"One Vision, One Identity, One Community ASEAN Economic Community (AEC) Impact on distributive trade AEC – ASEAN Economic Community Objectives – 4 main PILLARS PILLAR 1 PILLAR 2 PILLAR 3 PILLAR 4 Single market and production base Competitive economic region Equitable economic development Integration into global economy Advantages 1. PILLAR 1, to create a single market and production base across ASEAN, with minimal barriers to trade; and 2. PILLAR 2, to create a region which has the framework to foster competition in a manner that benefits investors , businesses and consumers Advantages • Reduction/elimination of tariffs and non-Tariff barriers • Trade facilitation – free flow of goods • Liberalisation of service sector, ie free provision of services across borders • Movement of skilled labour will be linked to provision of services as well • Freer flow of investment and capital, ie Financial integration of capital markets and investment (note – “freer”, and not “free”) Disadvantages Disadvantages • majority foreign ownership of key services • Over-focus on more lucrative export/overseas market to the detriment of local market, thereby indirectly creating; i. Over-reliance on imports and; ii. Exodus/outflow of hard foreign currency out of the country • movement of skilled labour, i. will also lead to mass movement of unskilled labour leading to an overwhelming immigrant population versus local population ii. Loss of employment opportunities for the local population • The domination of foreign retailers over the local retail market • Closure of smaller local retailers • So-called FDI using local funds • Unrestricted opening of new outlets by foreign players Conclusion While removal of trade barriers is to be lauded, some form of “shielding” must continue; • to exist NOT to protect local industries BUT to ensure equal footing between local and foreign enterprises in the long run ie “healthy and fair competition” • to ensure stable social demographics and growth of local population thereby avoiding the massive social problems and social unrest that will occurred if movement of skilled, semiskilled and unskilled labour is left “unchecked” • to control/mitigate spiraling inflation which will ultimately result from the improved standards of living ie higher costs of living • to ensure that local population have “some say” over their national economy End of Presentation Thank You