Asean Trading Bloc
Transcript of Asean Trading Bloc
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Three levels ofeconomic integration
Global: trade
liberalization by GATTor WTO
Regional: preferential
treatment of member
countries in the group
Bilateral: preferentialtreatment between
two countries
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FTA (free trade area): No internaltariffs among members, but eachcountry imposes its own external tariffsto the third country.
NAFTA (North America Free Trade
Agreement)AFTA (ASEAN Free Trade Area)EFTA (European Free Trade Area)
Customs union: No internal tariffsand common external tariffs
Mercosur (Southern CommonMarket),CACM (Central American Common
Market)CARICOM (Caribbean Communityand Common Market)
Common market: Free movement ofproducts and factors (resources), which
is customs union plus factor mobility
EU (European Union previouslyEEC)
Economic union: Common market pluscommon currency coordination of fiscal
and monetary policy
EMU (Economic and MonetaryUnion)
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Static effects: Short-term effects (shift of production) Trade creation: production shifts to more efficient member
countries from inefficient domestic or outside countries. Trade diversion: production shift to inefficient member
countries from more efficient outsiders. Dynamic effects: Long-term effects Cost reduction due to economies of scale Cost reduction due to increased competition.
ASEAN aims include the accelerationof economic growth, social progress, culturaldevelopment among its members, theprotection of the peace and stability of theregion, and to provide opportunities for membercountries to discuss differences peacefully
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Population: GDP(PPP): GDP(nominal)
575.5 million US$ 3,431.2 billion US$ 1,281.9 billion
Source:wikipedia Per Capita US$ 5,962 Per Capita-- $2,227
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The Association of Southeast Asian
Nations
A regionally-based internationalorganization with ten members.
Created in 1967 with five members:
Thailand, Singapore, Malaysia, Indonesia
and the Philippines Brunei joined in 1984, Vietnam in 1995,
Laos and Myanmar (Burma) in 1997 and
Cambodia in 1999.
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Originally a security bloc to show solidarity againstcommunist expansion.
Therefore Bangkok Declaration on 8 August 1967emphasized cooperation, amity and non-interference.
Different instinct than Schumans supranational EuropeanCoal and Steel Commission.
This resulted in the ASEAN Way. Bali Summit in 1976 put economics on the agenda. In 1992, idea of a regional bloc formed with the
CEPT( Common Effective Preferential Tariff ) scheme and
AFTA. In 2001, idea of a hub-spoke model for ASEAN and China,
Japan and Korea(ASEAN +3) first enunciated. 2007 ASEAN Charter and ASEAN EC Blueprint.
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ASEAN
+3/+6
ASEAN+1
NAFTA
Canada
Mexico
China
Japan
India
ASEAN+
1ASEAN+
1ASEAN+
1
ASEAN+1
U.S.
ChileP4
ROK
Australia
NZ
Brunei
Singapore
Thailand
Malaysia
Source: METI & MEC
ASEAN
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The goal is to create a stable, prosperous andhighly competitive ASEAN economic region inwhich there is a free flow of goods, services,investment and a freer flow of capital, equitableeconomic development and reduced povertyand socio-economic disparities in year 2020.
The ASEAN Economic Community seeks toestablish ASEAN as a single market andproduction base, so as to make ASEAN a moredynamic and stronger segment of the globalsupply chain.
3 Main Building Blocks AFTA, ASEAN Charterand AEC Blueprint
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Launched in 1992, the ASEAN Free TradeArea (AFTA) is now in place. It aims topromote the regions competitive advantageas a single production unit.
The elimination of tariff and non-tariffbarriers among Member Countries is
expected to promote greater economicefficiency, productivity, and competitiveness. Enabling Clause Notification.
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Averagetariff under AFTA
1993
0
10
15
20
5
P
e
r
c
en
t
2002
12.76%
3.57%
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Intra ASEAN trade
vis--vis total trade
12
196712% 2002
23.2%
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As of 1 January 2005, tariffs on almost 99 percent of the productsin the Inclusion List of the ASEAN-6 (Brunei Darussalam,Indonesia, Malaysia, the Philippines, Singapore, and Thailand)have been reduced to no more than 5 percent. More than 60percent of these products have zero tariffs.
Unlike the European Union, the ASEAN Free Trade Area (AFTA)does not apply a common external tariff on imported goods.Rather, each member may impose tariffs on goods entering fromoutside ASEAN based on its national schedules.
The average tariff for ASEAN-6 has been brought down from morethan 12 percent when AFTA started to 2 percent.
For the newer Member Countries, namely, Cambodia, Lao PDR,Myanmar, and Viet Nam (CLMV), tariffs on about 81 percent oftheir Inclusion List have been brought down to within the 0-5percent range.
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Other major integration-related economic activities of ASEAN includethe following: Roadmap for Financial and Monetary Integration of ASEAN trans-ASEAN transportation network Roadmap for Integration of Air Travel Sector interoperability and interconnectivity of national telecommunications
equipment and services, including the ASEAN Telecommunications RegulatorsCouncil Sectoral Mutual Recognition Arrangement (ATRC-MRA) onConformity Assessment for Telecommunications Equipment;
trans-ASEAN energy networks Initiative for ASEAN Integration (IAI) focusing on infrastructure, human
resource development, information and communications technology, andregional economic integration primarily in the CLMV countries; Visit ASEAN Campaign and the private sector-led ASEAN Hip-Hop Pass to
promote intra-ASEAN tourism Agreement on the ASEAN Food Security Reserve.
