Trade Liberalization in ASEAN

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Trade liberalization in ASEAN

Introduction

On August 8, 1967, the leaders from five Southeast Asian countries Indonesia,

Malaysia, Philippines, Singapore and Thailand, signed the ASEAN Declaration (also

known as the Bangkok Declaration), formally establishing the Association of Southeast

Asian Nations (ASEAN). These five countries were later joined by Brunei Darussalam

on January 8, 1984, Vietnam on July 28, 1995, Lao PDR and Myanmar on July 23,

1997 and finally Cambodia on April 30, 199912. The purpose of ASEAN was to promote

regional collaboration in economic, socio-cultural and security matters between

countries in the region to ensure mutual peace and prosperity 3 . As such, theestablishment of this regional entity provided the catalyst for trade liberalization in the

region.

Trade liberalization within ASEAN

After its formation, ASEAN took its first step towards regional trade liberalization when

its leaders signed the Declaration of the ASEAN Concord (also known as the Bali

Concord) on 24 February 1976 at the first ASEAN Summit, declaring the adoption of a

framework to achieve a dynamic, cohesive, resilient and integrated ASEAN

Community, which includes an ASEAN Security Community (ASC), ASEAN Socio-

Cultural Community (ASCC), as well as an ASEAN Economic Community (AEC). The

AEC was founded on the goal of creating a highly competitive ASEAN economic region

in which there is a free flow of goods, services, investment and a freer flow of capital,

equitable economic development and reduced poverty and socio-economic disparities

in year 2020.4

A year later in 1977, at the second ASEAN Summit in Kuala Lumpur, the ASEAN

member states signed the Agreement on ASEAN Preferential Trading Agreements

(PTA) in Manila, on 24 February 1977, which was the first regional trade agreement in

the region. The PTA provided for intra-regional preferential tariffs for products produced

within ASEAN member states (based on specific Rules of Origin), primarily through the

1ASEAN Secretariat.Overview of ASEAN. http://www.aseansec.org/64.htm

2Sandhu, K.S., Siddique, S., Jeshurun, C., Rajah, A., Tan, J.L.H., Thambipillai, P. (1992). The ASEAN

Reader. Institute of Southeast Asian Studies.3

Ibid4

ASEAN Secretariat. Declaration of ASEAN Concord II (Bali Concord II).http://www.aseansec.org/19096.htm


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use of the margin of tariff preference approach.56 However, due to the limited scope of

manufactured products covered under the PTA, the relatively insignificant differences in

levels of margins provided for by the Agreement, as well as the unclear eligibility criteriafor products to be covered under the PTA, intra-ASEAN trade was not greatly stimulated

and the PTA failed to achieve its objectives of liberalized trade within the region from

the onset.7 Nevertheless, over the ensuing decade, ASEAN Economic Ministers (AEM)

attempted to make improvements to the PTA after its implementation uncovered its

initial flaws, such as by adjusting the levels of margin, further defining eligibility criteria

and providing clearer guidelines as to what products could be considered sensitive to

national interests, which could be exempted from the PTA (this previously had been free

to be decided by each ASEAN Member Countries). 8

As it happened, the implementation period for the ASEAN PTA coincided with thediscussions of the Uruguay Round of Multilateral Trade Negotiations. As there were

concerns by ASEAN leaders over the likelihood of success of the Uruguay Round, and

fears that other regional blocs would consolidate their intra-regional trade agreements

(such as NAFTA in North America and the Maastricht Treaty by the EU), impetus was

provided to further improve upon trade liberalization efforts within the region. It is within

this context that discussions to build a framework for the ASEAN Free Trade Area

(AFTA) proceeded at the Third ASEAN Summit in 1987. On January 28, 1992, the

Framework Agreements on Enhancing ASEAN Economic Cooperation and the

Agreement on the Common Effective Preferential Tariff Scheme for the ASEAN Free

Trade Area were signed by ASEAN leaders, thus formally initiating the development ofAFTA, which was to be realized within a period of 15 years. 910

