ASEAN Economic Community

Definition

The ASEAN Economic Community (AEC) is a regional integration initiative established by the Association of Southeast Asian Nations (ASEAN) to create a single market and production base, promoting economic growth and stability among its member countries. The AEC aims to facilitate trade and investment through the elimination of tariffs, the harmonization of regulations, and the enhancement of connectivity across Southeast Asia.

5 Must Know Facts For Your Next Test

1. The ASEAN Economic Community was officially launched in December 2015, representing a significant step towards regional economic integration in Southeast Asia.
2. One of the primary goals of the AEC is to transform the region into a competitive economic zone by attracting investments and facilitating trade among member countries.
3. The AEC promotes the liberalization of trade in goods and services, aiming for a tariff reduction to zero on most products traded within the region.
4. In addition to economic integration, the AEC focuses on enhancing connectivity through infrastructure development, such as transportation and telecommunications.
5. The AEC has helped to foster greater cooperation among member countries in areas like labor mobility and skilled workforce development, promoting shared economic growth.

Review Questions

• How does the ASEAN Economic Community aim to enhance trade among its member countries?
  • The ASEAN Economic Community enhances trade among its member countries by eliminating tariffs and non-tariff barriers on goods and services. This allows for a more competitive environment where businesses can access a larger market without excessive costs. Additionally, harmonizing regulations and standards facilitates smoother trade processes, making it easier for companies to operate across borders within Southeast Asia.
• Discuss the potential challenges faced by the ASEAN Economic Community in achieving its goals of regional integration.
  • The ASEAN Economic Community faces several challenges in achieving its goals of regional integration, including differences in economic development levels among member states. Some countries may have less developed infrastructure or regulatory frameworks that hinder smooth trade. Moreover, political instability or varying national interests can create friction in negotiations. Addressing these disparities is crucial for ensuring that all member countries can benefit from economic integration.
• Evaluate the impact of the ASEAN Economic Community on labor mobility within Southeast Asia and its broader implications for economic growth.
  • The ASEAN Economic Community has significantly impacted labor mobility within Southeast Asia by promoting policies that facilitate the movement of skilled workers across borders. This has allowed member countries to address labor shortages in specific sectors while providing workers with greater opportunities for employment. The increased mobility can lead to enhanced productivity and innovation, contributing to overall economic growth in the region. However, it also raises questions about job competition and wage disparities that need to be managed to maintain social harmony among nations.

Related terms

ASEAN:

The Association of Southeast Asian Nations is a political and economic organization of ten Southeast Asian countries, aimed at promoting regional stability, economic growth, and cultural exchange.

Free Trade Agreement: A treaty between two or more countries that eliminates tariffs and other trade barriers on goods and services exchanged between them.

Single Market: An integrated market that allows for the free movement of goods, services, capital, and labor across member countries without restrictions.