Economic Community

With a market size of $2.3 trillion and 600 million people, AEC aims to achieve a single integrated market through the process of regional economic integration.

Overview

The AEC is the realisation of the region’s end goal of economic integration. It envisions ASEAN as a single market and product base, a highly competitive region, with equitable economic development, and fully integrated into the global economy.

The history of AEC can be traced back as far as 1992 when the ASEAN Leaders mandated the creation of the ASEAN Free Trade Area (AFTA). Since then, efforts were intensified to broaden the region’s economic potentials. The adoption of ASEAN Vision 2020 by the Leaders in 1997 has further envisaged ASEAN as a highly competitive region with free flow of goods, services, investments, a freer flow of capital, equitable economic development and reduced poverty and socio-economic disparities.

In 1998, the Leaders adopted the Hanoi Plan of Action (HPA). It chartered out a set of initiatives for economic integration to realise the ASEAN Vision 2020. Recognising the need for an integrated region, the Leaders issued the Declaration of ASEAN Concord II in 2003 which set out the establishment of ASEAN Community (initially targeted by 2020 but was later accelerated to 2015). The Declaration of ASEAN Concord II comprise of three pillars including the AEC.

The AEC Blueprint 2015 was adopted in 2007 as a coherent master plan guiding the establishment of the AEC in 2015. Immediately after that, a new AEC Blueprint 2025 was developed to set the strategic directions for ASEAN’s economic integration agenda in 2016 – 2025. As the Blueprint is coming to its end, the next phase of a more integrated ASEAN will be guided by the ASEAN Economic Community (AEC) Strategic Plan 2026 – 2030, as part of ASEAN 2045: Our Shared Future. The Strategic Plan comprises of six Strategic Goals, namely:

An Action-Oriented Community: Realising an integrated single market and production base with new sources of competitiveness;
A Sustainable Community: Engendering and mainstreaming climate-responsive elements and policies in all dimensions;
An Enterprising, Bold, and Innovative Community: Enhancing sectoral cooperation, attuned to emerging trends and developments;
An Adaptable and Pro-Active Community: Strengthening Global ASEAN Agenda;
An Inclusive, Participatory, a Collaborative Community: Leaving no one behind, charting people-centred ASEAN

Highly Integrated and Cohesive Economy

The ASEAN Economic Community envisions ASEAN as a single market and production base. Free flow of goods, services, investments, capital, and labor will allow the development of production networks in the region and enhance ASEAN’s capacity as the global supply chain.

Trade & Market Integration

Trade In Goods

Rules Of Origin

Trade In Services

Investment

Trade Facilitation

Customs

ASEAN Single Window

Finance Integration

Standard & Conformance

Highly Integrated and Cohesive Economy

Competitive, Innovative and Inclusive Economic Region

The goal of ASEAN economic integration is to create a stable, prosperous, and highly competitive economic region. Three core elements under the competitive region are:

ASEAN Member States are committed to introduce nation‐wide competition policies and laws (CPL) to ensure a level playing field and incubate a culture of fair business competition to enhance regional economic performance.

Enhanced Connectivity and Sectoral Development

Regional economic integration under the AEC necessarily demands greater connectivity between ASEAN Member States as well as within the countries. Transport, ICT, energy connectivity and tourism are key elements of physical and people‐to‐people connectivity in the region. Additionally, other sectors such as agriculture, forestry, fisheries, science and technology all play an important and complementary role to achieve an integrated market under the AEC.

Resilient and Inclusive ASEAN

Key initiatives in the development of a resilient and inclusive ASEAN focus on the development of micro, small and medium enterprises (MSMEs) and promotion of ASEAN integration among the developing members of ASEAN. These initiatives move towards bridging the development divide both at the SME level and enhance economic integration of Cambodia, Lao PDR, Myanmar, and Viet Nam (CLMV) to enable all Member States to move forward in a unified manner. All of which will enhance ASEAN’s competitiveness as a region as well as to ensure the benefits of the integration process for all. The ASEAN Economic Community also supports private sector engagement by facilitating work with ASEAN Business Advisory Council and other business councils in the region.

Integration with Global Economy

ASEAN operates in an increasingly inter‐connected and highly networked global environment, with interdependent markets and globalized industries. Establishing ASEAN as a dynamic region with businesses that are able to compete internationally means looking beyond the border of ASEAN Economic Community (AEC).

Through Free Trade Agreements (FTA) and Closer Economic Partnership (CEP) as well as enhanced participation in global supply networks, ASEAN is both integrating into the global economy as well as enhancing the attractiveness of its internal market for foreign investment.

Monitoring Regional Economic Integration

The implementation of the AEC Blueprint 2025 and its corresponding sectoral plans will be supported by effective and robust monitoring and evaluation. An enhanced framework was developed as a monitoring tool to assess the implementation status of AEC measures and their outcomes, as well as measuring the impact of the regional economic integration upon the broader socio‐economic environment of the ASEAN Member States. The framework will also be supported by the development of timely ASEAN statistics and capacity across the region.

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