Asean countries have removed tariff barriers and some visa restrictions

 

US President Barack Obama speaking at the US-Asean meeting at the Asean Summit in Kuala Lumpur on Saturday. The Asean leaders will sign a declaration today establishing the Asean Economic Community, originally envisioned in 2002.
US President Barack Obama speaking at the US-Asean meeting at the Asean Summit in Kuala Lumpur on Saturday. The Asean leaders will sign a declaration today establishing the Asean Economic Community, originally envisioned in 2002.

Kuala Lumpur - After daylong deliberations, the 10 leaders in the Association of Southeast Asian Nations (Asean) will sign a declaration on Sunday establishing the Asean Economic Community, originally envisioned in 2002.

By AP

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Published: Sat 21 Nov 2015, 11:00 PM

Last updated: Mon 23 Nov 2015, 10:00 AM

Southeast Asian leaders on Saturday opened a weekend summit that will bear the fruits of eight years of labour - the formal launch of a unified economic community in a diverse region far larger than the European Union or North America, with hopes of competing with China and India.
After daylong deliberations, the 10 leaders in the Association of Southeast Asian Nations (Asean) will sign a declaration on Sunday establishing the Asean Economic Community, originally envisioned in 2002.
Although Asean has helped greatly increase the region's economic and political integration, there is a long way to go before the AEC becomes fully functional after becoming a legal entity on December 31. Asean countries have torn down tariff barriers and have removed some visa restrictions, allowing people to work in other countries provided the jobs are in eight sectors, including medical, engineering and tourism.
But they still fall short in more politically sensitive areas such as opening up agriculture, steel, auto production and other protected sectors. Intra-regional trade has remained at around 24 per cent of Asean's total global trade for the last decade, far lower than 60 per cent in the European Union.
There are also other hurdles, such as corruption, uneven infrastructure and unequal costs of transportation and shipping. A wide economic gulf divides Southeast Asia's rich and middle income economies - Malaysia, Indonesia, Singapore, Brunei, Thailand and the Philippines - and its four less developed members, Communist Vietnam and Laos, Myanmar and Cambodia.
"The coming into being of the Asean community marks a new beginning for more than 630 million people, the birth of an integrated region - an entity that is a global economic force," Malaysian Prime Minister Najib Razak said.
However, much work remains. Mohamad Munir Abdul Majid, chairman of a council that advises Asean on business matters, said there is a disparity between what is officially recorded as having been achieved and what the private sector reports as their experience.
For instance, if you were to transit from one country to another, there are no tariffs at the borders. "But once you enter... you may have to grease the palms of some people in certain Asean countries to proceed. These 'behind the border' barriers... are a key impediment slowing down the process of integration," said Tan See Seng, a professor of international relations at the S. Rajaratnam School of International Studies in Singapore.
Malaysian Trade Minister Mustapa Mohamad agreed that non-tariff barriers remain. "There is a need for courage and political will. Sometimes we chickened out for whatever reason. It's important for us to push forward, to run faster," Mustapa told a regional business conference.
The AEC was envisaged in 2002 - and a blueprint created in 2007 - to face competition from China and India for market share and investments. While China's economic growth is expected to slow to an average of six per cent annually over the next five years, India's expansion is likely to pick up to 7.3 per cent in the same period, according to the Organisation of Economic Cooperation and Development.
The Asean summit will also include separate meetings with China, South Korea, India, Japan and the United States. On Sunday, those five countries along with the 10 Asean countries and Australia, New Zealand and Russia are to meet in the so-called East Asia Summit to discuss regional and global issues such as terrorism, the migrant crisis and cyber security. 



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