In contrast to the PTA, AFTA applied the Common Effective Preferential Tariffs (CEPT)

scheme in building a regional free trade area. Products to be included in the CEPT

scheme were to have their tariffs reduced to 0%-5%, according to a schedule of tariff

reductions as outlined in the CEPT Agreement. 11 The CEPT Agreement also called for

the elimination of quantitative restrictions and non-tariff barriers for products included in

the CEPT scheme12. In relation to the CEPT Agreement, there are four categories of

products described in lists, including the Inclusion List (IL), Temporary Exclusion List

5ASEAN Secretariat. Agreement on ASEAN Preferential Trading Arrangements, Manila, 24 February

1997. http://www.aseansec.org/1376.htm6

ASEAN Secretariat, 1997. ASEAN Economic Co-operation: Transition and Transformation. Institute ofSoutheast Asian Studies.7

Ibid.8

Ibid.9

ASEAN Secretariat. Framework Agreements on Enhancing ASEAN Economic Cooperation.http://www.aseansec.org/12374.htm10

ASEAN Secretariat. Agreement on Common Effective Preferential Tariff Scheme for the ASEAN FreeTrade Area. http://www.aseansec.org/12375.htm11

Ibid.12

Ibid.


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(TEL), Sensitive List (SL) and General Exemption List. Products that were part of the

CEPT scheme were included in the IL, which were to have their tariffs reduced to 0%-

5% by 2002 for ASEAN6 countries (Brunei, Indonesia, Malaysia, Philippines, Singaporeand Thailand), 2006 for Vietnam, 2008 for Lao PDR and Myanmar, and 2010 for

Cambodia13. Products in the TEL were temporary excluded from the CEPT scheme, but

would have to be transferred to the IL in equal batch up until year 200014. Products in

the SL would also be temporarily excluded from the CEPT scheme, but would be

reviewed 8 years after implementation of the CEPT Agreement15. Finally, those under

the GEL were to be permanently excluded, in line with Article 9 of the CEPT Agreement

and Article XX of the General Agreement on Tariffs and Trade (GATT)16. Under Article 3

of the original CEPT Agreement, agriculture products were excluded from the CEPT

scheme17. However, this provision was later amended in 1995 and agricultural products

were also included18.

In 1995, the Framework Agreement on Enhancing ASEAN Economic Cooperation was

amended to reduce the timeframe for the realization of AFTA from 15 years to 10

years19.

On September 30 1999, the Protocol on the Special Arrangement for Sensitive and

Highly Sensitive Products was signed, which defined the products considered to be

sensitive and highly sensitive by ASEAN member states that would only be phased in

for ASEAN6 countries by 2010, Vietnam by 2013 (except for sugar to be phased in by

2010), Lao PDR & Myanmar by 2015, and Cambodia by 2017

20

. All of the productslisted as sensitive or highly sensitive were agricultural products2122. Rice was the only

product listed as highly sensitive, by Indonesia, Malaysia and Philippines23. In August

2007, a Protocol to Provide Special Consideration for Rice and Sugar was adopted,

which allowed member states to obtain waiver from commitments to the CEPT Scheme

13Pasadilla, G.O., 2006. Preferential Trading Agreements and Agricultural Liberalization in East and

Southeast Asia. Discussion Paper Series No. 2006-02, Philippine Institute for Development Studies.14

Ibid.15

Ibid.16

Ibid.17 ASEAN Secretariat. Agreement on Common Effective Preferential Tariff Scheme for the ASEAN FreeTrade Area. http://www.aseansec.org/12375.htm18

ASEAN Secretariat. Protocol to Amend the Agreement on the Common Effective Preferential TariffScheme for the ASEAN Free Trade Area. http://www.aseansec.org/12371.htm19

ASEAN Secretariat. Protocol to Amend the Framework Agreements on Enhancing ASEAN EconomicCooperation.20

ASEAN Secretariat. Protocol on the Special Arrangements for Sensitive and Highly Sensitive Products.http://www.aseansec.org/1207.htm21

ASEAN Secretariat. Protocol on the Special Arrangements for Sensitive and Highly Sensitive Products.Annex 2. List of Sensitive Product. http://www.aseansec.org/sasp_2.htm22

ASEAN Secretariat. Protocol on the Special Arrangements for Sensitive and Highly Sensitive Products.Annex 1. List of Highly Sensitive Product. http://www.aseansec.org/sasp_1.htm23

Ibid.


