Asean should push for further trade liberalization — PIDS

MANILA, Philippines — The Association of Southeast Asian Nations (ASEAN) should continue to push for trade liberalization and should consider inclusion in the China-led Regional Comprehensive Economic Partnership (RCEP) to counter rising protectionism in the West, said state-run think tank Philippine Institute for Development Studies (PIDS). 

During a recent policy symposium on the ASEAN Economic Community and Nation Building held with Jakarta-based Economic Research Institute for ASEAN and East Asia, economists and academics said the regional bloc should continue its open regionalism strategy to protect its interest from the protectionist stance adopted by the US and Europe. 

Australian National University Emeritus Professor Peter Drysdale, in his keynote message during the forum, also warned against retreating to protectionism as this would cost ASEAN its growth momentum as well as income and jobs for its people. 

“The correct strategy for ASEAN is to hold firm and maintain course toward openness, reinforcing reforms and growth and economic security,” he said. 

Drysdale said inclusion in the RCEP would give ASEAN nations not only greater access to trade, but also greater influence in East Asia and potentially worldwide over time. 

“ASEAN’s open regionalism can be given practical demonstrations through trade and economic policy actions in RCEP and can be reinforced through the Asia-Pacific Economic Cooperation, the ASEAN Economic Community, and other major economic partnerships,” he said. 

RCEP is a proposed comprehensive regional economic integration agreement that would group China with the 10 ASEAN members plus Japan, South Korea, Australia, New Zealand and India into a trading bloc. 

PIDS president Gilberto Llanto said ASEAN, through the ASEAN Economic Community, has great potential to be a major driver of global growth and development. 

Among its advantages are a robust market of 600 million people, the availability of young and skilled workers and a healthy investment climate supported by the move toward competitive markets. 

“However, these potentials must be reinforced with a strong commitment of the political leadership to a vibrant AEC,” he said. 

He pointed out, however, the need for ASEAN member-states to address constraints to freer trade and flow of skilled labor and capital, regulatory coherence, and people-to-people contact and interaction.

“The AEC has some notable achievements but there are still major challenges. For instance, there has been a major progress in the reduction of tariffs to near zero in ASEAN yet there is a rising trend in the use of nontariff measures,” he said. 

Llanto’s comment was based on the findings of a PIDS study which shows that not all ASEAN member-states have clear and transparent rules on their nontariff measures, resulting in unclear regulations that increase the transaction cost of businesses.