Tax News :Singapore Plugs ASEAN Trade Integration

"The AEC 2015 journey will not be the end of the road for the Association of Southeast Asian Nations (ASEAN)," and its member countries are now working next phase of regional trade and economic integration, according to Lim Hng Kiang, Singapore's Minister for Trade and Industry.
During a speech at the ASEAN Business Club Forum on September 8 in Singapore, Lim noted that, "with 2015 fast approaching, ASEAN countries have made steady progress in realizing the ASEAN Economic Community. Virtually all goods in ASEAN already move throughout the region tariff-free."
ASEAN-6 countries – comprising Brunei Darussalam, Indonesia, Malaysia, the Philippines, Singapore and Thailand – eliminated tariffs on 99.65 percent of tariff lines, with effect from January 1, 2010, while ASEAN's newer members – Cambodia, Laos, Myanmar and Vietnam – reduced tariffs on 98.86 percent of their tariff lines to the 0-5 percent tariff range in 2010, and are expected to eliminate tariffs on these goods by 2015, with flexibility for a few import duty lines until 2018.
The focus is now, he said, on harmonizing ASEAN-wide trade facilitation initiatives, by, for example, eliminating non-tariff barriers, but that discussions were now beginning on how ASEAN should develop and deepen its economic inter-dependence further after 2015.
In addition, he confirmed that "integration does not just stop at ASEAN's borders. The ongoing negotiations of the Regional Comprehensive Economic Partnership (RCEP) are a defining point in our endeavor towards deeper integration beyond the region."
RCEP will bring ASEAN and its six current FTA partners – China, India, Japan, South Korea, Australia and New Zealand – into a single comprehensive trade agreement, and link a third of the world's gross domestic product and 45 percent of the world's population. The RCEP, he added, "is aimed at setting open, simple, and flexible trade rules for businesses to operate easily in, in order to further integrate ASEAN into the global value chain."
Furthermore, he continued, "while they may signal a shift in trade and economic gravity away from ASEAN, the ongoing negotiations of the Trans-Pacific Partnership (TPP), the trilateral China-Japan-South Korea FTA, and the Trans-Atlantic Trade and Investment Partnership between the United States (US) and European Union (EU), are significant regional integration efforts and offer the prospect of still larger integration with ASEAN."
"Together with the TPP, the RCEP could provide a possible pathway to a Free Trade Area of the Asia-Pacific, which, if realized, would be an unprecedented boost to economic interconnectivity."
In notes to his speech, it was commented that, with a market of 600m people and an average annual gross domestic product growth rate of 6 percent in the decade from 2002 to 2012, ASEAN was already the seventh largest economy in the world and the third largest in Asia in 2013, at USD2.3 trillion. A Deloitte study recently projected that five of the top 15 manufacturing locations in the world will be in ASEAN by 2018, and, by 2050, ASEAN is also projected to be the fourth-largest economy in the world (after the EU, US and China).
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