Section 4- Emerging - APEC

7/27/2019 Section 4- Emerging - APEC

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Objectives of APEC 2010-2015

1. Major issues of economic integration of ASEAN economies in

light of the blueprint: ASEAN way is a process of regional interactions and cooperation based

on discreteness, informality, consensus building and non-

confrontational bargaining styles. So concrete decision making and

implementation is an issue.

Decision making for the entire union is not centralized. Due to the

consensus-based approach every member has a veto, so contentious

issues must remain unresolved until agreements can be reached.

ASEAN is operated through consensus and informality. It is not a rulemaking body subjecting its members to the discipline of adhering its

laws and regulations.

There is issue of development gap between different ASEAN members.

So, not all the members are at equal level playing field.

ASEAN does not have the financial resources to extend substantial

grants or loans to the less developed existing members making

implementation of projects by the less developed members an issue.

ASEAN has failed at restraining its members and resolving border

disputes such as those between Burma and Thailand and Indonesia

and Malaysia. Also, ASEAN has failed in promoting human rights and

democracy in the junta-led Burma.

According to these leftist activists, the agenda of economic integration

would negatively affect industries in a few member nations leading to

job loss.

Uncompetitive sectors may be a challenge, but the CJK FTA may be the

means to further economic reform (strengthening national

competitiveness).

Competition for economic and non-economic hegemony is another

challenge, but the CJK FTA could be the means of settling intra-regional

conflicts (raising the sense of community).


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Continuing the work in 2013, APEC economies objective is to work on

improving regions supply chain performance by 10% by 2015 in terms

of time, cost and uncertainty of moving goods and services throughout

the Asia-Pacific. Ushering in a more systematic approach to addressing

supply chain will help increase trade, as well as raise standards of

living and stimulate employment in the long term.

Action plan for ease of doing business will focus on improving business

regulatory environment. The overall goal is to make it 25% cheaper,

faster and easier to do business in the region by 2015, with an interim

target of 5% improvement in 2011.This can be done by intensifying

and accelerating its efforts including through capacity building

programs.

3. Which country will lead to Economic integration?Russia is already building modern ports in the Russian Far East, modernizing the

transportation and shipment infrastructure, and improving national customs and

administrative procedures. The implementation of these projects will allow traffic

flow between Europe and the Asia-Pacific Region via Russia to be increased at leastfivefold by as early as 2020

China, Australia, US, Indonesia and Russia are projected to maintain their 97%

share of coal production in the 21-member Asia Pacific Economic Cooperation

(APEC) region through 2035. China will remain the group's and the world's largest

coal producing economy. China's coal production is expected to reach 1,849 million

tons of oil equivalent to account for half the region's output in 2035. An Asian bloc

could significantly augment Chinese economic power and perhaps its global political

clout as well, but it could also constrain Chinese behavior through moderating

pressures from its neighbors. An Asian bloc could have positive effects on the world

economy, by accelerating trade liberalization and providing additional financialresources to counter international monetary disturbances, or it could divert

substantial amounts of trade and dilute future efforts to stabilize the financial

system. Singapore can play, including providing leadership and exporting

technological and infrastructural services

Three factors would be necessary to achieve East Asian economic integration


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Stable growth of China- It is necessary to construct systems in China based on

multilateral rules. It is also important for both the U.S. and Japan to evaluate

strategies and coordinate as necessary based on information and experience gained

through exchange with China in a wide variety of settings.

The second issue is whether ASEAN nations can maintain and enhance theircollective competitiveness in international markets. The pivotal role will be played

by Indonesia.

The third issue is the importance of the presence of the U.S. in East Asia; therefore

rate highly the FTAAP proposed by the U.S. The stepping stone process leading up

to the FTAAP is also important.

There are two approaches to achieving economic integration in East Asia. The first

method, ASEAN Plus Three, involves promoting economic integration among East

Asian nations and Japan, South Korea and China. The second method, ASEAN Plus

Six, involves achieving an FTA that covers ASEAN nations and China, South Korea,

Japan, India, Australia and New Zealand by standardizing each of the ASEAN Plus

One frameworks between ASEAN nations and these countries. To achieve East Asian

economic integration, a multilayered approach is far more appropriate than

adhering steadfastly to one method. Utilization of the best solution for each problem

is essential. East Asia had already occurred in effect to some extent, although

institutionally different from the integration that has occurred in the EU. He pointed

out that 57% of the total trade of the ASEAN Plus Six nations (Japan, China, South

Korea, India, Australia and New Zealand) in 2003 was within the region, which is

higher than the corresponding figure of 45% for NAFTA and about the same as the

figure of 60% for the EU.

4. Landscape of Asian Economies after AEC

The Southeast Asian model of development has been characterized by an

increasingly export-led and foreign direct investment (FDI)-led development

strategy. ASEAN & AEC engagement will help them exploit their comparative

advantage, achieve economies of scale & open access to foreign capital,

technology & skill.

Economic integration will result in single market with no discrimination for

commodities and production factors, which will bring advantages to the

region. This is similar to the EU-style of regionalism but without

macroeconomic or monetary integration.

At present low intra ASEAN trade and more dependence is there on rest of

the world. Economic collaboration will result in integration in highly related


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industries in the region to start with like automobile; where Asia is a huge

market, and this will lead to spill over to other industries.

AEC would become a global business hub because of the Asian highway

connecting the southern provinces of China to Singapore; the east-west

economic corridor from India to Vietnam; and the sophisticated regional airtransport networks.

According to Mckinsey study it is estimated that an integrated ASEAN would

increase regional gross domestic product (GDP) by at least 10 percent, or

nominally US$50 billion, while reducing its operational costs by up to 20

percent.

Challenges for doing business in ASEAN countries: All business decision takes time. To develop local business support services,

necessary business approvals from local government takes some time. Alocal business partner is preferred to get approval from government or local

bodies. Prior to any action advice should be sought from a reliable source

preferably upon recommendation

All US businesses and their foreign subsidiaries are subject to the US Foreign

Corrupt Practices Act (FCPA). The FCPA makes it a crime to bribe local

government officials in order to obtain new business or keep existing

business. In ASEAN Countries bribery is the most prevalent ways to get any

approvals.

Regulation can be viewed as limiting the market or limiting competition. For

instance, regulatory policies can be viewed as inhibiting the market in terms

of licensing, franchising, permits, tariff and non-tariff measures, anti-dumping

and countervailing duties.

The countries of South East Asia have many cultures, customs, no-nos, and

religious practices. Just because you finally figure out how you can

comfortably work with the folks in Singapore, doesnt automatically mean you

can apply the same formula to the folks in Indonesia or Thailand.

Country wise most problematic factors- Cambodia & Philippines Corruption,

China & Malaysia- Access to financing, India & Vietnam-Inadequate supply of

infrastructure, Indonesia &South Korea- Inefficient government bureaucracy,

japan- Tax regulations, Singapore- Inflation, Thailand- Government Instability.

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Section 4- Emerging - APEC