September and October 2014 |
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Outlook on ASEAN Investment 2015
ASEAN Economic Community
ASEAN Economic Community is one element, along with the ASEAN
Security Community and Socio-Cultural Community, of the larger
ASEAN Community initiative targeted for implementation by 2020,
as decided upon at the ASEAN Concord II in October 2003. In 2007,
further details for AECwere laid out in the AEC Blueprint, including the
now looming deadline of 2015. The Blueprint sets out the intention
to “transform ASEAN into a single market and production base, a
highly competitive economic region, a region of equitable economic
development, and a region fully integrated into the global economy.”
The first of thesegoals promises anunrestrictedflowof goods, services
investment, and skilled labor between member nations, as well as a
“freer flow”of capital. Liberalizationmeasures for the free flowof goods,
services, skilled labor, capital and investment have already been 85
percent achieved, according to official ASEAN estimates. Although
doubts have been raised as towhether Cambodia, Laos, Myanmar and
Vietnamwill be able tomeet the compliance target of 2015,TheWorld
Bank has calculated that ASEAN’s overall trade costs have come down
15 percent over the past ten years, with intra-regional trade nearly
doubling over the same period, to almost US$500 billion last year.
As envisioned by the Blueprint, the achievement of these goals calls
for“newmechanisms andmeasures to strengthen the implementation
of its existing economic initiatives; accelerating regional integration in
the priority sectors; facilitatingmovement of business persons, skilled
labour and talents; and strengthening the institutional mechanisms
of ASEAN.”To accomplish these goals, the Blueprint sets out various
targets for IP, ecommerce, and infrastructure projects by 2015.
AECissupportedbytwofurtheragreements:theASEANComprehensive
Investment Agreement (ACIA) and the ASEANFramework Agreement
on Trade in Services (AFAS). The former includes provisions for
the liberalization of FDI using a negative list approach - in which
investment is permitted into all sectors not explicitly prohibited by
a given signatory country -, and sets out mechanisms for dispute
resolution and rulemaking . Conversely, AFASprovides for theopposite
approach, whereby FDI in certain services is prioritized based on their
inclusion on a positive list.
Additionally, several key ASEANmembers (Brunei, Malaysia, Singapore
and Vietnam) are also included in ongoing negotiations for the
Trans-Pacific Partnership, a U.S.-led regional free trade agreement.
The currently 12-member group represents two-fifths of world GDP,
including economic heavyweights such as the U.S., Japan, Canada,
Australia, and Mexico. If ratified, the TPP would entail FTA-style tariff
reductions in key economic sectors, in addition toother commitments
regarding intellectual property protection, environmental standards,
and ecommerce.
Lastly, the Regional Comprehensive Economic Partnership (RCEP) is
a proposed agreement for creating a free trade network between
ASEAN and the six countries with whom ASEAN has existing FTAs
(Australia, China, India, Japan, Korea and New Zealand). Unlike the
TPP, the RECP aims to accommodate a broader range of economic
disparity between its potential signatories, who account for nearly half
of the world’s population and approximately one-third of global GDP.
Trans-Paci c
Partnership
Regional
Comprehensive
Economic
Partnership
ASEAN’s Regional Free Trade Agreements
ASEAN
( Proposed )