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for these products under exceptional circumstances24. This Protocol was implemented

within the backdrop of the global food crisis.

At the 14th ASEAN Summit on February 26, 2009, ASEAN member states further signed

the ASEAN Trade in Goods Agreement, which is a consolidation of the CEPT

Agreement on AFTA25. It is considered to be a more comprehensive trade agreement

than its predecessor, and includes other issues apart from tariff liberalization an

elimination of non-tariff barriers, such as simplified Rules of Origin, trade facilitation

measures, trade remedy measures, customs procedures, standards, technical

regulations & conformity assessment procedures, as well as and sanitary &

phytosanitary measures 26 27 . A provision was also provided for regarding Most

Favoured Nation (MFN) treatment, whereby if an individual ASEAN member state were

to sign any trade agreements with non-member states and provide for lower tariff ratesto the non-members, other ASEAN member states would have the right to request for a

reduction of tariffs from the party of the external agreement28. With regard to the MFN

treatment provision, it is salient to note that there had been a proliferation of mainly

bilateral free trade agreements between individual ASEAN member states with other

countries outside the region. The Agreement also imposed a requirement to issue legal

enactments by each ASEAN member state to give effect to the implementation of the

tariff liberalization schedules in the agreement, which is significant as it is a first case of

supra-national governance by ASEAN over its members 29 . This was largely made

possible by the signing of the ASEAN Charter, giving ASEAN recognition as a legal

entity30.

Trade liberalization between ASEAN and other regions

Apart from trade liberalization within the region, ASEAN as a regional bloc has also

engaged in trade liberalization activities with other trading blocs and economies by

signing free trade agreements.

ASEAN-China Free Trade Area

24ASEAN Secretariat. Protocol to Provide Special Consideration for Rice and Sugar.

http://www.aseansec.org/22975.pdf25

ASEAN Secretariat. ASEAN Trade in Good Agreement. http://www.aseansec.org/22223.pdf26

Ibid.27

ASEAN Secretariat. ASEAN Trade in Good Agreement Fact Sheet.http://www.aseansec.org/Fact%20Sheet/AEC/2010-AEC-025-2.pdf28

ASEAN Secretariat. ASEAN Trade in Good Agreement. http://www.aseansec.org/22223.pdf29

Ibid.30

ASEAN Secretariat. ASEAN Charter. http://www.aseansec.org/publications/ASEAN-Charter.pdf


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The first among this was the establishment of the ASEAN-China Free Trade Area

(ACFTA), which was initiated by the signing of the Framework Agreement on

Comprehensive Economic Co-Operation Between ASEAN and the Peoples Republic ofChina on November 4, 2002 and entered into force on July 1, 2003. The Agreement

provided 3 tracks for liberalization of tariffs to 0%, including the Early Normal Track,

Sensitive Track and Early Harvest Program. Under the normal track, goods targeted for

tariff eliminations would be liberalized (rates would be agreed upon by the parties) by

2010 for ASEAN6 countries and China, while the remaining ASEAN countries would

have until 2015 to do so. As for those under the sensitive track, the end rates and date

for tariff reduction would be negotiable and agreed upon by the parties31. The Early

Harvest Program allowed for parties to the Agreement the option of liberalizing tariffs for

certain goods earlier than the 2010 deadline. Products covered under the Early Harvest

