Center for WTO and Integration
Vietnam Chamber of Commerce and Industry
No. 9 Dao Duy Anh, Dong Da, Hanoi
I. General introduction to AEC
History of the AEC:
1992: The concept of ASEAN economic integration was first introduced in the Framework Agreement on Promoting ASEAN Economic Cooperation signed in Singapore. The Agreement emphasizes the importance of cooperation in the fields of trade, industry, energy and minerals, finance and banking, food, agriculture and forestry, transport and communications.
You are watching: What is Aec
1992: Agreement on the Common Effective Preferential Tariff Program (CEPT) was signed, which was later replaced by the ASEAN Agreement on Trade in Goods 2010
1995: The Framework Agreement on ASEAN Services was signed
1998: The Framework Agreement on ASEAN Investment was signed, then it was replaced by the ASEAN Comprehensive Investment Agreement 2012
2003: At the 9th ASEAN Summit, ASEAN leaders first announced the goal of forming an ASEAN Economic Community (AEC). This goal is also in line with the ASEAN Vision 2020 adopted in 1997 with the goal of developing ASEAN into an ASEAN Community.
2006: At the 38th ASEAN Economic Ministers Meeting, the AEC Blueprint was released with specific goals and roadmap for the implementation of the AEC.
2007: At the 12th ASEAN Summit, ASEAN leaders agreed to accelerate the formation of the AEC by 2015 instead of 2020 as originally planned.
– A single market and common production base, through:
Free movement of goods
Free flow of services
Free flow of investment
Free flow of capital
Free movement of skilled labor
Priority integration fields
Food, agriculture and forestry
– A competitive economic region, through:
Competition Policy Frameworks
Intellectual property rights
– Balanced economic development, through:
Small and medium enterprise (SME) development plans
Integration initiative to narrow the development gap in ASEAN
– Integration into the global economy, through:
Close consultation in economic partnership negotiations
Enhance capacity to participate in the global supply network
Nature of AEC
Although it is called the “Economic Community”, the AEC is in fact cannot be considered a cohesive economic community like the European Community (EC) because the AEC does not have a strict organizational structure and highly binding and clear rules and regulations like the EC.
AEC is actually aim towards of ASEAN countries through the gradual realization of the above 04 goals (of which only goal 01 is relatively comprehensively and fully implemented through signed binding agreements and agreements, the the remaining goal is only to develop a roadmap, framework, implement a number of regional programs and initiatives).
AEC is a process of regional economic integration rather than an Agreement or an Agreement with binding commitments. Participating in the goals of AEC are a series of Agreements, Agreements, Programs, Initiatives, Declarations… among ASEAN countries related to these goals. These documents may include binding commitments to implement, or also declaration documents, aiming to (optional) of ASEAN countries.
Realization AEC has been implemented for a long time before (through the implementation of commitments in specific trade agreements signed between ASEAN countries) andwill be continued in the near future (continue to follow the roadmap of existing Agreements and Agreements and new issues, if any).
II. Main Agreements in AEC
In order to realize the AEC, many Agreements, Agreements, Initiatives… have been negotiated, signed and implemented by the members. In which the important and relatively fully enforced Agreements are:
ASEAN Trade in Goods Agreement (ATIGA) (Vietnamese)(English)
ASEAN Framework Agreement on Services (AFAS) (Vietnamese)(English)
Agreement on Movement of Natural Persons within ASEAN (MNP)
Mutual Recognition Agreements on Certain Service Areas
ASEAN Comprehensive Investment Agreement (ACIA)
Compare commitments in AEC with other FTAs that Vietnam participates in:
About the liberalization of goods: Among the FTAs that Vietnam has signed, the commitments on tariff reduction in the AEC are the highest and fastest.. So far, Vietnam has almost completed the tariff reduction roadmap in AEC.
About service liberalization: commitments on services in the AEC are similar to those in WTO, in some recent service commitment packages of AEC, the level of commitment has started to be higher than that of the WTO, but not by much and is also consistent with the actual level of openness in services of Vietnam.
