Integration trends in Asia Integration trends in Asia and Africaand Africa

(2h)

Association of Southeast Asian Association of Southeast Asian NationsNations

The establishment of ASEAN in Bangkok, 8 August 1967,

Member countries: Brunei Darussalam, the Republic of Indonesia, Malaysia, the Republic of the Philippines, the Republic of Singapore and the Kingdom of Thailand, Vietnam, Laos,

ASEAN basic data: Total Population: 497.56 million

Total GDP : US$ 737.48 billion Total trade: US$ 720 billion

Goals of ASEANGoals of ASEAN ECONOMIC INTEGRATIONECONOMIC INTEGRATION To accelerate the economic growth, social progress and cultural development in the region through joint endeavors; and

To promote regional peace and stability through abiding respect for justice and the rule of law.

TreatIESTreatIES Treaty of Amity and Cooperation in Southeast Asia (1976)Treaty of Amity and Cooperation in Southeast Asia (1976)1.Contains fundamentals principles on interstate

relations.2.Provides mechanisms for pacific settlement of

disputes. Agreement on ASEAN Preferential Trading

Arrangements (PTA) signed in Manila on 24 February 1977 - provides for the adoption of various instruments on trade liberalization on a preferential basis

Agreement on Enhancing ASEAN Economic Cooperation signed in Singapore on 28 January 1992

Treaty on the Southeast Asia Nuclear Weapon-Free Zone Treaty on the Southeast Asia Nuclear Weapon-Free Zone 15 15 December 1995December 1995

1.An undertaking by ASEAN states not to develop, manufacture, acquire, possess, test or use nuclear weapons.

2.Negotiations for the accession of Nuclear Weapon States are underway.

ASEAN Free Trade AreaASEAN Free Trade Area Launched in January 1992 To eliminate tariff barriers among Southeast

Asian countries with a view to integrating the ASEAN economies into a single production base and creating a regional market of 500 million people.

Agreement on the Common Effective Preferential Tariff Scheme for the ASEAN Free Trade Area -shall apply to all manufactured products, - including capital goods, processed agricultural products, and those products failing outside the definition of agricultural products as set out in this Agreement.

PercentPercent

ASEAN Free Trade AreaAverage tariff under AFTA

1993

12.76%12.76%

2002

3.57%3.57%

Intra ASEAN trade vis-à-Intra ASEAN trade vis-à-vis total trade increased vis total trade increased from 12% till 23,2% in from 12% till 23,2% in 20022002 e-ASEAN

To encourage and facilitate the growth of e-commerce;

Utilization of ICT in social services and government operations; and

To narrow the digital divide within the region.

Integrating ASEANIntegrating ASEAN

FINANCIAL COOPERATIONFINANCIAL COOPERATIONASEAN Surveillance ProcessASEAN Surveillance Process

Monitoring of global, regional and national financial developments

The Chiang Mai Initiative:The Chiang Mai Initiative:1.An expanded ASEAN Swap

Arrangement to help countries meet temporary liquidity problems

2.A network of bilateral swap arrangements among ASEAN countries, China, Japan and Republic of Korea

FUNCTIONAL COOPERATIONFUNCTIONAL COOPERATION

Human and social development

Culture and informationScience and technologyEnvironmentTransnational crime, including terrorism, drugs and narcotics trafficking.

Asia-Pacific Economic Asia-Pacific Economic Cooperation (APEC) Cooperation (APEC)

Is the premier forum for facilitating economic growth, cooperation, trade and investment in the Asia-Pacific region.

Unlike the WTO or other multilateral trade bodies, APEC has no treaty obligations required of its participants.

Decisions made within APEC are reached by consensus and commitments are undertaken on a voluntary basis.

Since its formation in 1989, APEC has grown to encompass 21 members spanning across the four continents,

21 APEC Member 21 APEC Member Economies Economies

Australia; Brunei Darussalam; Canada; Chile;

People's Republic of China; Hong Kong, China;

Indonesia; Japan; Republic of Korea; Malaysia;

Mexico; New Zealand; Papua New Guinea; Peru; The Republic of the Philippines; The Russian Federation; Singapore; Chinese Taipei; Thailand; United States and

Viet Nam.

aboutabout APECAPECAccounts for approximately 40% of the

world's population, 54% of world GDP and 44% of world trade

APEC's vision of regional economic cooperation is being realized through the 'Bogor Goals' of free and open trade and investment in the Asia-Pacific by 2010 for industrialized economies and 2020 for developing economies, adopted by APEC Leaders at the 1994 in Bogor, Indonesia.

APEC's Three Pillars:APEC's Three Pillars:

Trade and investment liberalisation

Business facilitation

Economic and technical cooperation

Achievements and Achievements and BenefitsBenefits

The Asia-Pacific region has consistently been the most economically dynamic region in the world.

