The ASEAN Economic Community and ASEAN economic integration

Abstract

ASEAN realized the ASEAN Economic Community (AEC) at the end of 2015. The AEC is an economic integration whose goals are free movement of goods, services, investment, and skilled workers, and freer movement of capital. Following the establishment of the ASEAN Free Trade Area (AFTA), ASEAN deepened its economic integration through the AEC. Evaluations of ASEAN’s economic integration are mixed. While highly praised for its steady integration progress, there are also assessments suggesting there is little progress in integration. This study examines the AEC’s economic integration and evaluates ASEAN economic integration, including the AFTA. The AEC is an “FTA-plus” economic integration, and its target and level of market integration are similar to those of the Economic Partnership Agreement. The AEC’s greatest achievement is using tariff elimination to realize a free trade area with a high level of trade liberalization. Liberalizing trade in services, eliminating non-tariff barriers, and facilitating trade have been delayed and have become issues for AEC2025. AEC2025 aims to participate in the global value chain, and its measure is the attraction of foreign direct investment. Although ASEAN’s economic integration has various issues, as a whole, it can be evaluated as successful because of its implementation of flexible liberalization over time. ASEAN’s economic integration is a successful example of economic integration by developing countries; other developing countries can learn lessons from ASEAN’s experiences.

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