ASEAN

Association of Southeast Asian Nations

ESTABLISHMENT
The

Association of Southeast Asian Nations, or ASEAN, was established on 8 August 1967 in Bangkok, Thailand, with the signing of the ASEAN Declaration (Bangkok Declaration) by the Founding Fathers of ASEAN, namely Indonesia, Malaysia, Philippines, Singapore and Thailand. Brunei Darussalam then joined on 7 January 1984, Viet Nam on 28 July 1995, Lao PDR and Myanmar on 23 July 1997, and Cambodia on 30 April 1999,

The ASEAN region has a population of about 500 million, a total area of 4.5 million square kilometers, a combined gross domestic product of almost US$ 700 billion, and a total trade of about US$ 850 billion. ASEAN was a product of the Cold War period, its initial interests focusing mainly on security matters, especially those linked to settling intra-regional disputes and resisting superpower influence.

AIMS AND PURPOSES

1) To accelerate the economic growth, social

progress and cultural development in the region 2) To promote regional peace and stability through abiding respect for justice and the rule of law in the relationship among countries of the region and adherence to the principles of the United Nations Charter 3) To promote active collaboration and mutual assistance on matters of common interest in the economic, social, cultural, technical, scientific and administrative fields;

4) To provide assistance to each other in the form of training and research facilities in the educational, professional, technical and administrative spheres 5) To collaborate more effectively for the greater utilization of their agriculture and industries, the expansion of their trade, including the study of the problems of international commodity trade, the improvement of their transportation and communications facilities and the raising of the living standards of their peoples; 6) To promote Southeast Asian studies; and 7) To maintain close and beneficial cooperation with existing international and regional organizations with similar aims and purposes, and explore all avenues for even closer cooperation among themselves.

FUNDAMENTAL PRINCIPLES
Mutual respect for the independence,

sovereignty, equality, national integrity, and national identity of all nations; The right of every State to lead its national existence free from external interference, subversion or coercion; Non-interference in the internal affairs of one another; Settlement of differences or disputes by peaceful manner; Renunciation of the threat or use of force; and Effective cooperation among themselves.

Charter of the Association of Southeast Asian Nations

The ASEAN Charter serves as a firm foundation

in achieving the ASEAN Community by providing legal status and institutional framework for ASEAN. It also codifies ASEAN norms, rules and values; sets clear targets for ASEAN; and presents accountability and compliance. The ASEAN Charter entered into force on 15 December 2008. A gathering of the ASEAN Foreign Ministers was held at the ASEAN Secretariat in Jakarta to mark this very historic occasion for ASEAN. The ASEAN Charter has become a legally binding agreement among the 10 ASEAN Member States.

The importance of the ASEAN Charter New political commitment at the top level New and enhanced commitments New legal framework, legal personality New ASEAN bodies More ASEAN meetings More roles of ASEAN Foreign Ministers New and enhanced role of the Secretary-General of ASEAN Other new initiatives and changes

Challenges for ASEAN Community

To narrow the development gap

To enhance connectivity within the region

To maintain ASEAN centrality in the regional

architecture
To increase public awareness and the sense

of ownership among ASEAN peoples

To provide quality of life and welfare for all the

ASEAN peoples

ASEAN Secretariat
The ASEAN Secretariat was set up in February 1976 by

the Foreign Ministers of ASEAN. It was then housed at the Department of Foreign Affairs of Indonesia in Jakarta. The existing ASEAN Secretariat at 70A Jalan Sisingamangaraja, Jakarta, was established and officiated in 1981 by the then President of Indonesia, H.E. Soeharto. The ASEAN Secretariat's basic function is to provide for greater efficiency in the coordination of ASEAN organs and for more effective implementation of ASEAN projects and activities. The ASEAN Secretariat's vision is that by 2015, it will be the nerve centre of a strong and confident ASEAN Community that is globally respected for acting in full compliance with its Charter and in the best interest of its people. The ASEAN Secretariat's mission is to initiate, facilitate and coordinate ASEAN stakeholder collaboration in realizing the purposes and principles of ASEAN as reflected in the ASEAN Charter.

External Relations

Australia Canada China European Union India Japan ROK (Republic of Korea ) New Zealand Russia United States Pakistan

Opportunities of ASEAN
ASEAN is observed to be an evolving economic

powerhouse and has been gaining lot of attraction with the international investors and enterprises. Amidst the growing economic uncertainty in the well developed markets, the regional association comprising largely of developing nations is brimming with opportunities in all sectors. It is especially important for companies operating in the infrastructure sector.

 ASEAN Business Outlook Survey 2011, conducted

by The American Chamber of Commerce in Singapore in collaboration with many other related associations and chambers, revealed that American companies expect the ASEAN market to become increasingly important for their businesses. The survey polled 327 senior executives from US companies in Cambodia, Indonesia, Malaysia, Singapore, the Philippines, Thailand and Vietnam. 73% of the survey respondents said they expect ASEAN's importance to their business will increase over the next two years, with 85% of them planning to expand their business in ASEAN.

