ASEAN was in itself a US$ 2.4 trillion economy in 2015 making it the 5th largest in the world. The Asian Economic Community (“AEC”) came into being at the end of 2015/start of 2016 but seems to have been overshadowed by all the talk of TPP and EU Vietnam Free Trade Agreement.
I thought that it would therefore be useful to give a little further background on the AEC and the fact that the benefits can be enjoyed by any company establishing a business in any member state, which of course includes Vietnam.
A commitment to enhance connectivity through a sectoral approach;
Equitable and Inclusive economic development with a focus on the Private Sector;
Full integration into the global economy
Some of the key features are as follows:
Mutual Recognition Agreements (“MRA’S) in goods should prevent product standards and regulations from becoming barriers to trade and three sectoral agreements have been finalized in electronic equipment, cosmetics and medicinal products.
There is also an agreement for MRA’s in services, to remove all barriers and restrictions on trade in services and also amongst qualified professionals facilitating free movement of labour E.G Tourism Professionals.
Free Flow of Investment is consolidated uner the ASEAN Comprehensive Investment Agreement which adopts the most favoured nation treatment and provides liberalization in manufacturing, agriculture and fisheries, forestry, mining and quarrying.
The creation of a single window for customs clearance.
ASEAN is also in the process of negotiating the Regional Comprehensive Economic Partnership (RCEP) widely tipped to replace the likely defunct TPP which includes 6 countries outside ASEAN, namely Australia, China, India, Japan, Korea and New Zealand. The regional bloc would account for 30% of global GDP and would be the world’s largest trading bloc.
So if you still believe in free trade and globalization, maybe ASEAN is the place to be!