ASEAN and the agro-food industry

ASEAN Harmonization in the Food Sector

ASEAN and the agro-food industry38% of ASEAN’s 620 million population, or 235 million, is involved in the agriculture and food sector. This is the largest employment sector for ASEAN. As the majority of ASEAN countries rely heavily on the sector for growth, trade, investment and employment, free flow of agriculture and food products within ASEAN becomes a necessity. There is enormous potential for intra-ASEAN trade  if ASEAN is able to achieve harmonization of standards and is able to eliminate the most significant technical barriers in the sector.

Trade in food significantly impacts the economies of many ASEAN countries. However, ASEAN members’ exports of agri-food products within the region are only a small part of ASEAN’s total exports, and are increasing slowly.

ASEAN faces the challenge of meeting changes in consumption and demand as incomes rise with population growth and greater economic prosperity.

ASEAN has clearly identified that ASEAN integration and harmonisation of standards and regulation in this key priority sector will help it to realise its potential.

Food standards and regulations serve many purposes: they protect public health by requiring limits on potentially harmful substances in products, provide requirements to ensure consumers have sufficient information to make an informed choice, and serve to facilitate trade between countries. However, at present, significant differences between ASEAN countries’ regulatory requirements create barriers which have a negative impact on food trade. Harmonisation of standards in the food sector will enable ASEAN to meet the demands of a growing population.

The trend in trade supports the need to accelerate this effort in order to harness the sector’s potential. The value of ASEAN agri-food exports has grown rapidly since 2008, rising from US$ 38.2 billion in 2008 to US$ 53.25 billion in 2011 as shown in Table 1. Yet, while the agri-food sector achieved the highest growth rate in 2011, it only commands 4.3% share of the value of total ASEAN exports.

ASEAN Exports in the Agri-Food Sector

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ASEAN Harmonization in the Food Sector, prepared for the Senior Economic Officials Meeting (SEOM) 2014

Executive Summary