Centre for International Law ASEAN Law and Policy Curriculum and Training Programme
ASEAN Economic Community: Overview of the Progress of the AEC to Date and Evaluating the AEC Blueprint 2015
Dr Chia Siow Yue
© Centre for International Law, ASEAN Law and Policy Curriculum and Training Programme This curriculum is freely available online for educational purposes. Any use of the curriculum must be accompanied by attribution to the Centre for International Law, ASEAN Law and Policy Curriculum and Training Programme. The material may not be used for commercial purposes and if modified may not be distributed.
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Overview of the Progress of the AEC to Date and Evaluating the AEC
Blueprint 2025
CHIA Siow Yue, Singapore Institute of International Affairs for NUS-CIL Course
Objective and contents of this module: The objective of this module is to prepare participants to understand the economic
imperatives and contents of ASEAN regional economic integration and to evaluate the
outcomes and challenges of such economic integration.
I. Introduction: ASEAN diversities
II. Why do countries/regions pursue economic integration?
1. Reasons for concluding free-trade agreements
2. What are the economic benefits of economic integration?
III. ASEAN economic integration through formal trade agreements
1. Conceptual framework
2. The WTO rules governing free-trade agreements
3. Scope and content of free-trade agreements
IV. ASEAN economic integration through production networks and value chains
1. What is global production network (GPN) or global value chain (GVC)?
2. GPNs/GVCs in ASEAN and East Asia - determinants, benefits and concerns
V. Progression in ASEAN economic integration before the AEC
1. ASEAN economic cooperation in the pre-AFTA period, 1977-1991
2. ASEAN economic integration in the AFTA period, 1992-2006
VI. ASEAN economic integration under the AEC 2015
1. Why the ASEAN Economic Community (AEC)?
2. The 2007 AEC Blueprint
3. Benefits of the AEC
4. Assessment of AEC 2015
VII. ASEAN economic integration under the AEC 2025
1. The AEC Blueprint 2025
2. Implementation of AEC Blueprint 2025
VIII. Conclusion
IX. Readings
I. Introduction: ASEAN Diversities
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Various aspects of ASEAN diversity impact on the direction and speed of ASEAN economic
integration, as well as on the political-security and socio-cultural dimensions:
-Huge differences in size, eg land mass, population, GDP: result in varying resource
endowment, labour force size, market size, and trade-dependency.
-Huge geographic dispersion, with archipelagic states and distant borders: impact on national
cohesion and common national interests, and compliance to ASEAN commitments.
-Different economic systems eg market-based versus state-based, globalised versus
nationalistic: impact on the direction and speed of ASEAN economic integration.
-Different historical traditions, eg Dutch, British, French, American: impact on legal
systems, institutions, traditions and fluency with international lingua franca.
-Different political systems, eg communism, capitalism, authoritarian, military, theocratic,
democratic: impact on the role of the state in economic development, role of the market,
state enterprises and industrial policies.
II. Why Do Countries/Regions Pursue Economic Integration?
Table 1: ASEAN: Some Aspects of ASEAN Diversity, 2016
Land area Popula- GDP GDP Goods Trade/ FDI Thousand Tion Current per capita Trade GDP Inflow
sq km Million US$bill. US$ US$bill. ratio % US$bill. Brunei 5.8 0.4 11.2 26943 7.5 67 0.0.2
Indonesia 1913.6 258.7 931.2 3600 280.8 30 3.5 Malaysia 330.3 31.6 299.6 9464 357.8 119 11.3
hilippines 300.0 103.2 311.5 3017 142.3 46 7.9
Singapore 0.7 5.6 297.0 52963 630.0 217 53.9
Thailand 513.1 67.5 407.0 6034 410.0 101 2.6
Cambodia 181.0 15.2 19.2 1266 22.4 141 2.3
Laos 236.8 6.6 15.9 2402 7.2 46 1.1
Myanmar 676.6 52.9 68.6 1297 27.2 40 3.0
Vietnam 331.0 92.7 198.2 2138 351.0 177 12.6
ASEAN 4488.8 634.5 2559.5 4034 2236.3 87 98.0
Source: ASEAN Secretariat database
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1. Reasons for concluding free-trade agreements
Economies increasingly conclude regional and bilateral free-trade agreements at the same
time as they continue to participate in multilateral trade negotiations in GATT/WTO.
-Consider a free-trade agreement when an economy could obtain benefits earlier than
otherwise under the GATT/WTO multilateral system or when the benefit is unavailable under
the GATT/WTO multilateral system because it has no relevant rules, such as on Investment.
-The economy must assess carefully the benefits it can obtain from various options including
unilateral policy actions, because free-trade agreements are fairly demanding in resources,
both human and financial.
Reasons for embarking on free-trade agreement negotiations include economic, political and
strategic factors, such as improved market access; promotion of domestic economic policy
reforms; faster trade liberalisation than possible under multilateral negotiations; fostering
strategic linkages with other countries; and because of fear of being left out and
disadvantaged (domino effect) when competitor countries enter into such agreements.
2. What are the benefits from economic integration?
a) With liberalisation of trade in goods:
-Removal of tariffs and non-tariff barriers: Boosts intra-ASEAN trade, economic growth and
employment, leads to more efficient resource allocation and productivity gains, encourages
foreign and domestic investments, lower business costs and improve economic
competitiveness, lower consumer prices and widen consumer choice.
-Trade facilitation measures (customs, standards, transport and telecommunications
connectivity): promotes trade and investment and integration into global production
networks/global value chains (GPNs/GVCs).
b) With liberalisation of trade in services:
-Improves service efficiency, thus lowering production and distribution costs and service
costs to consumers as well as widening consumer choice.
c) With liberalisation of behind-the-border measures (competition policy, intellectual
property protection, infrastructure development):
-Reduce business costs and raise competitiveness.
d) With liberalisation of investments, especially FDI:
-FDI brings financial, technological and managerial resources and participation in
GPNs/GVCs
e) With liberalisation of skilled labour mobility:
-Facilitates services and FDI with inflows of intra-corporate transferees and other skilled
professionals; skilled inflows facilitate transfer of knowhow, experiences and best practices.
f) With financial and capital market development:
-Leads to more efficient markets to finance trade, investment and corporate development
g) With narrowing the development gap:
-Improves ASEAN economic integration and social cohesion
Questions:
1. Under what situations should governments seriously consider entering into bilateral
or regional free-trade negotiations? What are their political, security, economic and
social concerns?
2. US President Donald Trump is advocating and implementing an “America First”
policy, arguing for fair and reciprocal trade. Would you advocate the same for your
country ---why or why not?
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III. ASEAN Economic Integration through Formal Trade Agreements
1. Conceptual framework
a) Theoretical stages of economic integration:
-Preferential trading agreements (PTAs): when countries agree to reduce/eliminate tariff
barriers on selected goods imported from each other.
-Free trade agreements (FTAs): when countries agree to remove trade tariff barriers on all
goods originating among themselves. Each economy retains the right to set its own MFN
tariffs and the conduct its commercial or trade policy. Preferential rules of origin have to
be crafted to identify originating goods. It is increasingly common for FTAs to also
include provisions liberalising trade in services and investment flows.
-Customs unions (CUs): when in addition to removing trade tariff barriers on all goods
originating among themselves, the countries also negotiate a common external tariff and
conduct a common commercial policy vis-à-vis the rest of the world. Since all members
of a CU apply the same external tariff on goods, there is no need to develop preferential
rules of origin. As with FTAs, a CU agreement can also contain provisions for services
and investment. Integration in the CU is deeper than under the FTA.
-Common market (CM): when countries remove all barriers to trade in goods and services
and movement of capital and labour and adopt harmonization of micro-economic policies,
common rules regarding anti-competitive practices, common policies affecting key
industries. The result is deep integration.
-Monetary and economic union: when countries adopt a common single currency and
pursue common macro-economic policies such as exchange rate, monetary policy,
harmonised tax systems, public sector spending and borrowing levels and jointly agreed
national budget deficits/surpluses. As with the CM, there is also unrestricted flows of
goods, services and investment and factor flows.
In addition to the above preferential trade arrangements, there are also Trade and Investment
Framework Agreements (TIFAs) and other economic cooperation agreements as a first step
towards free-trade agreements. Such agreements typically do not contain any market access
provisions, though they often establish mechanisms for the promotion of trade liberalisation.
In the ASEAN region, there is the Greater Mekong Subregion (GMS) which focuses on
infrastructure development among the countries that straddle the Mekong River. There is also
the ASEAN growth areas.
b) Choosing between Customs Union and Free Trade Area
-Reduced national flexibility of a common commercial policy in a CU: First, formation of
CU with a common external tariff may lead in some cases to some higher tariffs towards
other WTO members and redress have to be sought in the WTO procedures. Second, there
may be a need to consider whether to impose anti-dumping or safeguards measures against
third countries; if only one of the partners imposed such measures, they could easily be
circumvented. Third, any proposed adjustments to the tariff schedule by any CU member
would need to be discussed together to maintain the common external tariff. Fourth, in
ASEAN, a Customs Union is not possible because of zero duty rates for almost all goods
imposed by Singapore and Brunei, a level of openness which other ASEAN countries did not
want to follow; likewise, free ports, Singapore and Brunei as free ports did not wish to
increase their tariff rates to the level of other ASEAN countries to achieve a CU. -Difficulties with implementing preferential rules of origin in an FTA: First, rules of origin have to be enforced, which can be costly in terms of time and resources. Second, there is the “spaghetti-bowl" effect arising from numerous and overlapping FTAs that add to trade and
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administration costs. Third, there is the erosion of tariff preferences as the margin of preference available through the zero-tariff of an FTA becomes much smaller through successive rounds of GATT/WTO multilateral trade negotiations and with the increasing number of FTAs concluded among and between countries. Preference erosion is a major reason why FTAs need to go beyond tariff elimination to ensure substantive benefits for member economies.
