ASEAN 2015 INTERGRATION

Topics: ASEAN, International trade, Economic integration Pages: 13 (2555 words) Published: April 23, 2015
INTRODUCTION
The Association of Southeast Asian Nations or the ASEAN is a economic and political organization which comprises 10 countries Indonesia, Malaysia, the Philippines, Singapore, Thailand, Brunei, Cambodia, Laos, Burma and Viet Nam) and was establish on 8 August 1967.Initialy, The ASEAN is formed to boost economic growth, social cultural evolution and social progress among its member. In addition, The ASEAN also assists n maintain regional peace and stability, and provide forum for its members to discuss differences peacefully. In 2015, in order to boost economic growth and provide more opportunities for people and enterprises, the ASEAN leader decided to hasten the establishment of the ASEAN Economic Community (AEC). The AEC aims to Borderless Economic Community, which means that ASEAN is expected to become the region with free movement of goods and services, investment, labor force, and a free flow of capital among its members. There are four main goals of the AEC:

A Single market and production-base
A Competitive economic region
Equitable economic development
Integration into the global economy

In addition, ASEAN leaders have achieved consensus to focus on twelve potential industries as: agriculture, automotives, technology, fishing, rubber products, dệt may, wood products, air freight, thương mại điện tử ASEAN, health care, tourism and logistics. http://www.spireresearch.com/spire-journal/yr2013/q4/asean-economic-community-2015-a-real-opportunity-that-should-not-be-over-hyped/ The ASEAN is home of 617 million people and its real GDP growth from 2000-2013 is 5.1 %, along with low 2.8 % inflation rate. http://www.mckinsey.com/insights/public_sector/understanding_asean_seven_things_you_need_to_know For that reason, the integration 2015 promises a huge and potential market for its members and businesses as a whole. II OPPORTUNITIES AND CHALLENGES

Due to the establishment of the AEC, businesses in ASEAN definitely benefit from the integration in many perspectives; however, there are also threats and challenges ASEAN need to overcome to ensure stable growth in a long run. Government and businesses must take into consideration the impact of the integration in some key perspective as: Infrastructure, Labor Mobility, Travel Tourism and Hospitality, Education and Logistics. FREE FLOW OF GOODS

Tariff is known as import duties and non-tariff barriers include quotas, regulation related to product content and standard, packing and shipping regulation, harbor and airport permits, customs procedures. The effect of these obstacles is to limit import and protect domestic enterprises from foreign competition. http://www.infoplease.com/cig/economics/barriers-international-trade.html . Therefore, in order to achieve free flow of goods, ASEAN is in the process to eliminate tariff (0-5%) and non-tariff barriers in the community. Moreover, AEC 2015 also promotes harmonized, simple and standardized trade and custom procedures and relevant information flows which are expected to reduce international trade cost within region; therefore, it will enhance export competitiveness and facilitate the process of achieving a single market for goods, services and investment and a single production base. http://www.asean.org/archive/5187-10.pdf. All ASEAN nations have eliminated tariff on almost imported goods from other ASEAN countries expect on a few sensitive goods. http://www.adbi.org/files/2014.07.18.book.asean.2030.borderless.economic.community.pdf. Foreign manufacturers in ASEAN can expand their market rapidly and gain more revenue due to removal of tariff and non-tariff barriers on exported goods. Particularly, the decrease of cost of goods beyond the foreign market equilibrium price will lead to increase in the demand and supply of the foreign goods. As a result, businesses can create and maintain their competitive edge in foreign market. For example, after the integration, many multinational companies...
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