Association of Southeast Asian Nations (ASEAN)

Association of Southeast Asian Nations (ASEAN)OverviewThe Association of Southeast Asian Nations is a geo-political and economicorganization of 10 countries located in Southeast Asia, which was formed onAugust 8, 1967 by Indonesia, Malaysia, the Philippines, Singapore and Thailand.Its aims include the acceleration of economic growth, social progress, culturaldevelopment among its members, and the promotion of regional peace.Having a population of 1077.5 million, ASEAN has the GDP of US $ 1094.6billion in year of 2006 with a share of US $ 1286 billion in world’ total tradewhich was 6.1% share of the total world trade. Share of imports of all ASEANmember countries is US $ 613 billion witch accounts for 5.7% of world import; inexports there is a positive Balance of Trade exist having a total export volume inUS $ 673.4 billion which is 6.5% share of the world total exports.Among all the eleven nations of ASEAN the economy of Indonesia showsimmense growth and have the GDP of US $ 315.4 billion in 2006 which was28.8% share of among the ASEAN member nations while GDP for Pakistan isabout $133.9 billion which is only 5% share among the ASEAN membercountries. GDP per capita of Singapore was highest $28940 followed by Malaysia$ 5457 and Thailand $ 2805. Total trade of Singapore was also highest in 2006 $430.6 billion, followed by Malaysia $ 255.6 billion and Thailand $ 228.3 billionbeside that Cambodia has the least trade volume of $ 6.8 billion.INTRA –ASEAN TRADEASEAN total intra-regional trade share is 24.5 comparing 75.5 with the rest of theworld. In 2006 the intra-regional trade import share was 24.2% while intraregionaltrade export share was 24.8%.Intra-regional trade import in year 2005 was $ 243 billion, comparing with theintra-regional trade import for year 2006 $ 306 billion showing an increase about25.9%.

ASEAN Economic CommunityASEAN has emphasized regional cooperation in the “three pillars” of security,socio-cultural and economic integration. The regional grouping has made themost progress in economic integration, aiming to create an ASEAN EconomicCommunity (AEC) by 2015. The AEC would have a combined population of over566 million and a GDP exceeding US$ 1.173 trillion.ASEAN Free Trade AreaThe foundation of the AEC is the ASEAN Free Trade Area (AFTA), a commonexternal preferential tariff scheme to promote the free flow of goods withinASEAN. The ASEAN Free Trade Area (AFTA) is an agreement by the membernations of ASEAN concerning local manufacturing in all ASEAN countries. TheAFTA agreement was signed on January 28, 1992 in Singapore. When the AFTAagreement was originally signed, ASEAN had six members, namely, Brunei,Indonesia, Malaysia, the Philippines, Singapore and Thailand. Vietnam joined in1995, Laos and Myanmar in 1997, and Cambodia in 1999. The latecomers havenot fully met the AFTA's obligations, but they are officially considered part of theAFTA as they were required to sign the agreement upon entry into ASEAN, andwere given longer time frames in which to meet AFTA's tariff reductionobligations.ASEAN Investment Area (AIA)The AIA will encourage the free flow of investment within ASEAN. The mainprinciples of the AIA are as follows:• All industries are to be opened up for investment, with exclusions to bephased out according to schedules• National treatment is granted immediately to ASEAN investors with fewexclusions• Elimination of investment impediments• Streamlining of investment process and procedures• Enhancing transparency• Undertaking investment facilitation measuresFull realization of the AIA with the removal of temporary exclusion lists inmanufacturing agriculture, fisheries, forestry and mining is scheduled by 2010

for most ASEAN members and by 2015 for the CLMV countries (Cambodia, LaoPDR, Myanmar, and Viet Nam).ASEAN Framework Agreement on Trade in ServicesAn ASEAN Framework Agreement on Trade in Services was adopted at theASEAN Summit in Bangkok in December 1995. Under the agreement, ASEANmembers are negotiating intra-regional services liberalization in several sectors,including air transport, business services, construction, financial services,maritime transport, telecommunications and tourism. Although some sectorshave liberalized faster, such as air transport, other sectors remain subject tocontinued negotiation. Efforts to expand the scope of the Framework Agreementalso remain subject to continued negotiations.