investment in joint ventures. Thailand, for instance, allows foreigners to hold a maximum of 49 per cent, and this will increase to 51 per cent in 2008.

However, Asean members are considering gradually increasing the percentage of joint ventures that may be held by foreigners who are Asean nationals. One proposal suggests the percentage be raised to 51 per cent stake in 2009 and to 70 per cent in 2015.

The Asean economic ministers will also discuss existing agreements on regional cooperation and ways of implementing them earlier than scheduled. Members have already agreed to eliminate tariffs and allow a free flow of trade within the regional grouping by 2015.

Accelerating the pace towards an economic community is seen as necessary to facilitate trade and investment under free trade agreements already signed by Asean with major trading partners such as China.

The Trade Negotiations Department source said that despite the desire to speed up cooperation, there is a general feeling that liberalisation of the telecommunications sector should be delayed because some Asean members are not ready to open their markets in this area.

Under the provisions of the Asean Free Trade Area, tariff and customs-procedure streamlining will focus on 11 priority sectors covered by a common effective preferential tariff facility. The sectors include agricultural products, fisheries, automotive, wood products, rubber, textiles, electronics, information technology, healthcare and aviation.

These arrangements are slated for completion next year, as they apply to the six original Asean members and by 2012 for the four newer members.

The six original countries are Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand, while the new members are Cambodia, Laos, Burma and Vietnam.

The source said the Boracay meeting would lead to an agreement at the ministerial level during the 38th meeting of Asean Economic Ministers in August.

"The [Boracay] meeting should come up with some compromises and mutual agreements. However, some countries may add some negative-listed products to the eleven sectors," the source said.

He said member countries might add to their lists of sensitive products, particularly in the agricultural and healthcare sectors, in a bid to protect their local farmers and operators from foreign competition.

The meeting will also discuss a framework for a free trade agreement between Asean and the European Union.

Petchanet Pratruangkrai

The Nation