Question:
1. What are the common and different features of Free Trade Areas and Customs
Unions? Why did ASEAN not conclude a Customs Union among themselves?
2. The WTO rules governing free-trade agreements
Free-trade agreements among WTO countries permit departures from the non-discriminatory
rules of the WTO, and are governed by Article XXIV of GATT, Article V of GATS and the
Enabling Clause.
Article XXIV of GATT contains the rules for trade in goods: It defines a free-trade area as “a
group of two or more customs territories in which the duties and other restrictive regulations
of commerce . . . are eliminated on substantially all the trade between the constituent
territories in products originating in such territories.”
-What is meant by "substantially all the trade"? A widely accepted view is that an
agreement should cover at least 90% of trade. Calculation of "substantially all the trade"
would consider both actual trade flows and the number of tariff lines involved.
-Tariff elimination applies only to goods originating in the free-trade area, and for this, rules
of origin are necessary to identify such goods
Article V of GATS contains the rules for trade in services: WTO members may enter into a
free-trade agreement to liberalize trade in services if the Agreement has “substantial sectoral
coverage” , expressed in terms of numbers of sectors, volume of trade affected, and modes
of supply; eliminates/eliminates substantially discrimination in national treatment in the
sectors covered and/or prohibits new or more discriminatory measures in these sectors; and
does not raise barriers against non-members. A service supplier from a third country
incorporated in one of the parties to the free-trade agreement will also enjoy preferential
treatment within the free-trade area as long as it engages in substantive operations within the
territory of the parties; if the agreement involves developing countries only, they may
continue to give better treatment to firms owned or controlled by their own nationals.
The Enabling Clause allows developing economies to negotiate preferential trade agreements
among themselves under more flexible provisions in terms of sectors covered and tariff
elimination/reduction than would be possible between developed countries. When developing
countries enter into agreements with developed countries, they have more flexibility in terms
of substantial coverage and the extent to which they must eliminate discriminatory measures.
Questions:
1. Is the AEC reported to the WTO under GATT and GATS or under the Enabling
Clause?
2. Are the ASEAN+1 FTAs with China, Japan, South Korea, Australia-New Zealand
and India reported to the WTO under GATT and GATS or the Enabling Clause?
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3. Scope and content of free-trade agreements
-Comprehensiveness: The content of free-trade agreements has become very wide, going
beyond tariff measures and now usually covers services and investment. They deliver the
maximum economic benefit when they are comprehensive in scope and sectors. A
comprehensive FTA would have the following content
-Trade in goods, including trade remedies (safeguards, anti-dumping measures and
countervailing duties), customs procedures, rules of origin, technical barriers to trade and
sanitary and phytosanitary(SPS) measures, electronic commerce;
-Trade in services, including financial and telecommunications services;
-Investment liberalization, facilitation and protection;
-Other provisions: Movement of natural persons; Intellectual property; Competition policy;
Government procurement; occasionally also Labour and Environment.
-Mechanisms for consultation and dispute settlement: These mechanisms are to prevent and
resolve disagreements expeditiously through consultation, mediation or arbitration, avoiding
duplication with the WTO dispute settlement mechanism.
-Provision for periodic review: Periodic reviews ensure full implementation and take into
account changing economic circumstances, maintain momentum for domestic reform and
revisting old concerns and visiting new concerns
-Transparent administration of laws and regulations: Once they have been signed,
agreements are made public. Making theme readily available ensures that businesses
understand and take advantage of the liberalized trade conditions. Member economies notify
their agreements in line with WTO obligations and procedures
Question:
1. What are the pros and cons of widening and deepening the coverage of free-trade
agreements?
2. Would you “recommend” that your country enter into a Customs Union or a Free-
Trade Area in regional or bilateral agreements? Why?
IV. ASEAN Integration through Production Networks and Value Chains
1. What is global production network (GPN) or global value chain (GVC)?
a) Concept:
GPNs/GVCs break up the production process so that different stages or segments can be
carried out in different locations across countries. For example, many smart phones and
televisions are designed in the United States or Japan, but have sophisticated inputs, such as
semiconductors and processors produced in South Korea or Taiwan, and assembled in China.
They are then marketed in the US and Europe.
These complex global production arrangements have transformed the nature of trade and the
analysis of trade patterns and trade data. Traditional trade analysis uses trade data based on
gross value as collected in international and national statistics. But this can be misleading
regarding value added from trade and bilateral trade balances. TiVA data, together with
global input-output tables segment trade value added into the following:
-Pure domestic value-added (DVA) production activities are those that are completely
produced and consumed within one country. When these goods and services are exported to
another country, classical trade takes place, with production occurring completely in one
country and consumption in another.
-GPN/GVC activities involve value added created by production across national borders
(embodied in intermediate trade flows), which can be further decomposed into simple and
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complex cross-border production-sharing activities based on the number of border crossings.
b) Figure 1: Segments of value chain as represented by Smile Curve
-Left-hand side upstream segment ---high-value added R&D, branding, design
-Right-hand side downstream segment --- high value added logistics (distribution, marketing,
after-sales service)
-Middle centre segment ---lower value added manufacturing and assembly.
The logic of the smile shape is as follows. Research and design activities for critical
components occur early in the production process. These knowledge activities tend to be
high- value-added activities in GPNs/GVCs and tend to be carried out in more advanced
economies. The bottom point of the curve, reflects manufacturing and assembly activity at
low wages. Marketing, logistics, and after-product servicing are high value added market
knowledge activities found at the upward-sloping part of the smile curve on the right. And
they tend to be carried out in advanced economies, where the mass consumption products are
eventually purchased by households
c) Developing country participation in GPNs/GVCs:
GPNs/GVCs provide new opportunities for developing countries to increase their
participation in global trade and to diversify their exports from raw materials into industrial
goods. Without them, a developing country wishing to industrialise and export would need
the capability to produce a complete industrial product, e.g. parts of the computer keyboard
rather than the whole computer. The PRC is an example par excellence.
Developing countries wishing to be more involved in GPN/GVC and moving to higher value-
added activities within the chains over time need to note the following.
Geography matters: There are 3 interconnected production hubs for trade in parts and
components, centering respectively on the United States, China-Japan-South Korea, and
Europe (especially Germany). Proximity to these hubs matter.
Unit labor costs: There is a distinction between low wages and low unit labour cost. Low
wage countries do not have a production advantage unless there is labour productivity that is
low unit labour cost.
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Trade costs: Trade costs vary with countries and comprise transportation, insurance and other
fees, information costs, regulation and licensing barriers, insecure contracts, and weak trade
governance. While weak transportation links, inefficient customs clearance, bureaucracy, and
red tape all tend to impede trade, their effects are most pernicious in sectors requiring that
parts move back and forth across borders, eg in complex value chains such as motor vehicles,
computers, and machinery.
Fig 2: ASEAN Logistics Performance Index
The World Bank's Logistics Performance Index shows how infrastructure and bureaucracy
work together to move goods through the production process and on to consumers. Countries
with very high trade costs will not be able to participate in GPNs/GVCs. Developing
countries try to address this problem by establishing special export processing zones, which
have superior logistics and expedited customs clearance. A better approach is to improve
trade facilitation for all firms in the economy
2. GPNs/GVCs in ASEAN and East Asia - Determinants, benefits and concerns
a) Determinants:
GPNs/GVCs in East Asia originated in the 1980s in the clothing and electronics industries
and have since embraced an ever-widening range of industries and services.
-FDI from US, Western Europe and Japan moved to set up production in the first-tier Asian
NIEs (Hong Kong, South Korea, Taiwan, Singapore) in the 1980s, followed by FDI into
second-tier of Indonesia, Malaysia, Philippines, Thailand and PRC, and then into the third-
tier countries of CLMV.
-The determinants of participation are differential costs of production, procurement-
distribution, and cross-border coordination. In each geographical shift, the attractions of host
countries were, abundant low-wage young trainable labour, and good transport connectivity
with low risks of supply chain disruption and a conducive policy framework for FDI inflows.
In ASEAN, measures to implement AFTA, AFAS, AIA and the AEC facilitate participation
in GPNs/GVCs.
b) Benefits of participation:
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-Fosters industrialisation of the developing country, as country needs to develop capabilities
in specific tasks only, rather than capabilities to produce an entire industrial product(s).
-Encourages trade liberalisation, trade facilitation, and transport and ICT connectivity to
ensure smooth and open trade flows of imported inputs and exports of intermediate and final
goods.
-Leads to growth of intra-industry trade, intra-regional trade and FDI
-Strengthens the AEC
c) Concerns with participation
-For countries not into GPNs/GVCs, the main concern is how to join. In ASEAN, Cambodia,
Laos and Myanmar are desirous of more participation. They can take advantage of the PRC
relocation of some industrial activities as it undertakes structural reforms and upgrades.
Necessary condition is to provide a business-friendly investment climate.
-For countries already engaged in GPNs/GVCs such as Indonesia, Malaysia, Philippines,
Thailand and also Vietnam, the concern is how not to remain trapped in the low-value-added
segments, but to increase domestic value-added, skill content, and domestic linkages of
participation.
-For countries already in the high-value-added segments of GPN/GVC, such as Singapore,
the concern is how to retain its competitive leads in innovations and transportation -logistics.
Questions:
1. What policies and measures must countries such as Cambodia, Laos and Myanmar
undertake to increase participate in GPN/GVCs?
2. What policies and measures must countries such as Indonesia, Malaysia, Philippines,
Thailand and Vietnam undertake to increase domestic-value-added content?
3. What policies and measures must Singapore undertake to maintain its position in the
high-value-added segments of the GPN/GVC?
