Building upon the success of the ASEAN Economic Community (AEC) 2015 blueprint, the region has since embarked on the next phase of regional economic integration under the AEC 2025 Blueprint. It is a broad framework which aims to eventually realise the following outcomes:
The AEC is expected to potentially increase Singapore’s GDP by 3% above what it would otherwise be in 2035. It is projected to boost Singapore’s merchandise exports by S$110 billion and services exports by S$170 billion on a cumulative basis by 203510.
As we move towards the next decade, the AEC will focus on the development and promotion of micro, small and medium enterprises (MSMEs) in its economic integration efforts. Digital technology and environmental sustainability will also feature strongly in efforts to enhance trade and connectivity within the region.
9 According to the Economist Intelligence Unit (EIU), the main 50 cities in ASEAN, with populations of over 500,000 people, drive an “overwhelming share” of the region’s economic development. 10 MTI-FEPD’s study. The projected figures cover AEC measures already implemented and ASEAN+1 FTAs that are already in force. They do not include ASEAN-Hong Kong FTA or RCEP which are still undergoing negotiations.
ASEAN countries have also identified key areas where greater cooperation will reap greater benefits for all countries.
In the area of energy, members are pursuing initiatives to enhance energy connectivity and market integration, as well as build capabilities in areas such as energy efficiency, natural gas and renewable energy. These involve regulatory changes to foster more competition and innovation – changes that could make it easier for Singapore firms with the requisite expertise to expand into the region. Examples of initiatives that ASEAN member states are working on include the development of a regional green building code, signing a Memorandum of Understanding with the International Renewable Energy Agency (IRENA), and facilitating greater Liquefied Natural Gas (LNG) cooperation and trade.
Closer cooperation is also on the cards for cruise tourism, with the ASEAN Declaration on Cruise Tourism officially adopted on 25 January 2018. The initiative will streamline policies and regulations for a more efficient operating environment, as well as boost capacity for the industry. The agreement will leverage the unique selling points of each country to promote ASEAN as a single cruise tourism destination. This will in turn expanding market access opportunities for companies in sectors ranging from port development to hospitality services.
Even as ASEAN preserves its centrality, the bloc is committed to both broadening and deepening ties with external partners.
Advanced talks are underway to bring the negotiations for the Regional Comprehensive Economic Partnership (RCEP) to substantial conclusion. The agreement will involve all 10 ASEAN countries, along with China, India, Korea, Japan, Australia and New Zealand, and account for almost half the world’s population. The framework builds on the various existing ASEAN +1 FTAs, and aims to lower trade barriers and improve market access.
An ASEAN-EU Free Trade Agreement (AEUFTA) is also in the works, with countries setting out a framework to guide the parameters of the agreement. Once completed, the AEUFTA will be ASEAN’s first region-to-region FTA.
For more on the full list of ASEAN’s FTAs, click here.
The ASEAN Chairmanship rotates among the countries annually, with the Chairman for the year chairing the bloc’s summits, councils and committees. This accords every member country the opportunity to lead the region’s initiatives. Singapore is the ASEAN Chair for 2018, with the themes for this year’s chairmanship of “resilience and innovation”. As Chair, Singapore will advance the following areas: