Why the ASEAN Economic Community matters for Australia

‘Australia has long recognized the significance of ASEAN to the region’s security and prosperity’, said Mr Simon Merrifield, Australian Ambassador to the Association of Southeast Asian Nations (ASEAN) in recent presentations in Vietnam. ‘The emergence of the ASEAN Economic Community (AEC) underscores the significance of Southeast Asia as the global rearrangement of economic and strategic weight works its way through our region.’

Mr Merrifield conducted seminars with the theme of “Why ASEAN? Why now?” in Hanoi and Ho Chi Minh City on 8 and 9 December with the goal of promoting to Australian businesses the benefits of the forthcoming AEC. The seminars were organised by Austrade in partnership with the  Australian Chamber of Commerce in Vietnam.

‘Our trade relations with ASEAN are in good shape and two-way investment is growing, but we could do more’, said Mr Merrifield.

“The AEC matters to Australia. It’s an important milestone in ASEAN’s evolution towards a single market and production base. The combined ASEAN economies make the AEC our second largest trading partner. Its young population, growing middle class and strategic location underpin ASEAN’s prospects as a centre for continuing economic dynamism.

And ASEAN’s ongoing integration efforts will make intra-ASEAN business easier and position Southeast Asia as a host for regional and global value chains. These have already spurred growth and have been a key driver for integration. Australian businesses should find ways to tap into them, and use AANZFTA – the ASEAN-Australia-New Zealand FTA concluded earlier this decade – to do so.”

Trade and investment are key drivers of Australia’s 24 years of uninterrupted economic growth.

Collectively, ASEAN is Australia’s second largest trading partner (two-way trade surpassed $100 billion in 2014), accounting for 15 per cent of Australia’s total trade.  ASEAN investment in Australia totals over $110 billion. There were over one million ASEAN visitors to Australia in 2014 and over 100,000 students from ASEAN countries enrolled to study in Australia (around 22,000 of whom were from Vietnam).  With an ASEAN population of over 620 million, these numbers are likely to grow.

The declaration of the AEC at the end of 2015 offers a possible avenue for both Australian and Vietnamese businesses to capitalise on the region’s economic dynamism.

For further information, please contact the Australian Embassy at [email protected].