Slow progress in addressing non-tariff barriers is likely to prevent the Association of Southeast Asian Nations (ASEAN) from meeting its targets for economic integration among its members by 2015.
This is the view of Asian Development Bank’s lead economist for trade and regional cooperation, Jayant Menon, who said the Philippine government needs to invest in roads, railways and ports to lower trade costs.
He added that the government also has to start automation of processes to improve efficiency and prevent corruption.
“It’s highly unlikely that all their (ASEAN) targets will be met by 2015. Even the ASEAN score card shows that,” Menon said at the recent Management Association of the Philippines’ general membership meeting.
“In terms of score cards, it (what has been achieved) varies within two-thirds and three-quarters. The remaining bits are the hardest bits. These are the non-tariff barriers (such as) competition policy, intellectual property rights protection. These are moving very slowly,” Menon said, noting non-tariff barriers vary from country to country.
“In new member-countries, there is still a lot of red tape and the fact a lot of these customs procedures are not automated, not electronic, there is a lot of room for corruption. I see that is a major problem,” he said.
Among the biggest barriers impeding trade growth in the Philippines are poor infrastructure and red tape, with trade costs still high because infrastructure is still relatively weak, Menon said.
“There is still a lot of red tape and licensing that can be simplified to reduce that,” he said.
The ASEAN Economic Community is expected to come into effect by December 2015 as Southeast Asia transforms itself into a region where goods, services, skilled labor, investments and capital will flow freely across borders.
The ASEAN-6 member states Brunei, Indonesia, Malaysia, Philippines, Singapore and Thailand have eliminated import duties on 99.65% of trade tariff lines since January 2010.
Four other member-states – Cambodia, Lao People’s Democratic Republic, Myanmar and Vietnam – have 98.86% of their traded tariff lines reduced to zero to 5%.
Almost all duties on agricultural and industrial products have been eliminated.
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