Trade Facilitation in ASEAN

Free flow of goods within ASEAN is one of the principal goals outlined in the ASEAN Economic Community (AEC) Blueprint. While there are ongoing works to facilitate the movement of goods in ASEAN; however, cross border trade is still hampered by long delays at the border, which is in part caused by complex bureaucratic procedures [1]. The AEC Blueprint recognizes trade facilitation as a major component to achieving free flow of goods.

ASEAN defines trade facilitation as “creating a consistent, transparent, and predictable environment for international trade transactions that increases trading opportunities and help businesses, including small and medium sized enterprises (SMEs), to save time and reduce costs.”

By creating friendly trade environment among ASEAN Member States, it can boost the livelihood of people in the region. In ASEAN, only about 30 percent of trade takes places among the Member States, although some countries such as Cambodia, Thailand and Vietnam do trade with each other more frequently in agricultural goods.

Perishable agricultural goods such as fresh fruits and vegetables require more efficient and friendly trade procedures to reduce food and economic loss while ensuring its safety. Trade facilitation can minimize trade barriers among the Member States and reduce transaction costs and time spent to transport these goods across borders.

According to WTO, “estimates show that the full implementation of the trade facilitation could reduce trade costs by an average of 14.3 per cent and boost global trade by up to $1 trillion per year, with the biggest gains in the poorest countries.”[2]

Efforts to facilitate trade of agricultural goods among ASEAN Member States can increase the competitiveness of the agricultural sector, accelerate economic growth and alleviate poverty in the region. In contributing to sustainable agrifood systems and long-term food security, trade facilitation can help supply adequate, affordable, accessible, and safe food to meet the demand of increasing population.

 


[1] Inama, Stefano, and Edmund W. Sim. The Foundation of the ASEAN Economic Community: an Institutional and Legal Profile. Cambridge University Press, 2015.

[2] World Trade Report 2015. Geneva: World Trade Organization. 2015.