Southeast Asian economic union will benefit the US: diplomat

By Minh Le, Thanh Nien News

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ASEAN is a huge market of $2.6 trillion that can offer potentially endless opportunities for investors. Photo: Bloomberg ASEAN is a huge market of $2.6 trillion that can offer potentially endless opportunities for investors. Photo: Bloomberg

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US Ambassador to ASEAN Nina Hachigian has described 2015 as a big year for the Southeast Asian bloc, saying its newly launched economic community will benefit both its 10 member states and the US.
Speaking from Jakarta in a telephonic press briefing on Wednesday, Hachigian said the creation of the ASEAN Economic Community (AEC) last month, with a new set of detailed blueprints and action plans, is significant “because it shows a very high political level of commitment to the prospects of greater integration.”
She said stronger regional ties will have an impact felt beyond the bloc and, particularly, will be “economically and strategically beneficial” to the US.
“Our companies are the largest investor in ASEAN, so we have a big stake in how the AEC moves forward,” Hachigian said.
According to White House statistics, the US and ASEAN traded $254 billion in two-way goods and services, and foreign direct investment from US companies in Southeast Asia hit $226 billion in 2014, the highest number of any nation.
The US is pursuing what its officials call “a new normal” of relations with ASEAN as part of a larger Asia rebalance strategy.
Our companies are the largest investor in ASEAN, so we have a big stake in how the AEC moves forward." -- Nina Hachigian, US Ambassador to ASEAN  
Political and security interests aside, ASEAN is a huge market of $2.6 trillion that can offer potentially endless opportunities for foreign investors. With over 622 million people, it has a larger population than either North America or the European Union, a model that ASEAN itself in some ways tries to emulate.
The new economic community aims to turn the multi-dimensionally diverse region into a unified, more competitive market with free flows of not only goods but also capital and skilled labor.
Analysts have pointed out that the AEC will officially “open” at the end of this month following the formal signing, but it will take a long time before this ambitious project, which has been 10 years in the making, becomes fully functional.
‘Ongoing process’
The Economist’s Intelligence Unit said in a note last week that even with this community, regional integration will continue to be slow and uneven in the next decade because of a wide disparity in terms of economic development.
The note said it can be difficult to bring Cambodia, Laos, Myanmar and Vietnam up to speed with larger economies in the bloc to create uniform standards. “Myanmar's government, for example, is unlikely to feel the same level of urgency to open its economy up to more competition compared with its counterpart in Singapore, given the relative unpreparedness of its small- and medium-sized enterprises,” the note said.
Hachigian, who took the post in September last year, said even though there is still a lot of work to do, it is necessary to see the AEC as part of a continuing process.
She said she is hopeful considering the progress that ASEAN has made so far with its tariffs on goods, which have been cut almost down to zero.
Commenting on the gap between regional economies, the ambassador said the US is committed to helping ASEAN create a level playing field for its member states by providing assistance to increase the capacity of small and medium companies and cultivate regional young leaders.
Hachigian said apart from its economic achievements, ASEAN has stepped up and taken a larger leadership role in global politics.
She said the region is very active in tackling global issues such as climate change, human trafficking, Islamic extremism and illegal fishing. Some standards adopted by ASEAN are even higher than international norms, she noted.
During the one-hour briefing punctuated by concerns over the ongoing tension in the East Sea, Hachigian emphasized several times that it is vital to guarantee freedom of navigation and airspace in Asia-Pacific. 
She also confirmed that the next US-ASEAN Summit will be held in the US in the first half of 2016. That will be the first time the event is hosted by the US.
“ASEAN is very important to the US for many reasons,” she concluded. “But I’m just going to leave you with a quote from President Obama: ‘ASEAN plays a vital role in advancing a rules-based order for the Asia Pacific.’”

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