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IBE/U4 Topic 11 Association of South East Asian Nations (ASEAN)

The Association of Southeast Asian Nation (ASEAN) is an association of nations dedicated to economic and political co-operation in Southeast Asia countries.

ASEAN was established on 8th August 1967 in Bangkok, Thailand with the signing of the ASEAN Declaration (Bangkok Declaration) by the Founding Members of ASEAN, Indonesia, Philippines, Malaysia, Singapore and Thailand. Brunei Darussalam then joined on 7 January 1984, Vietnam on 28 July 1995, Lao PDR and Myanmar on 23 July 1997 and Cambodia on 30 April 1999 making up what is today the ten Member States of ASEAN.

The ASEAN region has a population of about 500 million, a total area of 4.5 million square kilometers, a combined gross domestic product of almost US$ 700 billion and a total trade of about US$ 850 million.

Objectives of ASEAN:

(i) To accelerate the economic growth, social progress and cultural development in the region through joint endeavors.

(ii) To promote regional peace and stability through abiding respect for justice and the rule of law.

(iii) To encourage active collaboration and mutual assistance on matters of common interest in Economic, Social, Cultural, Technical, Scientific and Administrative fields.

(iv) To provide assistance to each other in terms of training and research facilities in the educational, professional, technical and administrative areas.

(v) To work together for a greater utilization of agriculture and industries in order to expand the trade both locally and internationally.

(vi) To study the problems of international community trade, the improvement of their transportation and communications facilities and the raising of the living standards of the nations.

(vii) To promote Southeast Asian studies.

(viii) To maintain close and positive co-operation with existing international and regional organizations with similar aims and purposes.

ASEAN Free Trade Area (AFTA):

The framework of agreement on enhancing economic co-operation (1992) made a decisive move towards economic co-operation by proposing AFTA to increase ASEAN’s competitive advantage as a single production unit in the world market. With this, greater economic efficiency, productivity, and competitiveness were expected to emerge out of the elimination of tariff and non-tariff barriers. Towards this objective, foreign firms were allowed to team up with the local firms by using as much as 60 per cent of the imported materials from outside the ASEAN world.

A scheme of trade liberalisation, called as the common effective preferential tariff (CEPT) Scheme, was adopted to effect a lower targeted tariff level (in the range of zero to five per cent) to be achieved within a short time-framework of ten years, i.e. by January 1, 2003. New ASEAN members were, allowed longer time to meet this deadline, e.g. Vietnam up to 2006, Laos and Myanmar up to 2008, and Cambodia up to 2010.

The CEPT also provides for the elimination of non-tariff barriers in five years’ time. The implementation of CEPT is expected to facilitate:

(i) Harmonization of standards

(ii) Reciprocal recognition of tests and certification procedures

(iii) Removal of barriers to foreign investments

(iv) Macro-economic consultations

(v) Promotion of venture capital, etc.



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