AEC Vision Post-2015: Is an ASEAN Customs Union Feasible?
Das, Sanchita Basu; Sen, Rahul; Srivastava, Sadhana | February 2016
This paper explores the feasibility of the ASEAN Economic Community (AEC) moving forward to the next step of economic integration, i.e. towards an ASEAN Customs Union (ACU) post-2015. Effectively, the way to progress towards an ASEAN custom Union is by forming it among ASEAN-9 members with Singapore maintaining its existing zero tariff against non-members, thereby creating a Partial ACU. Using applied general equilibrium modelling exercise based on GTAP, the findings suggest that there are potential net positive welfare gains to be collectively reaped by ASEAN if it moves from an AFTA to a partial ACU post-2015. However, not all ASEAN members will individually gain from such an ACU and members may need to potentially devise a mechanism wherein some member country welfare losses in an ACU can be compensated by the members who gain. The paper argues that in spite of political economy challenges due to ASEAN’s unique characteristics and diversity in the levels of economic development among members, such a Partial ACU could be considered by ASEAN leaders due to its strategic imperatives.
CitationDas, Sanchita Basu; Sen, Rahul; Srivastava, Sadhana. 2016. AEC Vision Post-2015: Is an ASEAN Customs Union Feasible?. © ISEAS Yusof Ishak Institute. http://hdl.handle.net/11540/6719.
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