V. Progression in ASEAN Economic Integration before AEC
1. ASEAN Economic Cooperation in the Pre-AFTA Period, 1977-1991
Prior to the late-1980s, consideration of regional economic integration remained taboo in
Southeast Asia for a number of reasons.
-First, is the reluctance of some countries to undertake trade and investment liberalisation due
to the pursuit of industrial policies of import substitution. However, as the limitations of
import substitution in other regions became increasingly apparent, more ASEAN economies
switched to an export-oriented development strategy with greater acceptance of trade and
investment liberalisation.
-Second, was the lack of economic complementarity among ASEAN economies at that time,
as they were primarily producing and exporting similar raw materials and labour intensive
manufactures.
-Third was the diversity in size, resource endowment, level of economic development,
technological capability, and trade and investment regimes among ASEAN countries which led
to differing perceptions of benefits and costs of economic integration. This period was
characterised by pre-occupation with commodity trade problems, the ASEAN Preferential
Trading Arrangement (PTA) and industrial cooperation schemes.
a) ASEAN Preferential Trading Arrangement (PTA) 1977
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Each ASEAN country would grant to imports from other ASEAN States a margin of
preference on MFN tariffs. The PTA would cover “basic commodities” particularly food and
energy, products of the industrial cooperation schemes and lists of goods to be negotiated
among the parties. The PTA was generally considered a failure, with considerable negotiating
resources expanded producing only a limited impact on intra-ASEAN trade. With tariff
liberalisation based on time-consuming product-by-product negotiations, the lack of
seriousness to liberalise intra-ASEAN trade was evident by the inclusion of snow ploughs
and nuclear plants in the negotiations and by the long national exclusion lists.
b) ASEAN Industrial Cooperation (AIC)
This covers the ASEAN Industrial Projects (AIP 1976), ASEAN Industrial Complementation
(AIC 1981) and ASEAN Industrial Joint Ventures (AIJV 1983). The AIV schemes failed
because ASEAN countries were engaged in import substitution and building national
champions resulting in conflicting national interests. The schemes did not contribute
significantly to industrial development of ASEAN countries, except for B-to-B
complementation in automotive and Nestle’s multi-country plants.
2. ASEAN Economic Integration in the AFTA Period, 1992-2006
From the late 1980s dramatic global and regional developments were pressuring ASEAN to
move towards regional economic integration so as to compete effectively for global markets
and investments. The Uruguay Round was completed in December 1991 and GATT was
being reorganised into the WTO; the EU was being created by the Treaty of Maastricht in
February 1992; the North American Free Trade Area (NAFTA) was being negotiated and
finally signed in December 1992; radical economic reforms were taking place in China and
followed by India, laying the foundation for their accelerated economic growth in the coming
decade. The ASEAN Free Trade Area (AFTA) was established in 1992, followed by the 1995
ASEAN Framework Agreement on Services (AFAS) and by the 1998 ASEAN Investment Area
(AIA) agreement.
a) AFTA: Trade in Goods Liberalisation and Facilitation
Tariff elimination:
AFTA was established in January 1992, with intra-ASEAN tariff liberalisation and elimination
under the Common Effective Preferential Tariff (CEPT) scheme. A customs union with
common external tariffs was ruled out due to marked differences in MFN tariff levels among
ASEAN economies. There were Temporary Exclusion List (TEL), Sensitive List (SL)
comprising unprocessed agricultural products, and General Exclusion List (GEL) covering
products permanently excluded from liberalisation for reasons of national security, protection of
human, animal or plant life and health, and articles of artistic, historic and archaeological value.
In September 1994 it was agreed to eliminate the TELs by 2000 for ASEAN6 and by 2003 for
CLMV. The SL has a longer time-frame for liberalisation, with 2010 for ASEAN6 and 2013-17
for CLMV. In January 2003 ASEAN agreed that tariffs would be completely abolished on
trade among ASEAN6 by the beginning of 2010 and for CLMV by the beginning of 2015
with some exceptions expiring by 2018. In November 2004, the target dates for removing
tariffs were advanced to the beginning of 2007 for ASEAN6 and 2010 for CLMV for priority
sectors.
Removal of non-tariff barriers:
The 1995 ASEAN Summit directed the removal of NTBs from January 1996. NTBs include
import quotas and anti-dumping actions as well as technical, administrative, health and safety
regulations usually imposed for quality assurance and safety standards, but also for
protectionism. It took considerable time for ASEAN even to compile its NTB database.
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Trade facilitation - customs improvement:
Inefficient and ambiguous customs rules, regulations and procedures and their lack of
harmonisation result in arbitrary and corrupt application across ASEAN countries and add to
business transaction costs. In 1983, Indonesia, Malaysia, Philippines, Singapore and Thailand
adopted the ASEAN Code of Conduct and in 1997 the ASEAN Agreement on Customs
formalised the code. In 2003, ASEAN adopted the ASEAN Customs Valuation Guide and the
ASEAN Post-Clearance Audit Manual. In August 2003 ASEAN adopted the ASEAN
Harmonised Tariff Nomenclatures (AHTN) to provide a common system to classify and
designate all goods for customs purposes. A December 2005 agreement to establish the
ASEAN Single Window commits all ASEAN countries to set up National Single Windows
by 2008 for ASEAN6 and 2012 for CLMV; there would be only one point where customs
data and information are submitted and processed and customs decisions are made, thus
obviating the need for importers to shuttle a number of agencies to have their shipments
approved.
Trade facilitation- standards and mutual recognition:
To minimise business transaction costs, product standards are either harmonised across ASEAN
or mutual recognition arrangements (MRAs) negotiated to obviate multiple testing and
certification. However, standards harmonisation and even MRAs could be difficult to achieve in
view of the wide development gap among ASEAN countries and overall, progress was very
slow.
Trade facilitation - transportation and logistics:
Transportation development includes the development of physical infrastructure as well as
removal of administrative-political and regulatory obstructions. In 1995 ASEAN adopted the
Singapore-Kunming Rail Link to facilitate trade on mainland Southeast Asia and ease the
access to and from China. In 1999 ASEAN formalised the programme of developing the
ASEAN Highway Network. In 1998 ASEAN concluded a framework agreement for the
facilitation of transit passage of goods traded in the region: it commits the parties to ensure
that goods being transported from one ASEAN country to another through a third would not
be subjected to unnecessary delays, restrictions, taxation or customs inspection in the transit
country. The 1998 Hanoi Plan of Action called for the development of a Competitive Air
Services Policy as a prelude to an ASEAN Open Sky Policy; the rapid growth of budget
airlines in the region was already breaking up the monopolies of ASEAN national airlines. In
2002 ASEAN agreed to allow one another to deliver air cargo services to their respective
territories up to 100 tons a week. However, some countries restricted the operation of cargo
services from other ASEAN countries.
ASEAN Industrial Cooperation (AICO):
In 1996 ASEAN also adopted AICO with the objective of promoting joint manufacturing
between ASEAN-based companies. The qualifying criteria for AICO are a minimum of two
companies in two different ASEAN countries and a minimum of 30% national equity. AICO
allows the private sector to select the products for which to seek tariff concessions, subject to
approval of AICO status by the governments immediately involved. AICO products
immediately enjoy AFTA end-tariff rates of 0-5% as well as local content accreditation and
investment incentives offered by ASEAN national authorities. AICO has successfully
promoted production networks in automobile and electronics industries, by reducing the
preferential tariff rate to 0-5 % and liberalising equity restrictions for foreign investors.
b) AFAS: Trade in Services Liberalisation
AFAS was concluded in December 1995 to eliminate discriminatory measures, market access
limitations and other restrictions on trade in services. What is the rationale? First, services
are an increasingly important part of ASEAN national economies. Second, integrating the
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services sector is an essential component of other regional economic integrations such as
NAFTA and NAFTA-type bilateral FTAs. Third, an ASEAN-wide agreement will help lock
in the unilateral liberalisation measures already undertaken by individual ASEAN States and
prepare them for services liberalisation in other ASEAN and bilateral FTAs.
AFAS aims at liberalising trade in services beyond the GATS commitments and improve the
efficiency and competitiveness of ASEAN service suppliers. Services negotiations under
AFAS follow the WTO mode of request and offer and no agreement is reached until all
members agreed to the totality of the package offered. ASEAN later adopted the more
flexible “ASEAN minus X” approach to accommodate members unable to move at the same
pace, allowing them to join in at a later stage.
Services trade liberalisation involves four modes of supply: Mode 1 (cross-border supply),
Mode 2 (consumption abroad), Mode 3 (commercial presence) and Mode 4 (movement of
natural persons). The general reluctance to liberalise services under Mode 3 and Mode 4 led
to modifications which resulted in liberalisation of all limitations for Mode 1 and Mode 2 but
only progressive liberalisation for Mode 3 and Mode 4.
AFAS requires negotiations to be conducted sector by sector. Services trade liberalisation is
achieved through rounds of negotiations, with each round resulting in a package of
commitments by ASEAN States in each agreed sector /sub-sector and mode of supply.
Countries have so far negotiated and agreed on 7 packages of commitments under AFAS which
covers business services, professional services, construction, distribution, education,
environmental services, healthcare, maritime transport, telecommunication and tourism.
ASEAN has also concluded MRAs for professional services covering engineering, architecture,
accountancy, surveying, medical practitioners, dental practitioners, nursing services and tourism
services.
Assessment of AFAS: Many negotiations are extremely cautious either because of their
uncertainty about the impact of liberalisation and fear of the loss of regulatory control in
some service sectors (such as financial services) or because of the power of domestic
interests. Assessment made in the mid-term review of Hanoi Plan of Action noted progress in
negotiations has been slow and indicative offers have been slow in coming. In September
2005, ASEAN declared 2015 as the end-date for liberalisation of all services sectors.
c) AIA: Investment Liberalisation, Facilitation and Promotion
FDI inflows have played a crucial role in the economic development of ASEAN economies,
and particularly in the switch to an outward development strategy and participation in
GPNs/GVCs.