Program included agricultural products, although an exemption list was provided for tocover certain sensitive products 32 . After the Framework Agreement, a few other

subsidiary agreements were signed including the Agreement on Dispute Settlement

Mechanism of the Framework Agreement on Comprehensive Economic Co-operation

between the Association of Southeast Asian Nations and the Peoples Republic of

China on November 29, 2004; Trade in Goods of the Framework Agreement on

Comprehensive Economic Co-operation between the Association of Southeast Asian

Nations and the Peoples Republic of China on November 29, 2004; Agreement on

Trade in Services of the Framework Agreement on Comprehensive Economic Co-

operation between the Association of Southeast Asian Nations and the Peoples

Republic of China on January 14, 2007; and lastly, the Agreement on Investment of the

Framework Agreement on Comprehensive Economic Co-operation between the

Association of Southeast Asian Nations and the Peoples Republic of China on

November 29, 200433.

ASEAN-India Free Trade Area

On October 8, 2003, ASEAN signed the Framework for Comprehensive Economic

Cooperation Between the Republic of India and the Association of Southeast Asian

Nations, establishing the ASEAN-India Free Trade Area (AIFTA)34. The FrameworkAgreement is similar to the Framework Agreement for the ASEAN-China Free Trade

Area, and also provides for three tracks for tariff reductions to 0% the Normal Track,

Sensitive Track and Early Harvest Programs. Under the Normal Track, Brunei

31ASEAN Secretariat. Framework Agreement on Comprehensiv Economic Co-Operation Between

ASEAN and the Peoples Republic of China. http://www.aseansec.org/13196.htm32

Pasadilla, G.O., 2006.33

ASEAN Secretariat. ASEAN China Free Trade Area. http://www.aseansec.org/19105.htm34

ASEAN Secretariat. Framework for Comprehensive Economic Cooperation Between the Republic ofIndia and the Association of Southeast Asian Nations. http://www.aseansec.org/15278.htm


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Darussalam, Indonesia, Malaysia, Singapore and India would eliminate tariffs by end of

2011, and Cambodia, Lao PDR, Myanmar and Philippines would do so by end of 201635.

Subsidiary agreements under the Framework that have been signed include theAgreement on Trade in goods Under the Comprehensive Economic Cooperation

between the Association of Southeast Asian Nations and the Republic of India on

August 13, 2009; and the Agreement on Dispute Settlement Mechanism Under the

Comprehensive Economic Cooperation between the Association of Southeast Asian

Nations and the Republic of India also on August 13, 2009. Agreements on trade in

services and investment have not yet been signed at this time.

ASEAN-Japan Free Trade Area

At the same as the signing of the Framework for the ASEAN-India Free Trade Area,

ASEAN signed the Framework for Comprehensive Economic Partnership between the

Association of Southeast Asian Nations and Japan on October 8, 2003, establishing the

ASEAN-Japan Free Trade Area, also known as the ASEAN Japan Comprehensive

Economic Partnership (AJCEP)3637. This was followed up by signing of the Agreement

on Comprehensive Economic Partnership among Member States of the Association of

Southeast Asian Nations and Japan, which covered many areas related to trade

liberalization including trade in goods, rules of origin, sanitary and phytosanitary

measures, standards, technical regulations and conformity assessment procedures,

trade in services, investment, economic cooperation and settlement of disputes38.

ASEAN-Republic of Korea Free Trade Area

ASEAN signed its third free trade agreement with the Republic of Korea in the guise of

the Framework Agreement on Comprehensive Economic Cooperation Among the

Governments of the Member Countries of the Association of Southeast Asian Nations

and the Republic of Korea on December 13, 2005, forming the ASEAN-Republic of

Korea Free Trade Area (AKFTA)

39

. The subsidiary Agreement on Trade in Goods Under

35Ibid.

