Mention the Asean Economic Community or AEC, and most Thais still
believe that come 2015, when it starts, Thailand will open its door to trade
and services in the Asean region without any barriers and with labour moving
freely about.
This is one of several major
misunderstandings about AEC that need to be dispelled.
The Thailand Development Research
Institute's (TDRI) year-end conference in November last year, we pointed out
the AEC myths and countered them with facts and research. If we are going to
meet the challenge of sorting out the AEC effectively, we need to start with
facts, not fiction.
Myth 1: In 2015, Thailand will face major economic changes after the AEC
takes effect.
The fact is that major changes
for trade liberalisation have already taken place since 1993. The Agreement on
the Common Effective Preferential Tariff Scheme for the Asean Free Trade Area
(Afta-CEPT) has established trade liberalisation and the progress is nearly
complete for most countries in Asean.
The original Asean members have
mostly enjoyed zero tariff rates and while tariffs remain intact for the new
Asean members _ Laos, Cambodia, Vietnam and Myanmar _ we can be quite certain
they will continue to decline.
However, in terms of service
liberalisation, the impact is yet to be felt and the changes are unlikely to be
significant until 2015.
This is because the level of
commitment among Asean countries is appallingly low. In addition, the
limitations of individual country's domestic regulations remain significant
barriers in these sectors. As a result, almost all countries, except for
Singapore, still limit the extent of foreign participation in their domestic
services.
Myth 2: AEC will enable free movement of all types of labour in the
region.
The movement of labour will
become freer, but will remain far from free in 2015. Furthermore, there are
only eight types of professional/skilled labour which will be affected by
greater mobilisation due to the Mutual Recognition Agreement (MRA) under the AEC.
However, even these eight
professionals (namely, doctors, dentists, nurses, engineers, accountants,
architects, surveyors and tour guides) will still face varying domestic
professional standards which will prevent them from delivering their
professional services in other Asean countries. In the case of Thailand,
language requirements will remain the main obstacle.
More importantly is the movement
of unskilled labour, which is outside the scope of the AEC negotiations.
Figures show that 1.35 million
foreign workers held jobs here in 2010. Of those, 1.17 million of them came
from Myanmar, Laos and Cambodia. Most are working as manual or unskilled
labourers and household workers. The movement of these unskilled labourers has
been happening for a long time and has no relationship to the AEC.
Myth 3: The AEC is similar to the European Union (EU), and therefore
will face similar risks and challenges.
Many fear that, if not careful,
Asean countries will suffer the same fate as many countries in the EU.
This is perhaps the biggest myth
of all. The AEC is merely a free trade area. All Asean countries enjoy the
benefits of zero tariffs but remain largely in control of their own monetary
policies.
The EU is an economic union,
which goes many steps further than a free-trade agreement by establishing a
supra-national authority overseeing monetary policies of its member countries.
Many members of the EU also share the same currency: the euro. Without sharing
monetary policy and a common currency, the risk of economic integration in
Asean is very different from the EU.
These myths about the AEC have
created unnecessary worries.
Most trade liberalisation
measures that we fear are already in place, particularly among the original
Asean members.
Misunderstandings about the
movement of workers in Asean has created unnecessary uproar, worries and
misguided public opinion.
In short, many of these fears are
about things that have already happened and things that will not happen in
2015. That sort of fear is unnecessary and counterproductive.
Instead, the public and academic
community should pay more attention to figuring out how Thailand can cultivate
and seize the opportunities presented by this larger and growing economic
community. We should not forget the AEC will provide a market which is five
times larger than Thailand's economy alone, with nine times the population.
Thailand is strategically
situated in the hub of Asean, with 33 provinces connected to its neighbouring
countries. Thailand would also benefit from the opportunity to gain access to
cheaper labour and immensely rich natural resources and energy in Myanmar (natural
gas), Laos (electricity), Indonesia (coal), and Malaysia/Brunei (oil).
The AEC debate should move away
from fiction and focus on fact. How can this new economic collaboration open
new doors for Thailand's businesses and citizens, as well as offer benefits to
its neighbours? If we continue to be guided by myths about the AEC, we will
arrive in 2015 uninformed, unprepared and unable to seize opportunities brought
about by the real integration within Asean.
Somkiat Tangkitvanich
Business & Investment Opportunities
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