The 1998 ASEAN Investment Area (AIA) agreement aimed at providing a policy
environment to facilitate the free flows of investment and participation in global and regional
production networks. It grants national treatment to ASEAN investors by 2010 and to non-
ASEAN investors by 2020, with some exceptions specified in the TEL, SL and GEL. This
was later changed to full realisation of the AIA to 2010 for ASEAN6 and 2015 for CLMV
and parity treatment for ASEAN and non-ASEAN investors. Also, each ASEAN country is
to grant all other ASEAN countries on an MFN basis, the investment privileges that it would
accord to non-ASEAN countries under bilateral agreements. Sectoral coverage of the AIA
includes manufacturing, agriculture, fisheries, forestry and mining, and services incidental to
those sectors. ASEAN6 and Myanmar agreed to phase out their TELs in manufacturing by
2003, Vietnam, Cambodia and Laos by 2010. Malaysia and Singapore did not have TELs.
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To improve the investment climate, the AIA agreement calls for reduction/elimination of
regulations and conditions impeding investment flows and investment project operation, such
as ensuring transparency and consistency in application and interpretation of their investment
laws, regulations and administrative procedures. ASEAN countries are to exchange their
action plans on facilitating, promoting and liberalising inflows of investments. The AIA also
contains an investment promotion programme, which includes joint investment promotion
missions to target countries, creation of investment websites and databases and timely
publication of investment information.
Assessment of AIA: According to the Mid-Term Review of the Hanoi Plan of Action, some
countries faced difficulties in drawing up the TEL and SL for services that are incidental to
manufacturing, agriculture, fishery, forestry and mining. The extent and type of investment
barriers are evident from the length and content of the various TEL, SL and GEL. The
deadlines for phasing out the TELs in manufacturing were brought forward to January 2003
for the ASEAN6 and Myanmar, and to January 2010 for CLV. The deadlines for phasing out
the TELs in agriculture, fishery, forestry, mining and related services are 2010 for the
ASEAN6 and Cambodia, 2013 for Vietnam, and 2015 for Laos and Myanmar. The GEL
consists of industries and investment measures that are not open to FDI for reasons of
national security, public morals, public health and environmental protection.
Question:
1. From your country perspective, what were the main concerns and challenges in
implementing the commitments under AFTA, AFAS and AIA?
VI. ASEAN Economic Integration under AEC 2015
1. Why the ASEAN Economic Community (AEC)?
At the November 2002 ASEAN Summit, it was decided to move on to the next stage of
regional economic integration. There was concern over the weakened ability of ASEAN
countries to attract FDI in the aftermath of the 1997-8 Asian Financial Crisis as well as the
rise of China and India as competing FDI destinations. Hence ASEAN has to deepen
economic integration to persuade investors that an integrated ASEAN would have a
prospective market size that can compete with the large Asian economies.
The AEC is based on the 1997 ASEAN Vision 2020, calling for a stable, prosperous and
highly competitive ASEAN economic region in which there is free flow of goods, services,
investment and a freer flow of capital, equitable economic development and reduced poverty
and socio-economic disparities in year 2020. The 2002 High Level Task Force on ASEAN
Economic Integration made proposals and recommendations. The November 2004 Vientiane
Action Programme (VAP) lay down goals and strategies for bringing the ASEAN
Community to reality. The ASEAN Framework Agreement for the Integration of Priority
Sectors formalised the measures agreed upon in the VAP, with protocols for the 11 priority
sectors. The 2007 AEC Blueprint outlined the various measures and strategic schedules for
implementation.
2. The 2007 AEC Blueprint
The AEC has often been inappropriately compared to the EU Single Market in the media.
But it is neither a Customs Union (with common external tariff) nor a full Common Market
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(with free mobility of capital and labour and some policy harmonisation). Instead, it is an
FTA Plus with 4 pillars as shown in Table 3:
Table 3: 2007 AEC Blueprint - Four Pillars and Core Elements
Pillars Core elements
A. Single Market and Production Base A1. Free flow of goods: 9 strategic approaches
A2. Free flow of services: 3 strategic approaches
A3. Free flow of investment: 5 strategic approaches
A4. Freer flow of capital: 7 strategic approaches
A5. Free flow of skilled labour
A6. Priority integration sectors
A7. Food, agriculture and forestry
B. Competitive Economic Region B1. Competition policy
B2. Consumer protection
B3. Intellectual property rights
B4. Infrastructure development: 10 strategic approaches
B5. Taxation
B6. E-commerce
C. Equitable Economic Development C1. SME development
C2. Initiative for ASEAN Integration
D. Integration into Global Economy
D1. Coherent approach toward external economic
relations
D2. Enhanced participation in global supply networks
Source: ASEAN Secretariat (January 2008), ASEAN Economic Community Blueprint
3. Benefits of the AEC
The economic literature lists several benefits of economic integration, including an enlarged
market with economies of scale and scope, improved resource allocation and resource pools
with inflows of investment, other capital and labour, and competition leading to improved
efficiency and innovation. Plummer and Chia (2009) discuss the benefits from establishment
of the AEC for various ASEAN stakeholders (government, business, labour, consumers) and
these are outlined below.
a) Benefits from Goods and Services Trade Liberalisation under ATIGA and AFAS
-The creation of a single market and production base should enable ASEAN to benefit from
economies of scale and efficiency in production network processes, while other aspects of the
AEC will boost competitiveness, strengthen ASEAN institutions, and improve the region’s
socio-economic environment.
-The removal of intra-ASEAN tariffs and NTBs plus trade-facilitation measures will boost
intra-ASEAN trade, promote participation and expansion of production networks in ASEAN
and plug ASEAN economies into global supply chains.
-Services is both an input into further production of other economic sectors and for direct
consumption. Services facilitate trade and competitiveness and reduce cost and widen
consumer choice.
-Behind-the-border policies such as competition policy and intellectual property rights
protection, as well as infrastructure connectivity affect ASEAN competitiveness. Competition
15
policy not only improves economic efficiency but also income distribution. Consumer
protection improves living standards. Better IPR protection encourages technology transfer
and local innovations and protect indigenous technologies and property rights. Adequate
transport and communications infrastructure lowers the costs of distribution and
communication in trade and facilitate movements of peoples for business and tourism.
b). Benefits from Liberalisation of Investment and Skilled Labour Flows under AIA and
ACIA
-FDI inflows brings benefits of financial resources, technological and managerial knowhow, and
participation in GPNs/GVCs. A favourable investment climate includes political and economic
stability; large market size and favourable economic prospects; available educated, well-
disciplined low-cost labour; well-developed soft and hard infrastructure; and business-friendly
policies and practices. The ASEAN Comprehensive Investment Area (ACIA) builds on the
earlier AIA and has the 4 components of FDI liberalisation, facilitation, promotion and
protection.
-Skilled labour mobility (including professionals) is essential for effective implementation of
services and FDI liberalisations as well as for deeper economic integration. A free flow of
skilled labour will increase ASEAN’s attractions for foreign MNCs, particularly as it meets
their need for intra-corporate transferees of management and technical personnel. The easier
movement of ASEAN professionals within the region will also facilitate people-to-people
contact and enable transfers of knowhow, experiences and best practices.
c). Benefits of Financial and Capital Market Development
Developing financial resilience is a high priority for ASEAN countries since the Asian
Financial Crisis. This has led to reforms of domestic financial and banking systems, better
macroeconomic management and accumulation of foreign exchange reserves to hedge against
external shocks. As a result the ASEAN region was better able to withstand the onslaught of
the US financial crisis in 2008. Financial and capital market development is seen as providing
more efficient markets to finance trade, investment and corporate development in ASEAN
countries and contributes to Singapore’s role as a financial centre. Cooperation in ASEAN
and in ASEAN+3 (China, Japan and South Korea) have resulted in the Chiang Mai Initiative
(now Chiang Mai Initiative Multilateralisation CMIM), Asian Bond Market, and Regional
Surveillance Mechanism (now ASEAN+3 Macroeconomic Research Office AMRO).
d). Benefits from Narrowing the Development Gap
As highlighted at the outset, the ASEAN economies are characterised by wide diversity. When
the CLMV joined ASEAN in 1995-1999, they had per capita incomes lower than the older
ASEAN members and they were doubly handicapped by being less developed and by being
transitional economies. A wide development gap would lead to negative spill-over effects
between rich and poor neighbourhoods as well as hindering consensus building and the speedy
progress towards the ASEAN Community. “Special and differential treatment” were accorded
the CLMV in terms of delayed time-lines and flexibilities in meeting ASEAN liberalisation
commitments, and in provision of development and technical assistance from the ASEAN6 (as
well as from ASEAN Dialogue Partners) under the Initiative for ASEAN Integration (IAI). The
IAI also embodies the transfer of knowhow, development experience and best practices from the
more advanced ASEAN members.
4. Assessment of AEC 2015
In April 2009 ASEAN adopted the Declaration on the Roadmap for the ASEAN Community
(2009-2015) and agreed on the accelerated time table for realisation of the AEC to 2015. In
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April 2012, against a background of great uncertainty and bleak outlook for the global
economy, ASEAN committed to redouble efforts and set priority activities and concrete key
actions to realise the AEC by 2015. Evaluation of the AEC can be done through: What is its
implementation record? Has it realised the objectives it sets out to achieve? What are some of
the common metrics of measuring success of an economic integration project?
a) Asessment through the AEC Scorecard:
The ASEAN Secretariat’s Scorecard (first published in 2012) tracks implementation rates of
the AEC pillars, measures and strategic schedules in the 2007 AEC Blueprint.
