Reflections from Paseo de Coro
Many of you have probably heard of the AEC or saw it in the papers. But not all who heard and saw it may have an inkling of what really is it all about. Given the importance of the AEC and how its integration could affect each and all of us, I venture to present in brief what it’s all about basing on the information provided by the AEC secretariat in its website but which very few of us know or care to know about.
Basically, the AEC is the realization of economic integration as espoused in the Asean Vision 2020, which is based on a convergence of interests of ASEAN member countries to deepen and broaden economic integration through existing and new initiatives with clear timelines. The AEC envisages to accomplish four things — a single market and production base, a highly competitive economic region, a region of equitable economic development, and a region fully integrated into the global economy.
These four are inter-related and mutually reinforcing to ensure consistency and coherence as well as their implementation and proper coordination among relevant players within and among the ASEAN member countries.
Of the four, the most heard and feared is the establishment of the Asean as a single market and production base to make the Asean more dynamic and competitive with new mechanisms and measures to strengthen the implementation of its existing economic initiatives; accelerating regional integration in the priority sectors; facilitating movement of business persons, skilled labor and talents; and strengthening the institutional mechanisms of Asean.
The Asean single market allows free flow of goods, services, investments, capital, and skilled labor. In addition, the single market and production base also include two important components, namely, the priority integration sectors, and food, agriculture and forestry.
Developing a competitive economic region involves introducing competition policy, consumer protection, intellectual property rights, infrastructure development, taxation, and E-commerce. The main objective of the competition policy is to foster a culture of fair competition. Institutions and laws related to competition policy have recently been established in some (but not all) Asean member countries.
Under consumer protection, the Asean is mindful that consumers cannot be precluded in all measures taken to achieve integration. Consumer protection measures are already being developed in tandem with the proposed economic measures to address the already emerging consumer protection. The intellectual property (IP) policy can serve as a powerful stimulus to cultural, intellectual and artistic creativity and their commercialization, efficient adoption and adaptation of more advanced technologies, and continuous learning to meet the ever-rising threshold of performance expectations.
Under infrastructure development, an efficient, secure and integrated transport network in Asean is vital for realizing the full potential of the Asean Free Trade Area as well as in enhancing the attractiveness of the region as a single production, tourism and investment destination and narrowing development gaps. Regional efforts have been made to enhance transport facilitation and logistics services, promote multi-modal transport and transport facilitation.
The Asean Transport Action Plan (ATAP) 2005-2010 covers maritime, land and air transport, and transport facilitation. Under taxation, actions had already been done to complete the network of bilateral agreements on avoidance of double taxation among all member countries by 2010, to the extent possible.
Under E-Commerce, policy and infrastructure for electronic commerce are already being laid to enable on-line trade in goods (E-commerce) within Asean through the implementation of the E-Asean Framework Agreement.
In promoting Equitable Economic Development, the Asean gives priority to SME development. The Asean Policy Blueprint for SME Development (APBSD) 2004-2014 outlines the framework for SME development in the Asean region. It comprises strategic work programs, policy measures and indicative outputs.
Its objectives are to (a) accelerate the pace of SME development, optimizing on the diversities of Asean member countries; (b) enhance the competitiveness and dynamism of Asean SMEs by facilitating their access to information, market, human resource development and skills, finance as well as technology; (c) strengthen the resilience of Asean SMEs to better withstand adverse macroeconomic and financial difficulties, as well as the challenges of a more liberalized trading environment; and (d) increase the contribution of SMEs to the overall economic growth and development of Asean as a region.
Asean operates in an increasingly global environment, with interdependent markets and globalized industries. In order to enable Asean businesses to compete internationally, to make Asean a more dynamic and stronger segment of the global supply chain and to ensure that the internal market remains attractive for foreign investment, the Asean crucially look beyond the borders of AEC. This means external rules and regulations must increasingly be taken into account when developing policies related to AEC.
I hope this helps especially those in business who have more stake in their investment and everyone who until now is wondering what the AEC is all about.
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