 Trade accounts for nearly 100% of aggregate gross

domestic product across ASEAN the region lives or dies on the dynamism of trade and depends on investment to fuel growth. ASEAN has made significant progress in this area by implementing the ASEAN Free Trade Area (AFTA) and reducing over 95% of tariffs to 0-5% across member countries. To compete for investment, technology and entrepreneurism ASEAN knows it must follow through on similar pacts to liberalize investment rules, trade in services and tear down non-tariff barriers ASEAN has a significant commodity and natural resources sector. Malaysia and Indonesia combined produce 85% of the worlds crude palm oil, the major edible oil consumed in China and in India. ASEAN countries are also responsible for about 80% of global rubber production. Indonesia has coal reserves of more than 4,000mn tones and has become one of the key suppliers of thermal coal

 ASEAN GDP projected to grow from US$1.7 trillion in

2010 to US$4 trillion in 2025 Demographics are positive, with a rising share of population in the working-age bracket Singapore poised to benefit from growth of Asias high-net-worth population ASEAN is exciting in part because its a melting pot of different types of economies. On the one hand, you have a developed economy like Singapore; on the other hand you have emerging economies, such as Vietnam and Indonesia, that offer very exciting growth opportunities. If you look at Indonesia, for example, it has the largest population in the region, with 238mn people, and at the same time it is very rich in agriculture and commodity resources, which feed very nicely into growing markets like China and India. Or Thailand agriculture for instance. Thailand is also a major exporter of auto parts and

3 Pillars of ASEAN Community

APSC
(ASEAN Political Security Community)

AEC
(ASEAN Economic Community)

ASCC
(ASEAN Social & Cultural Community)

Rules-based community Peaceful, evolutionary, sharedsense of responsibility, and possessing comprehensive security Dynamic, supports efforts to form a global outreach and mutual interdependence Promotion and Protection of Human Rights

Common market and shared base of production Competitive with other regions A region with few developmental gaps A region that is integrated and yet able to retain its own momentum in moving forward external economic relations

Human resources Development Provide adequate social welfares and services Social rights and justice Environmental sustainability ASEAN identity The narrowing of developmental gap between Member States

ASEAN ECONOMIC COMMUNITY

The ASEAN Economic Community (AEC)

shall be the goal of regional economic integration by 2015. AEC envisages the following key characteristics: a) a single market and production base, b) a highly competitive economic region, c) a region of equitable economic development, and d) a region fully integrated into the global economy.

 The AEC areas of cooperation include

human resources development and capacity building; recognition of professional qualifications; closer consultation on macroeconomic and financial

policies; trade financing measures; enhanced infrastructure and communications connectivity; development of electronic transactions through eASEAN; integrating industries across the region to promote regional sourcing; and enhancing private sector involvement for the building of the AEC.

The ASEAN Free Trade Area (AFTA)

Most of the Southeast Asian region is now a free

trade area. Accounting for over 96 percent of all ASEAN trade, the first six signatories of the Common Effective Preferential Tariff scheme for the ASEAN Free Trade Area have reduced their tariffs on intra-regional trade to no more than five percent for almost all products in the Inclusion List or removed them altogether The ASEAN Free Trade Area was established in January 1992 to eliminate tariff barriers among the Southeast Asian countries with a view to integrating the ASEAN economies into a single production base and creating a regional market of 500 million people.

The ASEAN Free Trade Area (AFTA)

The ASEAN Free Trade Area (AFTA) has now

been virtually established. ASEAN Member Countries have made significant progress in the lowering of intraregional tariffs through the Common Effective Preferential Tariff (CEPT) Scheme for AFTA. More than 99 percent of the products in the CEPT Inclusion List (IL) of ASEAN-6, comprising Brunei Darussalam, Indonesia, Malaysia, the Philippines, Singapore and Thailand, have been brought down to the 0-5 percent tariff range

 ASEAN Free Trade Area (AFTA), it aims to

promote the regions competitive advantage as a single production unit. The elimination of tariff and non-tariff barriers among Member Countries is expected to promote greater economic efficiency, productivity, and competitiveness. The FTA collectively covers a market of nearly 1.8 billion people and proposes to gradually slash tariffs for over 4,000 product lines. Currently the FTA is restricted to trade in goods while negotiations for a similar agreement for services are currently under way

Benefits of FTA
Increase in Incomes/Growth:

An FTA expands trade volumes among member countries and tends to increase incomes/growth of the members. Intuitively, starting from a situation of tariff-distorted trade, the elimination of tariffs allows each member to specialize in the production of the goods in which it has a comparative advantage and trade those goods in exchange for imports of other goods from fellow members. Achievement of Economies of Scale: An FTA, by eliminating tariffs, expands a member country's export market thereby allowing

 Reduction of Monopoly Inefficiencies:

If inefficient monopolies exist in the domestic market, then increased competition from foreign products dampen domestic monopoly inefficiencies, if not eliminate them altogether. Availability of Greater Product Variety: The opening up of free trade increases trade flows and expand the variety of products available to consumers in the home country.

Challenges in FTA
Low

utilization of rates of FTA: A free trade agreement bestows numerous benefits like preferential tariffs, market access, and new business opportunities for partner economies Coverage of Agricultural Goods in FTA: Another potential problem with Asian FTAs is the suboptimal level of liberalization in agricultural products. Lack of political will and pressure to the pressures from the farm lobbies and social concerns. Rules of Origin (ROO): Rules of origin are used to determine the country of origin of a product for purposes of international trade. They are used to determine which goods will enjoy preferential tariffs to

ASEAN SOCIO-CULTURAL COMMUNITY

ASEAN Work Programme for Social Welfare,

Family, and Population; ASEAN Work Programme on HIV/AIDS; ASEAN Work Programme on Community-Based Care for the Elderly; ASEAN Occupational Safety and Health Network; ASEAN Work Programme on Preparing ASEAN Youth for Sustainable Employment and Other Challenges of Globalization; ASEAN University Network (AUN) promoting collaboration among seventeen member universities ASEAN;

 ASEAN Students Exchange Programme, Youth Cultural Forum, and the ASEAN Young

Speakers Forum; The Annual ASEAN Culture Week, ASEAN Youth Camp and ASEAN Quiz; ASEAN Media Exchange Programme; and Framework for Environmentally Sustainable Cities (ESC) and ASEAN Agreement on Tran boundary Haze Pollution.