The 14th ASEAN Summit, February 27-March 1, 2009, will affect the prospects for Thailand's trade and investment. The 10 ASEAN leaders are scheduled to sign an intra-ASEAN agreement and other pacts with other non-ASEAN countries as part of their efforts to strengthen economic ties within the ASEAN bloc and broaden their economic cooperation. ASEAN members are committed to liberalizing their trade in goods and services, investment and skilled labors to pave the way for the upgrade of the ASEAN Free Trade Area (AFTA) to the ASEAN Economic Community (AEC) by 2015. The regional economic integration will offer greater opportunities for Thailand's trade and investment in the ASEAN bloc. High on the agenda in the summit will be the global economic recession that is regarded as a major threat to ASEAN economies, especially Thailand's battered exports and tourism. The summit is expected to implement short-and long-term measures to withstand the economic crisis.
KASIKORN RESEARCH CENTER (KResearch) holds the view that Thailand will benefit from the ASEAN agreement, likely to come into force in June 2009. Over the short-term, liberalization in the trade of goods and services, collaboration on tourism, facilitation of cross-border movements of workers in five professional fields, plus eased ASEAN tourism regulations will help revive our exports and tourism. To this end, ASEAN will focus on incentives provided to both ASEAN and non-ASEAN tourists traveling within ASEAN, as well as along travel routes linking the region. Over the medium- and long-terms, strengthened cooperation in the development of infrastructure and transportation routes, plus liberalization in services and investment, will help bolster ASEAN's economic strength and competitiveness in the international arena. Liberalized services such as aviation, transport and logistics, IT, etc., are expected to be a boon for our exports and tourism. At the same time, liberalized investment will encourage Thai investors to set up manufacturing bases in other countries to improve their competitiveness. These factors will eventually strengthen Thailand's and ASEAN's economies as a whole.
Even so, ASEAN will remain challenged by major hindrances to the integration into the AEC, as summarized in the following:
- Economic inequality and legal structures between member countries, especially in laws concerning trade competition and intellectual property.
- Broader economic relations between ASEAN and other economic powerhouses in the East Asia, i.e., China, Japan and South Korea.
- Clear strategies for the AEC are needed to bolster ASEAN's economic strength over the long-term even though the AEC would provide a short-term impetus for ASEAN's economic growth.
- The revival of trade protectionism around the globe may prompt ASEAN to adopt technical trade barriers, although ASEAN is committed to eradicating tariffs and trade barriers per the AFTA framework by 2010.
- Concern about energy and food security may emerge as a major threat to ASEAN.
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