AEC Marks New Chapter For ASEAN As A Dynamic Economic Entity

By Noor Soraya Mohd Jamal KUALA LUMPUR, Jan 2 (Bernama) -- The establishment of the ASEAN Economic Community (AEC) Thursday, one of the pillars under ASEAN Community, marks a significant milestone and heralds a new chapter in the region’s vibrant 48-year history. Although much remains on the agenda, ASEAN throughout 2015 has truly gained traction as a dynamic economic entity with huge prospects for trade and investments. As 2015 chairman of ASEAN, Malaysia received strong support and cooperation from other member states and handed over the baton to Laos after having fulfilled its eight priorities as chair for the year. Next year will be a crucial first year for the regional grouping as an integrated economic community, guided by the AEC Blueprint 2025 which has laid the important foundation to further deepen economic integration of ASEAN beyond 2015. The AEC implementation is not a static goal -- rather, it is the beginning of an ongoing journey to transform the ASEAN states into a single market and production base and become more competitive and connected with other trading blocs. The region is economically significant as a unit and boasts as one of the fastest growing globally, bolstered by its strategic location in between major trade corridors. Moving forward, ASEAN is well-positioned to play an increasingly important role on the global economic stage. Amid the global economic turmoil, the region has cemented its position as an economic force to be reckoned with. Throughout 2015, the region was the central of most global economic agenda, among others, with the European Union, Asia-Pacific Economic Cooperation, G20 Summit and the Regional Comprehensive Economic Partnership (RCEP). Its members had a broad overlapping arrangement with other multilateral agreements with four of them being part of the proposed Trans-Pacific Partnership Agreement (TPPA). The TPPA negotiations, first launched in 2005, involved 12 countries -- Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, US and Vietnam. Indonesia and the Philippines have both expressed interests in joining the ambitious 21st Century free trade agreement (FTA), following in the footsteps of Malaysia, Brunei, Singapore and Vietnam, while Thailand is reportedly considering it. The TPPA finalisation in October was indeed a milestone also in the context of APEC, and together with AEC, is expected to shape a new economic scenario for Malaysia and ASEAN in 2016. Its conclusion has also catapulted the RCEP to become more urgent and speed up its progress, thus improving ASEAN trade and economic network. China and India have demonstrated their commitments to achieve progress in RCEP negotiations and its conclusion, targeted by 2016, would contribute significantly to regional and global economic integration, provide for equitable economic development and strengthen economic cooperation. RCEP is a proposed FTA between the 10 members of ASEAN and the six states with which ASEAN has existing FTAs, namely, Australia, China, India, Japan, South Korea and New Zealand. Moving forward, the AEC will require further enhancements to meet the demand and challenges over the next 10 years, thus ASEAN needs to constantly innovate and strengthen itself to ensure that the region continues to be globally competitive. Prime Minister Najib Razak has also stressed before the need for ASEAN to position itself as the "third force" that is the focus of the global business community, which now seems to be drawn to markets such as China and India. By 2025, the AEC is envisioned to be highly integrated and cohesive, competitive, innovative and dynamic with enhanced economic connectivity as well as integration and cooperation across sectors while fostering a more resilient, inclusive, and people-oriented, people-centred community that is integrated into the global economy. With growth rate expected to average between five and seven per cent from 2016 to 2025, ASEAN economies will remain strongly competitive, supported by its position as a global production hub of US$2.6 trillion and 625 million people despite external headwinds and downside risks. -- BERNAMA