Economic Community

ASEAN has emphasised regional cooperation in the “three pillars” of security,

sociocultural and economic integration.[55] The regional grouping has made the most
progress in economic integration, aiming to create an ASEAN Economic Community
(AEC) by 2015.[56]

[edit] Free Trade Area

The foundation of the AEC is the ASEAN Free Trade Area (AFTA), a common external
preferential tariff scheme to promote the free flow of goods within ASEAN.[56] The
ASEAN Free Trade Area (AFTA) is an agreement by the member nations of ASEAN
concerning local manufacturing in all ASEAN countries. The AFTA agreement was
signed on 28 January 1992 in Singapore.[57] When the AFTA agreement was originally
signed, ASEAN had six members, namely, Brunei, Indonesia, Malaysia, the Philippines,
Singapore and Thailand. Vietnam joined in 1995, Laos and Myanmar in 1997, and
Cambodia in 1999. The latecomers have not fully met the AFTA's obligations, but they
are officially considered part of the AFTA as they were required to sign the agreement
upon entry into ASEAN, and were given longer time frames in which to meet AFTA's
tariff reduction obligations.[58]

[edit] Comprehensive Investment Area

The ASEAN Comprehensive Investment Area (ACIA) will encourage the free flow of
investment within ASEAN. The main principles of the ACIA are as follows[59]

• All industries are to be opened up for investment, with exclusions to be phased

out according to schedules
• National treatment is granted immediately to ASEAN investors with few
exclusions
• Elimination of investment impediments
• Streamlining of investment process and procedures
• Enhancing transparency
• Undertaking investment facilitation measures

Full realisation of the ACIA with the removal of temporary exclusion lists in
manufacturing agriculture, fisheries, forestry and mining is scheduled by 2010 for most
ASEAN members and by 2015 for the CLMV (Cambodia, Lao PDR, Myanmar, and
Vietnam) countries.[59]

[edit] Trade in Services

An ASEAN Framework Agreement on Trade in Services was adopted at the ASEAN

Summit in Bangkok in December 1995.[60] Under AFAS, ASEAN Member States enter
into successive rounds of negotiations to liberalise trade in services with the aim of
submitting increasingly higher levels of commitments. The negotiations result in
commitments that are set forth in schedules of specific commitments annexed to the
Framework Agreement. These schedules are often referred to as packages of services
commitments. At present, ASEAN has concluded seven packages of commitments under
AFAS.[61]

[edit] Single Aviation Market

The ASEAN Single Aviation Market (SAM), proposed by the ASEAN Air Transport
Working Group, supported by the ASEAN Senior Transport Officials Meeting, and
endorsed by the ASEAN Transport Ministers, will introduce an open-sky arrangement to
the region by 2015.[62] The ASEAN SAM will be expected to fully liberalise air travel
between its member states, allowing ASEAN to directly benefit from the growth in air
travel around the world, and also freeing up tourism, trade, investment and services flows
between member states.[62][63] Beginning 1 December 2008, restrictions on the third and
fourth freedoms of the air between capital cities of member states for air passengers
services will be removed,[64] while from 1 January 2009, there will be full liberalisation of
air freight services in the region, while[62][63] By 1 January 2011, there will be
liberalisation of fifth freedom traffic rights between all capital cities.[65]

[edit] Free Trade Agreements With Other Countries

ASEAN has concluded free trade agreements with China, Korea, Japan, Australia, New
Zealand and most recently India.[66] In addition, it is currently negotiating a free trade
agreement with the European Union.[67] Taiwan has also expressed interest in an
agreement with ASEAN but needs to overcome diplomatic objections from China.[68]

[edit] Charter
Main article: ASEAN Charter

On 15 December 2008 the members of ASEAN met in the Indonesian capital of Jakarta
to launch a charter, signed in November 2007, with the aim of moving closer to "an EU-
style community".[69] The charter turns ASEAN into a legal entity and aims to create a
single free-trade area for the region encompassing 500 million people. President of
Indonesia Susilo Bambang Yudhoyono stated that "This is a momentous development
when ASEAN is consolidating, integrating and transforming itself into a community. It is
achieved while ASEAN seeks a more vigorous role in Asian and global affairs at a time
when the international system is experiencing a seismic shift," he added, referring to
climate change and economic upheaval. Southeast Asia is no longer the bitterly divided,
war-torn region it was in the 1960s and 1970s." "The fundamental principles include:

a) respect for the independence, sovereignty, equality, territorial integrity and national
identity of all ASEAN Member States; b) shared commitment and collective
responsibility in enhancing regional peace, security and prosperity; c) renunciation of
aggression and of the threat or use of force or other actions in any manner inconsistent
with international law; d) reliance on peaceful settlement of disputes; e) non-interference
in the internal affairs of ASEAN Member States; f) respect for the right of every Member
State to lead its national existence free from external interference, subversion and
coercion; g) enhanced consultations on matters seriously affecting the common interest of
ASEAN; h) adherence to the rule of law, good governance, the principles of democracy
and constitutional government; i) respect for fundamental freedoms, the promotion and
protection of human rights, and the promotion of social justice; j) upholding the United
Nations Charter and international law, including international humanitarian law,
subscribed to by ASEAN Member States; k) abstention from participation in any policy
or activity, including the use of its territory, pursued by and ASEAN Member State or
non-ASEAN State or any non-State actor, which threatens the sovereignty, territorial
integrity or political and economic stability of ASEAN Member States; l) respect for the
different cultures, languages and religions of the peoples of ASEAN, while emphasising
their common values in the spirit of unity in diversity; m) the centrality of ASEAN in
external political, economic, social and cultural relations while remaining actively
engaged, outward-looking, inclusive and non-discriminatory; and n) adherence to
multilateral trade rules and ASEAN's rules-based regimes for effective implementation of
economic commitments and progressive reduction towards elimination of all barriers to
regional economic integration, in a market-driven economy".[70]

However, the ongoing global financial crisis was stated as being a threat to the goals
envisioned by the charter,[71] and also set forth the idea of a proposed human rights body
to be discussed at a future summit in February 2009. This proposition caused
controversy, as the body would not have the power to impose sanctions or punish
countries who violate citizens' rights and would therefore be limited in effectiveness.[72]
The body was established later in 2009 as the ASEAN Intergovernmental Commission on
Human Rights (AICHR).

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