‘More needs to be done for AEC realization by 2015’

By Rachelle M. Nessia with reports from Habhajan Singh, The Malaysian Reserve

Thursday 16th of February 2012

NEW DELHI, Feb. 16 (PIA) --- Panelists during the recently-concluded Delhi Dialogue IV in India agreed that there is still a long way to go for the realization of the Asian Economic Community (AEC) by 2015.

Some of the challenges raised during the dialogue include trade barriers, lack of trust among Asian neighbors, low intra-regional trade share and the development divide.

Tariff and non-tariff barriers were among the issues that emerged at the panel discussing the economic integration of Association of Southeast Nations (ASEAN) during the dialogue held Feb. 13 to 14 in New Delhi.

The two-day dialogue was themed “India and ASEAN: Partners for Peace, Progress and Stability

Dr. Sok Siphana, an advisor to the Cambodia government and one of the dialogue panelists, said the rising non-tariff barriers in the trade of goods and lack of settlement channels remain one of the challenges faced by Southeast Asian nations as they move towards firming the AEC.

"In the trade of goods, the tariff reduction program is on track, but non-tariff barriers are on the rise," Siphana said.

If left unchecked, he said the new non-tariff measures could nullify the benefits from tariff reductions.

"You can get information on tariff rates by picking up a book or other sources. But for non-tariff restrictions, it is not easily available," he told the conference.

Another panelist, Isabel Guerrero, former country economist in the Philippines and currently Vice President of the World Bank Group South Asia Region, echoed Siphana’s observations as she lamented that in spite of trade agreements among the South Asian countries, major trade barriers remain.

She also cited behind-the-border restrictions, weak logistics, and poor market access for lagging regions as additional issues that beset economic integration in the region.

The panelists called for ASEAN and India to put into place measures that will dismantle said barriers in order to achieve full regional integration.

Dr. Siphana, in his talk, described as 'praiseworthy' ASEAN’s economic growth in the last few years.

In 2010, its merchandise trade value jumped from US$ 1.54 trillion in 2009 to US$ 2.04 trillion in 2010.

During the same period, Asean's exports of commercial services to the world jumped 139% to US$162.8 trillion, he said.

Foreign direct investment (FDI) reached US$75.8 billion in 2010, doubling the 2009 level, and growing at an annual average rate of 19%, according to figures given by Dr Siphana.

However, he noted that Asean intra-regional trade stands at 25% has to be pushed to 40%, which is still lower than the 68% intra-trade among the 27 European Union (EU) members.

With the advent of the AEC in 2015, Siphana said the implementation of numerous measures identified in the AEC Blueprint, ASEAN single window and trade facilitation must be accelerated.

A recent scorecard survey on the readiness of AEC blueprint found that the region has completed 75% of its total first implementation period in 2010.

AEC was formulated when ASEAN leaders during the Bali Summit in October 2003 announced that AEC shall be the goal of regional economic integration.

If realized, AEC is seen to unify a market of more than 600 million citizens with a combined gross domestic product of nearly US$2,000 billion. (RMN/PIA Negros Oriental)