Objectives of APEC 2010-2015

1. Major issues of economic integration of ASEAN economies in light of the blueprint:

ASEAN way is a process of regional interactions and cooperation based on discreteness, informality, consensus building and nonconfrontational bargaining styles. So concrete decision making and implementation is an issue. Decision making for the entire union is not centralized. Due to the consensus-based approach every member has a veto, so contentious issues must remain unresolved until agreements can be reached. ASEAN is operated through consensus and informality. It is not a rule making body subjecting its members to the discipline of adhering its laws and regulations. There is issue of development gap between different ASEAN members. So, not all the members are at equal level playing field. ASEAN does not have the financial resources to extend substantial grants or loans to the less developed existing members making implementation of projects by the less developed members an issue. ASEAN has failed at restraining its members and resolving border disputes such as those between Burma and Thailand and Indonesia and Malaysia. Also, ASEAN has failed in promoting human rights and democracy in the junta-led Burma. According to these leftist activists, the agenda of economic integration would negatively affect industries in a few member nations leading to job loss. Uncompetitive sectors may be a challenge, but the CJK FTA may be the means to further economic reform (strengthening national competitiveness). Competition for economic and non-economic hegemony is another challenge, but the CJK FTA could be the means of settling intra-regional conflicts (raising the sense of community).

2. What are the objectives of APEC 2015?

Working toward the achievement of a "seamless regional economy," APEC 2011 focused on three themes: Strengthening regional economic integration and expanding trade by advancing "next-generation" trade and investment issues.

Promoting green growth and fostering job creation in green industries Expanding convergence. regulatory cooperation and advancing regulatory

In 2012,the objectives included:

Trade and investment liberalization Regional economic integration Strengthening food security Establishing reliable supply chains Intensive cooperation to foster innovative growth

In 2013,
Attaining Bogor Goals Creating Sustainable Growth with Equity Promoting Connectivity

Looking forward by 2015

Lower barriers to trade and create more liberal markets Reduce tariffs upto 5% on 54 environmental goods by the end of 2015. Stimulate development of clean technologies, boost green businesses and foster sustainable growth. Refrain through the end of 2015 from imposing new export restrictions, raising new barriers to investment or to trade in goods and services, or implements measures inconsistent with WTO commitments. This will encourage business to trade across borders thereby increasing competition and lowering costs for both producers and consumers.

 Continuing the work in 2013, APEC economies objective is to work on improving regions supply chain performance by 10% by 2015 in terms of time, cost and uncertainty of moving goods and services throughout the Asia-Pacific. Ushering in a more systematic approach to addressing supply chain will help increase trade, as well as raise standards of living and stimulate employment in the long term. Action plan for ease of doing business will focus on improving business regulatory environment. The overall goal is to make it 25% cheaper, faster and easier to do business in the region by 2015, with an interim target of 5% improvement in 2011.This can be done by intensifying and accelerating its efforts including through capacity building programs.

3. Which country will lead to Economic integration?

Russia is already building modern ports in the Russian Far East, modernizing the transportation and shipment infrastructure, and improving national customs and administrative procedures. The implementation of these projects will allow traffic flow between Europe and the Asia-Pacific Region via Russia to be increased at least fivefold by as early as 2020 China, Australia, US, Indonesia and Russia are projected to maintain their 97% share of coal production in the 21-member Asia Pacific Economic Cooperation (APEC) region through 2035. China will remain the group's and the world's largest coal producing economy. China's coal production is expected to reach 1,849 million tons of oil equivalent to account for half the region's output in 2035. An Asian bloc could significantly augment Chinese economic power and perhaps its global political clout as well, but it could also constrain Chinese behavior through moderating pressures from its neighbors. An Asian bloc could have positive effects on the world economy, by accelerating trade liberalization and providing additional financial resources to counter international monetary disturbances, or it could divert substantial amounts of trade and dilute future efforts to stabilize the financial system. Singapore can play, including providing leadership and exporting technological and infrastructural services Three factors would be necessary to achieve East Asian economic integration

Stable growth of China- It is necessary to construct systems in China based on multilateral rules. It is also important for both the U.S. and Japan to evaluate strategies and coordinate as necessary based on information and experience gained through exchange with China in a wide variety of settings. The second issue is whether ASEAN nations can maintain and enhance their collective competitiveness in international markets. The pivotal role will be played by Indonesia. The third issue is the importance of the presence of the U.S. in East Asia; therefore rate highly the FTAAP proposed by the U.S. The stepping stone process leading up to the FTAAP is also important. There are two approaches to achieving economic integration in East Asia. The first method, ASEAN Plus Three, involves promoting economic integration among East Asian nations and Japan, South Korea and China. The second method, ASEAN Plus Six, involves achieving an FTA that covers ASEAN nations and China, South Korea, Japan, India, Australia and New Zealand by standardizing each of the ASEAN Plus One frameworks between ASEAN nations and these countries. To achieve East Asian economic integration, a multilayered approach is far more appropriate than adhering steadfastly to one method. Utilization of the best solution for each problem is essential. East Asia had already occurred in effect to some extent, although institutionally different from the integration that has occurred in the EU. He pointed out that 57% of the total trade of the ASEAN Plus Six nations (Japan, China, South Korea, India, Australia and New Zealand) in 2003 was within the region, which is higher than the corresponding figure of 45% for NAFTA and about the same as the figure of 60% for the EU.

4. Landscape of Asian Economies after AEC

The Southeast Asian model of development has been characterized by an increasingly export-led and foreign direct investment (FDI)-led development strategy. ASEAN & AEC engagement will help them exploit their comparative advantage, achieve economies of scale & open access to foreign capital, technology & skill. Economic integration will result in single market with no discrimination for commodities and production factors, which will bring advantages to the region. This is similar to the EU-style of regionalism but without macroeconomic or monetary integration. At present low intra ASEAN trade and more dependence is there on rest of the world. Economic collaboration will result in integration in highly related

industries in the region to start with like automobile; where Asia is a huge market, and this will lead to spill over to other industries. AEC would become a global business hub because of the Asian highway connecting the southern provinces of China to Singapore; the east-west economic corridor from India to Vietnam; and the sophisticated regional air transport networks. According to Mckinsey study it is estimated that an integrated ASEAN would increase regional gross domestic product (GDP) by at least 10 percent, or nominally US$50 billion, while reducing its operational costs by up to 20 percent.

Challenges for doing business in ASEAN countries:

All business decision takes time. To develop local business support services, necessary business approvals from local government takes some time. A local business partner is preferred to get approval from government or local bodies. Prior to any action advice should be sought from a reliable source preferably upon recommendation All US businesses and their foreign subsidiaries are subject to the US Foreign Corrupt Practices Act (FCPA). The FCPA makes it a crime to bribe local government officials in order to obtain new business or keep existing business. In ASEAN Countries bribery is the most prevalent ways to get any approvals. Regulation can be viewed as limiting the market or limiting competition. For instance, regulatory policies can be viewed as inhibiting the market in terms of licensing, franchising, permits, tariff and non-tariff measures, anti-dumping and countervailing duties. The countries of South East Asia have many cultures, customs, no-nos, and religious practices. Just because you finally figure out how you can comfortably work with the folks in Singapore, doesnt automatically mean you can apply the same formula to the folks in Indonesia or Thailand. Country wise most problematic factors- Cambodia & Philippines Corruption, China & Malaysia- Access to financing, India & Vietnam-Inadequate supply of infrastructure, Indonesia &South Korea- Inefficient government bureaucracy, japan- Tax regulations, Singapore- Inflation, Thailand- Government Instability.