2. Focus is on the creation of an ASEAN
Economic Community where there is
a free flow of goods, services,
investment, and free flow of capital,
equitable economic development,
and reduced poverty and socio-
economic disparities in year 2020.
4. Favorable Implications
the benefit of expanding markets
and promoting competition by
eliminating barriers to trade
among member-countries
“trade creation effect”
5. Risks
may give rise to welfare losses (“trade
diversion effect”)
limited investment resources are diverted
to the larger-scale integrated market
(“investment diversion effect”)
concerns on the “noodle bowl effect”, the
potential problems that may arise as a
result of lack of coherence among
different overlapping agreements
7. ASEAN Free Trade Agreement
(AFTA)
Put in place in 1992
aims to promote the region’s competitive
advantage as a single production unit
commits members to free trade within a 15-year
timeframe through the elimination of tariff and
non-tariff barriers with the end in view of
promoting greater economic efficiency,
productivity and competitiveness
8. ASEAN economic community:
the ultimate goal in 2020
Was recommended by the ASEAN
Heads of Government last November
2002
In 2003, ASEAN founded on the three
pillars of political and security
community, economic integration
and socio-cultural cooperation
9. ASEAN economic community:
the ultimate goal in 2020
ASEAN Security Community (ASC),
the ASEAN Economic Community
(AEC) and the ASEAN Socio-Cultural
Community (ASCC) was formed
based on the three pillars
10. Monetary and Financial
Integration
sought to promote closer monetary and
financial cooperation by way of the conduct
of an economic review and policy dialogue as
well as the establishment of regional
financing arrangements
The ASEAN Surveillance Process was
established on October 1998
11. Monetary and Financial
Integration
May 2000- the ASEAN+3 Finance Ministers agreed
on the Chiang Mai Initiative (CMI) and to expand the
ASEAN Swap Agreement (ASA) to all ASEAN
members
“all swap providing countries can simultaneously
and promptly provide liquidity support to any
parties involved in bilateral swap arrangements at
times of emergency”