37. There is a critical element in the Roadmap calling for the implementation of an ASEAN Single Shipping Market. Here there are a number of issues that need to be addressed prior to the implementation stage. These include the definition of a single shipping market, and the formulation of a strategy to realise such a market, bearing in mind the issue of cabotage principle.
2.2.2 Free Flow of Goods
38. For the past two decades, ASEAN Member States have intensified trade between themselves and also with the rest of the world including East Asia. Intra-ASEAN trade in goods is characterised by active participation of Member States in international production networks in East Asia, which can be attributed partly to substantial reduction in tariff.
39. Intra-ASEAN trade as a share of total ASEAN trade increased from 19.4% during 1990-1991 to about 24% in both periods of 1995-1996 and 2000-2001, and to 27% during 2007-2008 (UNCTAD 2010). The intra-regional trade intensity index of ASEAN also increased from 3.65 during 1995-1996 to 4.55 during 2007-2008. This has led to ASEAN having the highest share of intra-regional trade to total trade (at 26.3% in 2008) among the regional economic groupings in the developing world. This reflects the high level of inter- dependence between regional production networks operated by both manufacturers and producers.
40. In addition, the extent of reciprocal transactions in machinery and components in ASEAN-5 countries were larger than those in other countries, reflecting active participation of ASEAN Member States in East Asian regional production networks as shown in Figure
2.5 below.