AEC deadline of 2025 ‘more realistic’

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ASEAN artThe ASEAN Economic Community (AEC), a trade bloc between ASEAN member states designed to cut red tape and allow freer trade, is still much of a theoretical construction.

A recent report by the Asian Development bank titled “The ASEAN Economic Community: A Work in Progress”, shows that 55 per cent of 38 businesses interviewed in the region remain unaware of the AEC’s ambitious plan to abolish trade barriers and reduce government regulation by the self-imposed deadline of December 31, 2015. The bank also calls the 2015 deadline unrealistic, arguing that at least 10 more years might be needed to fully implement the agreement.

The report said that “little or no interest” from the business community, a general lack of awareness, contrasting ASEAN government regulations, discrimination against foreign investors and inadequate infrastructure were among the key reasons for the AEC’s hindered progress.

First sketched in 2003, the AEC had a 2020 deadline, but in 2007, that was amended to 2015. In it ideal concept, the agreement would transform ASEAN into a trade bloc similar to the European Union  where goods, services, investment, skilled labour and capital all flow seamlessly across borders.

The ADB concluded that ASEAN “has no prospect of coming close to a single market by the AEC’s 2015 deadline or even by 2020 or 2025. One should not expect in 2015 to see ASEAN suddenly transformed. A deadline of 2025 would still seem “more realistic”.

The AEC scorecard shows that Cambodia, Vietnam, Laos and Myanmar are lagging behind in reducing tariffs across the region with a combined progress rate of 67 per cent, compared to 99 per cent for the remaining six member states. Infrastructure is also a big issue.

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Reading Time: 2 minutes

The ASEAN Economic Community (AEC), a trade bloc between ASEAN member states designed to cut red tape and allow freer trade, is still much of a theoretical construction.

Reading Time: 2 minutes

ASEAN artThe ASEAN Economic Community (AEC), a trade bloc between ASEAN member states designed to cut red tape and allow freer trade, is still much of a theoretical construction.

A recent report by the Asian Development bank titled “The ASEAN Economic Community: A Work in Progress”, shows that 55 per cent of 38 businesses interviewed in the region remain unaware of the AEC’s ambitious plan to abolish trade barriers and reduce government regulation by the self-imposed deadline of December 31, 2015. The bank also calls the 2015 deadline unrealistic, arguing that at least 10 more years might be needed to fully implement the agreement.

The report said that “little or no interest” from the business community, a general lack of awareness, contrasting ASEAN government regulations, discrimination against foreign investors and inadequate infrastructure were among the key reasons for the AEC’s hindered progress.

First sketched in 2003, the AEC had a 2020 deadline, but in 2007, that was amended to 2015. In it ideal concept, the agreement would transform ASEAN into a trade bloc similar to the European Union  where goods, services, investment, skilled labour and capital all flow seamlessly across borders.

The ADB concluded that ASEAN “has no prospect of coming close to a single market by the AEC’s 2015 deadline or even by 2020 or 2025. One should not expect in 2015 to see ASEAN suddenly transformed. A deadline of 2025 would still seem “more realistic”.

The AEC scorecard shows that Cambodia, Vietnam, Laos and Myanmar are lagging behind in reducing tariffs across the region with a combined progress rate of 67 per cent, compared to 99 per cent for the remaining six member states. Infrastructure is also a big issue.

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