PUBLICATIONS & REPORTS

Contents Introduction

The Association of Southeast Asian Nations (ASEAN) has broadened its membership to include nine nations in Southeast Asia, bringing formerly hostile states into the ASEAN fold. It has deepened the economic cooperation dimension of ASEAN with the ASEAN Free Trade Agreement (AFTA). Implementation of AFTA, which will lower tariffs on almost all tradable goods to zero to five percent by the year 2003, has been pushed forward ahead of its original schedule. ASEAN is now in the process of liberalization of commercial services under the ASEAN Framework Agreement on Services (AFAS). Though selected service industries have been previously included in economic cooperation arrangements, AFAS represents a more complete effort at extending preferential treatment to services within the region. This paper examines the theoretical and policy issues in the liberalization of tradable commercial services within a region. In particular, regulatory, technological and related investment policy issues must be considered within a regional trading arrangement that wishes to extend intra-group preferences to tradable commercial services. Issues of rules of origin, technical standards, and differential investment restrictions necessary to implement preferential trade in services are evaluated.