More work needed for Asean economic integration as challenges emerge

The emergence of China as a rising superpower and the increasing link between economics and security have undermined the foundations on which the Association of Southeast Asian Nation was built, experts said at a forum ahead of the regional bloc’s summit.

The 50-year-old regional grouping should, thus, adapt if it is to continue its economic journey, former Foreign Secretary Roberto R. Romulo said. “Asean’s embrace of globalization was responsible for its rapid economic transformation. Unfortunately, we now live in a world fraught with uncertainties.”

Romulo was speaking at “Asean Leadership amid a New World Order,” a discussion organized by private think tank Stratbase ADRi, where titans of the Philippine economy talked about the changing international landscape and how these affect the region’s business community.

For Romulo, a way to deal with this is for Asean to be more aggressive in its pursuit of deepening economic integration, even as it has already made strides in this area with the removal of nontariff measures and the implementation of a single window.

From the Japanese perspective, Prof. Yorizumi Watanabe of the Faculty of Policy Management of the Graduate School of Media and Governance, Keio University, pointed out at Brexit and the impact of Trump presidency as two major sources of uncertainty.

Watanabe said that with the United State’s withdrawal from the Trans-Pacific Partnership (TPP), China can take advantage by imposing its own power-oriented trade policies, such as the aggressive use of antidumping measures and the state subsidies on steel. There will be less incentives to enhance free-trade agreements in the absence of TPP, further jeopardizing trade liberalization in East Asia.

Dindo Manhit, president of Stratbase ADRi, echoed the need for a more robust mechanism to participate in the global economy, in particular the urgent need to make economic gains not just sustainable but also inclusive.

“Although global trade is expected to rebound from its tepid performance in 2016, the future contours of global trade are still hazy. The much-delayed Regional Comprehensive Economic Partnership [RCEP] is sometimes considered the last active hope for greater international economic cooperation,” he said.

Former Trade Secretary Gregory L. Domingo said micro, small and medium enterprises (MSMEs) account for 99 percent of businesses in the region, thus, the need for a mechanism like the RCEP.

He explained: “MSMEs don’t feel the benefit of free-trade agreements. To export, over 30 documents are necessary. MSMEs feel left out, a source of resentment.”