WITH the economic integration in Association of Southeast Asian Nations (Asean) happening next year, member-countries that envisioned a single market and production base are also pressing to integrate with the global community, an expert said.
Glenda T. Reyes, component lead of the Trade and Investment Policy of Deloitte Consulting LLP said during the Department of Trade and Industry’s Free Trade Area information campaign that the Asean region, which has the seventh largest economy in the world, will “enhance its participation in the global supply of networks.”
Reyes is also the former assistant director of the Services and Investment Division of the Asean Economic Community Department .
According to her, Asean already entered into FTAs with China, Korea, Australia, New Zealand, Japan and India in response to the move of strengthening its ties with the global community.
The FTAs are agreements entered by Asean and these countries to eliminate or reduce tariffs and other requirements of commerce, said DTI-Export Marketing Bureau, International Services Division officer in charge Maria Teresa S. Loring.
For Korea and China, Loring said 90 percent of the products traded are already at zero tariffs since January 2010.
u201cJointly, Asean plus its FTA partners has a market size of 3.3 billion and economic size of 17.23 trillion for 2010,” Reyes said.
With the Asean also dubbed as an important market for foreign businesses, Reyes said the 2014 Asean Business Outlook Survey reflects the region’s contribution to the global economy.
According to the survey, 63 percent of the respondents reported that over the past two years, “Asean markets have grown as a portion of their companies worldwide revenues”; 73 percent said Asean markets will become more important to their companies worldwide revenues over the next two years; and 91 percent are expecting their companies’ trade and investment in Asean to increase over the next five years.
Reyes said Asean is also experiencing a higher rate of return on foreign direct investments. In 2005 to 2010, the annual average rate of return of FDI was 11 percent for Asean. In contrast, the world average was 6.9 percent and developing countries logged 9.4 percent.
In 2013, the region was hailed as the seventh largest economy in the world with a combined Gross Domestic Product of $2.4 trillion from 10 member countries. Loring said Asean is also well positioned for trade flows, ranking fourth largest exporter in the world. It accounts for seven percent of global exports.
The region also identified priority sectors for the integration. Under goods, agro-based goods, automotive products, electronic and electric goods, fisheries, rubber-based goods, textile and clothing, and wood-based products are among the Priority Integration Sectors (PIS). For the service sectors, air transport, healthcare services, logistics services and tourism are among those that were identified.
To support the local industry, one of the initiatives undertaken by DTI is its outbound and inbound business matching, where local entrepreneurs will be matched with foreign partners or clients.
Last year, DTI conducted six outbound and 22 inbound business matching activities. The agency said a total of $1 billion worth of sales was generated from trade shows and international fairs for 2013.