The ASEAN Community sees the light: the genesis of a new powerful economic and political bloc and EU’s big opportunity

ANTALYA, TURKEY - NOVEMBER 15: Malaysian Prime Minister Najib Razak holds a press conference within the G20 Turkey Leaders Summit on November 15, 2015 in Antalya, Turkey. Cem Genco / Anadolu Agency

ANTALYA, TURKEY – NOVEMBER 15: Malaysian Prime Minister Najib Razak holds a press conference within the G20 Turkey Leaders Summit on November 15, 2015 in Antalya, Turkey. Cem Genco / Anadolu Agency

The global “trade gold rush” we analysed last week doesn’t seem to be limited to the European Union solely, but indeed it’s expanding on a larger scale around the globe. Already on 16 November during G20 Leaders Summit, where the Sting was the only Brussels-based EU media to attend and cover extensively the top world summit in Antalya Turkey, the President of the European Commission Jean-Claude Juncker announced that the EU is determined to begin negotiations towards a Free Trade Agreement with Australia.

Similarly, one week later, at the other side of the world, the leaders of the 10-member Association of Southeast Asian Nations (ASEAN) signed a declaration last weekend establishing a formal economic, political, security and socio-cultural community. The ASEAN Community finally saw the light.

Freer movement and exchanges

The declaration that was signed last weekend in Kuala Lumpur, this year’s host of the group’s annual summit, formally concludes a process of twelve years of meticulous work. The brand-new ASEAN Community now attempts to create freer movement of trade and capital in an area of 625 million people with a powerful combined economic output of $2.6 trillion.

Many tariff barriers have already been eliminated among the 10 ASEAN countries, which now aim to better harmonise economic strategies and entwine macroeconomic policies and financial textures throughout the region.

Involvement of the private sector

Among the hottest points that were discussed last weekend in Malaysia, which are destined to be the key points for a comprehensive cooperation of the Community, was the improvement of the connectivity of their transportation infrastructure and communications, the integration of the industries to promote regional sourcing and the involvement of the private-sector in the economy, as stated after the event.

All 10 ASEAN countries seem to be convinced to invest on the latter especially in order to trigger real competitiveness. ASEAN grouping now includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

An important case-study

That the matter is interesting also from a Western perspective is actually more than clear. The birth of an EU-style regional economic bloc, a single market with a free flow of goods, capital and skilled labour in the region is definitely a phenomenon that deserves careful analysis.

Indeed the ASEAN community now offers to its members an upgrade of the former treaty, and thus a solid opportunity to create a region with a combined gross domestic product (GDP) that would make it the world’s seventh-largest economy. The combined GDP of the ASEAN economies is expected to grow up to US $4.7 trillion by 2020, stressed the Malaysian Prime Minister Najib Razak, the summit host, at the signing ceremony, and could become the world’s fourth-largest economy as a bloc as early as 2030.

Moreover, other first-rate players in the global trade fields already have a strong connection with the ASEAN. India, for instance, already has several ministerial groups that cover key-areas of the dialogue with the ASEAN such as foreign affairs, commerce, telecommunications and renewable energy.

China’s vision

Also China, which has become ASEAN’s largest trading partner through the years, is definitely regarding  the creation of the ASEAN Community with keen interest. Indeed China’s objective post last weekend’s agreement is to upgrade the already existing ASEAN-China Free Trade Area (ACFTA), which came into effect more than 5 years ago.

In 2013, Chinese Premier Li Keqiang called for an “upgraded version” of the ACFTA, speaking of a trade cooperation of “a greater scope and higher quality”, in order to ensure growth and meet the demand of a restructured trade model. That moment might have finally come for China.

With the completion of a renewed ACFTA, China aims now to have tariffs reduced to zero on 7,880+ product categories, or 90 percent of imported goods. The ACFTA is the largest free trade area in the world in terms of population and the third largest in terms of nominal GDP, ranked right after the EU and the US.

All eyes on trade

The EU should definitely not let the ASEAN Community “train” pass without even requesting a stop, and thus without paying the due attention to the birth of a wannabe-giant of the global trade. The opportunities within this brand new deal could be vast, in a moment in which trade, again, seems to be the strongest of all responses for a quick recovery from the global financial crisis.

Several unexplored opportunities join the excitement around this new economic and political construct.

Still a tough match

Of course, enthusiasm alone is certainly not enough. At the closing news conference the Malaysian Prime Minister Najib Razak underscored that ASEAN had still no specific deadline for the zero-tariffs goal completion, but would aim for “meaningful deliverables that can be done every year when we meet at the ASEAN summit”.

