Malaysiakini News

Time for Asean to close ranks, remove non-tariff trade barriers

M Saraswathi, Bernama  |  Published:  |  Modified:

The escalating trade war between the United States and China should come as a stark reminder for the 10 Asean-member countries that continuing to impose non-tariff barriers (NTBs) would only rob them of the opportunities to exploit fully the advantages of a single regional market.

As leaders converge for their annual summit in Singapore next month, they need to put on the table an agenda to discuss reducing or cutting surcharges imposed on a whopping 2,683 tariff lines, to show commitment they are serious in opening up their respective markets.

No doubt a liberalised regional market with a consumer base in excess of 630 million should take into account the differing levels of economic development among economies, which means equitable liberalisation.

That has been the underlying principle dictating Asean's free trade area, but that does not mean member economies should use that premise as an excuse to close their markets for some products indefinitely.

Both American and Chinese firms are already feeling the impact of the fallout from the trade war, which means it is only a matter of time before Asean, where most of its companies export substantially to these markets, are adversely affected.

If at all, there is a an urgent need for Asean members to adhere honestly to the principle of "prosper-thy-neighbour", the time is now.

What US President Donald Trump has embarked upon has inevitably led to a chain reaction in China and possibly among its other trading partners in protecting their markets further, with dire consequences in the long run, particularly for export-oriented countries like Malaysia.

As Prime Minister Dr Mahathir Mohamad called for Asean to close ranks when he met his fellow leaders in Bali, NTBs, protectionism and trade wars restrain businesses from flourishing.

Room for improvement

No doubt, Asean has made remarkable headway in opening up trade and with regional leaders having constantly pledged and assured efforts will continue to reduce NTBs, there seems to be a lot of room for improvement.

Besides the customs surcharges affecting 2,683 tariff lines, there are technical measures and product characteristic requirements which affect 975 tariff lines.

And when new risks such as the escalating trade war and financial instability erupt, Asean- member countries seem to retreat into their own cocoon.

Leaders need to go beyond their usual rhetoric and take unified decisions to implement market liberalising measures before it is too late.

There is no denying that widespread trade tensions between major economies will inevitably affect smaller Asean economies which in turn could spill over and affect the global trading system.

There won't be any winners at all from a trade war.

Hence, Asean should work together to ensure that trade policies can be effective in strengthening the multilateral trading system, so that it can fully tap on its growing market that will touch 700 million soon.

A sturdier economy and expanded market could be the regional grouping's strongest antidote against external factors and a clear path towards fulfilling the aspirations of creating in the actual sense of the word an Asean Economic Community (AEC) by 2025.

The AEC is meant to facilitate free flow of goods, services and investment, as well as freer flow of labour and capital.

The Asean Summit next month in Singapore offers leaders every chance to make a mark in the regional grouping's history in taking a strong stance on issues that is slowing down its economic progress.

- Bernama


 

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