The Association of Southeast Asian Nations (ASEAN) is a political and economic union of ten member countries in Southeast Asia. It was formed on August 8, 1967 by Indonesia, Malaysia, the Philippines, Singapore, and Thailand. Since then, ASEAN has expanded to include Brunei, Burma (Myanmar), Cambodia, Laso, and Vietnam.
On January 28, 1992, the six ASEAN countries signed the ASEAN Free Trade Area (AFTA) agreement, which included a schedule for phasing out tariffs and non-tariff barriers between members in the region. Unlike EU countries, ASEAN countries do not have a common external tariff. However, the Common Effective Preferential Tariff (CEPT) bounds external tariffs that individual countries set between 0 - 5%. and had the goal of attracting more foreign direct investment to ASEAN countries. When Vietnam, Laos and Myanmar and Cambodia joined, they were required to sign the agreement, but were given an extended period of time to meet the agreement tariff reduction obligations. Despite general exceptions in the agreement for internal tariffs on products deemed necessary, for example, to protect national security, ASEAN countries have agreed to reduce all internal tariffs between the six original signatories by 2010, and by 2015 for Vietnam, Laos, Myanmar and Cambodia.
In 1996 and 1997, the first meetings were held by the ASEAN Plus Three (APT) countries. The APT is a forum that is used to help economic cooperation in the area and ensure financial stability since the Asian Financial Crisis. It includes ASEAN countries as well as their close trading partners China, Japan and South Korea. Since 1999, the finance ministers of each country have met periodically to discuss financial stability in the region.
At the 13th ASEAN Summit on November 20, 2007 in Singapore, the Asean members signed the ASEAN Charter, a constitution governing relations among the ASEAN members and establishing ASEAN itself as an international legal entity. They also adopted the ASEAN Economic Blueprint, a plan to serve as a coherent master plan guiding the establishment of the ASEAN Economic Community.1 The ASEAN Economic Community (AEC) proposes to create a single common market for the ASEAN countries plus six, including China, Japan, South Korea, Australia, New Zealand and India.2
On February 27, 2009 a free trade agreement between the ten ASEAN members and New Zealand and Australia was signed.
The AEC will come into effect on December 31, 2015, and will allow ASEAN members to conduct business a lot easier within the region.3 The goal is to increase the regions competetive advantage and to allow for the region to act as a unified production base.
References:
1. Asean Economic Community. Retrieved from: http://www.asean.org/communities/asean-economic-community.
2. Asean 6 Trade Bloc in the Making. Retrieved from: http://investvine.com/asean6-trade-bloc-in-the-making/.
3. Asean Economi Community. Retrieved from: http://www.techinasia.com/asean-economic-community/.