ASEAN ECONOMIC COMMUNITY BLUEPRINT
(The electronic version of the Economic Community Blueprint
can be accessed at http://www.aseansec.org/21083.pdf.)
I. INTRODUCTION
1. The ASEAN Leaders at their Summit in Kuala Lumpur in December 1997 decided to
transform ASEAN into a stable, prosperous, and highly competitive region with equitable
economic development, and reduced poverty and socio-economic disparities (ASEAN Vision
2020).
2. At the Bali Summit in October 2003, ASEAN Leaders declared that the ASEAN Economic
Community (AEC) shall be the goal of regional economic integration (Bali Concord
II) by 2020. In addition to the AEC, the ASEAN Security Community and the ASEAN
Socio-Cultural Community are the other two integral pillars of the envisaged ASEAN Community.
All the three pillars are expected to work in tandem in establishing the ASEAN
Community in 2020.
3. Subsequently, the ASEAN Economic Ministers Meeting (AEM) held in August 2006
in Kuala Lumpur, Malaysia, agreed to develop “a single and coherent blueprint for advancing
the AEC by identifying the characteristics and elements of the AEC by 2015 consistent
with the Bali Concord II with clear targets and timelines for implementation of various measures
as well as pre-agreed flexibilities to accommodate the interests of all ASEAN Member
Countries.”
4. At the 12th ASEAN Summit in January 2007, the Leaders affirmed their strong
commitment to accelerate the establishment of an ASEAN Community by 2015 as envisioned
in the ASEAN Vision 2020 and the ASEAN Concord II, and signed the Cebu Declaration on
the Acceleration of the Establishment of an ASEAN Community by 2015. In particular, the
Leaders agreed to hasten the establishment of the ASEAN Economic Community by 2015
and to transform ASEAN into a region with free movement of goods, services, investment,
skilled labour, and freer flow of capital.
II. CHARACTERISTICS AND ELEMENTS OF AEC
5. The AEC is the realisation of the end goal of economic integration as espoused in
the Vision 2020, which is based on a convergence of interests of ASEAN Member Countries
to deepen and broaden economic integration through existing and new initiatives with
clear timelines. In establishing the AEC, ASEAN shall act in accordance to the principles
of an open, outward-looking, inclusive, and market-driven economy consistent with
multilateral rules as well as adherence to rules-based systems for effective compliance and
implementation of economic commitments.
298 SINGAPORE YEAR BOOK OF INTERNATIONAL LAW (2008)
6. The AEC will establish ASEAN as a single market and production base making
ASEAN more dynamic and competitive with new mechanisms and measures to strengthen
the implementation of its existing economic initiatives; accelerating regional integration in
the priority sectors; facilitating movement of business persons, skilled labour and talents;
and strengthening the institutional mechanisms of ASEAN. As a first step towards realising
the ASEAN Economic Community, ASEAN has been implementing the recommendations
of the High Level Task Force (HLTF) on ASEAN Economic Integration contained in the
Bali Concord II.
7. At the same time, the AEC will address the development divide and accelerate integration
of Cambodia, Lao PDR, Myanmar and Viet Nam (CLMV) through the Initiative
for ASEAN Integration and other regional initiatives. Other areas of cooperation are also to
be incorporated such as 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 e-ASEAN; integrating industries across the region
to promote regional sourcing; and enhancing private sector involvement for the building of
the AEC.
8. Based on the above and taking into consideration the importance of external trade to
ASEAN and the need for the ASEAN Community as a whole to remain outward looking, the
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. These characteristics are interrelated
and mutually reinforcing. Incorporating the required elements of each characteristic
in one Blueprint shall ensure the consistency and coherence of these elements as well as their
implementation and proper coordination among relevant stakeholders.
A. Single Market and Production Base
9. An ASEAN single market and production base shall comprise five core elements: (i)
free flow of goods; (ii) free flow of services; (iii) free flow of investment; (iv) free flow of
capital; and (v) free flow of skilled labour. In addition, the single market and production
base also include two important components, namely, the priority integration sectors, and
food, agriculture and forestry.
A1. Free flow of goods
10. Free flow of goods is one of the principal means by which the aims of a single
market and production base can be achieved. A single market for goods (and services) will
also facilitate the development of production networks in the region and enhance ASEAN’s
capacity to serve as a global production centre or as a part of the global supply chain.
