Philippines Ready: Can ASEAN Economic Community happen in 2015?

The way to an ASEAN Economic Community, envisioned by the 10-member Association of South East Asian Nations to come about in 2015, is going through a rough ride, a ranking official of ASEAN said on Tuesday.

At the moment many of the member-states are experiencing difficulties in complying with or implementing the requirements for an integrated economic community, ASEAN deputy secretary general Dr. Lim Hong Hin,  told participants to the annual Punongbayan & Araullo CEO Business Forum in Makati City

 "Despite progress in a number of areas, 28 percent of AEC measures due to be implemented for 2008-2011 are still pending as of end-August 2012," said Lim.

 These measures cover trade – customs modernization standard and conformity and services liberalization – investments, agriculture, consumer protection, and ratification of transportation agreements.

 ASEAN members have failure to comply with decisions, treaties and protocols at the national levels, Lim noted.

 "Others point to implementation bottlenecks due to lack of necessary funds to support the integration measures, particularly at the national level," Lim revealed.

 "This is a concern because failure of many ASEAN countries to follow through on their commitments may undermine the success of AEC," he said.

 The Philippine scorecard showed 104 of 110 measures have been implemented during the Phase 1 of the ASEAN Economic Community blueprint, said Trade Undersecretary Adrian Cristobal Jr.

 Two of the measures Philippines still needs to comply with are in the areas of transportation and infrastructure, the Philippine official noted.

 The role of private sector role is vital for the ASEAN Economic Community to succeed, Lim said, encouraging it to take the lead in raising investments and productivity, adopting a sound risk management practice and risk analyses, and promoting corporate governance and consumer education.

 At this point he discounted the idea of creating an ASEAN single currency, saying "the time is not ripe for a discussion on a single currency just like the euro."

 AEC is a single market and production base economy where goods, services, investments, capital, and skilled labor can flow freely within a community of nations – home to 600 million people and a combined gross domestic product of more than $1.13 trillion.

 ASEAN+6

 During the forum, Lim said the association is looking forward to start discussions for a broader economic partnership with six non-ASEAN countries before the year ends. The idea was to create the biggest free trade area in the world

 "In support of greater integration with the global economy, ASEAN countries are actively working to launch the start of negotiations for the Regional Comprehensive Economic Partnership with China, Japan, Korea, India, Australia and New Zealand by the end of this year," Lim noted.

 These countries have existing free trade agreements with the regional bloc, including the ASEAN-China FTA, ASEAN-Japan, ASEAN-Korea, ASEAN-Australia and New Zealand, and ASEAN-India.

 "Despite differences, we want to move forward... and come out with a guiding principle to create RECP," said Lim.

 ASEAN+6 would cover wide areas of the Asia-Pacific region, and Lim said is more feasible and realistic than the Trans-Pacific Partnership. "Once completed, it will be the largest FTA in the world."

 The 2005 Trans-Pacific Strategic Economic Partnership Agreement is a multilateral free trade that claims to further liberalize the economies of the Asia-Pacific region.

 All efforts at creating RCEP were aimed at consolidating all free trade agreements entered into by ASEAN. "The goal here is to promote wider economic integration," Lim said.

GMA News