Europe-PH News

The European Chamber of Commerce of the Philippines (ECCP) and many of its members are strong supporters of Asean’s regional economic integration process. The aims and goals of the Asean Economic Community (AEC), as set out in the blueprint in November 2007, are welcomed and well supported by our membership and by European business more generally. Once achieved, they will undoubtedly boost economic and social development in the region to the benefit of the broad population and the countries of Association of Southeast Asian Nations (Asean).

We recognize that the movement toward those aims and goals is a process: the "deadline" of the end of 2015 is just a point in time, rather than a "big bang." There is much work that remains to be done, and the comments and recommendations we continuously make, should be seen not as being critical of Asean and its member-states, but merely to highlight some areas where, in our opinion, further work is required to achieve one of the key stated goals of the AEC, i.e., the elimination of nontariff barriers (NTBs) to trade.

We are taking a broad overview of market access and trade-flow restrictions across the Asean region and see some common themes across the region, namely:

Overbearing and complex customs procedures;

The uneven and sometimes opaque application of regulations and procedures;

Continuing restrictions on foreign ownership and control in certain sectors; and Lack of harmonized standards (-- or accepting international standards throughout the region) -- or the mutual recognition of standards.

Each of these elements inhibits the free flow of goods and services, reduces competition, increases costs for producers and consumers, and can lead to unwanted results, such the proliferation of illicit trade with the negative impacts that that can have on consumer health and safety, and government revenues.

There remain a large number of NTBs across Asean despite the stated aims of the AEC. The World Trade Organization puts the number well above 2,000 as of the end of 2014, though admittedly, not all are in effect. Nevertheless, NTBs are, without doubt, a significant problem in the region and probably represent the greatest obstacle to achieving the AEC in the near term. Removing them will require significant political will on behalf of the respective governments in the region.

Some member-states of Asean have a larger number of active NTBs to deal with than others, often reflecting either the stage of economic development they are at or domestic political concerns. The ECCP, however, encourages greater and accelerated movement in tackling these issues as the upsides, to long-term economic growth, the competitiveness of domestic industry, and to consumers in terms of prices, choice and improvements in quality and health, should far outweigh the short-term negative impacts on domestic players. Many of these NTBs are included in the Advocacy Papers the European Union-Philippines Business Network handed over to the Philippine government during the EU-Philippines Business Dialogue on May 12. We made clear when we handed over the Advocacy Papers that the EU Business Network in the Philippines is supporting sustainable and inclusive economic growth. In other words, if we find common ground and can eliminate NTBs, both sides will definitely benefit. 

Source: Business Mirror