Thursday, March 27, 2014

Wrap-up of the 2014 ASEAN Economic Ministers' Retreat

Last month the ASEAN Economic Ministers (AEM) held their annual retreat in Singapore.   This year’s meeting focused more on setting goals for 2014 rather than announcing decisions or completion of work projects:

  • The AEM endorsed the High Level Task Force on Economic Integration’s recommendation to establish a working group to determine a framework for continued integration in the ASEAN Economic Community (AEC) for the post-2015 period, e.g., 2016-2025.  The working group will focus on non-tariff measures (NTMs) and strengthening the ASEAN institutions.   The AEM also asked the ASEAN Secretariat to prepare a paper on strengthening the ASEAN institutions, for review by the ASEAN Summit in May 2014.

  • The AEM discussed prioritizing ASEAN’s relations with its trading partners.  In the Regional Comprehensive Economic Partnership (RCEP) talks with Australia-New Zealand, China, India, Japan and Korea, ASEAN will focus on goods, services and investment, and put intellectual property, competition and economic and technical cooperation with the RCEP partners on a “cooperation basis” (e.g., any RCEP commitments on these issues will be aspirational at best, looser than those for goods, services and investment).   The AEM also noted the need to harmonize rules of origin in the RCEP talks. All of this confirms that RCEP will be more of a “cleaning-up” exercise than the broad, ambitious effort involved in the Trans Pacific Partnership (TPP) talks – just as important, but not as far-reaching.

  • The AEM targeted August 2014 for the signing of services and investment chapters of the ASEAN-India Free Trade Agreement and November 2014 for services and investment chapters in the ASEAN-Japan Closer Economic Partnership.  Free trade agreement talks with Hong Kong will start in early 2014 (but, in my opinion, drag on until the RCEP talks are closer to completion in end 2015). 

  • Myanmar outlined its deliverables for its term as ASEAN Chair in 2014, particularly on small and medium-sized enterprises and public-private partnership for infrastructure development. 

  • The AEM stressed the need to increase public outreach on the ASEAN Economic Community to the business sector and the general public.

All in all, no surprises.  But the above confirms that the AEC integration process continues onward, regardless of who is the ASEAN Chair, and that the ASEAN leaders recognize the need to harmonize ASEAN’s FTAs with its trading partners and the need to strengthen the ASEAN institutions.  Indeed, these tasks largely go hand-in-hand. The real question is whether ASEAN will address these needs properly, something we will have to wait until end-2015 to see.