83 - The 2030 Architecture of Association of Southeast Asian Nations Free Trade Agreements

Summary

The economic world in 2030 will be unrecognizable from what it is today as emerging countries, including the Association of Southeast Asian Nations (ASEAN) region as a whole, grow faster than advanced economies as a result of the global financial crisis.

After recovering from the Asian financial crisis of 1997–1998, ASEAN started to feel the need to move beyond the scope of AFTA to attract more capital inflows, especially from East Asia. From that point onwards, the ASEAN Economic Community blueprint was proposed and finally signed, with the aim of creating a single market and production base by promoting the free flow of goods, services, capital, and skilled labor.

To promote a free flow of goods in order to position itself as a production base for both ASEAN and ASEAN dialogue partners and investors, ASEAN switched from a collection of agreements related to trade in goods to a comprehensive agreement — the ASEAN Trade in Goods Agreement (ATIGA).

With ATIGA, ASEAN set the time frame to eliminate both tariff barriers (especially for products on the sensitive and highly sensitive list) and NTBs by 2015.

For the movement of capital, ASEAN adopted the elimination of investment restrictions and impediments under the ASEAN Comprehensive Investment Agreement (ACIA).

The AEC also agreed to ease the free flow of professional employees, but only seven mutual recognition agreements (MRAs) were finally signed (for engineering services, architectural services, nursing services, medical practitioners, dental practitioners, surveying qualifications, and accountancy services).

The ability of ASEAN to position itself as a core of all ASEAN+ economic integration depends mainly on the success of members in narrowing their differences, both on economic and noneconomic issues.

One proposal starts with an East Asian FTA (known as EAFTA) among ASEAN+38 countries and then extending it gradually to ASEAN+6 countries and others; another idea proposes including all ASEAN+6 countries in a region-wide FTA or comprehensive economic partnership in East Asia (known as CEPEA) from the start.

Overall, the two processes (EAFTA and CEPEA) have created real questions in East Asia, if not great confusion, about the way people look at the region, and have complicated the regional institutional landscape.