11. Through ASEAN Free Trade Area (AFTA), ASEAN has achieved significant progress
in the removal of tariffs. However, free flow of goods would require not only zero tariffs
but the removal of non-tariff barriers as well. In addition, another major component that
would facilitate free flow of goods is trade facilitation measures such as integrating customs
procedures, establishing the ASEAN Single Window, continuously enhancing the Common
Effective Preferential Tariffs (CEPT) Rules of Origin including its Operational Certification
Procedures, and harmonising standards and conformance procedures.
12. The Common Effective Preferential Tariffs for ASEAN Free Trade Area (CEPTAFTA)
Agreement will be reviewed and enhanced to become a comprehensive agreement
12 SYBIL ASEAN ECONOMIC COMMUNITY BLUEPRINT 299
in realising free flow of goods and applicable to ASEAN needs for accelerated economic
integration towards 2015.
13. Elimination of Tariffs. Tariffs on all intra-ASEAN goods will be eliminated in accordance
with the schedules and commitments set out in the CEPT-AFTA Agreement and other
relevant Agreements/Protocols.
Actions:
i. Eliminate import duties on all products, except for those phased in from the
Sensitive and Highly Sensitive Lists by 2010 for ASEAN-6 and by 2015, with
flexibilities for some sensitive products by 2018, for CLMV in accordance with
the provisions of the Protocol to Amend the CEPT Agreement for the Elimination
of Import Duties;
ii. Eliminate import duties on products in the Priority Integration Sectors by 2007
for ASEAN-6 and 2012 for CLMV in accordance with the provisions of the
ASEAN Framework (Amendment) Agreement for the Integration of Priority
Sectors;
iii. Complete the phasing in of the remaining products in the Sensitive List (SL) into
the CEPT Scheme and reduce tariffs on these products to 0-5% by 15 January
2010 for ASEAN-6, 1 January 2013 for Viet Nam, 1 January 2015 for Lao
PDR and Myanmar, and by 1 January 2017 for Cambodia, in accordance with
the provisions of the Protocol on Special Arrangements for Sensitive and Highly
Sensitive Products; and
iv. Phase in products, which are in the General Exceptions List, in conformity with
the CEPT Agreement.
14. Elimination of Non-Tariff Barriers. ASEAN has achieved significant progress in tariff
liberalisation. The main focus of ASEAN towards 2015 will be placed on the full elimination
of non-tariff barriers (NTBs).
Actions:
i. Enhance transparency by abiding to the Protocol on Notification Procedure and
setting up an effective Surveillance Mechanism;
ii. Abide by the commitment of a standstill and rollback on NTBs;
iii. Remove all NTBs by 2010 for ASEAN-5, by 2012 for the Philippines, and by
2015 with flexibilities to 2018 for CLMV, in accordance with the agreed Work
Programme on Non-Tariff Barriers (NTBs) elimination;
iv. Enhance transparency of Non-Tariff Measures (NTMs); and
v. Work towards where possible having regional rules and regulations consistent
with International best practices.
15. Rules of Origin (ROO): Putting in place ROO which are responsive to the dynamic
changes in global production processes so as to: facilitate trade and investment among
ASEAN Member Countries; promote a regional production network; encourage development
of SMEs and the narrowing of development gaps; and promote the increased usage of
the AFTA CEPT Scheme.
Actions:
i. Continuously reform and enhance the CEPT ROO to respond to changes in
regional production processes, including making necessary adjustments such as
the introduction of advance rulings and improvements to the ROO;
ii. Simplify the Operational Certification Procedures for the CEPTROOand ensure
its continuous enhancement, including the introduction of facilitative processes
300 SINGAPORE YEAR BOOK OF INTERNATIONAL LAW (2008)
such as the electronic processing of certificates of origin, and harmonisation or
alignment of national procedures to the extent possible; and
iii. Review all the ROO implemented by ASEAN Member Countries, individually
and collectively, and explore possible cumulation mechanisms, where possible.
16. Trade Facilitation. Simple, harmonised and standardised trade and customs, processes,
procedures and related information flows are expected to reduce transaction costs in
ASEAN which will enhance export competitiveness and facilitate the integration of ASEAN
into a single market for goods, services and investments and a single production base.
