The Philippines and its regional neighbors have made significant strides in breaking down trade barriers and promoting financial integration, despite challenges posed by various economic crises in the last five years.
However the creation of an integrated Association of Southeast Asian Nations (Asean) economic zone by 2015 may still be out of reach, a new report from the Asian Development Bank (ADB) indicated.
“Asean seeks to create an Asean Economic Community (AEC) by December 2015. Although it has come a long way toward meeting its own targets, it is likely to fall short by the deadline,” the ADB said in its inaugural Asian Economic Integration Report, which it planned to release twice a year. “How close it gets to these targets will depend on the progress of reforms in the next two years.”
The ADB said progress toward the AEC had been steady but slow.
The Manila-based multilateral lender said the region needed to work harder on tackling barriers to trade in economically sensitive sectors such as agriculture, steel and motor vehicles.
Countries in the region will also need to reduce non-tariff barriers that are increasingly replacing tariffs as constraints to international trade, the ADB added.
Liberalizing trade in services and enacting competition policy and intellectual property rights protection—all difficult areas of reform—require national rather than regional actions, the bank said.
The report stressed the need for the region to move toward integration to protect individual Asean members to better weather economic and financial crises in developed economies.