The formal establishment of the AEC on 31 December 2015 marks a key milestone in ASEAN economic integration journey. ASEAN has since embarked on the next phase of its economic integration agenda for the period of 2016-2025, guided by the AEC Blueprint 2025, which was adopted by the ASEAN Leaders at the 27th ASEAN Summit on 22 November 2015 in Kuala Lumpur, Malaysia.
The AEC Blueprint 2025 builds on the AEC Blueprint 2015, and consists of five interrelated and mutually reinforcing characteristics, namely: (i) A Highly Integrated and Cohesive Economy; (ii) A Competitive, Innovative, and Dynamic ASEAN; (iii) Enhanced Connectivity and Sectoral Cooperation; (iv) A Resilient, Inclusive, People-Oriented, and People-Centred ASEAN; and (v) A Global ASEAN.
In the next decade, ASEAN will also provide a new emphasis on the development and promotion of micro, small and medium enterprises (MSMEs) in its economic integration efforts. At the same time, ASEAN will likewise embrace the evolving digital technology as leverage to enhance trade and investments, provide an e-based business platform, promote good governance, and facilitate the use of green technology.
Characteristics and Elements:
A | A Highly Integrated and Cohesive Economy
The main objective of this characteristic is to facilitate the seamless movement of goods, services, investment, capital, and skilled labour within ASEAN in order to enhance ASEAN’s trade and production networks, as well as to establish a more unified market for its firms and consumers. The key elements of a highly integrated and cohesive ASEAN economy include:
B | A Competitive, Innovative, and Dynamic ASEAN
The objective of this characteristic is to focus on elements that contribute to increasing the region’s competitiveness and productivity by (i) engendering a level playing for all firms through effective competition policy; (ii) fostering the creation and protection of knowledge; (iii) deepening ASEAN participation in GVCs; and (iv) strengthening related regulatory frameworks and overall regulatory practice and coherence at the regional level. The key elements of a competitive, innovative and dynamic ASEAN include:
- Effective Competition Policy
- Consumer Protection
- Strengthening Intellectual Property (IP) Cooperation
- Productivity-Driven Growth, Innovation, R&D, Technology Commercialisation
- Taxation Cooperation
- Good Governance
- Effective, Efficient, Coherent and Responsive Regulations, and Good Regulatory Practices (GRP)
- Sustainable Economic Development
- Global Megatrends and Emerging Trade-related Issues
C | Enhanced Connectivity and Sectoral Cooperation
The main objectives of this characteristic are to enhance economic connectivity involving various sectors, namely, transport, telecommunication and energy, in line with and in support of the vision and goals of the Master Plan on ASEAN Connectivity (MPAC) and its successor document, as well as to further integrate
and cooperate in key sectors that complement existing efforts towards creating an integrated and sustainable economic region, with the aim to maximise their contribution in improving the overall competitiveness of ASEAN and strengthening soft and hard networks in the region.
D | Resilient, Inclusive, People-Oriented and People Centred ASEAN
The AEC Blueprint 2025 seeks to significantly enhance the third characteristic of the AEC Blueprint 2015 on “Equitable Economic Development” by deepening existing elements and incorporating other key elements.
E | Global ASEAN
ASEAN is continuing to make steady progress towards integrating the region into the global economy through FTAs and comprehensive economic partnership agreements (CEPs) with China, Japan, Republic of Korea, India, Australia and New Zealand. Negotiations to conclude the Regional Comprehensive Economic Partnership (RCEP) and the ASEAN-Hong Kong FTA (AHKFTA) are also ongoing. These FTAs/CEPs have been strengthening ASEAN’s position as an open and inclusive economic region, and lay the foundation for ASEAN to retain its centrality in global and regional engagements, where possible. ASEAN Member States are also engaged in FTAs and CEPs with their strategic trade partners to complement the regional FTAs/CEPs.
Building on the gains from ASEAN’s global engagement and its economic integration initiatives, ASEAN shall work towards further integrating the AEC into the global economy. Through these engagements, ASEAN can seek to promote complementarities and mutual benefits for ASEAN. Strategic measures include the following:
- Strategic approach towards external economic relations
- Review and improve existing ASEAN FTAs and CEPs
- Enhance economic partnerships with non-FTA DPs
- Engage with regional and global partners
- Support to the multilateral trading system
- Engagements with regional and global institutions
- The ASEAN Economic Community Council (AECC) is the principal body accountable for the overall implementation of the strategic measures in the AEC Blueprint 2025. They will monitor and enforce compliance of all measures agreed in the Blueprint.
- A consolidated strategic action plan has been developed comprising of key action lines that will operationalise the strategic measures in the AEC Blueprint 2025. The strategic action plan takes into account the relevant sectoral work plans, and will be reviewed periodically to account for developments in each sector.
- Relevant ASEAN sectoral bodies will coordinate the implementation of their work plans, while relevant government agencies will be responsible for following up on, and overseeing, the implementation and preparation of more detailed action plans at the national level.
- Notwithstanding the above, ASEAN Member States retain the option to utilise the ASEAN Protocol on Enhanced Dispute Settlement Mechanism (EDSM) to promote a rules-based community.
- ASEAN Member States shall translate milestones and targets of the AEC Blueprint 2025 into national milestones and targets;
- The monitoring/tracking of the implementation and compliance of strategic measures/action lines agreed upon in the document will be conducted by the ASEAN Secretariat through an enhanced monitoring framework using appropriate approaches and robust methodology. The impact and
outcomes of the AEC Blueprint 2025 will be monitored, including with the support of the ASEAN Community Statistical System (ACSS)
- As may be appropriate, the implementation of AEC Blueprint 2025 will allow for both a consensus and flexibility approach in the decision-making process by economic bodies in certain sensitive aspects. Where there is no consensus or when the need for expedited decisions arises, ASEAN will apply Article 21.2 of the ASEAN Charter
- AEC Blueprint 2025 will promote transparency and improve the operation of notification procedures under all ASEAN economic agreements through the Protocol on Notification Procedures
- The ratification of ASEAN legal instruments after signing will be accelerated, with best endeavours, within 6 months, subject to domestic processes of ASEAN Member States.
- Partnership arrangements with the private sector, industry associations, and the wider community at the regional and national levels will also be actively sought and fostered to ensure sustained participation of all stakeholders in the integration process.
- Strong institutional support, further strengthening of ASEAN Secretariat and strategic collaboration with other institutions
The AEC Blueprint 2025 shall be reviewed periodically as decided by the AEC Council, but not more than every three years, unless otherwise agreed. Mid-term and end-of-term evaluations covering the periods 2016-2020 and 2021-2025 will be conducted to monitor progress and evaluate outcomes/impacts, including achievements and challenges from the implementation of the AEC Blueprint 2025, with a view towards enhancing the level of economic integration in ASEAN. The mid-term and end-of-term evaluations may be complemented with more regular monitoring and reporting of implementation progress.