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The Association of SouthEast Asian Nations (ASEAN) is
composed of 10 countries in East Asia -- Thailand, Myanmar, Laos, Cambodia, Viet
Nam, Philippines, Brunei Darussalam,
Indonesia, Malaysia and Singapore. It has a combined population of around 670
million people -- about twice the US population.
The ASEAN Economic Community (AEC) has been envisioned to
be a common space to facilitate mobility of goods and people markets of the
member-countries. It will officially materialize on December 31, 2015 but since
there are hardly any official transactions on a new year’s eve, it will
effectively start in January 2016.
Among the important characteristics of the common market
are: tariff and non-tariff reduction;
trade facilitation; services liberalization; investment liberalization and
facilitation; connectivity and transport facilitation; and a Regional
Comprehensive Economic Partnership (RCEP).
Since trade facilitation and liberalization is the
cornerstone of the common market, here is some data on the exports performance
of ASEAN member countries. Data for its neighbors in North and South Asia are
included for comparison purposes.
Notice how Vietnam has expanded its exports 21x in just
17 years, from 1995 to 2012. China was also able to expand its exports by more
than 13x over the same period. These two countries’ achievements are definitely
an object of envy for many other countries and governments.
What some countries miss out in exports of goods, they
were able to compensate somehow with high remittances of their nationals who
are working abroad.
AEC is a useful project for many citizens of the member-countries
as it will facilitate further liberalization in trading of goods and services,
investments, and accelerate domestic reforms. Compared to the European Union’s
common market, AEC is less ambitious and hence, more practical; there will be no
monetary union.
The ASEAN Free Trade Area (AFTA) has been effective in promoting intra-ASEAN
trade. Movement of people is further facilitated if there is freer flow of
goods and commodities across national borders. Many member countries give
visa-free entry for travels below 31 days of citizens of other member countries
.
Member countries should aspire to extend the free trade
philosophy and public policy to many other countries outside the region or
continent. Small population economies Hong Kong and Singapore were able to
export $400+ billion of merchandise goods in 2012 mainly because of their
almost unilateral trade liberalization policy.
Where trade is facilitated and welcomed, foreign
investments follow. And this will create new jobs to the people of developing
countries of Asia. Having stable and good-paying jobs for the people is the
single biggest important measure to fight poverty in the region and the rest of
the world.
--------------See also:
Business 360 12: Optimum Size of Government, October 13, 2013
Business 360 13: US Government Shutdown and Lessons for Asia, November 28, 2013
Business 360 14: Middle Income Trap and Economic Freedom, January 02, 2014
Business 360 15: How to Improve Economic Freedom in Asia, January 22, 2014
Globalization, Mobility and Inequality, February 18, 2014
Free Trade 34: ASEAN's Bilateral and Regional FTAs, February 27, 2014
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