ASEAN Leaders Eye Next Steps For Boosting Economic Integration

15 September 2016

The Association of Southeast Nations (ASEAN) concluded a series of leaders’ level meetings last week, gathering in Vientiane, Laos, for three days of talks on “Turning Vision into Reality for a Dynamic ASEAN Community.”

The 6-8 September talks marked the first such leaders’ gathering since the ASEAN Economic Community was launched last year, with numerous other related summits held on the margins with other regional players.

According to a statement by Thongloun Sisoulith, the Laos prime minister who chaired the 28th and 29th ASEAN Summits last week, the discussions were geared toward developing the next steps for “a politically cohesive, economically integrated, socially responsible and a truly rules-based, people-oriented, people-centred ASEAN Community.”

The talks in the Laotian city were structured around a series of future-oriented priorities, according to Sisoulith, including reducing the “development gap” between them; facilitating trade; and helping micro, small, and medium-sized enterprises (MSMEs) gain a stronger foothold in the marketplace.

ASEAN Economic Community: One year in

Overall, the ASEAN Economic Community (AEC) represents a market of US$2.6 trillion and more than 622 million people, making it the third largest economy in Asia and the seventh globally. However, the 10 members of ASEAN showcase a wide variety in their levels of development, including emerging economies such as Indonesia and least developed countries (LDCs) such as Cambodia, Laos, and Myanmar – making the challenge of group-wide integration even greater.

A year ago in Kuala Lumpur, the group adopted its AEC Blueprint 2025, which launched the economic community and aimed to guide its formation from 2016 to 2025, building on the progress of an earlier 2008-2015 blueprint.

According to the new AEC Blueprint 2025, the measures suggested will lead to “a networked, competitive, innovative, and highly integrated and contestable ASEAN.” This new blueprint builds from the previous one of 2008-2015, and features five linked elements that together aim to make the 10-country group more integrated internally, while competitive and innovative abroad. It also refers to the importance of making the group’s work inclusive and people-oriented.

In terms of implementation, the priority is to implement by year’s end the measures still pending from the previous AEC Blueprint 2015, with LDCs in the group given until 2018 to do so.

“We were pleased to note that in 2016, the inaugural year of the AEC, efforts have been focused on completing the remaining AEC 2015 measures as well as initiating the implementation of new measures under the AEC Blueprint 2025,” said the chairman’s statement.

The document notes that even with “external headwinds,” the group’s overall GDP growth last year and going forward are expected to be “robust” and “resilient,” with promising prospects for trade and investment.


The chairman’s text further noted areas where ASEAN members are working to make additional progress in AEC implementation, including eliminating tariffs on any remaining tariff lines and addressing non-tariff barriers to trade. Other issues raised including steps to facilitate intra-regional trade, and harmonising standards and regulatory regimes.

The statement also refers to the enactment of a group-wide deal on the movement of people who are involved in merchandise and services trade, as well as investment. Other topics raised included work on competition rules, consumer protection frameworks, and an intellectual property rights action plan.

The ASEAN group also adopted nine documents last week, all of them dealing with relevant and current international issues and concerns. These included, among others, addressing internal and external disasters; facilitating the transition from informal to formal employment; reinforcing cultural heritage cooperation; strengthening education for out-of-school children and youth; climate change and the Convention on Biological Diversity, and fighting HIV and AIDS.

RCEP leaders meet

Notably, the gathering also featured a leaders’ level meeting of the Regional Comprehensive Economic Partnership (RCEP) – a group that includes all of ASEAN, along with their six FTA partners. That group is aiming to conclude negotiations for a major regional trade deal by the end of this year.

However, some officials have recently suggested that the target of concluding the RCEP talks this year may be left unmet, given the current pace of the negotiations. (See Bridges Weekly, 7 September 2016)

Following the RCEP leaders’ talks in Laos, participating countries called for intensifying efforts to advance market access and text-based negotiations. (See Bridges Weekly, 23 June 2016)

“While acknowledging the complexities of the RCEP negotiations and the diversity of the participating countries, including differences in the level of development, we resolve to find appropriate ways to address the various sensitivities and interests of each participating country to arrive at balanced, high-quality, and mutually-beneficial outcomes,” said leaders afterward.

Additional RCEP negotiating rounds are expected in October and December.

The 16-country group has similarly proven resilient to harsh international economic conditions, accounting for 30.6 percent of global GDP, or US$22.4 trillion; internal trade amounting to US$11.9 trillion last year; and foreign direct investment (FDI) inflows at US$ 329.6 billion, according to the joint leaders’ statement.

The meetings in Laos also allowed for a series of other meetings on the margins, such as ASEAN Plus One, ASEAN Plus Three (APT), and the East Asia Summit (EAS). There was also the Mekong-Japan Summit under the sub-regional cooperation framework, as well as bilateral meetings between ASEAN and leaders from Australia, Japan, Korea, and the US respectively.

ICTSD reporting.

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