MANILA — Former Trade Secretary Gregory Domingo said the ASEAN Economic Community (AEC), or the economic integration of the 10 ASEAN member states, has been successful in improving trade and investments in the region, however much remains to be done, particularly making the AEC more inclusive.
During the ASEAN Leadership amid a New World Order forum of Stratbase ADR Institute (ADRi) in Makati City Wednesday, Domingo said AEC has increased trade among ASEAN countries by 15 percent in the past decade.
This has improved with the elimination of tariff in over 99 percent of tariff lines while gradually reducing tariff for agricultural products flowing within ASEAN.
Domingo, who is now the Governor for the Philippines at Economic Research Institute for ASEAN and East Asia (ERIA), however noted that the micro, small, and medium enterprises (MSMEs) find it challenging to participate in the regional trade and seize the opportunities brought by the AEC.
He said rules in the region for exports are structured for big players.
“Even they have the capability to export, they still have to submit over 30 documents to export. The rules are structured for big volume exports,” he added.
“ASEAN must put MSMEs at the center of policy making,” the former Department of Trade and Industry (DTI) chief said.
Domingo stressed that the region can maximize the benefits of tariff reduction and elimination in AEC if rules will allow more MSMEs to participate in the regional trading.
“The plight of MSMEs must be addressed head on by ASEAN and its partners if we are to appease anti-trade sentiment,” he said.
MSMEs account for 99 percent of business establishments in the region.
Aside from making the AEC more inclusive to MSMEs, among the significant areas that needed to be addressed by ASEAN include reducing non-tariff barriers (NTBs) and non-tariff measures (NTMs) that have been slowing down movement of goods and the rules of origin, which have been hard for some enterprises to comply with.
“AEC is successful and has contributed significantly to the economic well being of ASEAN but much remains to be done,” Domingo said.