The Economies of Southeast Asia, Second Edition

The Economies of Southeast Asia, Second Edition

Before and After the Crisis

Jose L. Tongzon

This updated and fully revised second edition provides a comprehensive examination of issues of paramount importance for Southeast Asian economies including: the economic implications of the 1997 Asian crisis for both older and newer members of ASEAN; the role of government and FDI in ASEAN economic growth and development; trade patterns with the US, Japan and the EU and the economic implications of China’s accession to the WTO for ASEAN countries; the environmental consequences of industrialisation and growth; the emergence of economic growth triangles and their contribution to ASEAN growth and regional cooperation; the prospects and challenges of ASEAN economic cooperation before and after the crisis; and the key challenges facing ASEAN member countries in the aftermath of the crisis.

Chapter 12: ASEAN free trade area and the transitional southeast Asian economies

Jose L. Tongzon

Subjects: asian studies, asian economics, development studies, development economics


12. ASEAN free trade area and the transitional Southeast Asian economies The admission of Cambodia to ASEAN in 1999 marked the fulfilment of the ASEAN founding fathers’ long-cherished dream to establish an ASEAN10, a grouping covering all countries in Southeast Asia. This was indeed a significant event in the history of ASEAN economic cooperation because Cambodia was the last country in Southeast Asia to be admitted to the fold due to its long history of domestic conflicts and associated political issues affecting its relationship with the rest of the region. Vietnam became officially the first Southeast Asian transitional economy to become a member of the Association of Southeast Asian Nations (ASEAN) on 28 July 1995. As an official member of ASEAN, it has also committed itself to trade liberalization based on the principles of AFTA.1 At about the same time Myanmar, emerging from its self-imposed isolation, ceded to the ASEAN Treaty of Amity and Cooperation and opened up to join the rest of Southeast Asia in terms of economic orientation and objectives. At the Thirtieth Annual Ministerial Meeting in Kuala Lumpur in July 1997, Laos and Myanmar were admitted as full members of ASEAN. Membership of ASEAN brings with it a commitment to the establishment of AFTA. As ASEAN members, these newly emerging Southeast Asian economies will have to deal with the important question of how they can maximize the benefits of trade liberalization, as proposed under AFTA. In light of this question, the objective of this chapter is to...

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