ASEAN Economic Community

Definition

The ASEAN Economic Community (AEC) is a regional economic integration initiative among the ten member states of the Association of Southeast Asian Nations (ASEAN), aimed at creating a single market and production base in the region. It promotes free flow of goods, services, investment, and skilled labor, fostering economic cooperation and enhancing competitiveness among member countries while also addressing disparities in development.

5 Must Know Facts For Your Next Test

1. The AEC was officially launched on December 31, 2015, marking a significant step towards deeper economic integration among ASEAN members.
2. It aims to achieve four main goals: a single market and production base, a highly competitive economic region, equitable economic development, and integration into the global economy.
3. The AEC allows for the free movement of skilled labor across member states, facilitating better employment opportunities and addressing labor shortages in specific sectors.
4. Member states are working together to harmonize regulations and standards to enhance trade facilitation and investment climate within the region.
5. The AEC is expected to contribute significantly to the overall growth of ASEAN economies, with projections indicating an increase in regional GDP and trade volume as barriers are lowered.

Review Questions

• How does the ASEAN Economic Community aim to enhance economic cooperation among member states?
  • The ASEAN Economic Community enhances economic cooperation among member states by promoting the free flow of goods, services, investment, and skilled labor. This integration fosters a single market and production base that enhances competitiveness across the region. By harmonizing regulations and standards, member countries can facilitate trade and investment more effectively, leading to increased economic collaboration and growth.
• What are the main objectives of the ASEAN Economic Community, and how do they contribute to regional development?
  • The main objectives of the ASEAN Economic Community include establishing a single market and production base, enhancing competitiveness, promoting equitable economic development, and integrating into the global economy. These objectives contribute to regional development by facilitating trade and investment flows, ensuring that all member states can benefit from economic growth, while also addressing disparities in development. This collective approach aims to uplift all member nations economically.
• Evaluate the impact of the ASEAN Economic Community on international trade dynamics within Southeast Asia and beyond.
  • The ASEAN Economic Community significantly impacts international trade dynamics by creating a more integrated regional market that is attractive for both intra-regional trade and foreign investments. By reducing tariffs and harmonizing regulations, it encourages trade between ASEAN members and enhances their collective bargaining power in global markets. This integration not only boosts trade within Southeast Asia but also positions ASEAN as an important player in the global economy, facilitating deeper engagement with external partners.

Related terms

ASEAN: The Association of Southeast Asian Nations is a regional organization founded in 1967 to promote political and economic cooperation among its member countries.

Free Trade Area: A zone in which a group of countries eliminates tariffs and other trade barriers on goods traded among them.

Regional Integration: The process by which countries in a geographic region work together to reduce barriers to trade and increase economic cooperation.