ASEAN urged to speed up plans to become single market

ASEAN urged to speed up plans to become single market

Agence France-Presse, Vientiane

The Association of Southeast Asian Nations (ASEAN) must speed up trade liberalisation if it wants to unify into a powerful economic bloc, business experts said on Saturday.

The 10-member ASEAN aims to establish a European-style economic community, which would see a single market of over 500 million people in goods, services and investments, by 2020.

But experts at a two-day ASEAN business and investment conference cited a web of business regulations, nationalistic tendencies and growth of non-tariff barriers such as domestic taxes, as threats to regional integration efforts.

Oudet Souvannavong, who heads the ASEAN Business Advisory Council, said the 2003 implementation of the ASEAN Free Trade Area had created new non-tariff measures obstructing the free flow of goods and commodities in some countries.

"The ASEAN environment, seen as a bloc, is not yet favourable," he said.

"Despite the effort made by the ASEAN governments to build up the spirit of a unified ASEAN, there are psychological barriers such as national interests."

Oudet said the council had identified tourism and agriculture as two initial priority sectors where indigenous companies could flourish and cross-investment and alliances between ASEAN companies could be enhanced.

But faster harmonisation of product standards, simplified customs procedures and removal of non-tariff barriers were crucial to accelerate economic integration, he said.

Walter Lohman, president of the US-ASEAN Business Council, said China's booming economy was driving ASEAN's renewed efforts to become a truly synergistic trade bloc.

"They need to create efficiently the economies of scale to stay competitive," he told AFP on the sidelines of the conference held before the annual ASEAN summit next week.

"The challenge is in reconciling such vastly different economies. From Laos to Singapore, there is a lot in between, a lot of trade barriers entrenched that will have to be dealt with."

The United States is the top investor in ASEAN, pumping US$88 billion into the region so far. But there has been a lull in large American investments since 1997, when the region was struck by financial turmoil.

Lohman said ASEAN's efforts to deepen economic ties with regional neighbours would create a bigger market and new opportunities for US businesses.

ASEAN has started free trade negotiations with China, Japan and South Korea that will form the building blocks for a proposed East Asia Free Trade Area comprising nearly two billion people.