Initial Scorecard covers 2008-2011. Implementation rates are very modest except for
integration into global economy --Single market and production base 65.9%; Competitive
economic region 67.9%; Equitable economic development 66.7%; Integration into global
economy 85.7%. Problematic areas in implementation of the single market and production
base and competitive economic region are services liberalisation, trade facilitation and free
flow of skilled labour, competition policy and intellectual property protection. Problematic
area ini equitable economic development is the uneven distribution of benefits and costs of
liberalisation, marginalisation of local MSMEs and the need mechanism to compensate losers
among businesses and workers. The scarcity of information in the Scorecard for an analytical
evaluation of the AEC shows the need to strengthen monitoring capacity at ASEAN
Secretariat and at national levels.
Table 4: AEC Scorecard
Key areas Phase I (2008-2009) Phase II (2010-2011) Total Measures
Fully Not fully Fully Not fully Fully Not fully
Implemente
d
Implemente
d
Implemente
d
implemente
d
implememte
d
implemente
d
Single market and production
base:
Free flow of goods 9 0 23 24 32 24
Free flow of services 10 3 13 17 23 20
Free flow of investment 5 1 5 8 10 9
Freer flow of capital 1 0 5 0 6 0
Free flow of skilled labour . . 1 0 1 0
Priority integration sectors 28 0 1 0 29 0
Food, agric and forestry 8 0 5 6 13 6
Total number of measures 61 4 53 55 114 59
Implementation rate 93.8% 49.1% 65.9%
Competitive economic region:
Competition policy 2 0 2 0 4 0
Consumer protection 2 0 5 4 7 4
Intellectual property rights . . 4 1 4 1
Transport 15 10 6 8 21 18
Energy 0 0 2 1 2 1
Mineral 1 0 7 0 8 0
ICT 2 0 4 0 6 0
Taxation . . 0 1 0 1
e-commerce . . 1 0 1 0
Total number of measures 22 10 31 15 53 25
Implementation rate 68.7% 67.4% 67.9%
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Equitable economic
development:
SME development 1 0 4 3 5 3
IAI 2 0 1 1 3 1
Total number of measures 3 0 5 4 8 4
Implementation rate 100% 55.5% 66.7%
Integration into global
economy:
External economic relations 5 0 7 2 12 2
Total number of measures 5 0 7 2 12 2
Implementation rate 100% 78% 85.7%
Source: ASEAN Secretariat (2012) Economic Community Scorecard
b) Assessment on Realisation of Objectives of AEC 2015
The ASEAN Secretariat released in 2015 A Blueprint for Growth. ASEAN Economic
Community 2015: Progress and Key Achievements.
(1.1) Single market and production base- Free flow of goods
Tariff elimination: ATIGA came into force in 2010 and consolidated and streamlined all the
provisions in AFTA-CEPT and relevant ministerial decisions and commitments in the AEC
Blueprint into a single legal instrument. In 2014, average ATIGA tariff rate stood at 0.54%,
with 0.04% for ASEAN6 and 1.33% for CLMV versus the 2007 rates of 2.58%, 1.32% and
4.44%, respectively. By 2015 the share of ATIGA 0% tariff lines across ASEAN reached
96.0%.
Rules of origin (ROO): There has been continuous reform and enhancement of ROO, such as
advance rulings, simplification of Operational Certification Procedures and harmonisation or
alignment of national procedures. ROO may follow the RVC, CTC, specific processes rules
(PSR) and combinations with the co-equal rule allowing exporters a choice of rules. ROO
self certification enables exporters/producers to self-declare the origin of their goods and thus
reduce cost, especially for smaller exporters located at a distance from the regulatory
authority.
Trade facilitation: This aims at simplifying, harmonising and standardising trade and customs
processes, procedures and related information flows.
-ASEAN Trade Repository (ATR): The ATR provides regulatory transparency and greater
certainty in business dealings and thus reduce business costs. However, some ASEAN States
have yet to complete their National Trade Repository (NTR) web portals. The ATR is
expected ultimately to contain information such as MFN tariffs, preferential tariffs under
ATIGA and other ASEAN FTAs, ROOs, NTMs, national trade and customs laws and rules,
as well as comprehensive procedures and documentary requirements, administrative rulings,
best practices and a list of authorized traders.
-Non-Tariff Barriers (NTBs): NTBs were to be eliminated for ASEAN6 (except Philippines)
in 2008-2010, for Philippines in 2010-2012, for CLMV in 2013-2015 with flexibilities to
2018.
--The NTM database made initial progress with submissions of national NTM lists posted on
the ASEAN website. Currently these databases are being updated and interagency bodies
established to strengthen coordination when addressing NTMs and NTBs.
--ASEAN Single Window (ASW): ASW connects and integrates the 10 national single
windows (NSWs) enabling electronic data exchange for cargo clearance and release to
facilitate intra-regional trade. The AEC Blueprint targeted the operationalization of NSWs in
ASEAN6 by 2008 and CLMV by 2012. Implementation of the full- fledged ASW Pilot
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Project began in early April 2015 and due to end in December 2016.
--Customs integration: The ASEAN Agreement on Customs entered into force in November
2014. It simplifies and harmonises customs valuation tariff nomenclature and customs
procedures; ensures consistency, transparency and fair application of customs laws,
regulations and procedures; and ensures efficient administration and expeditious clearance of
goods. However, degree of implementation varies with 9 ASEAN States implementing.
ASEAN has developed the ASEAN harmonized tariff nomenclature (AHTN) which
facilitates trade negotiations, calculation of tariffs on trade transactions and collection of
trade statistics. Protocol 2 of the ASEAN Framework Agreement on Facilitation of Goods in
Transit (AFAFGIT) has been finalised, while Protocol 7 on Customs Transit System is
undergoing ratification.
--Standards, technical regulations and conformity assessment procedures (STRACAP): Their
harmonisation is now largely in place. ASEAN has also concluded three sectoral MRAs
covering EEE, cosmetics and medicinal products while yet others are being developed.
(1.2) Single market and production base- Free flow of services
The AEC Blueprint sets out specific goals to lift restrictions on trade in services — for the
four PIS sectors (air transport, e-ASEAN, healthcare, tourism) by 2010, for logistics by 2013,
and for all other services sectors by 2015. The target is to schedule a minimum number of
new sub-sectors based on GATS W/120 classification with 10 in 2008, 15 in 2010, 24 in
2013 and 24 in 2015.
Nine packages of commitments have been concluded under AFAS. ASEAN
commitments in terms of numbers of subsectors and depth of commitments have pro-
gressively and significantly improved. AFAS targets evolve with each package along with
increased numbers and types of thresholds. However, commitments under AFAS, while
significantly above those offered under GATS and Doha Round, do not go beyond the
applicable non-preferential regimes of many ASEAN states and across sectors. Hence the
impact of AFAS is more in ensuring certainty of regional policy rather than delivering
additional preferential service liberalization. Replacement of AFAS by ATISA has been
delayed.
Free flow of skilled labour: AFAS provides for MRAs for professionals so as to facilitate free
flow of skilled labor in ASEAN while taking into account relevant domestic regulations and
market demand conditions. The challenge is realigning domestic laws, regulations and
practices to enable skilled labor flows facilitated by MRAs. So far 8t MRAs have been
concluded, covering engineering services, nursing services, architectural services, surveying
qualifications, medical practitioners, dental practitioners, accounting services and tourism
professionals. The MRAs adopted different approaches, reflecting the varying nature of these
services and realities of regulatory regimes. Progress in implementing MRAs on architectural
services and engineering services are the most advanced.
(1.3) Single market and production base- Free flow of investment
The AEC Blueprint spelt out specific actions to achieve objective of fostering a free and open
investment regime. The 2012 ACIA anchored on investment liberalization, protection,
promotion and facilitation marked a key milestone towards the objective of free and open
investment regime. ACIA improves on the earlier IGA and AIA and covers 5 main sectors of
manufacturing, agriculture, fisheries, forestry, mining and quarrying and related services.
There are reservations on national treatment obligation and senior management and board of
directors’ obligation. ACIA is also cobbled by extensive national exclusion lists and lim-
itations on foreign equity and land ownership.
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(1.4) Single market and production base- Freer flow of capital
Under the AEC Blueprint, the financial integration framework sets out to achieve a well-
integrated and well-functioning regional financial system with more liberalized financial
services, capital account regimes and inter-linked capital markets. Adoption of the 2011
ASEAN Financial Integration Framework (AFIF) further strengthens this.
(2) Competitive economic region
Infrastructure development:
An integrated transportation network is essential for competitiveness, as it facilitates
movement of goods, services and people and enhances resource allocative efficiency. The
2004 ASEAN Transport Action Plan (2005-2010) provided the basis for broadening co-
operation in regional transportation networks. This was followed by the Master Plan on
ASEAN Connectivity (MPAC) 2010-2015, and the ASEAN Strategic Transport Plan (ASTP)
2011-2015.
Land transport connectivity includes construction of missing railway links
(Singapore- Kunming Railway Link or SKRL) and upgraded roads under the Asian Highway
Network (AHN). Maritime transport connectivity involves adoption of the Roadmap towards
an Integrated and Competitive Maritime Transport in ASEAN which sets framework for
progressive development of integrated ASEAN ports and shipping sectors and an ASEAN
Single Shipping Market (ASSM). Aviation transport connectivity involves implementation of
the ASEAN Aviation Single Market (ASAM) which aims at providing competitive space for
expansion and opportunities for regional air travel. The physical transport infrastructure has
to be supported by an improved regulatory framework or transport facilitation to simplify and
harmonize international transport procedures, reducing time and cost of logistics involved in
transporting cargo and passengers. Three specific initiatives are the ASEAN Agreement on
the ASEAN Facilitation of Goods in Transit (AFAFGIT), ASEAN Framework Agreement on
Facilitation of Inter-State Transport (AFAFIST) and ASEAN Framework Agreement on
Multimodal Transport (AFAMT).
