The Free flow of parcels is taking another giant step with the planned launch of a The ASEAN Economic Community getting stronger and the CPTPP free trade pact now fully implemented.
ASEAN
A group of Asian Countries Seeking Greater Economic Integration.
The Association of Southeast Asian Nations (ASEAN) was formed in 1967 and currently consists of 10 member states: Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.
The ASEAN Economic Community (AEC) was created with the main objective to create a single economic market that is more fully integrated into the global economy. Since 2007, the ASEAN countries gradually lowered their import duties among them and targeted them to be zero for most of the import duties in 2015. ASEAN has concluded free trade agreements with China, Korea, Japan Australia and India.
The ASEAN Economic Community envisions the free movement of goods, services, investment, skilled labor, and capital among the 10 ASEAN member states. Canadian companies can now access many ASEAN countries vie CP-TPP.
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Facts about ASEAN and Canada
- ASEAN consists of over 600 million consumers
- ASEAN is amongst the top ten trading partners of Canada
- Canada - ASEAN trade rose by nearly 20% over the last 5 years
- Total trade between Canada and ASEAN is estimated at over $15 billion
Read more: CPTPP and duty free import to Canada
ASEAN Non-Tariff Barriers
Besides eliminating most tariffs (and greatly reducing tariffs on “sensitive” products), efforts are underway to reduce non-tariff barriers. For many, non-tariff barriers are considered more important to free trade than only a reduction in duties.
Non-Tariff barriers to Free trade within the AEC include:
- Horticulture import controls
- Copyright Issues
- Rules of Origin and certification processes
The ASEAN Trade Repository collects and shares trade data amongst the 10 member states. This helps each country understand and negotiate the effect of free trade and non-tariff concerns.
Shipping between ASEAN Region and Canada
Via the CPTPP Free Trade Agreement, Canada enjoys duty free preferential access to many countries in the ASEAN region.
- Brunei Darussalam: Shipping to Brunei
- Indonesia: Shipping between Indonesia and Canada
- Lao PDR: Shipping from Laos to Canada
- Malaysia: Shipping between Malaysia and Canada
- Philippines: Shipping from the Philippines to Canada
- Singapore: Shipping between Singapore and Canada
- Thailand: Shipping between Thailand and Canada
- Viet Nam: Shipping from Vietnam to Canada
Opening up the Airspace:
A critical aspect of free movement of parcels and people is the creation of an ASEAN Single Aviation Market (ASEAN-SAM). The ASEAN-SAM is geared towards a unified aviation market by 2015 andexpected to fully liberalize air travel between member states. The open air agreements will benefit air travel around the world and fee up tourism, trade, and investments.
The ASEA-SAM supersedes existing air services agreements among member states which are inconsistent with its provisions.
ASEAN E-Commerce and parcel delivery
While the initial focus on free trade agreements is the large macro trends and effects on major commodities, small and medium size businesses (SME) will ultimately see the greatest percentage benefit.
The investment in Singapore Post by Alibaba is proof of the expected growth in e-commerce parcels in ASEAN countries and beyond.
The lowering of non-tariff barriers will have the greatest benefit for SME’s who do not have the resources to navigate through difficult regulations. ASEAN negotiators are keenly aware of the importance of SME’s in their region and have placed an emphasis on ensuring businesses of all sizes benefit from the AEC. Keeping the support of SME’s is not just good for the economy, an inclusive policy will help ensure continued political support for free trade.