Moreover, although as we said many barriers have already been lowered or eliminated, many politically sensitive sectors reportedly remain protected, such as agriculture, auto production and steel. Not so surprisingly though, building up a real community turns out to be no piece of cake either for that part of the world.

The European Sting will keep monitoring the evolutions of the ASEAN Community and the ACFTA very closely as well as the EU’s trade involvement with the new Asian powerful bloc.










the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

The Ecofin deceives the SMEs with the EIB €10bn capital increase

3 ways we are making an impact on plastic pollution

Brexit and migration dominates the debate on October’s EU summit

State aid: Commission invites comments on simplified rules for State aid combined with EU support

Every year, South Korea comes to a standstill for an exam marathon

CLIMATE CHANGE FOCUS: Climate-proofing Timor-Leste

7 of the world’s 10 most polluted cities are in India

Utmost hypocrisy emitted by EU’s energy regulation

Vienna has the world’s best quality of living

How to fix our planet: the pioneers fighting to bring nature back

Sudan: New political transition, bolstered by peacebuilding, could bring long-term stability to Darfur, Security Council told

Measles in Europe: infection rates highest in a decade, says UN health agency

Crowdfunding: what it is and what it may become

Female leaders warn about the erosion of women’s rights

Philanthropy is at a turning point. Here are 6 ways it could go

Closing the loop: Commission delivers on Circular Economy Action Plan

EU and UK soon to be in a post-Brexit rush over free trade agreement with Australia

First-ever global conference of national counter-terrorism chiefs will strengthen cooperation, build ‘resilient’ States, says top UN official

Did young people just kill television?

Why the financial scandals multiply?

This incredibly detailed map of Africa could help aid and development

UN chief appoints Luis Alfonso de Alba as Special Envoy for the 2019 Climate Summit

UN chief encourages victims of terrorism to ‘raise up their voices’

EU Commission says falling labour remuneration leads to deflation and damages growth prospects

80 adolescents a day will still die of AIDS by 2030, despite slowdown in epidemic

This is what a planet-wide network of ocean sanctuaries could look like

A day in the life of a refugee: the wait

Nuclear non-proliferation treaty an ‘essential pillar’ of international peace, says UN chief

Can Greece’s democratic institutions keep it in Eurozone?

Recognize, celebrate and ‘stand in solidarity’ with persons with albinism

MWC 2016 LIVE: Industry looks to reduce mobile gender gap

Donor countries need to reform development finance to meet 2030 pledge

Industrial policy: recommendations to support Europe’s leadership in six strategic business areas

Four major resources for new European young entrepreneurs

Why feeding the planet doesn’t have to mean sacrificing our forests

What will Germany look like after the next election?

What Ghana can teach us about integrating refugees

Car-free day – and the other 364 days of the year

Bundestag kick starts the next episode of the Greek tragedy

Immigrants make good entrepreneurs. This study proves it

G20 LIVE: “International communities and leaders have great expectations for 2016 G20 summit in Hangzhou China”, Mr Wang Xiaolong, the Chinese Foreign Ministry’s special envoy stresses live from G20 in Antalya Turkey

UN honours peacekeepers who ‘paid the ultimate price’, for the sake of others

One billion people have preventable eye conditions, increasingly linked to lifestyle choices: UN health agency

China’s 13th Five Year Plan and the opportunities for Europe

Eurozone closer to a deflation – stagnation trap

Brexit kick-off: a historic day for the EU anticlockwise

The EU Parliament sidesteps the real issues about banks, while the US target the Eurozone lenders

Blockchain will make sure green pledges aren’t just greenwash: a new initiative by young leaders at the World Economic Forum

South Africa’s SMEs should be first in line for a digital upgrade

Artificial intelligence summit focuses on fighting hunger, climate crisis and transition to ‘smart sustainable cities’

Black Panther’s ‘General Okoye’ joins the fight against gender-based violence

Smart city experts should be looking to emerging markets. Here’s why

How the diaspora is helping Venezuela’s migration crisis

SMEs are driving job growth, but need higher investment in skills, innovation and tech to boost wages and productivity

Brussels to point the finger to Washington for lack of commitment over TTIP

Diversity training doesn’t change people’s behaviour. We need to find out what does

Eurozone banks to separate risky activities: Can they stay afloat?

UN welcomes ‘milestone’ release of 833 Nigerian children from anti-Boko Haram force

EU’s unsparing question to UK: now what kind of future relations do you want?

Brexit talks: Today the world to hear of a predictable failure

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s