ASEAN: Regional Trends in Economic Integration, Export ... - USITC

CHAPTER 2
ASEAN and Selected Regional Trends and
Improvements
Introduction to ASEAN
ASEAN was established in 1967 to accelerate economic growth, promote regional peace
and stability, and enhance cooperation on economic, social, cultural, technical, and
educational matters. 1 The five founding countries—Indonesia, Malaysia, the Philippines,
Singapore, and Thailand—were later joined by Brunei Darussalam (Brunei) in 1984,
Vietnam (1995), Burma (1997), Laos (1997), and Cambodia (1999). 2
Since its founding, ASEAN’s progress on economic integration has been affected by
various factors. As a largely voluntary, consensus-based institution, 3 with an
economically and politically diverse membership, ASEAN has generally followed a slow,
step-by-step approach to building regional cooperation and has progressively entered into
more legally binding and institutionalized agreements. 4 However, certain external events
have stimulated faster and deeper progress on integration among member countries: a
growing international trend toward regionalism and free trade agreements (FTAs),
especially those involving ASEAN’s important trading partners; the Asian financial crisis
of 1997; the rise of emerging economies that compete with ASEAN countries, especially
China and India; and the 2008–09 global economic slowdown. 5
Although political security was ASEAN’s initial focus, economic cooperation grew in the
1970s with agreements on joint industrial projects and preferential trading arrangements
(box 2.1). 6 The first substantial step toward integrating the ASEAN market came in 1992
when the ASEAN-6 agreed to establish the ASEAN Free Trade Area (AFTA). 7 The
AFTA provided for the reduction or elimination of tariffs under a Common Effective
Preferential Tariff scheme (CEPT) and the removal of quantitative restrictions and other
nontariff measures (NTMs). It also addressed other cross-border measures, such as trade
facilitation and standards harmonization. 8 ASEAN leaders signed agreements to liberalize
services trade in 1995 (ASEAN Framework Agreement on Services, or AFAS) and
1 For more background on ASEAN, see ASEAN Secretariat Web site, “About ASEAN,”
http://www.aseansec.org/about_ASEAN.html (accessed January 5, 2010).
2 East Timor and Papua New Guinea have shown an interest in joining ASEAN.
3 Atje, “ASEAN Economic Community: In Search of a Coherent External Policy,” 2007; Soesastro,
“Implementing the ASEAN Economic Community (AEC) Blueprint,” 2007.
4 ASEAN Secretariat Web site, About ASEAN, http://www.aseansec.org/about_ASEAN.html (accessed
January 5, 2010). According to one observer, the history and diversity of the ASEAN member states have
resulted at times in a lack of political will and strong reluctance to cede national sovereignty to accelerate
regional integration. Chia, “Trade and Investment Policies and Regional Economic Integration in East Asia,”
April 2010, 8.
5 See, for example, ADB, Emerging Asian Regionalism, 2008, 22; ASEAN Secretariat, “Fact Sheet: An
ASEAN Economic Community by 2015,” August 20, 2008; and Petri, “Competitiveness and Leverage:
Benefits from an ASEAN Economic Community,” 2009, 216–217.
6 Declaration of ASEAN Concord, 1976; ASEAN Secretariat, “Economic Achievement,” n.d.
7 The ASEAN-6 countries are Brunei, Indonesia, Malaysia, the Philippines, Singapore, and Thailand.
8 ASEAN Secretariat, “Economic Achievement,” n.d.
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