Economist: AEC is vulnerable
Fifty years since its inception, the Association of Southeast Asian Nations' (ASEAN) ambition to achieve regional economic integration remains beset by vulnerabilities, an economist said Thursday, citing historical differences, non-binding agreements, and divergent perspectives.
"The ASEAN Economic Community (AEC) is vulnerable due to three main reasons. We have structural and historical factors, agreements are flexible, and divergent perception about ASEAN," UP School of Economics professorial lecturer Dr. Josef Yap said during a forum in Quezon City.
Historical conflicts among ASEAN countries such as Cambodia, Thailand, and Vietnam may hinder regional progress, Yap noted.
"There are cultural differences ... unlike the EU (European Union), where member countries have a common Judeo-Christian background. We don't have that. We have cultural differences ... making it difficult for us to do business with each other," the economist said.
Regional agreements among the 10-member regional bloc are "flexible" due to the slow progress of consultations and consensus.
"Example is the ASEAN FTA (Free Trade Agreement), which was described as 'weak' and 'trade' light.' Liberalization parameters are not binding and not subject to dispute settlements," he said.
"Agreements are flexible, meaning I can neglect on my commitment without being penalized," Yap added.
Divergent national interests, expectations, aspirations, and perceptions among member-states about the AEC, may obstruct the regional aim of full integration.
"So, if we are not on the same page, we could move in different directions – and it's difficult to move forward," Yap said.
The AEC aims to transform the bloc into a single market, valued at $2.6 trillion, and over 622 million people, with a single production base characterized by free flow of goods, services, and investments, as well as capital and skilled labor.
"ASEAN economic community is a work in progress; and 2015 was a milestone," Yap said.
To address the vulnerabilities, Yap said member-states must focus on promoting collective decisions. "We can shift our strategy. ASEAN should focus on its comparative advantages and promote collective actions," Yap noted.