Since APEC's inception in 1989, APEC's total trade has grown 395%, outpacing the rest of the world.

In the same period, GDP (in purchasing power parity terms) in the APEC region has tripled, while GDP in the rest of the world has less than doubled

Trade liberalizationTrade liberalization In 1989 average trade barriers in the region stood

at 16.9%; by 2004 barriers had been reduced by approximately 70% to 5.5%.

Intra-APEC merchandise trade (exports and imports) has grown from US$1.7 trillion in 1989 to US$8.44 trillion in 2007 - an average increase of 8.5% per year;

Merchandise trade within the region accounted for 67% of APEC's total merchandise trade in 2007

Trade with the rest of the world has increased from US$3 trillion in 1989 to US$15 trillion in 2007, an average increase of 8.3% per year. (Trade in the rest of the world has increased at 7.6% over the same period.)

Over 30 bilateral free trade agreements (FTAs) have been concluded between APEC Member Economies.

Business FacilitationBusiness Facilitation The Single Window Strategic Plan, adopted in

2007, provides a framework for the development of Single Window systems which will allow importers and exporters to submit information to government once, through a single entry point.

In 2008, a groundbreaking Investment Facilitation Action Plan was endorsed; to improve the investment environment in Member Economies

APEC is also removing behind-the-border barriers to trade through its Structural Reform agenda, which focuses on reforming domestic policies and institutions that adversely affect the operation of markets, and the capacity of businesses to access markets and to operate efficiently

Key APEC MilestonesKey APEC Milestones 2008 - Lima, Peru

APEC focused on the social dimensions of trade and on reducing the gap between developing and developed members. Leaders also addressed the global financial crisis in the Lima APEC Leaders' Statement on the Global Economy. They committed to take all necessary economic and financial measures to restore stability and growth.

2007 - Sydney, Australia For the first time, APEC Member Economies issue a Declaration on Climate Change, Energy Security and Clean Development. Adopted a major report on closer Regional Economic Integration, including structural reform initiatives, and welcomed the new APEC Trade Facilitation Action Plan which will reduce trade transaction costs by a further five per cent by 2010

APEC Agenda APEC Agenda (continue)(continue)

2006 - Ha Noi, Viet Nam 2005 - Busan, Korea 2004 - Santiago, Chile 2003 - Bangkok, Thailand

2002 - Los Cabos, Mexico 2001 - Shanghai, People's Republic of China 2000 - Bandar Seri Begawan, Brunei Darussalam 1999 - Auckland, New Zealand 1998 - Kuala Lumpur, Malaysia

1997 - Vancouver, Canada 1996 - Manila, The Philippines 1995 - Osaka, Japan

1994 - Bogor, Indonesia1993 - Blake Island, United States

1989 - Canberra, Australia

South Asian Association South Asian Association for Regional Cooperation for Regional Cooperation (SAARC)(SAARC) SAARC is an economic and political organization

of eight countries in Southern Asia. It was established on December 8, 1985 by India,

Pakistan, Bangladesh, Sri Lanka, Nepal, Maldives and Bhutan.

In April 2007, at the Association's 14th summit, Afghanistan became its eighth member.

Observers: Australia, China, European Union, Iran, Japan, Mauritius, Myanmar (Burma), South Korea, United States

In terms of population, its sphere of influence is the largest of any regional organization: almost 1.5 billion people.

GDP (PPP) Total - US$ 4,074,031 million (3rd) GDP per capita US$ 2,777 

The objectives of the The objectives of the SAARCSAARC

to promote the welfare of the peoples of South Asia

to accelerate economic growth, social progress and cultural development in the region

to promote active collaboration and mutual assistance in the economic, social, cultural, technical and scientific fields

to strengthen cooperation with other developing countries

to strengthen cooperation among themselves in international forums on matters of common interest

to cooperate with international and regional organizations with similar aims and purposes.

IneffectivenessIneffectivenessSAARC's inability to play a crucial role in

integrating South Asia is often credited to the political and military rivalry between India and Pakistan.

Over the years, SAARC's role in South Asia has been greatly diminished and is now used as a mere platform for annual talks and meetings between its members

SAARC has also refrained itself from interfering in the internal matters of its member states.

Further evolutionFurther evolutionThe People's Republic of China has shown its interest in joining SAARC.

The Russian Federation intends to become an observer as well, and is supported by India.

Union of Myanmar has expressed an interest in joining as a full member.

FTA and Preferential Trading ArrangementFTA and Preferential Trading Arrangement The Agreement on the South Asian Free Trade Area was reached

at the 12th SAARC summit at Islamabad, Pakistan on 6 January 2004. (India, Pakistan, Nepal, Sri Lanka, Bangladesh, Bhutan and the Maldives)

Zero customs duty on the trade of practically all products in the region by end 2016.