36ASEAN Secretariat. Framework for Comprehensive Economic Partnership between the Association of

Southeast Asian Nations and Japan. http://www.aseansec.org/15274.htm37

Singapore FTA Network. Overview of ASEAN JAPAN Comprehensive Economic Partnership (AJCEP).http://www.fta.gov.sg/fta_ajcep.asp?hl=3838

ASEAN Secretariat. Agreement on Comprehensive Economic Partnership among Member States ofthe Association of Southeast Asian Nations and Japan.http://www.aseansec.org/agreements/AJCEP/Agreement.pdf39

ASEAN Secretariat. Framework Agreement on Comprehensive Economic Cooperation Among theGovernments of the Member Countries of the Association of Southeast Asian Nations and the Republic ofKorea. http://www.aseansec.org/18063.htm


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the Framework Agreement Comprehensive Economic Cooperation Among the


and the Republic of Korea was signed on August 24, 2006, which provided for tariffreductions towards Most Favoured Nation rates through a Normal Track and Sensitive

Track. ASEAN 6 and Republic of Korea were to achieve this by 2010, Vietnam by 2016,

and Cambodia, Lao PDR & Myanmar by 201840. Other subsidiary agreements under

AKFTA include the Agreement on Dispute Settlement Mechanism Under the Framework

Agreement Comprehensive Economic Cooperation Among the Governments of the

Member Countries of the Association of Southeast Asian Nations and the Republic of

Korea, signed on December 13, 2005; Agreement on Trade in Services Under the

Framework Agreement Comprehensive Economic Cooperation Among the


and the Republic of Korea, signed on November 27, 2007; and Agreement onInvestment Under the Framework Agreement on Comprehensive Economic

Cooperation Among the Governments of the Member Countries of the Association of

Southeast Asian Nations and the Republic of Korea, signed on June 2, 200941.

ASEAN-Australia New Zealand Free Trade Area

The final free trade agreement signed by ASEAN with other trading blocs thus far is

Agreement Establishing the ASEAN-Australia New Zealand Free Trade Area

(AANZFTA), on February 27, 200942. The AANZFTA Agreement touches upon areas

also included under the ATIGA, such as trade in goods, rules of origin, customs

procedures, sanitary and phytosanitary measures, standards, technical regulations and

conformity assessment procedures, safeguard measures, trade in services, movement

of natural persons, electronic commerce, investment, economic co-operation, and

intellectual property. Of particular note is the inclusion of Article 3 under Chapter 2 on

Trade in Goods, which provides for the elimination of all forms of export subsidies for

agricultural products43.

40ASEAN Secretariat. Agreement on Trade in Goods Under the Framework Agreement on

Comprehensive Economic Cooperation Among the Governments of the Member Countries of theAssociation of Southeast Asian Nations and the Republic of Korea.http://www.aseansec.org/AKFTA%20documents%20signed%20at%20aem-rok,24aug06,KL-pdf/TIG%20-%20ASEAN%20Version%20-%2022August2006-final.pdf41

ASEAN Secretariat. ASEAN Republic of Korea Free Trade Area. http://www.aseansec.org/22557.htm42

ASEAN Secretariat. Agreement Establishing the ASEAN-Australia-New Zealand Free Trade Area.http://www.aseansec.org/22260.pdf43

Ibid.


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Trade liberalization between individual ASEAN Member States and other

countries

Apart from trade liberalization efforts between ASEAN as a regional bloc with trading

partners outside the region, each of the individual ASEAN Member States have also

signed free trade agreements with other economies. A list of existing free trade

agreements are listed in the following, which are mostly between ASEAN6 countries

with other non-ASEAN economies (except the Laos-Thailand Preferential Trading

Arrangement) 44 . It should be noted that there are several more that have been

proposed and are still under negotiation.

Indonesia

1. Pakistan-Indonesia Free Trade Agreement, Framework Agreement signed onNovember 25, 2005

2. Japan-Indonesia Economic Partnership Agreement, 2008

Lao PDR

1. Laos-Thailand Preferential Trading Arrangement, 1991

Malaysia

1. Malaysia-Japan Economic Partnership Agreement (JMEPA), 2006

2. Malaysia-Pakistan Closer Economic Partnership Agreement (MPCEPA), 2008

3. Malaysia-New Zealand Free Trade Agreement, 2009

4. Malaysia-Chile Free Trade Agreement, 2010

Philippines

1. Japan-Philippines Economic Partnership Agreement, 2008

Singapore

1. European Free Trade Association-Singapore Free Trade Agreement, 2003

2. Gulf Cooperation Council-Singapore Free Trade Agreement, 2008

3. India-Singapore Comprehensive Economic Cooperation Agreement, 20054. Japan-Singapore Economic Agreement for a New-Age Partnership, 2002

