AFTA: the way towards ASEAN economic integration

Abstract

This thesis presents a comprehensive analysis of AFTA's problems and assesses the prospects for ASEAN economic integration. Economic cooperation of ASEAN members constitutes the principal dependent variables of this study. The independent variables, the reasons and explanations of ASEAN's problems and progress, are identified as several intraregional and extraregional elements. The analysis of ASEAN economic performance or the dependent variables shows that ASEAN's progress in the economic sector has not been impressive. Progress in the area of intraregional trade has been minimal with little promising prospects of it being improved dramatically in the near future. However, the low level of intraASEAN trade may not greatly affect the progress of ASEAN economic integration. This is because ASEAN members have agreed to establish AFTA is due more to recent developments in the ASEAN economy than to the desire to expand intraASEAN trade. As for the analysis of ASEAN's internal independent variables, ASEAN intraregional elements have greatly influenced the progress of AFTA and ASEAN economic integration. Most of the variables such as lack of economic complementarity, the lack of modern associational groups as well as member strategies and perceptions which emphasized nationalism are mainly responsible for the slow progress. However, none of these variables generates a negative influences strong enough to withdraw the process of AFTA and its way towards ASEAN economic economic integration. Positive influences flow from the extraregional elements such as ASEAN economic relations with other countries and world economic environment. The perceptions of economic dependence upon external powers have contributed to greater measure of unity and cohesion within ASEAN. The concluding assessment of this research is that it is quite possible that ASEAN might achieve the first step of economic integration, a Free Trade Area, but almost certainly not in the time frame, 2003. Moreover, there are still several difficulties that need to be solved before ASEAN will achieve a higher degree of its economic integration.