Global Conditions

Significance of the ASEAN Trading Block

Association of Southeast Asian nations (ASEAN) has been significant in eliminating poverty and encouraging trade among the member countries. This trading block is at the forefront of encouraging peaceful and friendly relations among the neighbouring countries. In this regard, mutual cooperation is expanded and strengthened. Moreover, such peaceful programs are aimed at solving disputes/differences that can arise among the member countries. Therefore, the ASEAN trading block is significant to the member countries because it provides mutual benefit, which in turn leads to cooperative linkage that helps in facilitating common development agenda.

The member nations of ASEAN

The members include “Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam” (“Association of Southeast Asian nations” b, 2011). It has also been reported that “the Association of Southeast Asian Nations, or ASEAN, was established on 8 August 1967 in Bangkok, Thailand, with the signing of the ASEAN Declaration (Bangkok Declaration) by the Founding Fathers of ASEAN, namely Indonesia, Malaysia, Philippines, Singapore and Thailand” (“Association of Southeast Asian nations” a, 2011 ).

Implications/Benefits of the ASEAN Trading Bloc Structure

ASEAN has facilitated economic development among the member countries, especially through partnership programs that enable peaceful co-existence in the Southeast Asian community. This forms a strong foundation for economic growth and development. This trading bloc also encourages regional stability, by making sure that peace prevails in the region. This is achieved by ensuring that justice prevails, through strict adherence to the rule of law, which the United Nations Charter advocates for. Moreover, ASEAN trading block provides training and research services to the member countries, such as in education and technical matters. It also creates a favorable environment for using agriculture and industries effectively to expand agriculture production. To this end, it focuses on problems affecting the international commodity trade, such as poor transport and communication infrastructure.

Political Agenda of ASEAN

This trading bloc’s political agenda can be found in its fundamental principles, which is “contained in the Treaty of Amity and Cooperation in Southeast Asia (TAC) of 1976” (“Association of Southeast Asian nations” a, 2011). The agenda can be outlined:

“1. Mutual respect for the independence, sovereignty, equality, territorial integrity, and national identity of all nations. 2. The right of every State to lead its national existence free from external interference, subversion or coercion. 3. Non-interference in the internal affairs of one another. 4. Settlement of differences or disputes by peaceful manner. 5. Renunciation of the threat or use of force. 6. Effective cooperation among themselves” (“Association of Southeast Asian nations” a, 2011).

Focusing on the above statement, ASEA agenda is centered on forming right groups to provide not only meaningful actions, but also political solutions to address human rights issues affecting the member countries. In this regard, ASEAN addresses, for instance, the rights of persons with disabilities. In addition, ASEAN uses regional leaders to discuss political matters and development agenda. For example, on 19^th May 2011, ASEAN held its fifth Defence Ministers’ Meeting (ADDM) in Jakarta to discuss issues of terrorism and political armed conflicts (“Terrorism, Piracy on Agenda at ASEAN Defence Ministers Meeting”, 2011). This meeting was aimed at strengthening political relations and security among the member countries.

Effect of ASEAN on other Regional Groups

It can be argued that ASEAN trading bloc affects other regional groups in terms of beneficial cooperation and peaceful co-existence. This is due to the fact that one of the main goals of ASEAN is to promote closer cooperation with other international/regional groups. This is often realized through international trade.

Cooperation among Nations

The cooperation among nations is encouraged by equal partnership among the concerned member states. This is strengthened through collaboration on issues of common interest. Moreover, economic, cultural, administrative, social and technical mutual assistance help in encouraging the cooperation.

Effect of ASEAN Trading Bloc on the US Economy

This trading bloc affects the US economy by limiting the amounts of exported products, and this little flow of goods/services is caused by political instability/conflicts. In this regard, it is evident that:

 “A protracted war could affect the ability of the US market to absorb ASEAN exports due to the likelihood of slumping US demand for consumer goods and the sinking US dollar which may push up the prices of ASEAN exports. This would have a negative impact on the export-dependent ASEAN economies which require a steady flow of exports to consolidate their recovery and to keep jobs” (Pushpanathan, 2011).

It is clear that less international trade can be realized when there are political conflicts. As a result, fewer goods and services are exported/imported, thus less Gross Domestic Product (GDP)/income and employment creation are attained.

Industry or Group that has Benefited Most from ASEAN Trading Bloc

It can be ascertained that export/import service industry is the main beneficiary since most of the products from ASEAN regions are traded among different member nations, which characterized by the international outlook. Regarding this, it has been reported that:

“to collaborate more effectively for the greater utilization of their agriculture and industries, the expansion of their trade, including the study of the problems of   international commodity trade, the improvement of their transportation and communications facilities and the raising of the living standards of their peoples” (“Association of Southeast Asian nations” a, 2011).

Summing up, in order to carry out business and earn profits, ASEAN trading bloc advocates for the member countries to find a suitable way of reaching consumers through export/imports of goods and services. Some members of this bloc reach their customers through running of retail outlets, while others move with their goods from one market place to another. These are traditional ways that limit the size of the market served. However, these methods still thrive in the modern society alongside new methods, for instance, e-commerce. In this regard, ASEA is currently promoting more modern and pragmatic approaches to facilitate its export/import services, for instance, e-marketing.