The realisation of land connectivity, ASEAN Single Shipping Market and ASEAN
Single Aviation Market are still “work in progress” not only because of infrastructure
construction bottlenecks but also because of existing national policy restrictions regarding
foreign carriers and barriers at frontier posts and customs transits. Considerable collective
effort is needed to accelerate implementation of outstanding measures.
The ASEAN Plan of Action for Energy Cooperation with 6 out of 16 power
interconnection projects for the ASEAN Power Grid have been implemented, with additional
6 schedules for completion in 2017, aiming for a regional renewable energy target of 15% in
total installed capacity by 2015 and promoting development of R&D for renewable and alter-
native energy initiatives.
Master Plan on ASEAN Connectivity 2025 (MPAC 2025)
The MPAC 2025 succeeded the Master Plan on ASEAN Connectivity 2010, focuses on 5
strategic areas of sustainable infrastructure, digital innovation, seamless logistics, regulatory
excellence and people mobility. If implemented effectively, the MPAC 2025 will only bring
more economic and educational opportunities for ASEAN
-Sustainable infrastructure: Given that ASEAN needs at least US$110 billion of
infrastructure investment each year to support future growth, MPAC 2025 aims to help
investors seize opportunities in sustainable infrastructure by improving project preparations,
enhancing infrastructure productivity and supporting cities in adopting sustainable practices.
-Digital innovation: Digital technologies in ASEAN could potentially be worth up to US$625
billion by 2030, which may be derived from increased efficiency, new products and services.
Capturing digital innovation requires the establishment of regulatory frameworks for the
20
delivery of new digital services; support for the sharing of best practices on open data; and
equipping MSMEs with the capabilities to access these new technologies.
-Seamless logistics: Improving logistics competitiveness will facilitate movement of goods
and increase business opportunities. MPAC 2025 aims to support this by identifying and
addressing key bottlenecks on important trade routes in ASEAN.
-Regulatory excellence: MPAC focuses on standards harmonisation, mutual recognition and
technical regulations, as well as trade-distorting non-tariff measures in order to achieve
regulatory excellence.
-People mobility: The number of tourists from outside ASEAN could reach 150 million by
2025. MPAC 2025 will focus on providing comprehensive information on travel options and
simplifying visa application processes; develop high-quality qualification frameworks in
critical vocational occupations, which ASEAN States could implement according to their
national circumstances, and encourage greater mobility of intra-ASEAN university students.
Competition policy, consumer protection, and intellectual property protection:
Competition policy and law is supposed to provide a “level playing field” for all producers,
suppliers and consumers and the challenge is how to minimise the anti-competitive behaviour
of state-enterprises and of discriminatory government procurement practices. Currently there
are competition laws and competition authorities in place in Indonesia, Malaysia, Singapore
and Thailand while other states are in process of drafting and implementing competition-
related laws. There is need to foster greater harmonisation of competition policies and laws in
ASEAN.
All but one ASEAN state has consumer protection law. Achievements to date include
establishment of an ASEAN Consumer Portal and development of a strategic ASEAN Action
Plan on Consumer Protection. With the rise of e-commerce and digital transactions, consumer
protection is even more difficult to enforce.
Although most intellectual property rights (IPR) legislations and procedures are
already in place in several ASEAN states, challenge remains in states implementing them.
Strengthening regional cooperation in IPR drafting legislation and enforcement procedures
would help. A major highlight is establishment of ASEAN TMView, an online platform that
provides users with a practical tool to obtain data on trademarks.
(3) Equitable economic development
ASEAN put in place measures to augment CLMV capabilities to participate in the integration
process and provide flexibilities for implementing regional commitments such as longer
implementation time frames and lower thresholds for compliance. ASEAN has not reached
the stage where mandating compulsory transfers from richer to poorer regions is politically
acceptable. Pursuit of equitable economic development is undertaken through SME
development and IAI for CLMV. Various indicators show a narrowing of the development
gap between the ASEAN6 and the CLMV. In the past decade, economic growth has been
much more buoyant in the CLMV, particularly Vietnam, than in the ASEAN6. The CLMV
are also participating in regional production networks and undertaking economic
restructuring and human resource development and attracting sizeable investment inflows.
However, absolute gaps between ASEAN’s middle-income and low-income countries remain
sizeable and more efforts and action programmes are called for.
Small and medium enterprises:
Strategies to enhance SME growth and capabilities such as access to finance, markets,
information, and dissemination and supporting services have been developed. The Strategic
Action Plan for SME Development for 2010-2015 has key strategies to support SME access
to finance, market and internationalisation, human resource development, information and
advisory services, and technology and innovation. Some of these initiatives have been
21
completed while some will continue beyond 2015. Successful implementation of initiatives
includes ASEAN Benchmark for SME Credit Rating Methodology, SME Service Centre,
ASEAN SME Policy Index and ASEAN Common Curriculum for Entrepreneurship. Need to
improve policy and regulatory environment, finance and technology access, and SME
capacity to participate effectively and proactively in GPNs/GVCs.
Integrated ASEAN initiative (IAI):
IAI Workplan I was implemented through a collection of projects proposed by ASEAN
States and were either self-funded or funded with support of donor partners. IAI Workplan II
designed to assist CLMV meet specific AEC commitments and mostly comprised training
and capacity building initiatives. . Since the first IAI Work Plan, more than 600 projects and
activities worth over US$102 million have been implemented. The 2011 ASEAN Framework
for Equitable Economic Development (AFEED) provide guiding principles for inclusive and
sustainable growth for all sectoral and ministerial bodies under the AEC Pillars. The 2014
ASEAN Equitable Development Monitor focused on identifying development gaps within
ASEAN with significant progress in reducing development gaps through rapid economic
growth. Issues that remain include access to formal banking systems and savings rates and
access to water sanitation and electricity
The development gap has been narrowed. In 2006-2015 average GDP growth rate of CLMV
was 6.0%-8.7%, compared to the region’s average of 5.2%; CLMV merchandise trade grew
2.5-5.8 fold. CLMV also played an increasing role in the regional trade, contributing to
16.9% of ASEAN’s total merchandise trade in 2015 as compared to 6.4% in 2006. However,
CLMV still have the lowest incomes among ASEAN States, while the scale and complexity
of ASEAN’s commitments and agreements have grown substantially
(4) Integration into the global economy
ASEAN is increasingly participating in GPNs/GVCs but needs more pro-active measures to
enhance participation, such as strengthening standards, compliance capacity, infrastructure
connectivity, and innovation, technology and skills transfer. ASEAN is also forging external
linkages through FTAs/CEPs. ASEAN has entered into FTAs/CEPs with China, Japan,
South Korea, Australia-New Zealand and India, and more recently with Hong Kong. It is also
negotiating agreements with the EU. ASEAN external trade with the non-ASEAN regions
has grown over the decades pari passu with the growth of intra-ASEAN trade. FDI inflows in
the ASEAN region are dominantly from the OECD countries. Some ASEAN members are
participating in the CPTPP (TPP11). Negotiations on RCEP (involving ASEAN10 plus
China, Japan, South Korea, Australia-New Zealand and India) started in 2013, but has yet to
be concluded.
In sum, the AEC has made substantive progress in implementing measures outlined in the
AEC Blueprint and in subsequent initiatives such as ASEAN infrastructure connectivity. The
AEC was established on 3l December 2015. However, not all the AEC Blueprint measures
were fully implemented, such as NTB elimination, trade facilitation measures, services and
investment liberalisations, IPR, competition policy, SME development, capital market
development, and transport and logistics development. Also, to fully achieve a single market
and production base, ASEAN would have to overcome issues arising from implementing
rules of origin, include government procurement and circumscribed the role of state
enterprises.
c. Intra-ASEAN Trade Share and Preferential Tariff Utilisation Rate as Metrics of AEC
Success?
22
Intra-ASEAN trade share:
Many analysts measure the success or otherwise of regional economic integration projects by
the extent of intra-regional trade and investment. On those metrics, the ASEAN economic
integration through AFTA-AFAS-AIA and AEC cannot be considered a success. Intra-
ASEAN trade grew rapidly in the 1990s but has remained at around 25% of ASEAN total
trade for almost two decades. In contrast the intra-regional trade share of NAFTA and EU
are much higher. Likewise, barely 20% of FDI inflows into ASEAN countries originates
within ASEAN.
However, advocates of ASEAN economic integration often argue that the raison-d’etre of
AFTA-AFAS-AIA and AEC is to practice “open regionalism” and build competitive
economies that can compete in international trade and international investment markets.
ASEAN has been fairly successful using those metrics. Most of intra-
ASEAN trade is related to GPN/GVC trade in parts and components with final markets
outside of ASEAN. And most FDI inflows are from the OECD countries and largely in
GPN/GVC related activities. ASEAN’s trade with the rest of the world has grown as fast as
its intra-regional trade. ASEAN has become the 4th largest exporting region in the world,
trailing only the EU, NAFTA and China.
ASEAN preferential tariff utilisation rate:
Critics of ASEAN economic integration also use the metric of low preferential-tariff
utilisation of AFTA and ATIGA. Various surveys had shown that the ASEAN preferential
tariff utilisation rate is surprising low, including JETRO (2007) and Kawai and Wignaraja
(2011). Several reasons account for the low utilisation rates. First, is the low margin of
preference (MOP) between MFN and AFTA-CEPT rates and the prevalence of NTBs.
