Tải bản đầy đủ - 0 (trang)
ASEAN Economic Integration: Taking Care of Business

ASEAN Economic Integration: Taking Care of Business

Tải bản đầy đủ - 0trang

b552_Chapter-18.qxd



11/12/2007



8:49 AM



Page 218



FA



218



Asia in the Global Economy: Finance, Trade and Investment



common action to eliminate the barriers which divide Europe, affirming as

the essential objective of their efforts the constant improvements of the living and working conditions of their peoples”.2

Like the EU, the Association of Southeast Asian Nations (ASEAN), has

also had the aspect of economic integration and cooperation embedded in

their founding declaration. ASEAN was founded in 1967 with Indonesia,

Malaysia, Philippines, Singapore, and Thailand as its founding members. The

first summit was held in Bangkok and of the five objectives contained the

“Bangkok Declaration”, two of them are3:

• “(A desire) to establish a firm foundation for common action to promote

regional cooperation in Southeast Asia in the spirit of equality and partnership and thereby contribute towards peace, progress and prosperity in

the region”.

• “(I)n an increasingly interdependent world, the cherished ideals of peace,

freedom, social justice, and economic well-being are best attained by fostering good understanding, good neighborliness, and meaningful cooperation among the countries of the region already bound together by ties of

history and culture”.

Since its founding, the membership of ASEAN has been widened to

include 10 countries in Southeast Asia (the initial five as well as Brunei,

Cambodia, Laos, Myanmar, and Vietnam). Nevertheless, the aim of deeper

ASEAN economic integration has remained unchanged; in fact it has been

the bedrock of most ASEAN discussions. Developments in the external environment have worked in tandem to raise the awareness about the need to

hasten the process of intra-ASEAN integration. These developments include:

(a) the stalling of multilateral trade talks; (b) the economic emergence of

China and India and concomitant concerns about loss of ASEAN’s global

competitiveness; and (c) the spate of new free trade pacts being negotiated

in Asia and in particular, by ASEAN members themselves.4

While the overall economic effects of Asia’s new wave of trade pacts

remain uncertain, ASEAN is potentially well placed to reap the benefits of

this new regionalism. The three largest countries in Asia, viz. China, India,

and Japan, are due to fully implement trade pacts with ASEAN by 2010,

2012, and 2011, respectively. South Korea, Australia, and New Zealand have

also been actively courted by ASEAN, as has the United States. Nonetheless,

for ASEAN to capitalize fully on its de facto hub status, greater efforts need

2



More information on the Treaty of Rome is available at http://europa.eu/scadplus/treaties/eec_en.htm

“The ASEAN Declaration” also known as the “Bangkok Declaration” signed in Bangkok on 8 August

1967. Available at http://www.aseansec.org/1212.htm

4

See Chapter 17 of this Volume.

3



b552_Chapter-18.qxd



11/12/2007



8:49 AM



Page 219



FA



ASEAN Economic Integration: Taking Care of Business



219



to be expended to maintain cohesion and deepen intra-ASEAN integration.

This chapter takes stock of the ongoing process of economic integration and

addresses some of the challenges toward ASEAN economic integration.



A Brief History of ASEAN Economic Integration

Though the Bangkok ASEAN Declaration of 1967 laid out the case as well as

the need for increased economic integration, not much was done in this area

for a while. This lull in further negotiations resulted, perhaps, because of the

war that took place in the region from the latter part of the 1960s to the mid1970s. In 1976, the “ASEAN Concord” was signed in Bali and that declaration provides that “Member States shall cooperate in the field of trade in

order to promote development and growth of new production and trade”.