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DOH
3
Planning
Bureau
CHINA
THAILAND
VIETNAM
INDONESIA
PHILIPPINES
MALAYSIA
HONG KONG
SINGAPORE
BRUNEI
INDIA
Laoag
CAMBODIA
LAOS
DenpasarSurabaya
Surakarta
Bandung
JAKARTABakahuni
Palembang
Padang
Medan
Banda AcehIpoh
KotaBaharu
Hat Yai
Sarawak
Kalimantan
Sabah
Mindanao
Zamboanga
Ho Chi MinhSihanouk Ville
DaNang
Haiphong
ThakhekBanLaouVinh
HANOI
Chiang Rai
Kunming
Tak UdonThani
VIENTIANE
Mergui
Tavoy
Meiktila
Mandalay
Tamu
Changsha
Shanghai
Shenzhen
YANGONMANILA
BANDAR SERIBEGAWAN
PHNOM PENH
TungKeng
Loilem
BANGKOK
NakhonRatchasima
Dumai
Cikampek
Udomxay
NakhonSawan
Kuantan
DARUSSALAM
Banjarmasin
Lao CaiJinghong
NamthaLuang
Vung Tao
SYMBOL :
ASEAN Highway
MYANMARThibawMuse
KUALA LUMPUR
Dali
Payagyi
Bangsaphan
Savannakhet
Ruili
Kawthoung
Kuching
Pontianak
PakseQuang Ngai
Matnog
Surigao City
ASEAN HIGHWAY NETWORKASEAN HIGHWAY NETWORK
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source: www.aseansec.org
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The charter's aims included: "Respect for the independence, sovereignty and territorial
integrity of member states".
"Peaceful settlement of disputes".
"Non-interference in member states internal affairs".
"Right to live without external interference
However, the ongoing global financial crisis was statedas being a threat to the goals envisioned by the charterand also set forth the idea of a proposed human rights
body to be discussed at a future summit in February2009. This proposition caused controversy, as the bodywould not have the power to impose sanctions or punishcountries who violate citizens' rights and wouldtherefore be limited in effectiveness
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An ASEAN single market and production base shall comprise fivecore elements:
(i) free flow of goods (tariffs/NTBs eliminated & ROOs and TFimproved to create single production base);
(ii) free flow of services (particularly air transport, e-ASEAN, heathcare and tourism / MRAs);
(iii) free flow of investment (ASEAN Investment Area and ASEANIGA);
(iv) freer flow of capital (ASEAN Capital Market Development andIntegration); and
(v) free flow of skilled labor (visas and employment passes forprofessionals and skilled labor and ASEAN University Network).
In addition, the single market and production base also include twoimportant components, namely, the priority integration sectors,and food, agriculture and forestry.
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ASEAN Regional Forum(ARF)
Brunei
Darussalam
Indonesia
MalaysiaPhilippines
Singapore
Thailand
Vietnam
Cambodia
Laos
MyanmarPapua NewGuinea
Australia
Canada
China
India
Japan
New
Zealand
Russia
United States
European Union
Mongolia
DPRK
Rep. of
Korea
source: www.aseansec.org
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Confidence-building Preventive diplomacy Conflict resolution
(The Republic of China (also known as Taiwan) has beenexcluded since the establishment of the ARF, and issuesregarding the Taiwan Strait is neither discussed at the ARF
meetings nor stated in the ARF Chairman's Statements.)
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EXTERNAL RELATIONS
Inter-regional cooperation
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Aimed at promoting security, economic
and transboundary concerns
Create an East Asian Free Trade Zone inlong term vision
The Chiang Mai Initiative
An expanded ASEAN Swap Arrangement to help
countries meet temporary liquidity problems
The Asian Currency Unit (ACU) is a proposedweighted index of currencies
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NEXTERNAL RELATIONS
Inter-regional cooperation
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Established 1989 Forum for 21 Pacific Rim countries or regions to
discuss the regional economy, cooperation, tradeand investment.
41% of the world's population
56% of world GDP and
49% of world trade Free Trade Area of the Asia-Pacific Region (FTAAP)
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EXTERNAL RELATIONS
Inter-regional cooperation
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45 partners; Established in 1996 Representing half of the worlds GDP, almost 60% of the worlds population and
60% of global trade key achievement of ASEM is TEIN (Trans-Eurasia Information Network),
the first large-scale research and education network connecting regionalresearchers in Asia with their counterparts in Europe. Over 60 millionusers now have access to improved network performance providingmutually beneficial global research collaboration between Asia andEurope.
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EXTERNAL RELATIONS
Inter-regional cooperation
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Established Sept 1999 30 member countries The Forum includes a political track, an economic track and
an academic track which can involve both the public and
private sectors. Purpose -- By the principle of mutually respecting for
sovereignty and territorial integrity, non-inference into eachother's internal affairs, equality and mutual benefit andreaching unanimity through consultation, EALAF wouldprovide a broader platform for political, business and otherleaders to exchange views , and to promote betterunderstanding, and political, economic and culturalcooperation between countries in the two regions.
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Became a sectoral dialogue partner of ASEAN in 1992 Become a full dialogue partner of ASEAN in 1995 and a
member of the ASEAN Regional Forum (ARF) in 1996 India signed an agreement in October 2003 for a free trade
area (FTA) with Thailand Sub-regional cooperation has accelerated too - The Mekong-
Ganga Cooperation (MGC) and the BIMST-EC In 2003, India acceded to the Treaty of Amity and
Cooperation (TAC) in South-East Asia
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Economic Boom
Massive Investment Inflows
Regional Stability
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