Singapore had zero MOP except for 6 beverage items. Most other ASEAN countries have
positive but low MOP for most products. In particular, electronic products and components
which is a major ASEAN export, had zero MFN tariffs because of the WTO Information
Technology Agreement and the duty-drawbacks for these products in ASEAN export processing
zones. Second, although AFTA has been in existence since 1993, many SMEs were
“unaware” of how to apply for tariff preferences, indicating that considerable outreach effort
is necessary. Third, is the problem with satisfying the ASEAN ROO of 40% of RVC, as
ASEAN exports of industrial goods and parts and components are also heavily dependent on
imported inputs, they often fail to qualify under the RVC ruling. Fourth, is the lack of
consistency in treatment by customs authorities of the Form D Certificate of Origin creating
uncertainty and lengthy processing time that discourage exporters. The issues with ROO and
customs are being addressed in recent years as the ROOs have been revised, self-certification
has been adopted and customs procedures have been streamlined. However, while tariffs are
becoming less of an issue in ASEAN trade, NTBs have emerged as the main obstacle in the
trade liberalisation endeavour.
Questions:
1. Analysts and observers both within and outside ASEAN seem to be divided in
assessing whether the AEC2015 has been a success or failure. What is your assessment?
State your arguments.
2. If applied tariff rates were the primary consideration, would you advise your
country’s rice and sugar producers and motor vehicle assemblers to export to other
ASEAN countries, partner countries of ASEAN+1 FTAs or export to the world and face
MFN applied tariffs and/or GSP preferential tariffs?
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VII. ASEAN Economic Integration under AEC Blueprint 2025
1. AEC Blueprint 2025
With the formal establishment of the AEC on 31 December 2015, the AEC Blueprint 2025
was developed to complete the “unfinished business” of the 2007 AEC Blueprint as well as to
chart new strategic directions for the next decade 2016-2025. The new Blueprint was adopted
in November 2015 and confirms that the AEC will not progress to a Customs Union,
Common Market or Monetary Union, nor would it encompass government procurement and
free movement of unskilled/ semi-skilled labour.
Even as an FTAplus, AEC 2025 continues to exclude government procurement and restrict
free flow of labour only to the skilled.
-Government procurement: This refers to acquisitions by governments or their agencies of
goods and services, but does not generally cover the commercial activities of state-trading
enterprises. Preferential government procurement policies impact on potential trade
opportunities. Inclusion of government procurement in AEC could provide substantial
opportunities to other ASEAN economies. It should be noted that neither GATT nor GATS
apply to government procurement but there is the plurilateral WTO Agreement on
Government Procurement, which has less than 50 members and includes Singapore.
-Free movement of unskilled/semi-skilled labour: The AEC already faces difficulties with
implementing the free flow of skilled labour, so it would seem unrealistic to extend the
coverage to unskilled/semi-skilled labour as well. The difficulty lies in ASEAN diversities
of demographic size and population density and wage levels and unemployment rates. With
free mobility, high-wage ASEAN countries would not be able to cope with the surges of
migrant labour from neighbouring countries. As it is, Singapore, Malaysia and Thailand are
the largest host countries to ASEAN unskilled/semi-skilled migrant workers, including large
pools of undocumented workers in Malaysia and Thailand.
The AEC will remain an FTA-plus with 5 characteristics which basically repackaged the four
pillars of the 2007 AEC Blueprint, namely:
1. Highly cohesive and integrated economy: Establish a more unified market and enhanced
trade and production networks
2. Competitive, innovative and dynamic ASEAN: Enhance competitiveness and productivity,
deepen GVC participation, strengthen regulatory framework and practice, and regional
coherence
3. Enhance connectivity and sectoral cooperation: Enhance connectivity in transport,
telecommunications and energy and integrate in key sectors
4. Resilient, inclusive, people-centred, people-oriented ASEAN: Enhance equitable economic
development
5. Global ASEAN: Further global integration through FTAs and CEPs
The AEC 2025 Consolidated Strategic Action Plan (CSAP) was adopted in February 2017
and lays out 153 strategic measures and 525 specific action lines and expected time lines of
implementation from 2016 to 2025, as well as sectoral work plans and bodies. CSCAP also
provides for a more structured tracking and reporting of the implementation of progress of
Blueprint 2025 by the ASEAN Secretariat.
2. Progress with AEC Blueprint 2025
a) Reporting and monitoring:
In the AEC 2015, the ASEAN Secretariat adopted the AEC Scorecard to monitor compliance.
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Monitoring which is generally regarded as highly inadequate and could be one factor in the
poor implementation record of some countries, sectors and measures. For the AEC Blueprint
2025 and its sectoral work plans, the AEC 2025 Monitoring and Evaluation (M&E)
Framework goes beyond compliance monitoring to incorporate outcomes monitoring and
impact evaluation.
The reporting of ASEAN economic integration progress and outcomes will be
undertaken and tailored for a wide-range of audiences. The progress of outcomes-level KPIs
will be reported periodically, along with progress on compliance monitoring. Some reports
will be directly and exclusively presented to ASEAN Member States, while the ASEAN
Integration Report and the ASEAN Economic Integration Brief (AEIB) will be made
available to the public. These public reports will synthesise and provide analysis of trends
and issues at the overall AEC Blueprint 2025-level as well as for specific sectors under the
AEC. So far, two issues of the AEIB have been released in 2017 covering progress in 2016-
2017.
The AEC Blueprint 2025 will be reviewed periodically, not more than every 3 years,
unless otherwise agreed. Mid-term and end-of-term evaluations covering the periods 2016-
2020 and 2021-2025 will be conducted to monitor progress and evaluate outcomes/impacts,
including achievements and challenges from the implementation of the AEC Blueprint 2025,
with a view towards enhancing the level of economic integration in ASEAN. The review
mechanism for the AEC is conducted through the Country Visit process which is a technical
verification tool for compliance monitoring of the AEC 2025 Monitoring and Evaluation
Framework. The first full Country Visit was held on 9-13 October 2017 in the Philippines,
while the second was held in Indonesia in late 2017.
Pending a more comprehensive report to be released by the ASEAN Secretariat for
public consumption, progress on AEC 2025 can only be gleaned from the AEIB of June 2017
and November 2017.
b) ASEAN Economic Integration Brief, June 2017 issue:
-The ASEAN Economic Ministers (AEM) adopted the ASEAN Trade Facilitation Framework
in 2016 and set the target to reduce 10% of trade transaction costs by 2020 (see November
2017 issue) . The ASEAN Trade Repository (ATR) is a one-stop online database on ASEAN
trade- and customs-related information where the public can also access the information
available on the National Trade Repositories (NTRs) of each ASEAN State. Linked to the
ATR is the ASEAN Tariff Finder, a cost-free search engine for tariff and tariff related
information under ASEAN and ASEAN+1 FTAs.
-The ASEAN Solutions for Investments, Services and Trade (ASSIST) has become fully
operational. ASSIST is a non-binding and consultative mechanism for the expedited and
effective solution of operational problems encountered by ASEAN-based enterprises on
cross-border issues arising from implementation of ASEAN economic agreements.
-The ASEAN Agreement on Movement of Natural Persons (MNP) entered into force in June
2016. It will help establish streamlined and transparent procedures for applying immigration
formalities under the agreement, further facilitating the movement of ASEAN persons
engaging in trade in goods and services and in investment.
-Initiative for ASEAN Integration Work Plan III: This continues to provide technical
assistance to CLMV to enhance their capacity in implementing their ASEAN commitments
and focuses on 5 areas, namely food and agriculture; trade facilitation; MSMEs; education;
and health and well-being. New features include greater involvement of CLMV officials in
developing, coordinating and monitoring of activities as well as a monitoring and evaluation
mechanism to track progress and measure outcomes.
-To stimulate innovation, the revamped ASEAN Intellectual Property Portal provides a
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consolidated platform to access comprehensive IP information, including the databases on
trademarks, geographical indications and case laws.
-With the growing importance of e-commerce, the ASEAN Coordinating Committee on
Electronic Commerce (ACCEC) was established and is in the process of finalising the ASEAN
Work Programme on e-Commerce.
-ASEAN Roll-on Roll-off (RORO) Sea Linkage Route has launched on 30 April 2017 the
maiden voyage between Davao-General Santos in the Philippines and Bitung in Indonesia.
This represents a major milestone in ASEAN transport connectivity.
-The System and Parallel Test Runs of the Pilot ASEAN Customs Transit System (ACTS) was
completed by Malaysia, Singapore and Thailand. This is a computerised customs transit
management system.
-ASEAN tourism development saw the launch of Visit ASEAN@50: Golden Celebration
Campaign, ASEAN Roadmap for Strategic Development of Ecotourism Clusters and
Corridors, and ASEAN Sustainable Tourism Award (ASTA)
-To enhance MSME access to financing, the ASEAN Institutional Framework on Access to
Finance for MSMEs was adopted in August 2016.
-Consultative processes between AEC sectoral bodies and ASEAN-BAC representatives and
lead private sector entities are being institutionalized.
-The Initiative for ASEAN Integration (IAI) Work Plan III was adopted in 2016 and provides
special assistance to CLMV to further regional integration to narrow the ASEAN
development gap.
-On external relations, formal talks on a framework for a future ASEAN-EU FTA was
launched.
c) ASEAN Economic Integration Brief, November 2017 issue:
-ASEAN-wide Self-Certification Scheme: Working towards its implementation by 2018.
Scheme will facilitate utilisation of ATIGA by allowing exporters to issue origin declaration
with lower transaction costs.
-ASEAN Seamless Trade Facilitation Indicators (ASTFI) and Trade-Facilitation Strategic
Action Plan (ASTI-SAP) track reduction in trade transaction cost in the region by 10% in
2020 and doubling of intra-ASEAN trade between 2017 and 2025.
-ASEAN Trade in Services Agreement (ATISA) negotiations are still ongoing.