In 1977, there was an agreement signed in Manila where members agreed to

adopt various instruments on trade liberalization on a preferential basis. After

the third summit meeting of the ASEAN heads of government in Manila in

December 1987, ASEAN declared that “Member States shall strengthen

intra-ASEAN economic cooperation to maximize the realization of the

region’s potential in trade and development”.5

However, most of these agreements and declarations really did not

amount to much action on the ground. The real breakthrough came in

January 1992 when, in Singapore, six ASEAN member countries signed the

Common Effective Preferential Tariff (CEPT) scheme for an ASEAN Free Trade

Area (AFTA).6 The aim of the CEPT scheme was to reduce tariff barriers to no

more than 5 percent and completely eliminate quantitative restrictions as

well as other non-tariff barriers within AFTA. An ASEAN note in 2003 said

“The elimination of tariffs and non-tariff barriers among the ASEAN members

has served as a catalyst for greater efficiency in production and long-term

competitiveness. Moreover, the reduction of barriers to intra-regional trade

gives ASEAN consumers a wider choice of better quality consumer products”.7 However, there were some exclusions in the list of goods. The same

note goes on to say: “734 tariff lines in the General Exception List, representing about 1.09 percent of all tariff lines in ASEAN, are permanently

excluded from the free trade area for reasons of national security, protection

of human, animal or plant life and health, and of artistic, historic and archaeological value”.

5

“Manila Declaration” signed in Manila on 15 December 1987. Available at http://www.aseansec.org/

5117.htm

6

The 6 ASEAN countries or ASEAN 6 are Brunei, Indonesia, Malaysia, Philippines, Singapore, and

Thailand. The other 4 members, Cambodia, Laos, Myanmar, and Vietnam joined later.

7

Southeast Asia: A Free Trade Area. http://www.aseansec.org/viewpdf.asp?file=/pdf/afta.pdf



b552_Chapter-18.qxd



11/12/2007



8:49 AM



Page 220



FA



220



Asia in the Global Economy: Finance, Trade and Investment



In 1997, in Kuala Lumpur, “Vision 2020” of ASEAN was released and on

the subject of economic integration, it says “We resolve to chart a new direction towards the year 2020 called, ‘ASEAN 2020: Partnership in Dynamic

Development’ which will forge closer economic integration within ASEAN”.

Finally in 2003, ASEAN countries signed the ASEAN Concord–2 and on the

issue of setting up an ASEAN Economic Community, it says:

“The ASEAN Economic Community is the realization of the end-goal of economic integration as outlined in the ASEAN Vision 2020, to create a stable,

prosperous and highly competitive ASEAN economic region in which there

is a free flow of goods, services, investment and a freer flow of capital, equitable economic development and reduced poverty and socio-economic

disparities in year 2020.”



Limited de facto Integration

Under the region’s flagship trade initiative, viz. AFTA, the bulk of intraASEAN trade enjoys tariff rates between 0 and 5 percent (the newer members, Cambodia, Laos, Myanmar, and Vietnam, have been granted longer

timetables to implement AFTA). While AFTA came into force earlier than

originally planned (1 January 2002 for the original ASEAN members) and a

target zero-tariff rate will be achieved by 2010 (2018 for the transition members), its impact has thus far proven to be rather disappointing. Even though

AFTA 96 percent of all of ASEAN’s trade now falls within the AFTA, there are

wide differences among the ASEAN-6 members with respect to their commitments to tariff elimination under the CEPT scheme. Thus, while some of

the ASEAN countries viz. Singapore has reduced most of its CEPT tariff rates

to zero, others viz. Malaysia and Philippines have not yet fulfilled all their

AFTA commitments, with some of the products still attracting high tariffs

higher than those within the CEPT range of 0–5 percent. The newer members

have been given a deadline till 2010 to comply with the AFTA commitments

for tariff reduction.

Further, although AFTA is already implemented, costs of complying with

the Rules of Origin (ROOs) to satisfy the criteria for preferential treatment are

perceived to be quite high by the businessmen. A recent study estimates that

current utilization rate of tariff concessions under the CEPT scheme is as low

as 5 percent. This is largely due to lack of clear and transparent procedures

as well as absence of credibility and mutual trust between the countries that

provide and receive preferential tariff treatment under AFTA. Further, the

margins of preference between the ASEAN-wide tariff rate (referred to as the

“Common Effective Preferential” tariffs or CEPT) and those applied by ASEAN



b552_Chapter-18.qxd



11/12/2007



8:49 AM



Page 221



FA



ASEAN Economic Integration: Taking Care of Business



221



countries to imports from the rest of the world are rather low.8 Further, AFTA

is narrowly focused on reducing and eventually eliminating intra-ASEAN tariff barriers on merchandise trade. Non-tariff and other trade hindering barriers have not been adequately addressed by AFTA.

