ASEAN's Accelerated Plan for a Single Market Raises Concerns

Sources: Asean Urged to Firm Single Market Plan, ASEAN Aims for Single Market by 2015, Washington Signs Pact With ASEAN Nations

Although the leaders of the Association of South-East Asian Nations (ASEAN) will not convene until December for their annual summit, they are already facing pressure from the Asian Development Bank to put clarifying their plan and committment to create a common market by 2015 at the top of the agenda. This is at least partially motivated by the fact that ASEAN moved the target date up 5 years from the original 2020 deadline. The major aims of creating a single economic market for these Asian countries include staying competitive with the Chinese and Indian markets and attracting more foreign direct investments. Last year, foreign investment into ASEAN grew by 48%, and there is hope that a unified market will encourage further growth. The U.S. is ASEAN's biggest export market as well as the region's most significant foreign direct investor.

In an effort to acquire a key position in the possible creation of a pan-Asian trade zone, ASEAN has been negotiating trade agreements with other Asian nations including China, South Korea, and Japan. Some of these agreements are for cutting tariffs and stream-lining customs so as to facilitate a freer flow of goods. By the end of August, ASEAN had also signed a trade pact with the U.S. along similar lines.

There are doubts, however, about the feasibility of establishing a common market by 2015. The concerns stem from the ambitious nature of the accelerated plan as well as the question of whether organizational structure of ASEAN is fit enough for such an undertaking. A blueprint of new agencies that would carry out ASEAN's policies and regulatory decisions regarding the common market is to be submitted at the December summit.

Questions:

1. What may be some consequences if the accelerated plan is not implemented by the new deadline?

2. What role should countries like the U.S. play in helping ASEAN to implement this plan?

3. What issues might have to be addressed in this "blueprint" design for the single market?