Amid increasing globalization, ASEAN aims to become a more dynamic and stronger segment of the global supply chain and is determined to look beyond the borders of the ASEAN Economic Community. The region presents opportunities for investors to access not only ASEAN markets but also some of the world’s largest economies. These include ASEAN’s top trade partners such as USA, EU, China, Japan, and India, as well as its FTA partners like Korea, Australia, and New Zealand.
ASEAN is a signatory to five (5) FTAs – one each with China, Korea, Japan, Australia and New Zealand, and India. ASEAN, post-FTA signing and entry-into-force, focuses on how these agreements can be effectively implemented. It strives to ensure that target beneficiaries optimize their FTA utilization on order that parties to the agreements achieve their desired results.
The FTAs push for trade liberalisation and facilitation, with others being more comprehensive and including provisions on investments and movement of natural persons. Other provisions are focused on rules of origin, customs procedures, and dispute settlement.
ASEAN and its dialogue partners continue to discuss ways and negotiate on how the FTAs can be enhanced and best maximized. In November 2012, heads of states of ASEAN, China, Japan, Korea, Australia, New Zealand, and India officially kicked off negotiations for the Regional Comprehensive Economic Partnership (RCEP) in Phnom Penh, Cambodia.
RCEP is bound to be the largest regional trading arrangement as it would create an integrated market spanning 16 countries with a combined market of over 3 billion people and total GDP of about US$20 trillion. ASEAN leaders expect the RCEP to keep the region’s growth momentum as it further opens up markets and makes economies competitive.
What are the possibilities for investors?
- Retail companies such as supermarkets can offer the market a wider range of products and may even consider creating ASEAN isles
- Exporters in ASEAN such as furniture and jewelry makers can diversify their markets and manage business risks
- SMEs in supporting industries can more easily integrate themselves into the regional supply chain and global economy
- Large multinationals doing business in ASEAN have wider options in selecting regional hubs and marketing offices