The data bears out the limited effectiveness of AFTA. First, intra-ASEAN

trade has accounted for only about one-fifth of ASEAN’s total trade, this share

remained stagnant over the last decade (and much of the intra-ASEAN trade

is due to Singapore), at the expense of its increasing trade linkages with the

two Asian giants China and India. Intra-ASEAN trade is also far lower than

other regional economic alliances such as the European Union (two-thirds)

or the North American Free Trade Area (one half). Second, only a small proportion of the intra-ASEAN trade is conducted under the CEPT (45 percent of

intra-ASEAN trade is in electrical and electronic parts and components

broadly defined).9

In addition, little to no progress has been made in facilitating intraASEAN services trade (the ASEAN Framework on Services or AFAS has

been largely ineffective). One of the prime reasons behind this has been

political constraints, associated with the protectionist interests of those

who might lose from reforms in AFAS. Further, there are significant constraints in the AFAS Framework itself that restrict speedy liberalization of

regional service trade. A major constraint is the uneven levels of development among the ASEAN economies. As such, technical expertise in legal

and sectoral aspects of services trade liberalization must be provided for

new ASEAN members, many of whose service sectors are not even well

developed. Second, there is a need to add credibility to the liberalization

agenda under AFAS, by specifying coverage of sectors and detailed time

lines for progressive liberalization. Analysts have argued that a multi-track

approach may be suitable for sectors that are growing rapidly and are likely

to be less affected by national interests. In this context, it is argued that

AFAS should follow a negative-list approach than the currently existing positive list one, as it would allow greater coverage and transparency in negotiations, and assure service providers of fair and non-discriminatory treatment

with respect to market access in all service sectors, unless specifically

exempted. This would also allow greater consistency with the bilateral

8



Drawing lessons from the CER grouping (consisting of Australia and New Zealand), it has been suggested

that ASEAN members might consider a waiver of the rules or origin for those goods wherein the difference between the ASEAN member’s MFN tariff rate is 5 percent or lesser, which could perhaps enhance

the utilization of AFTA by exporters and importers. See Lloyd, P and P Smith (2006). Global economic

challenges to ASEAN integration and competitiveness: A prospective look, REPSF Project No. 05/004,

Regional Economic Policy Support Facility (REPSF) (September).

9

For details see Austria, MS (2004). The pattern of Intra-ASEAN trade in priority goods sector, REPSF

Research Project No. 03/006 (August).



b552_Chapter-18.qxd



11/12/2007



8:49 AM



Page 222



FA



222



Asia in the Global Economy: Finance, Trade and Investment



approach wherein most of ASEAN’s services trade negotiations have been

based on a negative list.10

Further, services trade liberalization would require ASEAN members to

undertake domestic reforms, particularly on regulatory issues, in order to

benefit from service trade liberalization. This is particularly so in case of the

financial services sector, which has already suffered adversely in the crisis of

1997–1998. It would also require ASEAN economies to devise an adequate

safeguard mechanism in order for policymakers to respond efficiently to possible negative effects on the domestic economy from such liberalization.

Besides the AFTA and AFAS initiatives that provide limited de facto building blocks for economic integration, there is also the ASEAN Investment Area