The new agreement SAFTA, came into being on 1 January 2006. SAFTA requires the developing countries in South Asia - India,

Pakistan and Sri Lanka, to bring their duties down to 20% by 2007. In the final five year phase ending 2012, the 20% duty will be reduced to zero.

The least developed nations: Nepal, Bhutan, Bangladesh and Maldives have an additional three years to reduce tariffs to zero. Pakistan has signed but not ratified the treaty.

The Agreement on SAARC Preferential Trading Arrangement (SAPTA) was signed on 11 April 1993 and entered into force on 7 December 1995.

Economic and Monetary Economic and Monetary Community of Central AfricaCommunity of Central Africa

CEMAC (Communauté Économique et Monétaire de l'Afrique Centrale) is established to promote economic integration among countries that share a common currency, the CFA franc.

CEMAC is the successor of the Customs and Economic Union of Central Africa (UDEAC), which it completely superseded in June 1999 (through an agreement from 1994).

Its member states are Cameroon, the Central African Republic, Chad, the Republic of the Congo, Equatorial Guinea and Gabon.

Currently, CEMAC countries share a common financial, regulatory, and legal structure, and maintain a common external tariff on imports. In theory, tariffs have been eliminated on trade within CEMAC, but full implementation of this has been delayed.

Movement of capital within CEMAC is free On January 24, 2003, the European Union (EU) concluded

a financial agreement with Economic Community of Central African States (ECCAS) and CEMAC, on condition that ECCAS and CEMAC will merge into one organization.

West African Economic and West African Economic and Monetary UnionMonetary UnionThe West African Economic and Monetary

Union (UEMOA, Union économique et monétaire ouest-africaine) is an organization of eight states established to promote economic integration among countries that share a common currency - the CFA franc.

UEMOA was created by a Treaty signed at Dakar, Senegal, on January 10, 1994 by Benin, Burkina Faso, Côte d’Ivoire, Mali, Niger, Senegal, and Togo. On May 2, 1997, Guinea-Bissau became its eighth member state.

UEMOA is a customs union and monetary union.

AchievementsAchievementsUEMOA members have implemented

macroeconomic convergence criteria and an effective surveillance mechanism;

Have adopted a customs union and common external tariff (early 2000);

Have harmonized indirect taxation regulations; and have initiated regional structural and sectoral policies.

A September 2002 IMF survey cited the UEMOA as "the furthest along the path toward integration" of all the regional groupings in Africa.

UEMOA and ECOWAS (Economic Community of West African States) have developed a common program of action on trade liberalization and macroeconomic policy convergence. They have also agreed on common rules of origin

Economic CommunityEconomic Communityof West African Statesof West African States

Established by Treaty of Lagos, May 28, 1975 GDP in 2005: U$342,519Billion (28th), per

capita: U$ 7,890 The Economic Community of West African

States (ECOWAS) - a regional group of 15 countries.

Its mission is to promote economic integration, by means of economic and monetary union creating a single large trading bloc.

Member states: Benin, Burkina Faso, Cape Verde, Côte d'Ivoire, The Gambia, Ghana, Guinea, Guinea Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone and Togo.

ECOWAS is one of the pillars of the African Economic Community.

Common Market for Common Market for Eastern and Southern AfricaEastern and Southern Africa

COMESA was established on 5 November, 1993, started its activity in December1994

COMESA is a preferential trading area with19 member states stretching from Libya to Zimbabwe. replacing a Preferential Trade Area which had existed since1981.

Current members: Burundi, Comoros, Democratic Republic of the Congo, Djibouti,  Egypt, Eritrea, Ethiopia, Kenya, Libya,

Madagascar, Malawi, Mauritius,Rwanda,  Seychelles, Sudan, Swaziland, Uganda, Za

mbia,  Zimbabwe.

continuecontinueCOMESA is one of the pillars of the

African Economic CommunityIn 2008, COMESA agreed to an

expanded free-trade zone including members of two other African trade blocs, the East African Community (EAC) and the Southern Africa Development Community (SADC)

Southern African Southern African Development Community Development Community (SADC)(SADC)Established on August 17, 1992 14 Member states:  Angola,  Botswana,

 Lesotho,  Malawi,  Mozambique,  Swaziland,  Tanzania,  Zambia,

 Zimbabwe,  Namibia,  SouthAfrica,  Mauritius,  Democratic Republic of

the Congo,   Madagascar. SADC is an inter-governmental organization

with its major goal to further socio-economic cooperation and integration and political and security cooperation.