Actions:
i. Assess trade facilitation conditions in ASEAN;
ii. Develop and implement a comprehensive trade facilitation work programme
which aims at simplifying, harmonis
ASEAN ECONOMIC COMMUNITY BLUEPRINT
(The electronic version of the Economic Community Blueprint
can be accessed at http://www.aseansec.org/21083.pdf.)
I. INTRODUCTION
1. The ASEAN Leaders at their Summit in Kuala Lumpur in December 1997 decided to
transform ASEAN into a stable, prosperous, and highly competitive region with equitable
economic development, and reduced poverty and socio-economic disparities (ASEAN Vision
2020).
2. At the Bali Summit in October 2003, ASEAN Leaders declared that the ASEAN Economic
Community (AEC) shall be the goal of regional economic integration (Bali Concord
II) by 2020. In addition to the AEC, the ASEAN Security Community and the ASEAN
Socio-Cultural Community are the other two integral pillars of the envisaged ASEAN Community.
All the three pillars are expected to work in tandem in establishing the ASEAN
Community in 2020.
3. Subsequently, the ASEAN Economic Ministers Meeting (AEM) held in August 2006
in Kuala Lumpur, Malaysia, agreed to develop “a single and coherent blueprint for advancing
the AEC by identifying the characteristics and elements of the AEC by 2015 consistent
with the Bali Concord II with clear targets and timelines for implementation of various measures
as well as pre-agreed flexibilities to accommodate the interests of all ASEAN Member
Countries.”
4. At the 12th ASEAN Summit in January 2007, the Leaders affirmed their strong
commitment to accelerate the establishment of an ASEAN Community by 2015 as envisioned
in the ASEAN Vision 2020 and the ASEAN Concord II, and signed the Cebu Declaration on
the Acceleration of the Establishment of an ASEAN Community by 2015. In particular, the
Leaders agreed to hasten the establishment of the ASEAN Economic Community by 2015
and to transform ASEAN into a region with free movement of goods, services, investment,
skilled labour, and freer flow of capital.
II. CHARACTERISTICS AND ELEMENTS OF AEC
5. The AEC is the realisation of the end goal of economic integration as espoused in
the Vision 2020, which is based on a convergence of interests of ASEAN Member Countries
to deepen and broaden economic integration through existing and new initiatives with
clear timelines. In establishing the AEC, ASEAN shall act in accordance to the principles
of an open, outward-looking, inclusive, and market-driven economy consistent with
multilateral rules as well as adherence to rules-based systems for effective compliance and
implementation of economic commitments.
298 SINGAPORE YEAR BOOK OF INTERNATIONAL LAW (2008)
6. The AEC will establish ASEAN as a single market and production base making
ASEAN more dynamic and competitive with new mechanisms and measures to strengthen
the implementation of its existing economic initiatives; accelerating regional integration in
the priority sectors; facilitating movement of business persons, skilled labour and talents;
and strengthening the institutional mechanisms of ASEAN. As a first step towards realising
the ASEAN Economic Community, ASEAN has been implementing the recommendations
of the High Level Task Force (HLTF) on ASEAN Economic Integration contained in the
Bali Concord II.
7. At the same time, the AEC will address the development divide and accelerate integration
of Cambodia, Lao PDR, Myanmar and Viet Nam (CLMV) through the Initiative
for ASEAN Integration and other regional initiatives. Other areas of cooperation are also to
be incorporated such as 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 e-ASEAN; integrating industries across the region
to promote regional sourcing; and enhancing private sector involvement for the building of
the AEC.
8. Based on the above and taking into consideration the importance of external trade to
ASEAN and the need for the ASEAN Community as a whole to remain outward looking, the
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. These characteristics are interrelated
and mutually reinforcing. Incorporating the required elements of each characteristic
in one Blueprint shall ensure the consistency and coherence of these elements as well as their
implementation and proper coordination among relevant stakeholders.
A. Single Market and Production Base
9. An ASEAN single market and production base shall comprise five core elements: (i)
free flow of goods; (ii) free flow of services; (iii) free flow of investment; (iv) free flow of
capital; and (v) free flow of skilled labour. In addition, the single market and production
base also include two important components, namely, the priority integration sectors, and
food, agriculture and forestry.
A1. Free flow of goods
10. Free flow of goods is one of the principal means by which the aims of a single
market and production base can be achieved. A single market for goods (and services) will
also facilitate the development of production networks in the region and enhance ASEAN’s
capacity to serve as a global production centre or as a part of the global supply chain.
