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

The AEF is unique within the region in that it has been the only active sectoral group in
any of the priority integration sectors. 56 The purpose of the AEF is to promote dialogue
between the public and private sectors and to help implement the measures contained in
the Roadmap. The AEF has actively sought input from multinational firms as well as
local companies, and it has had an ambitious agenda in moving toward implementation of
many of the measures contained in the Roadmap. However, although the AEF played an
important role in its first several years, its level of activity seems to have waned recently.
The AEF convened 10 times between its inception in 2003 and October 2008, holding at
least one meeting each year. However, the AEF did not meet in 2009 and, although a
meeting was scheduled for April 2010, it did not take place.
In addition to the Roadmap, promoting investment in the electronics industry is also a
focus of the ASEAN Secretariat. Initially, both the Secretariat and the AEF thought that
electronics investment could be promoted by expanding the framework of the ASEAN
Industrial Cooperation Scheme (AICO). AICO was intended to promote regional supply
chains in manufacturing. However, the incentives offered under AICO were limited to
duty waivers. For many electronics firms, especially computer components firms, this
incentive was of little value, given that most of their products already enjoyed duty-free
treatment. The intent was to expand the incentives offered under AICO at a later time. 57
However, despite recommendations from the AEF that AICO’s scope be broadened, 58
incentives never expanded beyond duty waivers. As a result, AICO has had little impact
on the computer components industry.
Beyond the official integration efforts led by the Secretariat, there is some evidence that
ASEAN’s role in integrating member countries into the regional economy can boost that
country’s competitiveness within the global supply chain for computer components. The
primary evidence of this comes from Vietnam. Vietnam’s integration into the ASEAN
Free Trade Area accelerated its adoption of international norms on trade and investment
policy 59 and thereby facilitated its entry into the WTO. WTO accession, in turn, has
provided an enormous boost to Vietnam’s ability to sell in international markets and
attract investors.
Export Competitiveness
The ASEAN region is a globally competitive exporter of computer components. Tables
3.1 through 3.3 provide trade values for computer components for 2004–08. Overall,
computer components exports from the ASEAN region totaled nearly $56 billion in 2008,
confirming the importance of the industry to the regional economy and making the region
the second largest source of computer components after China. On an individual country
basis, Thailand and Malaysia were the fourth- and fifth-largest global exporters of
computer components, respectively. 60
56 ASEAN Secretariat official, interview by USITC staff, Jakarta, Indonesia, March 2, 2010.
57 Ibid.
58 Santiago, “Development of ASEAN Framework for Trade Negotiations: Electronics Industry,”
March 2007, 25.
59 Fukase and Martin, “A Quantitative Evaluation of Vietnam’s Accession to the ASEAN Free Trade
Area,” November 1999, 47–48.
60 After China, the EU, and the U.S. WITS, Integrated Data Warehouse (accessed January 5, 2010).
Exports based on partner country imports.
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