Association of South East Asian Nations

Member Nations: Brunei, Cambodia, Indonesia, Laos, Malaysia,

Myanmar, the Philippines, Singapore, Thailand and Vietnam.
Four major events account for this vigorous economic growth
of the ASEAN countries:

The ASEAN governments commitment to deregulation, liberalization, and

privatization of their economies.

The decision to shift their economies from commodity based to

manufacturing based.

The decision to specialize in manufacturing components in which they have

a comparative advantage.

Japans emergence as a major provider of technology and capital necessary

to upgrade manufacturing capability and develop new industries.

ASEAN Economic Community

The Association of Southeast Asian Nations (ASEAN) is intensifying

efforts to realize by 2015 the ASEAN Economic Community and
implement the initiatives to achieve a single market and
production base, allowing the free flow of goods, services,
investments, and skilled labor, and the freer movement of capital
across the region.
Created in 1967 mainly for political and security reasons, ASEAN is today a
successful model for regionalism, widely recognized globally.
On its 40th anniversary in 2007, ASEAN adopted the ASEAN Economic
Community Blueprint, which advanced the completion target to 2015 from
2020.
If ASEAN were one economy, it would be seventh largest in the world with a
combined gross domestic product (GDP) of $2.4 trillion in 2013. It could be
fourth largest by 2050 if growth trends continue.
With over 600 million people, ASEAN's potential market is larger than the
European Union or North America. Next to the People's Republic of China
and India, ASEAN has the world's third largest labor force that remains
relatively young.
ASEAN is one of the most open economic regions in the world, with total
merchandise exports of over $1.2 trillion - nearly 54% of total ASEAN GDP
and 7% of global exports.

ASEAN Economic Community

The ASEAN Economic Community is defined by four pillars: (i) creating a

single market and production base, (ii) increasing competitiveness, (iii)
promoting equitable economic development, and (iv) further integrating
ASEAN with the global economy.
In November 2007, ASEAN leaders also approved the Initiative for ASEAN
Integration Strategic Framework and Work Plan (2009-15), which is meant
to bridge the perceived "development divide" between the older and
economically more advanced members - Brunei, Indonesia, Malaysia,
Philippines, Singapore and Thailand, known as the ASEAN-6, and the four
newer ones - Cambodia (1999), Lao People's Democratic Republic (1997),
Myanmar (1997), and Viet Nam (1995).
Under the ASEAN Free Trade Agreement, the Common Effective
Preferential Tariff scheme has brought down tariff rates on goods coming
from ASEAN members to virtually zero for ASEAN-6. The four new ASEAN
members have until 2015 to reduce their tariff.
While progress has been made in lowering tariffs and some behind-theborder economic hurdles, non-tariff barriers remain as major impediments to
achieving a single market by 2015. The liberalization of trade in services has
also been slow despite the industry's growing importance in the region.

ASEAN Economic Community 2015

The AEC will establish ASEAN as a single market and production

base with the goal of making ASEAN more dynamic and
competitive.
Four Pillars of AEC
1. Single Market and Production Base
2. Competitive Economic Region
3. Equitable Economic Development
4. Integration into the Global Economy

ASEAN Economic Community 2015

Pillar 1: Single Market and Production Base
Five Core Elements
1. Free flow of goods;
2. Free flow of services;
3. Free flow of investment;
4. Freer flow of capital; and
5. Free flow of skilled labour
Progress toward goals
. Tariffs already near zero.
. The ASEAN Trade in Goods Agreement
. The ASEAN Framework Agreement on Services
. The ASEAN Comprehensive Investment Agreement
. Pilot program for the ASEAN Self-Certification System for
exporters launched.
. Exchange of trade data and information through the ASEAN
Single Window Gateway.
. Mutual Recognition Arrangements (MRAs) in place on
testing standards in many areas.
. Stock exchanges from ASEAN-5 and Viet Nam have
collaborated to form ASEAN Exchanges.
. MRAs concluded in eight professions to facilitate the

ASEAN Economic Community 2015

Pillar 2: Competitive Economic Region
Progress toward goals
AEC seeks to foster a culture of fair competition, including
institutions and laws that underpin the effort, including protection
for consumers and guarantees for intellectual property
rights.
ASEAN Member States intensifying their efforts to introduce
competition policy and law by 2015.
Outreach activities underway to educate the public on the
importance of competition policy.
The ASEAN Highway Network is physically connecting key
roadways, including the priority Transit Transport Routes, a vital
infrastructure and logistics component.
Six (out of planned 16) cross-border connections of the
ASEAN Power Grid already in operation. The Trans-ASEAN Gas
Pipeline will connect ASEANs gas pipeline infrastructure.
The agreements and protocols under the ASEAN Open Skies
Policy have been concluded and implemented.
Telecommunication infrastructure is also undergoing
continuous enhancement.

ASEAN Economic Community 2015

Pillar 3: Equitable Economic Development

Progress toward goals

There are thirty business incubators and innovation centres under
the ASEAN Business Incubator Network to promote business
matching and development.
The ASEAN SME Guidebook towards the AEC 2015 has been
developed.
The Initiative for ASEAN Integration has developed new approaches
so that the benefits of the AEC are evenly shared between all
Member States.
The ASEAN Framework for Equitable Economic Development was
introduced in 2011.

Pillar 4: Integration into the Global Economy

Progress toward goals

ASEAN+1 FTAs with the Peoples Republic of China, Japan, the
Republic of Korea, Australia, New Zealand and India position
ASEAN at the centre of global supply chains.
ASEAN is negotiating the Regional Comprehensive Economic
Partnership (RCEP), a regional agreement involving ASEAN and its
six FTA partners. RCEP will represent a combined GDP of about