Driving ASEAN Economic Integration and Trade through MRAs on Food Standards

Pushpanathan SundramThe 2015 deadline is quickly approaching for a single ASEAN Economic Community (AEC). Why is economic integration important in ASEAN for the private and public sectors? What role can the food industry play to support the 2015 integration?

Mr. Pushpanathan: Economic integration in ASEAN will help unlock the region’s significant economic growth potential. As a one of the drivers of the global economy, the ASEAN region already has a combined GDP of US$2.2 trillion. This figure is expected to double by 2020, according to the World Economic Forum (WEF), trade forecast to grow at around 6% across the region. The ASEAN Economic Community (AEC) will encourage the intra- and extra-regional free flow of goods and services, by reducing costs and complexities associated with importing and exporting around the region.

The region’s agro-food industry plays an important role in this growth in trade. Growing at around 36.6% in 2011, it is the fastest growing sector in the region. In many countries in the region, the industry contributes significantly to the GDP, reaching 50 per cent in Myanmar and 33.4 per cent in Cambodia for example.

However, the industry also faces non-tariff barriers and technical constraints that is impeding the growth of trade within ASEAN. These barriers in the food sector stem from the inadequate harmonization in areas such as product registration and labeling standards; highlighting the importance of economic integration and Mutual Recognition Agreements (MRAs) on food standards across the region. Read more