The ASEAN Economic Community
The long awaited arrival of the ASEAN Economic Community appears to be getting closer with recent announcement at the Davos Summit confirming that the single market will indeed be in place by the end of 2015. The ASEAN community comprises of 10 countries from South East Asia namely: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar (Burma), the Philippines, Singapore, Thailand and Vietnam.
There have been numerous plans for the community for many years with some countries not being ready to put specific plans in place largely due to the fact that some of the members such as Singapore and Myanmar are poles apart in terms of their economic development. 2015 will see the introduction of a European Union-style market with tariffs removed for trade between member nations and free movement of skilled workers living in the region although full lifting of travel and employment restriction will not come into force until 2020.
Big things are expected of the community with many large businesses looking to capitalise on the freer market conditions. As the border, immigration and customs restriction are reduced, businesses will look to utilise the best raw materials, skills and facilities that are on offer in all of the member states with every country looking to benefit from the greater competition. It is hoped that the opening up of the markets will lead to general economic growth within the entire region.
There has been natural, initial scepticism by many towards the community with many citing the failures of the European Union as proof. In reality, these comparisons are largely irrelevant as there would be no intention to utilise a single currency or indeed for there to be any form of Central Government. Where an issue may occur, and this has already been addressed, is with regards to migrant labour but the decision to delay the lifting of all restrictions until 2020 gives the opportunity to fully address the issue and put provisions in place.
The ASEAN community is likely to offer huge opportunities to the multinationals already operating in the region, not least to those involved with the logistics industry. Regardless of which country the operations will be based, it is likely that they will require materials from other countries in the region – this is expected due to the reduced tariffs on imports and exports. Companies such as CEA Project Logistics will have a considerable competitive advantage over many others operating in the same market due to their existing knowledge and the fact that they already have offices in Singapore, Thailand and Myanmar.
For more information regarding how CEA Project Logistics could assist your company within ASEAN, contact us today.
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