The Secretary General of Malaysia’s Ministry of International Trade and Industry, Dr. Rebecca Fatima Sta Maria, gives a brief progress summary of the Asean Economic Community (AEC) project to integrate Southeast Asia’s economies into a more cohesive bloc. Started four years ago, the project has another four years to meet its 2015 deadline. How does everything look at the halfway point?

It is important, she says, to look at the goal itself and dispel any notion that Asean is trying to become a customs union or common market in the form of the European Union. Each of the world’s regions has its own regional framework to suit the economies and unique conditions of that part of the world, whether it be NAFTA, the Gulf Cooperation Council or UNASUR. With its diversity of economic development and somewhat similar and competing industries, Southeast Asia realizes it is not in a position to form a union anything like the EU… at this stage. So what is the AEC’s 2015 aim?

The AEC is, in a nutshell, the realisation of a competitive and dynamic region which allows for free flow of goods, services and investment, and freer flow of capital and skilled workers by 2015. Tariff and non-tariff barriers are to be gradually eliminated.

On the surface these might seem like fairly loose goals, but they’re just first steps. ASEAN is aiming at something called ‘open regionalism’, where the organization as a whole can sign trade treaties but within which individual countries may form their own agreements. Intra-region trade has been made much freer with 95% of traffic now tariff free. The Self-Certification System and the Asean Single Window have sped up trade by reducing bureaucracy and introducing measures to make transportation more efficient. These moves in turn make the region more attractive to outside investors.

The AEC has met 83.8% of its first-phase (2007-09) objectives, and will try to achieve 100% of them plus more in the second phase (2010-11). New measures to ease movement of skilled labor across borders, an aviation ‘open skies’ policy, healthcare, environmental and tourist cooperation strategies and transparent investment rules are all on the agenda over the coming years.

Planners are confident the AEC can reach its goals and become an attractive and somewhat integrated economy of 600 million people in the next four years. And while ASEAN may not aspire to be like the European Union in the immediate future, there are clearly those who harbor dreams of something closer to it in the longer term.

source & article: Business Times