Asean on track for EU-style market by 2015

By Agence France-Presse | Source: Inquirer Business

Southeast Asia’s efforts to create a single market by 2015 are in their hardest phase owing to protectionist reflexes on sensitive sectors, according to President Aquino.

Despite the challenges, however, leaders of the Association of Southeast Asian Nations (Asean) are working hard to meet the target, Aquino told reporters on Wednesday night in Brunei where he was attending Asean’s annual summit.

“They have finished with the easy parts but the accomplishments will not be as fast as in discussing the hard parts. When you reach that point, there can be some protectionist measures taken by each economy,” Aquino said.

“But since we are focused on reaching the target, everyone who believes that one community is beneficial to everybody concerned will really try hard (to reach the goal),” he said.

Although overshadowed by security issues, an ambitious plan by Asean to transform itself into an EU-like community by the end of 2015 has sparked more optimism, with diplomats saying the bloc was on track to meet the deadline.

About 77 percent of the work to turn the bustling region into a single market and production base, first laid out in a 2007 blueprint, have been done, according to a confidential draft statement to be issued after the summit.

Nine leaders in the 10-nation bloc huddled behind closed doors on Thursday at a cavernous, stone and marble building Brunei’s Sultan Hassanal Bolkiah had ordered built for the annual two-day summit. Absent from the session was Malaysian Prime Minister Najib Razak, who was campaigning for reelection back home.

Asean, a region of 600 million people in 10 countries, wants to establish a common market and manufacturing base so that it can better compete as a group with giant neighbors such as China and India in trade and investments.

Many challenges

The region attracted 7.6 percent of the world’s foreign direct investment in 2011, up from 4.3 percent in 2006, Jaspal Bindra, Standard Chartered’s chief executive for Asia, wrote in a column in the Borneo Bulletin on Thursday.

Trade Secretary Gregory Domingo said Asean had already achieved up about three quarters of its targets relating to its single-market goal since beginning the process in 2007.

But he also emphasized there were many challenges, including a framework to open up the services sector such as banking, insurance, telecommunications and retail within Asean.

Another challenge is harmonizing customs procedures and putting them online so that businesses can see them real-time, Domingo told a media briefing held with Aquino.

Tariff barriers

On trade in goods, agriculture is also among the most difficult sectors to fully liberalize, Domingo said.

“If their agriculture sector is large, they will protect it because there are a lot of farmers (affected),” he said.

Analysts have said that Asean has achieved much in cutting tariff barriers to trade in goods, but still has a lot to do before the end-of-2015 target in opening up the services sector by removing nontariff hurdles.

“Asean is fully aware of that and they’re now trying to do an inventory of those nontariff barriers so that we can eliminate them one by one,” Domingo said

Leave a Reply

Your email address will not be published. Required fields are marked *