The declaration issued by the APEC leaders at the end of their summit meeting in Bali last week paid much attention to the issues of physical, institutional and people-to-people connectivity, which is considered the key to achieving the organization's goal of free trade and investment.

The leaders even attached to their declaration two documents, a Framework on Connectivity and a Multi Year Plan on Infrastructure Development and Investment, which provide technical details on the work in progress in those areas.

Under physical connectivity, the APEC leaders have committed to cooperate in developing, maintaining and renewing physical infrastructure and under institutional connectivity they will advance structural reforms to remove regulatory barriers to trade and investment.

Unfortunately, the ASEAN Summit meeting in Brunei Darussalam, held immediately after the APEC Summit, did not have connectivity high on its agenda, though this matter is actually very urgent and imperative for supporting ASEAN economic integration through the ASEAN Economic Community (AEC), scheduled to start in December 2015.

The problem is that a single market and production base to create an AEC requires more than just the removal of import tariffs. In fact, even zero import tariffs are meaningless for trade if non-tariff barriers are not removed. Sad to note that ASEAN members have not achieved much in the way of enhancing institutional connectivity through the removal of non-tariff barriers related to technical and safety standards, customs clearance, transit transportation systems, rules of origin etc.

The rationale is that different standards and assessment practices, different product registration and labeling rules require duplicate testing for quality certification.

For instance, the production of electrical goods needs to adhere to common safety standards so that the goods can be sold in all participating countries; food safety rules in one country need to be mutually recognized as acceptable in another country so that foodstuffs can be exported within the participating countries.

Therefore a key challenge in building the AEC is the creation of a level playing field for the regulations used to ensure consumer protection, and the health and safety aspect of goods produced and sold in the region, through the alignment of national standards to relevant international standards, and the implementation of mutual recognition arrangements between member states.

ASEAN also needs to harmonize national customs procedures and improve customs clearance procedures to make them simpler, more predictable, consistent and transparent, and develop a regional transit transportation system to cut down red tape, costs and delays incurred through the repeated export, import and transshipment of goods at national borders.

Also equally important is an efficient administration of the ASEAN rules of origin.

So all in all, ASEAN members still have a huge volume of work to do to realize their economic integration.

By thejakartapost.com

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