ASEAN Economic Community and Tranregional Trade agreements in Asia. Impact on Automobile value chains in Asia. (IJATM Special issue)

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Abstract:

The ASEAN Economic Community has been officially launched at the ASEAN summit in November 2015. This new agreement is supposed to establish “a single production base and consumption market” among ASEAN Member States (AMS) for goods and many services. Concretely, tariffs are abolished and non-tariff barriers are supposed to be progressively removed. The ASEAN EC is bound to be amplified by a larger free trade agreement called the Regional Comprehensive Economic Partnership (RCEP), involving big powers in Asia trading with ASEAN. This ASEAN +6 (ASEAN plus Australia, China, India, Japan, New Zealand, South Korea) formally maintains ASEAN centrality in regional integration. But at the same time, some AMS (Brunei, Malaysia, Singapore and Vietnam) plus Japan are part of other transregional agreements such as the Transpacific Partnership (TPP) signed on 4 February 2016 under the tutelage of the USA. The TPP is seen by the US government as a companion agreement to the proposed Transatlantic Trade and Investment Partnership (TTIP), under negotiation between the United States and the European Union. The TPP not only aimed at reducing tariffs but also establish an investor-state dispute settlement mechanism and enhanced property rights. This agreement between Pacific-rim countries excludes China which favours another agreement the Free Trade Area of the Asia-Pacific (FTAAP) in another arena, the Asia-Pacific Economic Cooperation (APEC). The irony of this inflation of regional or transregional trade agreements is that each agreement is supposed to resolve the “noodle rice bowl” effect which arises from the application of the right rule when trading in Asia and the Pacific. Our communication will to take stock on the main agreements with the objective to assess the impact on the automobile supply and demand. With a focus on Southeast Asia, we will see if these agreements have any chance to stimulate a real integration of the market and influence the organisation of the automobile value chains in the region.