Regarding investment liberalization: investment commitments in the AEC are more comprehensive than those in the WTO and signed FTAs of Vietnam but are also consistent with the investment provisions in Vietnamese law (the implementation of investment commitments in the AEC is not forcing Vietnam to amend its domestic laws)
Regarding labor liberalization: Up to now, the liberalization of labor in AEC Only Mutual Recognition Agreements (MRAs) on the qualifications of skilled workers (through the development of a common practice registration system) in 8 occupations, but until now only there are 2 fully enforced MRAs.
See also: What is English Statistics, Report
Opportunities and challenges for Vietnamese businesses
When the goals of the AEC are completed, the AEC will bring great opportunities to the Vietnamese economy and businesses, especially:
AEC opens up a large common market area: with nearly 100% of goods flowing freely within the bloc, the AEC creates a common goods market area among ASEAN countries, opening up great business opportunities for businesses in the region;
AEC opens up opportunities to attract foreign investment to VietnamThe business environment is expanded in the direction of transparency and equality, which will be a condition to attract foreign investment not only from ASEAN countries but also from non-ASEAN countries, especially the FTA partner countries of Vietnam. ASEAN enters Vietnam to participate in regional value chains;
AEC creates pressure, enhances the competitiveness of Vietnamese enterprisesParticipating in a common playing field and under competitive pressure from regional partners in terms of management level, technology and human resources will force Vietnamese enterprises to self-reform, change, and improve their productivity. competition in order to survive and develop.
AEC creates atmosphere and motivation for businesses: With the spirit of preparing for the formation of the AEC at the end of 2015 and the expectations of a dynamic single market area with many opportunities to open, Vietnamese businesses seem to have been awakened to prepare for investment. position and fight for the upcoming strong integration process.
The biggest challenge in the AEC for Vietnam present is competitive pressure from goods from ASEAN countriesWith a relatively similar product structure in all 10 ASEAN countries, the opening of the market will create great competitive pressure for Vietnamese enterprises, especially those with weak competitiveness and in historically highly protected sectors. In the future, when the AEC goals are completed, pressures from other aspects will arise, the challenge will thus expand to other issues. .
Service challenge: If the goal of free flow of services in the AEC is realized, Vietnamese enterprises in the service sector will certainly be placed in a much fiercer competitive environment (by current barriers/conditions). conditions for foreign service providers entering Vietnam are still relatively high, so Vietnamese service enterprises are currently being “wrapped up” quite carefully in many service areas);
Labor challenge: When AEC completes the goal of free labor movement, without adequate preparation, Vietnamese workers with poor skills and lack of necessary skills (foreign language, professionalism, etc.) may face difficulties. great difficulty.
IV. Recommendations for businesses and the government
first. Recommendations for business
With the nature of a roadmap goal, and with the composition of the Agreements and Agreements that have been and are being implemented, at the time of the AEC’s formation (the end of 2015), trade mechanisms and policies with other countries. ASEAN countries will not have significant changes compared to the present, and therefore will not create any shocking impact on Vietnamese businesses.
However, businesses still need to take the initiative to learn the contents and commitments of the Agreements in force in the AEC to take advantage of opportunities and limit challenges from the implementation of these agreements. In addition, businesses also need to pay attention to the roadmap for the implementation of the future goals of the AEC in order to be ready for a common market and production area that will be formed when the goals of the AEC are approved. completed.
In addition, the AEC is not the only integration goal of Vietnam, besides there are many other FTAs with important partners that are expected to have a great and resonant impact on the economy and Vietnamese enterprises. Therefore, enterprises need to focus all efforts on improving their competitiveness, including taking advantage of integration opportunities to improve competitiveness, thereby being able to survive and develop in the world. in the coming time when Vietnam integrates more deeply into the world economy.
See also: What is Premise – Translation Meaning of the word Premise
2. Recommendations for state agencies
Strengthen the provision of information to businesses about AEC as well as other FTAs that Vietnam is participating in. The information provided should be specific and easily accessible to the business;
Closer coordination with VCCI and associations in the process of negotiating as well as implementing steps to realize the AEC later;
Building a more frequent and effective business consultation channel not only for negotiation but more importantly for the implementation of trade commitments (especially a focal point is needed to provide information and support). assisting businesses in understanding the contents of AECs and FTAs as well as advising and explaining to businesses in case of problems).