(AIA) initiative that is force for the founding members of ASEAN and Brunei

Darussalam and accords ASEAN investors preferential treatment with regard

to market access and the granting of national treatment, for all sectors except

for those deemed to be sensitive. The newer members of ASEAN, Cambodia,

Laos, and Vietnam have until 1 January 2010 to implement AIA. However, as

in case with other schemes for ASEAN economic integration, implementation of this scheme has been uneven among ASEAN members. Indeed, the

framework of agreement of the AIA lacks substantive details, although being

legally binding, as the implementation is left to the individual members. In

addition, recent free trade pacts of ASEAN and its individual members with

its extra-ASEAN trading partners have all committed to investment liberalization, which could render the AIA to be insignificant, unless steps are taken

by ASEAN to build upon the AIA in order to develop a common framework

for investment liberalization for investors from both inside and outside the

region.11 Further, there is also a need to harmonize the tax laws and regulation in ASEAN for investors to take advantage of it as a single market that

integrates the capital with the goods and services market in the near future.12



ASEAN Competitiveness as seen by McKinsey

A McKinsey study estimate that manufacturing costs as well as logistics costs

will decline as a result of full economic integration.13 Their logic is that

10



For a recent report on AFAS see Thanh, VT and P Bartlett (2006). Ten years of ASEAN framework agreement on services (AFAS): An assessment, REPSF Project No. 05/004, Regional Economic Policy Support

Facility (REPSF ) (July).

11

For details see Hew, D et al. (2006). AIA-Plus: Building on free trade agreements (ASEAN and Five

Dialogue Partners — CER, China, India, Japan, Korea), REPSF Research Project No. 04/010 (December).

12

For details see Farrow, I and S Jogarajan (2006). ASEAN Tax regimes and the integration of the priority

sectors: Issues and options, REPSF Project No. 05/005, Regional Economic Policy Support Facility (REPSF)

(October).

13

See Schwarz, A and R Villiinger (2004). Integrating Southeast Asia’s economies, The McKinsey Quarterly,

No. 1.



b552_Chapter-18.qxd



11/12/2007



8:49 AM



Page 223



FA



ASEAN Economic Integration: Taking Care of Business



223



Potential cost savings in electronics industry, index: cost before integration = 100

Manufacturing Cost Savings

100



Logistics Cost Savings



3-6

Cost before

integration



2-5

Scale,

Scope



Cost of

Components



2-5

Direct

(less delay

at customs)



3-5



79-90



Indirect

(Improved

inventory

management)



Cost after

integration



Fig. 1. Analysis by McKinsey on potential savings to the electronics industry in

ASEAN if countries integrate.

Source: McKinsey & Co.



because there is a bigger consumer market, it reduces per-unit cost because

of economies of scale. Then because of reduced customs duties, the manufacturers will benefit if they export goods to another country. All in all, they

estimate that the costs of the electronic industry will reduce by some 10–20

percent. Figure 1 shows how the electronics industry in the ASEAN region

could benefit from economic integration.

While the potential gains from integration within ASEAN are significant, another McKinsey Consulting report on ASEAN Competitiveness

highlighted three significant concerns that investors have expressed about

ASEAN14: (a) subscale and fragmented markets; (b) unnecessary costs due

to different product standards and customs procedures; and (c) unpredictable policy implementation by ASEAN members, including the recent

back-tracking by some countries on their respective liberalization commitments (e.g., Malaysia in the case of motor vehicles and parts,

Indonesia in agricultural products, and Philippines in the case of petrochemical products).

In recognition of these concerns, at the Bali summit in October 2020,

the 10 ASEAN leaders agreed to the goal of creating an ASEAN Economic

Community (AEC) by 2020 (so-called “Bali Concord II”). The AEC,

which was initially mooted by then Singapore Prime Minister Goh Chok

Tong, is one pillar of the “ASEAN Community”, the other two being political and security cooperation and socio-cultural cooperation. The primary



14



The McKinsey report is titled “ASEAN Competitiveness Study” and was commissioned by the ASEAN

Secretariat.



b552_Chapter-18.qxd



11/12/2007



8:49 AM



Page 224



FA



224



Asia in the Global Economy: Finance, Trade and Investment



objective of the AEC is to deepen and accelerate intraregional economic

integration by liberalizing trade, investment and skilled labor flows and

addressing behind-the-border barriers thus creating a single production

base and single market.15

As a follow-up to the McKinsey report, the ASEAN Economic Ministers

established a High-Level Task Force (HLTF) on ASEAN economic integration.

