Global economic challenges to ASEAN integration and competitiveness: a prospective look

Global economic challenges to ASEAN integration and competitiveness: a prospective look

Published Jan 2004

Authors

P. Lloyd, P. Smith

Publisher

Focus themes

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The future direction of ASEAN

This report takes a forward-looking view of ASEAN in the context of a rapidly changing world economy. The report explores what a commitment to the goal of a single market or complete economic integration implies. It is concerned with the future directions of economic policies in the ASEAN Economic Community, with what type of regional trading agreement it might become and what modalities it might adopt to implement future policies for the liberalisation of trade and the further economic integration of the area.

The report highlights that further progress towards economic integration in any Regional Trade Agreement depends on the following three factors:

  • ¤the objective or objectives of the RTA
  • the timetable or timetables for the achievement of the objective
  • the choice of modalities to implement the integration

in order for ASEAN to be successful, the report proposes the following recommendation for further policy direction:

  • ASEAN needs to state a precise objective as how far to integrate; the choice of a single market covering goods, services and direct capital markets should be preferred
  • starting and end dates and timetables are set for all border, beyond-the border and across-borders measures covered by the choice of objective should be defined
  • there should be an investigation of all the measures which currently prevent the free movement of goods, services and capital between member economies
  • in goods markets, the achievement of a single market requires that all tariff items are on the Inclusion List, other than GATT Article XX exceptions
  • in services markets, there should be a negative list approach rather than a positive list approach and those services on the negative list should be reviewed with the object of removing them
  • sector-based modalities should be used primarily where it is not possible to design rules that are uniform across sectors
  • a monetary union be considered at a later date when the ASEAN economies are more integrated.

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