In 2008, the SADC agreed to establish a free trade zone with the East African Community (EAC) and the Common Market of Eastern and Southern Africa (COMESA).

Results of SADCResults of SADC Efforts to place political and security cooperation on

a firm institutional base failed. SADC is a weak organisation. It is under-resourced. One significant challenge is that member states also

participate in other regional economic cooperation schemes and regional political and security cooperation schemes that may compete with or undermine SADC's aims. (For example, South Africa and Botswana both belong to the Southern Africa Customs Union, Zambia is a part of the Common Market for Eastern and Southern Africa, and Tanzania is a member of the East African Community).

On Wednesday October 22, 2008, SADC joined with the Common Market for Eastern and Southern Africa and the East African Community to form the African Free Trade Zone, consisting of 26 countries with a GDP of an estimated $624bn (£382.9bn).

It is hoped the African Free Trade Zone agreement would end problems arising from the fact that several of the member countries belong to multiple groups.

Economic Community of Economic Community of Central African States (ECCAS)Central African States (ECCAS)

ECCAS began functioning in 1985, but was inactive for several years because of financial difficulties (non-payment of membership fees by the member states) and the conflict in the Great Lakes area. The war in the DR Congo was particularly divisive, as Rwanda and Angola fought on opposing sides.

Member states: Burundi, Cameroon,  Central African Republic, Chad, Democratic Republic of the Congo, Republic of the Congo,  Equatorial Guinea,  Gabon,  São Tomé and Príncipe, Angola, (1999). Rwanda left ECCAS in 2007.

 Some of the ECCAS states have formed the Economic and Monetary Community of Central Africa(CEMAC). On 24 January 2003, the European Union concluded a financial agreement with ECCAS and CEMAC, on condition that ECCAS and CEMAC merging into one organization, with ECCAS taking responsibility for the peace and security of the sub-region.

Southern African Southern African Customs UnionCustoms Union

SACU is the oldest customs union in the world.

It was established in 1910 as a Customs Union Agreement between the then Union of South Africa and the High Commission Territories of Bechuanaland, Basutoland and Swaziland.

The agreement was updated on December 11, 1969, it was relaunched as the SACU with the signing of an agreement between the Republic of South Africa, Botswana, Lesotho and Swaziland. (entered into force on March 1, 1970).

In 1990, Namibia joined SACU as its fifth member.

East African CommunityEast African CommunityGDP, 2005: US$ 104.2 billion, per capita US$

1,065 Currents members of the EAC are: Kenya,

Tanzania, Uganda, Burundi, and RwandaThe EAC was originally founded in 1967, but

collapsed in 1977. It was officially revived on 7 July 2000.

The customs union in East Africa was signed in March 2004 and commenced on 1 January 2005.

In 2008, the EAC, after negotiations with the Southern Africa Development Community (SADC), and the Common Market for Eastern and Southern Africa (COMESA) agreed to an expanded free trade area.

EAC is one of the pillars of the African Economic Community.

African Economic African Economic CommunityCommunityThe African Economic Community

(AEC) is an organization of African Union states establishing grounds for mutual economic development among the majority of African states.

The stated goals of the organization include the creation of free trade areas, customs unions, a single market, a central bank, and a common currency, thus establishing an economic and monetary union.

Currently there are multiple regional blocs in Africa.

Pillars and Subgroups of Pillars and Subgroups of the AECthe AECCommunity of Sahel-Saharan States (CEN-

SAD), Common Market for Eastern and Southern Africa (COMESA), East African Community (EAC), Economic Community of Central African States (ECCAS/CEEAC), Economic and Monetary Community of Central Africa (CEMAC), Economic Community of West African States (ECOWAS), West African Economic and Monetary Union (UEMOA),West African Monetary Zone (WAMZ),

Intergovernmental Authority on Development (IGAD), Southern African Development Community (SADC), Southern African Customs Union (SACU), Arab Maghreb Union (AMU/UMA).

African regional blocs, not African regional blocs, not participating in the AEC participating in the AEC Greater Arab Free Trade Area (GAFTA) (also

includes most Middle Eastern states), Economic Community of the Great Lakes Countries (CEPGL), Indian Ocean Commission (COI), Liptako-Gourma Authority (LGA), Mano River Union (MRU),

Their membership is as follows: GAFTA 2005 membership:  Egypt,  Libya,

Morocco,  Sudan,  Tunisia. CEPGL 1976 membership:  Burundi,  Congo-

Kinshasa,  Rwanda. COI 1984 membership: Comoros,  Madagascar,

 Mauritius,  Seychelles LGA1970 membership:  Burkina Faso, Mali,

Niger, MRU 1973 membership:  Liberia,  Sierra Leone.

Joined later: 1980:  Guinea.