ASEAN reaffirms trade commitment
Economic ministers from the Association of Southeast Asian Nations, or ASEAN, have reaffirmed the bloc's commitment to integration and free trade, a move analysts expect will shield the region from external headwinds.
Analysts noted that the 51st ASEAN Economic Ministers meeting, held in Bangkok from Sept 6 to 11, comes at a time that the region faces the economic uncertainties due to the trade tensions between the United States and China, the United Kingdom's exit from the European Union, and weakness in both global investments and consumer demand.
The 10-member bloc concluded the meeting with a call for broader intra-regional trade and the immediate conclusion of negotiations on the Regional Comprehensive Economic Partnership, a proposed free-trade agreement.
"ASEAN is sending a signal that it opposes protectionism," said Siwage Dharma Negara, senior fellow at the Singapore's ISEAS-Yusof Ishak Institute.
In an interview, Negara said ASEAN members believe that any protectionist trade measures can hurt their economies. The bloc favors rule-based cooperation and seeks to further reduce tariffs and non-tariff barriers in line with its commitments to the ASEAN Economic Community, or AEC.
Established in 2015, the AEC is seen as a way to transform Southeast Asia into a globally-competitive single market and production base by 2025.
In a statement, the trade and economic ministers of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam said they "remain resolute in their commitment to the region's economic integration agenda and to achieve the target to double intra-ASEAN trade by 2025, supported by an open, inclusive, and rules-based international trading system".
The ministers said the region collectively reported higher trade and foreign direct investments in 2018. Trade in goods in ASEAN went up 8.7 percent, while trade in services expanded 10.6 percent. Total FDI inflows to the region increased 5.3 percent to $154.7 billion.
"If the ASEAN member states could more proactively promote trade among themselves by taking advantage of AEC, then their reliance on trading with the major world economies would be lightened, and ASEAN countries could thus be more resilient," Oh Ei Sun, a senior fellow with the Singapore Institute of International Affairs, told China Daily.
Oh said ASEAN also looks forward to the immediate conclusion of RCEP's negotiations as the trade pact will open up more markets.
ASEAN led the formation of the Regional Comprehensive Economic Partnership in 2012 and was supported by China, India, Japan, South Korea, Australia and New Zealand. If completed, it will be the largest multilateral trade deal in history, accounting for about one-third of the global economy. But negotiations over the trade pact stalled as some countries were reluctant to slash tariffs.
At the conclusion of the Regional Comprehensive Economic Partnership's ministerial meeting - held during the just concluded 51st AEM in Bangkok - the trade and economic ministers of ASEAN and their counterparts in Australia, China, India, Japan, South Korea and New Zealand issued a joint statement that "reaffirmed their collective resolve to bring negotiations to a conclusion".
"Continuing uncertainties in the trade and investment environment have dampened the growth outlook across the world, with a likely impact on businesses and jobs, adding to the urgency and imperative of concluding the RCEP (Regional Comprehensive Economic Partnership)," the ministers said.
Thailand's Deputy Prime Minister and Commerce Minister Jurin Laksanawisit said an agreement on Regional Comprehensive Economic Partnership, is expected to be signed by 2020, according to a report by Bangkok Post.
Nawazish Mirza, associate professor of finance at France's La Rochelle Business School, said concluding the negotiations for Regional Comprehensive Economic Partnership, is "very critical" for ASEAN economies.
Mirza said once partnership is in place, ASEAN can access bigger markets such as China, India and Australia.