The ASEAN experience in using trade deals to slash trade costs: What prospects for greater trade cooperation among Southeast Asian countries?

• Author: Balino, Sofia
• Position: SPECIAL REPORT - Association of Southeast Asian Nations

Southeast Asia has become an increasingly dynamic region in terms of international trade activity. This is true particularly as a coalition of 10 countries looks to become more integrated with each other, as well as with a wide community of partners in the region and farther afield. Notably, the Association of Southeast Asian Nations (ASEAN) has pursued a multi-pronged approach to slash trade costs and border lag times both within their grouping and with other countries. This includes efforts to establish and strengthen an economic community; forge regional trade agreements with other countries; and implement global trade rules.

ASEAN brings together countries of different development levels, political systems and economic approaches. The group began with just five members in 1967 and over the years its mission and membership have grown rapidly. The 10-country group includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Viet Nam. The group is now in the process of implementing the ASEAN Economic Community Blueprint 2025, a 10-year roadmap aimed at facilitating intraregional and interregional trade and investment.

Trade facilitation, an essential component of ASEAN's work, was one of 'five economic thrusts' the Singaporean presidency of the group focused on this past year. It is also one of the areas ASEAN has identified in its Blueprint 2025 for progress, with the group committing to 'accelerate and deepen the implementation of trade facilitation measures.' Along with implementing the World Trade Organization (WTO) Trade Facilitation Agreement (TFA), ASEAN members have identified a series of steps, such as developing national single windows and national trade repositories in each member state, that would help meet the goal of 'convergence in trade facilitation regimes' that would be comparable to those seen in other parts of the world.

Notably, the rise of digital trade has added a new dimension to trade facilitation efforts in the ASEAN region. According to a recent United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) report, full implementation of the TFA, together with other digital trade facilitation or paperless trade measures, would cut trade costs in the Asia-Pacific region by 26% ($673 billion) every year. This would include potential trade cost reductions for all ASEAN countries in excess of 15%, with Cambodia, Indonesia and Viet Nam enjoying the highest cuts.

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