-Focused and Strategic Action Agenda on Investment (FAST) is aligned with
implementation of ACIA. A business-matching activity between MNCs and MSMEs was
held in October 2017 in Manila
-ASEAN Work Programme on Electronic Commerce (AWPEC) 2017-2025: AWPEC was
adopted in September 2017. It aims to facilitate cross-border e-commerce in ASEAN,
covering multi-sectoral E-commerce initiatives in infrastructure, education and technology
competency, consumer protection, modernization of the legal framework, security of
electronic transactions, payment systems, trade facilitation, competition and logistics. A key
deliverable of the AWPEC is the development of an ASEAN Agreement on E-Commerce
-Inclusive Business (IB): The ASEAN IB Framework was endorsed in September 2017. The
IB initiative of the Philippines is based on the G20 framework that promotes the adoption of
business models that provide goods, services and livelihoods on a commercially viable basis
to people at the “bottom of the pyramid.”
-Women’s Economic Empowerment: The Manila Statement on Mainstreaming Women's
Economic Empowerment in ASEAN, includes a six-point Action Agenda which was agreed
upon by the AEM in September 2017 to be submitted for the Leaders' adoption in November
2017.
-The ASEAN Declaration on Innovation: Adopted in November 2017, it signifies ASEAN's
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commitment towards strengthening the impact of science, technology, and innovation
towards people's empowerment, inclusive growth, and strengthening of the ASEAN
Community.
-ASEAN Regional Guidelines on Food Security and Nutrition Policy: This was endorsed in
September 2017. It serves as a general framework to help ASEAN States build stronger food
security and nutrition cooperation and integration in the region. Also endorsed are several key
frameworks and documents, including the ASEAN Public-Private Partnership Regional
Framework for Technology Development in the Food, Agriculture and Forestry Sectors,
revised ASEAN Criteria and Indicators for Sustainable Management of Tropical Forests, Plan
of Action on ASEAN Cooperation on Halal Food 2017-2020, and the ASEAN Guidelines on
Prudent Use of Anti Microbials in Livestock.
-ASEAN cooperation on transport: Several outputs were delivered at the 23rd ASEAN
Transport Ministerial Meeting in October 2017. ASEAN States have concluded the 10th
Package of Commitments on Air Transport Services under AFAS and signed the Protocol to
facilitate its implementation. Also signed the Protocol 3 on Domestic Code-Share Rights
between points within the territory of any other ASEAN State; adopted the ASEAN Air
Traffic Management Master Plan; and adopted and signed the MRA on Flight Crew
Licensing. Also concluded and signed the ASEAN Framework Agreement on the Facilitation
of Cross Border Transport of Passengers by Road Vehicles, a key regional transport
framework,
-External economic relations: Negotiations for the ASEAN-Hong Kong, China (HKC) FTA
and ASEAN-HKC Investment Agreement were concluded in September 2017. Also in
September 2017, ASEAN and Canada agreed to launch exploratory discussions on an
ASEAN-Canada FTA, and to finalise the Joint Feasibility Study Toward an ASEAN- Canada
FTA. The Report of the Stage One General Review of the ASEAN-Australia-New Zealand
FTA Agreement was completed. On RCEP, 20 rounds of negotiations have been held. The
RCEP Trade Negotiating Committee has agreed on the “RCEP Key Elements for Significant
Outcomes by End of 2017” at the 19th round. Negotiators focused efforts at the 20th round to
achieve the outcomes set out in the paper.
d) 32nd ASEAN Summit in Singapore, 27-28 April 2018:
This first summit with Singapore as ASEAN Chair produced three key deliverables:
(i) Vision for a Resilient and Innovative ASEAN:
10 Key Principles: unity and centrality; rules-based order; peace and security; cooperation
against terrorism and non-traditional threats; economic integration and openness; embrace
technology; investment in youth and elderly; strengthening ASEAN identity; sustainable and
inclusive development; and respect for human rights and fundamental freedoms. Most of the
Principles are on politics-security, indicating the importance of these issues in recent years
and the need for a strong and stable political-security foundation to support the region’s
economic growth and social cohesiveness.
(ii) Leaders’Statement on Cybersecurity Cooperation:
This reaffirms ASEAN’s openness towards intra-regional security cooperation while
earnestly reaching out to its Dialogue Partners to create a secure and resilient cyber
ecosystem in the region
(iii) Establishment of the ASEAN Smart Cities Network (ASCN):
This is a proposal from Singapore to establish an ASEAN Smart Cities Network (ASCN) to
harness technologies in addressing rapid urbanisation across ASEAN. 26 ASEAN cities will
participate as pilot ASCN cities. Apart from the emphasis on “smart solutions,” the ASCN
attempts to open up new “fronts” of regional cooperation.
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Questions:
1. Is ASEAN too cautious and timid in continuing with its FTAplus mode of economic
integration? Give your reasons and your country’s perspective
2. Discuss the benefits and challenges your country would face if there were provisions
of government procurement and free mobility of unskilled/semi-skilled labour in the
AEC.
VIII. Conclusion
While ASEAN celebrated its 50th Anniversary in August 2017, its economic integration
history is much shorter. ASEAN embarked on regional economic integration from 1992 with
implementation of AFTA, AFAS, AIA followed by AEC, ATIGA, ACIA and ATISA. AEC
2015 was established on 31 December 2015 and AEC 2025 was implemented from 2016.
Initially ASEAN economic integration was driven by external developments and crises, with
limited conviction among ASEAN officials of the benefits of regionalisation and
globalisation, so that commitments and implementations were “half-hearted”. Over time there
was growing recognition of the need for regional economic cooperation and integration for
the region to remain cohesive and resilient, internationally competitive, and economically
dynamic.
The AEC 2015 has achieved many milestones but has failed to fully realise the objectives as
set out in the 2007 Blueprint. The AEC remains a work-in-progress, hence the launch of AEC
2025 to complete unfinished business and chart new directions over the next 10 years for the
AEC. AEC 2025 has modest ambitions, remaining an FTAplus and eschewing deeper
integration such as Customs Union or Common Market. It reflects the continuing wide
diversities in economic level and performance among ASEAN countries, the concern over
erosion of national sovereignty and the concern over the costs of deeper economic
integration. Problems faced by the EU and NAFTA in recent years also gave ASEAN pause
over deeper integration.
In the coming decade, the ASEAN region will face serious challenges from the anti-
globalisation sentiments around the world that is gaining traction; threats from terrorism and
cybersecurity; and disruptive effects of climate change, technological advances, geopolitical
shifts in the region and political leadership changes in several ASEAN countries. More than
ever, ASEAN needs to withstand and overcome these challenges by working together rather
than working separately.
XI. Readings - Primary *Chia, Siow Yue (June 2017). “Modalities for ASEAN Economic Integration: Retrospect and
Going Forward”. Singapore Economic Review, Vol.62, No.3, June 2017
*Chia Siow Yue and Michael G Plummer (2015). ASEAN Economic Cooperation and
Integration: Progress, Challenges and Future Directions. UK: Cambridge University Press
Readings – Secondary *Athukorala, Prema-chandra (August 2010). Production Networks and Trade Patterns in East
Asia: Regionalization or Globalization? Asian Development Bank Working Paper Series on
Regional Economic Integration No.56
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*Chia Siow Yue (2011). “Singapore” in Masahiro Kawai and Ganeshan Wignaraja (eds),
Asia’s Free Trade Agreements: How is Business Responding? UK: Edward Elgar.
*Kawai, Masahiro and Ganeshan Wignaraja (eds) (2011). Asia’s Free Trade Agreements:
How is Business Responding? UK: Edward Elgar.
*Plummer, Michael G and Chia Siow Yue (eds) (2009). Realizing the ASEAN Economic
Community, a Comprehensive Assessment. Singapore: Institute of Southeast Asian Studies.
*Severino, Roldofo C. (2006). Southeast Asia in Search of an ASEAN Community: insights from
the former ASEAN Secretary-General. Singapore: Institute of Southeast Asian Studies.
*Singapore Economic Review. Special Issue on ASEAN’s Long-Term Economic Potential
and Vision, Vol.62, No.03, June 2017
*Wignaraja, Ganeshan (2016). “Production networks and enterprises in East Asia”. OECD
Insights 2 February 2016.
*World Bank-IDE-OECD (2017). Global Value Chain Development Report 2017- Measuring
and Analyzing the Impact of GVCs on Economic Development.
Readings – ASEAN Secretariat Documents
*ASEAN Secretariat (2017). ASEAN Community Progress Monitoring System 2017.
* ASEAN Secretariat (2017) AEC 2025 Consolidated Strategic Action Plan
*ASEAN Secretariat (2017). Towards ASEAN Economic Community 2025: Monitoring ASEAN
Economic Integration
*ASEAN Secretariat (2017).ASEAN Economic Integration Brief, No.2, November 2017.
*ASEAN Secretariat (2017). ASEAN Economic Integration Brief, No.1, June 2017
*ASEAN Secretariat (2016). ASEAN Community in Figures 2016. Jakarta: ASEAN
Secretariat.
*ASEAN Secretariat (November 2015). A Blueprint for Growth. ASEAN Economic
Community 2015: Progress and Key Achievements. Jakarta: ASEAN Secretariat.
* ASEAN Secretariat (November 2015). ASEAN Integration Report 2015. Jakarta: ASEAN
Secretariat.
*ASEAN Secretariat (November 2015). ASEAN 2025: Forging Ahead Together. Jakarta:
ASEAN Secretariat.
*ASEAN Secretariat (May 2012). ASEAN Economic Community Scorecard: Charting
Progress Towards Regional Economic Integration. Jakarta: ASEAN Secretariat
*ASEAN Secretariat (Oct 2009). Roadmap for an ASEAN Community 2009-2015. Jakarta:
ASEAN Secretariat.
*ASEAN Secretariat (2008). ASEAN Economic Community Blueprint. Jakarta: ASEAN
Secretariat.
*ASEAN Secretariat (2001). Mid-Term Review of the Hanoi Plan of Action. Jakarta:
ASEAN Secretariat
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