10 - ASEAN: An Integrated Market?

Summary

The ASEAN Trade in Goods Agreement (ATIGA) and the ASEAN Comprehensive Investment Agreement (ACIA) are both worldclass agreements. They are comprehensive and include key principles in international trade, such as the free transfer of capital; full protection and security for investments; fair and equitable treatment for investors; dispute resolution; and others. However, the agreements will only realize their great potential for ASEAN and the ASEAN Economic Community (AEC) if their implementation is just as comprehensive.

The timely and consistent implementation of both agreements will bring huge benefits for ASEAN as it will make the region a more attractive investment destination. The implementation of the ATIGA, ACIA as well as the realization of the AEC by 2015 would lead to significantly increased investment into the ASEAN region.

At the moment however, most senior business executives with knowledge of the region will tell you that they do not perceive ASEAN as an integrated and cohesive market. They still tend to see ASEAN as ten different markets with ten different rules and regulations. They see ASEAN as ten smaller economies instead of one market of 600 million people, with a US$1 trillion GDP and total trade of about US$1.4 trillion. So although they would like to develop an “ASEAN strategy” to take advantage of economies of scale, in reality, they can only adopt strategies for individual member countries.

The challenge for ASEAN is to convince the private sector that ASEAN is serious about realizing the AEC by 2015 and that it will implement the various agreements and roadmaps it has put in place without further delay and without backtracking on commitments it has made.

It is recommended that the ASEAN Secretariat be more proactive in informing the private sector about initiatives under the AEC, the ASEAN Charter, ATIGA/ACIA and other agreements that would benefit businesses with operations in ASEAN. The ASEAN Secretariat Website should be fully utilized to inform the private sector of what ASEAN and the ASEAN Secretariat are doing to push for greater integration.