Specific initiatives suggested by the HLTF to advance the process of economic integration in the next few years include:

• the hastening of customs clearance and simplifying customs procedures;

• eliminating existing tariff and non-tariff barriers to trade;

• accelerating the implementation of the Mutual Recognition Arrangements

(MRAs) for key sector such as electrical, electronic, and telecommunications equipment;

• harmonizing standards and technical regulations;

• creating a more effective ASEAN Dispute Settlement Mechanism

(DSM); and

• fast-tracking of liberalization of 11 priority sectors. They are automotive,

wood-based products, rubber-based products, textiles/apparels, agrobased products, fisheries, electronics, air travel, tourism, information and

communications technologies (ICT), and healthcare.



Conclusion: Multi-Speed Approach within ASEAN

While ASEAN needs to focus specifically on making the region a seamless

and enlarged production base, there remain a number of skeptics about the

effectiveness of ASEAN as an economic entity (as opposed to a political

one). For instance, the vast and growing income gaps and heterogeneity

among the various members may well act as a road-block to deeper

economic intra-ASEAN integration in the near term. They could also limit

the ability of the association to develop a common strategy to deal with

extra-regional countries. Indeed, while ASEAN as a group is engaged in

15



There have been a number of papers on the ASEAN Economic Community. For instance, see Cuyvers, L,

PD Lombaerde and S Verherstraeten (2005). From AFTA toward an ASEAN Economic Community … and

beyond, Discussion Paper No. 46, Center for ASEAN Studies: Antwerp; Hew, D (2003). Towards an

ASEAN Economic Community by 2020: Vision or reality? Viewpoints, Institute for South East Asian Studies

(June 16). For a discussion of the ASEAN Economic Community and the newer members of ASEAN, see

Thanh, VT (2006). Can the CLV effectively engage in the ASEAN integration? Paper for presentation at the

Seminar Accelerating Development in the Mekong Region — The Role of Economic Integration, Siem

Reap (26–27 June 2006).



b552_Chapter-18.qxd



11/12/2007



8:49 AM



Page 225



FA



ASEAN Economic Integration: Taking Care of Business



225



negotiations with China and India, Thailand and Singapore — which are the

two most enthusiastic liberalizers in ASEAN — are negotiating separate

comprehensive agreements with these two countries as they are concerned

about the slow pace of negotiations and implementation of ASEAN-wide

agreements.

Apart from establishing trade pacts with third countries, Singapore and

Thailand have recently formed a “Singapore–Thailand Enhanced

Economic Relationship” (STEER). Among other things, the aim of the

STEER is to act as a high level forum to intensify bilateral economic cooperation across various sectors (agriculture and food, life sciences, automotive parts and components and financial services). Other areas of

cooperation include development of SMEs, customs cooperation, healthcare, spa services, tourism, transport logistics, financial services, ICT, and

MRAs. In another substantive step in bilateral cooperation, Singapore

has joined in the early harvest program initiated between Thailand and

China in their bilateral FTA. The agreement will involve the three countries eliminating tariffs on all fruits and vegetables and came into effect on

1 January 2005.

Clearly, just as some ASEAN countries prefer to take a more graduated

approach to liberalization (as they aim to balance domestic economic

priorities and promote their external economic interests), Singapore and

Thailand are fully justified to “go-it-alone” in pursuit of their respective

national interests. Recognizing this reality of multi-speed integration

among member countries, ASEAN leaders implicitly endorsed the “2 plus X”

approach, whereby any two-member countries can choose to integrate

certain sectors faster bilaterally if they so desire. (The “plus X” presumably

refers to either other ASEAN members or Dialogue partners like China and

India.)

Nonetheless, there are valid concerns that this multi-speed approach

taken toward integration will further stratify ASEAN and undermine its ability to act as a unified hub as they outreach to the rest of the world. Indeed,

ASEAN’s first mover advantage in the FTA game may in fact be eroding. For

instance, China and India are both now much more focused on opportunities for mutual rather than zero sum gains. There are signs of intensified business and economic interactions between these two Asian giants, as there are

bilateral cultural and political ties. ASEAN’s response to these and other

dynamics in the global economy needs to be resolute; deeds and declarations will no longer suffice.



b552_Chapter-18.qxd



11/12/2007



8:49 AM



Page 226



FA



Asia in the Global Economy: Finance, Trade and Investment



226



Table 1.



