Comment on “Association of Southeast Asian Nations Economic Integration: Developments and Challenges”

• DOI: http://doi.org/10.1111/j.1748-3131.2011.01180.x
• Date: 01 June 2011
• Published date: 01 June 2011
• Author: Shujiro URATA

Comment on “Association of Southeast

Asian Nations Economic Integration:

Developments and Challenges”

Shujiro URATA†

Waseda University

JEL codes: F1, F4, F5

Chia (2011) analyzes the issue of the Association of Southeast Asian Nations (ASEAN)

economic integration with focuses on its developments and challenges by tracing the

developments from the pre-ASEAN Free Trade Area (AFTA) period (1977–1992) to the

AFTA period (1992–2007), and then to theASEAN Economic Community (AEC) period

(2008–). The paper first gives a brief discussion of the economic characteristics of ASEAN

member countries to set the stage for her analysis in the later sections. The diversity

among ASEAN member countries in various aspects, especially in terms of the levels of

economic development, is emphasized. One interesting observation relates to the wide

differences in trade facilitation measures such as the number of documents required for

exporting, which is a stumbling block for establishing an integrated market.aepr_118066..67

Chia then turns to the issue of economic integration in ASEAN. The motivation

behind ASEAN economic integration is discussed first. In addition to the benefits such as

economies of scale and scope, which may arise from an enlarged market,Chia emphasizes

the competitive pressure from an emerging North American Free Trade Area and the

European Single Market. Chia presents a comprehensive and detailed account of various

programs such as the AFTA, the ASEAN Framework Agreement on Services, and the

ASEAN Investment Area, which have been implemented by ASEAN for promoting its

economic integration. Most of the discussion is devoted to AFTA whose implementation

began slowly but has accelerated over time. Despite such progress, Chia finds the utiliza-

tion rate of AFTA low. Chia also observes trade barriers still remain in the form of

nontariff barriers, including import quotas and antidumping actions.

The next section discusses the programs developed for achieving the AEC, including

the AEC Blueprint. Chia presents the results of a computable general equilibrium (CGE)

model used to simulate the impacts of the AEC on ASEAN members. The results show

sizable increases in the economic welfare of all members. Chia also presents the AEC

scorecard for 2008–2009, which assesses the percentage of targets achieved.On the objec-

tive of a single market and production base, the achievement record was 82%.

In her conclusion, Chia emphasizes the importance of political will to achieve eco-

nomic integration. She also takes up the issue of the proliferation of free trade agreements

(FTAs)involving ASEAN members both as a group and individually. She sees the situation

†Correspondence: ShujiroUrata, Graduate School of Asia-Pacific Studies, WasedaUniversity,1-21-1

Nishiwaseda, Shinjuku, Tokyo 169-0051, Japan. Email: surata@waseda.jp

doi: 10.1111/j.1748-3131.2011.01180.x Asian Economic Policy Review (2011) 6, 66–67

© 2011 The Author

Asian Economic Policy Review © 2011 Japan Center for Economic Research

66