Regional economic bloc ASEAN is still on the path to materialize the target of doubling trade and investment values among its member states despite global uncertainties due to the Covid-19 pandemic and the war in Ukraine, Secretary-General Kao Kim Hourn said in a recent interview with Jakarta-based BTV network.

The target was set by the ASEAN Free Trade Area (AFTA) Council in 2017, two years after the regional economic integration fully came into effect, to be achieved by 2025.

In 2017, the value of intra-ASEAN trade in goods was around $590 billion, while intra-ASEAN investment stood at $26.5 trillion.

“At the AFTA Council, they want to double the amount of intra-trade and investment … they want to see the numbers double by 2025,” Hourn told BTV’s Pudja Lestari in the interview aired on Thursday.

Despite the escalating geopolitical tension due to Russia’s invasion of Ukraine and the global economy yet to fully recover from the wounds inflicted by the pandemic, “I think the prospect is still quite positive”, the Cambodian said.

“There are many things that the ASEAN economies have been discussing in order to push ahead the economic development agenda but particularly in the post-Covid-19 recovery. One of course is to continue to embark on the intra-ASEAN trade, investment, and tourism,” he said.

“We make sure that we continue to do more trade among ASEAN member states.”

During the interview at the ASEAN secretariat in Jakarta, Hourn said that the regional grouping is upgrading the ASEAN Trade in Goods Agreement (ATIGA) among member states to eliminate unnecessary trade barriers among themselves.

Indonesia last year ratified the first protocol to amend the ATIGA and issued a ministerial regulation on the updated procedures for customs and import duties to conform with the regional regulations.

Major Partners
The ASEAN Chief, who assumed office less than four months ago, is pleased that the bloc has successfully maintained a beneficial partnership with great economic powers in Asia and beyond.

ASEAN also seeks to upgrade bilateral free trade agreements with major partners such as China, Japan, South Korea, Australia, New Zealand, and India “in order to make the FTA more relevant to our business sector” and “to ensure that our FTA is really in favor of our economic agenda”.

On the Regional Comprehensive Economic Partnership (RCEP) agreement that took effect on January 1, 2022, Hourn expressed confidence that it will come to full implementation this year.

The RCEP agreement involves 10 ASEAN members and Australia, China, Japan, New Zealand, and South Korea that together account for a third of the global population and roughly 30 percent of the global GDP.

Hourn said that ASEAN is the third-largest regional economic bloc in the world after the European Union and the North American Free Trade Agreement (NAFTA) with plenty of room for growth.

“We are looking at the new drives of the economy, we are looking at the blue economy, the green economy, and the digital economy,” he said.

ASEAN is predicted to add roughly about $1 trillion to the regional economy by 2030, Hourn said, citing a recent study.

“At the moment our economic ministers already commissioned the Boston Consulting Group to look at the details of how we can really take advantage of the digital economy for all ASEAN member states,” he said.

ASEAN groups Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Singapore, Thailand, the Philippines, and Vietnam.

Source: Jakarta Globe