11. Through ASEAN Free Trade Area (AFTA), ASEAN has achieved significant progress
in the removal of tariffs. However, free flow of goods would require not only zero tariffs
but the removal of non-tariff barriers as well. In addition, another major component that
would facilitate free flow of goods is trade facilitation measures such as integrating customs
procedures, establishing the ASEAN Single Window, continuously enhancing the Common
Effective Preferential Tariffs (CEPT) Rules of Origin including its Operational Certification
Procedures, and harmonising standards and conformance procedures.
12. The Common Effective Preferential Tariffs for ASEAN Free Trade Area (CEPTAFTA)
Agreement will be reviewed and enhanced to become a comprehensive agreement
12 SYBIL ASEAN ECONOMIC COMMUNITY BLUEPRINT 299
in realising free flow of goods and applicable to ASEAN needs for accelerated economic
integration towards 2015.
13. Elimination of Tariffs. Tariffs on all intra-ASEAN goods will be eliminated in accordance
with the schedules and commitments set out in the CEPT-AFTA Agreement and other
relevant Agreements/Protocols.
Actions:
i. Eliminate import duties on all products, except for those phased in from the
Sensitive and Highly Sensitive Lists by 2010 for ASEAN-6 and by 2015, with
flexibilities for some sensitive products by 2018, for CLMV in accordance with
the provisions of the Protocol to Amend the CEPT Agreement for the Elimination
of Import Duties;
ii. Eliminate import duties on products in the Priority Integration Sectors by 2007
for ASEAN-6 and 2012 for CLMV in accordance with the provisions of the
ASEAN Framework (Amendment) Agreement for the Integration of Priority
Sectors;
iii. Complete the phasing in of the remaining products in the Sensitive List (SL) into
the CEPT Scheme and reduce tariffs on these products to 0-5% by 15 January
2010 for ASEAN-6, 1 January 2013 for Viet Nam, 1 January 2015 for Lao
PDR and Myanmar, and by 1 January 2017 for Cambodia, in accordance with
the provisions of the Protocol on Special Arrangements for Sensitive and Highly
Sensitive Products; and
iv. Phase in products, which are in the General Exceptions List, in conformity with
the CEPT Agreement.
14. Elimination of Non-Tariff Barriers. ASEAN has achieved significant progress in tariff
liberalisation. The main focus of ASEAN towards 2015 will be placed on the full elimination
of non-tariff barriers (NTBs).
Actions:
i. Enhance transparency by abiding to the Protocol on Notification Procedure and
setting up an effective Surveillance Mechanism;
ii. Abide by the commitment of a standstill and rollback on NTBs;
iii. Remove all NTBs by 2010 for ASEAN-5, by 2012 for the Philippines, and by
2015 with flexibilities to 2018 for CLMV, in accordance with the agreed Work
Programme on Non-Tariff Barriers (NTBs) elimination;
iv. Enhance transparency of Non-Tariff Measures (NTMs); and
v. Work towards where possible having regional rules and regulations consistent
with International best practices.
15. Rules of Origin (ROO): Putting in place ROO which are responsive to the dynamic
changes in global production processes so as to: facilitate trade and investment among
ASEAN Member Countries; promote a regional production network; encourage development
of SMEs and the narrowing of development gaps; and promote the increased usage of
the AFTA CEPT Scheme.
Actions:
i. Continuously reform and enhance the CEPT ROO to respond to changes in
regional production processes, including making necessary adjustments such as
the introduction of advance rulings and improvements to the ROO;
ii. Simplify the Operational Certification Procedures for the CEPTROOand ensure
its continuous enhancement, including the introduction of facilitative processes
300 SINGAPORE YEAR BOOK OF INTERNATIONAL LAW (2008)
such as the electronic processing of certificates of origin, and harmonisation or
alignment of national procedures to the extent possible; and
iii. Review all the ROO implemented by ASEAN Member Countries, individually
and collectively, and explore possible cumulation mechanisms, where possible.
16. Trade Facilitation. Simple, harmonised and standardised trade and customs, processes,
procedures and related information flows are expected to reduce transaction costs in
ASEAN which will enhance export competitiveness and facilitate the integration of ASEAN
into a single market for goods, services and investments and a single production base.
Actions:
i. Assess trade facilitation conditions in ASEAN;
ii. Develop and implement a comprehensive trade facilitation work programme
which aims at simplifying, harmonis
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