Iikka Korhonen: The paper assesses the proposal to create the ASEAN Economic Community (AEC) from several different angles. The paper examines existing trading arrangements in both merchandise and services trade. It is obvious that although average tariff rates have declined substantially over the years, many obstacles to fuller trade integration remain, especially non-tariff barriers to trade. Furthermore, restrictions on service trade and barriers to immigrations remain even more pronounced. Therefore, the author concludes, correctly in my opinion, that the ambitious plans regarding introduction of the AEC will not materialize anytime soon.
Regarding the proposed AEC, it is perhaps instructive to compare it with the European Union (EU), the only existing example of a truly deep economic union, where goods, services, capital, and labor are allowed to move freely.1 For example, even the proposed AEC (which is unlikely to take place in the proposed schedule) sees no introduction of common...