5. Korea-Singapore Free Trade Agreement, 2006

6. New Zealand-Singapore Closer Economic Partnership, 2001

7. Peoples Republic of China-Singapore Free Trade Agreement, 2009

8. Singapore-Australia Free Trade Agreement, 2003

9. Singapore-Costa Rica Free Trade Agreement, 2010

44Asia Regional Integration Center, Asia Development Bank (ADB). Free Trade Agreements by Country.

http://aric.adb.org/FTAbyCountryAll.php


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10. Singapore-Jordan Free Trade Agreement, 2005

11. Singapore-Panama Free Trade Agreement, 2006

12. Singapore-Peru Free Trade Agreement, 200913. United States-Singapore Free Trade Agreement, 2004

Thailand

1. Laos-Thailand Preferential Trading Arrangement, 1991

2. Japan-Thailand Economic Partnership Agreement (JTEPA), 2007

3. India-Thailand Free Trade Area, framework agreement signed on November 30,

2003

4. Peoples Republic of China-Thailand Free Trade Agreement, 2003

5. Thailand-Australia Free Trade Agreement, 20046. Thailand-New Zealand Closer Economic Partnership Agreement, 2005

7. Thailand-Bahrain Free Trade Agreement, framework agreement signed on

December 29, 2002

8. Thailand-Peru Free Trade Agreement, framework agreement signed on January

2004

Vietnam

1. Japan-Vietnam Economic Partnership Agreement, 2009

ASEAN member states as part of multilateral economic groupings

1. Preferential Tariff Arrangement-Group of Eight Developing Countries, 2006

(Indonesia and Malaysia are members)

2. Trade Preferential System of the Organization of the Islamic Conference,

Framework Agreement signed on March 31, 2004 (Malaysia is a member)

3. Trans-Pacific Strategic Economic Partnership Agreement, 2006 (Brunei

Darussalam and Singapore are members)

4. Trans-Pacific Partnership, framework agreement signed on March 15, 2010

(Brunei Darussalam, Malaysia, Singapore and Vietnam are members)

5. Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation(BIMSTEC), framework agreement signed on February 8, 2004 (Myanmar and

Thailand are members)


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Trade liberalization between individual ASEAN Member States and multilateral

institutions

Many member countries of ASEAN, particularly the ASEAN6, are members of

multilateral trade institutions such as the GATT and WTO.

The following are the ASEAN member countries that have signed the GATT and the

dates when they became signatories to the Agreement by 199445:

Brunei Darussalam: December 9, 1993

Indonesia: February 24, 1950

Malaysia: October 24, 1957

Myanmar: July 29, 1948

Philippines: December 27, 1979

Singapore: August 20, 1973

Thailand: November 20, 1982

All of the above countries became members of the WTO upon its establishment, on

January 1, 1995. The remaining ASEAN member countries that have joined the WTO

since then are46:

Cambodia: October 13, 2004

Vietnam: January 11, 2007

Lao PDR is still not a member of the WTO at present but is in the process of accession,

and participates as an observer47.