Intra-ASEAN exports of ASEAN 6 countries (US$ billions) (1996–2005).

1996



2001



2002



2003



2004



2005



Brunei

Indonesia

Malaysia

Philippines

Singapore

Thailand



0.4

8.3

22.7

3.0

34.4

12.1



0.8

9.5

21.0

5.0

32.9

12.6



0.7

9.9

22.1

5.5

34.0

13.2



0.6

10.7

24.6

6.6

36.0

16.6



0.9

13.0

31.8

6.8

43.5

21.1



1.5

15.8

36.7

7.1

71.9

23.9



Total



80.8



81.8



85.8



97.2



116.8



155.1



Source: ASEAN Trade Statistics Database, ASEAN Statistical Pocketbook.



Table 2.



Intra-ASEAN imports of ASEAN 6 countries (US$ billions) (1996–2005).

1996



2001



2002



2003



2004



2005



Brunei

Indonesia

Malaysia

Philippines

Singapore

Thailand



2.8

5.5

14.7

4.0

27.4

9.8



0.5

5.7

15.3

4.2

29.0

10.1



0.6

7.0

17.3

5.2

30.5

10.5



0.6

8.0

20.1

6.4

31.2

12.8



0.6

11.7

26.2

8.4

37.4

15.8



0.7

17.3

29.1

8.9

52.2

21.6



Total



64.2



66.0



72.0



81.2



101.2



132.1



Source: ASEAN Trade Statistics Database, ASEAN Statistical Pocketbook.



Table 3.



Intra-ASEAN exports as percentage of total exports (1996–2005).

1996



2001



2002



2003



2004



2005



Brunei

Cambodia

Indonesia

Laos

Malaysia

Myanmar

Philippines

Singapore

Thailand

Vietnam



17.9



15.4



30.6



15.2

29.3

21.7





21.9

4.9

16.9



23.9

42.9

15.5

27.0

19.3





25.4

4.8

17.4



23.7

49.8

15.7

27.2

19.9





19.7

4.8

17.6

71.0

24.8

68.6

18.2

25.0

20.6





17.1

3.2

18.2

84.2

25.1

74.2

17.2

24.3

21.7

14.8



24

4.7

18.5

84.8

26.1

49.9

17.3

31.3

21.8

17.6



Total



25.0



22.3



22.6



22.9



22.5



25.3



Source: ASEAN Statistical Pocketbook.



b552_Chapter-18.qxd



11/12/2007



8:49 AM



Page 227



FA



ASEAN Economic Integration: Taking Care of Business



Table 4.



227



Intra-ASEAN imports as percentage of total imports (1996–2005).

1996



2001



2002



2003



2004



2005



Brunei

Cambodia

Indonesia

Laos

Malaysia

Myanmar

Philippines

Singapore

Thailand

Vietnam



64.2



11.9



19.5



14.1

22.2

13.5





41.6

72.7

18.5



20.9

46.9

14.1

25.0

16.2





39.2

35.9

22.4



21.9

56.2

15.6

26.2

16.8





45.6

58.3

24.7

74.7

25.1

52.5

17.1

24.4

16.7





42.6

33.6

25.1



24.9

49.2

19.0

22.9

16.6

24.2



49.1

36.4

30

51.6

25.5

54.9

18.7

26.1

18.3

27.4



Total



18.3



21.1



22.2



22.8



22.2



24.5



Source: ASEAN Statistical Pocketbook.



b552_Chapter-18.qxd



11/12/2007



8:49 AM



Page 228



FA



This page intentionally left blank



Tài liệu bạn tìm kiếm đã sẵn sàng tải về

ASEAN Economic Integration: Taking Care of Business

Tải bản đầy đủ ngay(0 tr)

×