At the WTO, the different ASEAN member countries are also members of the various

groupings, as follows48:

45WTO. The 128 countries that had signed GATT by 1994.

http://www.wto.org/english/thewto_e/gattmem_e.htm46

WTO. Members and Observers. http://www.wto.org/english/thewto_e/whatis_e/tif_e/org6_e.htm47

WTO. Accessions a Lao Peoples Democratic Republic.http://www.wto.org/english/thewto_e/acc_e/a1_laos_e.htm


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Groups ASEAN Member Countries

Asia Pacific Economic Cooperation

(APEC)

Brunei Darussalam, Indonesia, Malaysia,

Philippines, Singapore, Thailand, Vietnam

G-90 Cambodia, Myanmar, Lao PDR (as

observer)

Least developed countries (LDCs) Cambodia, Myanmar, Lao PDR (as

observer)

Recently acceded members (RAMs) Vietnam

Cairns group Indonesia, Malaysia, Philippines, Thailand

G-20 Indonesia, Philippines, Thailand

G-33 Indonesia, Philippines

NAMA 11 Indonesia, Philippines

Friends of Anti-Dumping Negotiations

(FANs)

Singapore, Thailand

W52 sponsors Indonesia, Thailand

Questions on the future of ASEAN and its direction in trade liberalization

ASEAN was originally set up as a loose regional political grouping, mainly with the view

of maintaining peace and stability within the Southeast Asian region, amongst a milieu

of decolonization, the Cold War, as well as ongoing tensions between countries within

the region. It was only later that ASEAN was envisioned as a platform for regionaleconomic cooperation through trade liberalization. The signing of the ASEAN Charter

provided the first step towards real regional integration, with the objective of creating a

single market within the region similar to the European Union49.

Nevertheless, while on the one hand ASEAN Member States have made unitary steps

towards this objective by liberalizing trade within the region, as well as engaging outside

48WTO. Groups in the WTO. http://www.wto.org/english/tratop_e/dda_e/negotiating_groups_e.pdf

49ASEAN Secretariat. ASEAN Chater. http://www.aseansec.org/publications/ASEAN-Charter.pdf


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economies as a single economic bloc, on the other, each have also made and continue

to pursue exclusive economic relationships with outside partners on separate bases. At

the multilateral level at the WTO, ASEAN Member States also do not always negotiateas a unified bloc on all issues, such as on agriculture, as its members are separately

part of various groupings50. This could be contrasted with the European Union, which is

a recognized group at these negotiations51.

In light of these differing directions taken by its Member States on trade policy both at

the bilateral and multilateral levels in recent years, it is thus questionable whether the

overall trade liberalization project within ASEAN will be successful at the end, and

whether the ASEAN single market could become a reality.

The ASEAN situation demonstrates that while there may be apparent economic

incentives for trade liberalization and economic integration at a regional level, such

incentives may not always be realized. For ASEAN, this boils down to a lack of political

will among ASEAN leaders to act in unison towards the expressed objectives of creating

an ASEAN community (including the ASEAN Economic Community). During times of

crisis, these divisions have become more obvious. An example of this can be found

during the global food crisis, where ASEAN Member States did not work in solidarity to

provide for food security within the region, as net rice exporting countries (such as

Cambodia, Thailand and Vietnam) elected to supply rice to the global market for higher

prices, rather than come to the aid of net rice importing countries (such as Indonesia

and the Philippines)

52

53

.

Conclusion

ASEAN provide an interesting case study on trade liberalization, as there appears to be

two tracks occurring at the same time. One is the regional track, where trade

liberalization is carried out with the goal of establishing a regional economic bloc in the

form of the AEC, through implementation of AFTA and other associated trade

agreements. The other is on an individual basis by each of the ASEAN Member States

with ASEAN, other countries outside the region, as well as at the multilateral stage atthe WTO.

50WTO. Groups in the agricultural negotiations.

http://www.wto.org/english/tratop_e/agric_e/negoti_groups_e.htm51

Ibid.52

Chandra, A. C. & Lontoh, L. A. (2010). Regional Food Security and Trade Policy in Southeast Asia: TheRole of ASEAN. Policy Brief, Trade Knowledge Network.http://www.iisd.org/tkn/pdf/regional_food_trade_asean_brief.pdf53

Dano, E. & Peria, E. (2006). Emergency or Expediency? A Study of Emergency Rice ReserveSchemes in Asia. ASIA DHRRA and AFA. http://asianfarmers.org/wp-content/uploads/2008/05/emergency-or-expediency.pdf

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Trade Liberalization in ASEAN