Biz sector calls for infodrive on 2015 ASEAN integration

CEBU, Philippines -  The Cebu business sector is calling on the government to intensify its information drive on the country’s preparedness of the ASEAN integration by 2015.

Cebu Business Club (CBC) president Gordon Alan “Dondi” Joseph said most businesses, specifically the Small and Medium Enterprises (SMEs) do not really have an idea, what they are going to benefit or lose in this regional market integration three years from now.

 “I don’t think Cebu is prepared for the ASEAN integration, some do not even understand its impact to their respective businesses,” said Joseph adding that “most businesses don’t know what’s going to happen come 2015.”

With this he said the government and private sector should work together in drawing plans and strategies on how to benefit the ASEAN integration, and at the same time prepare the small players in specifically those that will be affected by the zero-tariff implementation.

The implementation of ASEAN Free Trade Area (AFTA) will provide negative impact to some other sectors of the economy, like the local manufacturing companies, and the farmers.

With the zero tariff rule, the agriculture sector its being threatened while agricultural goods produced from other ASEAN countries with high technology adoption, will be made available in the Philippine market in much cheaper prices.

“We should start working on the preparation right now and work fast,” said Joseph.

On the other hand, in a recent visit to Cebu, Department of Trade and Industry (DTI) undersecretary Adrian S. Cristobal Jr., said that as the Philippines is moving into a “sweet spot” as an investment destination, and trading partner, the government has set up a good plan to strengthen its involvement in the regional economic integration.

He said that over the last decade, ASEAN has become increasingly an integrated production network centered on China and Japan.

The most prominent feature of this production network is that most of the goods traded are intermediate goods, meaning parts and components, rather than final goods.

“The Philippines is very much a part of this production network. The electronics industry is a case in point,” Cristobal said.

This development he said is result of business strategy, where production process, such as for making an automobile or a computer, “is split into different steps and each production step is undertaken in different locations across national boundaries.”

Trade activities such as this have been one of the driving forces behind increased trade integration in ASEAN+3.

According to Cristobal foreign direct investments (FDIs) have played an important role in the formation of this production network in ASEAN+3 countries. Multinational companies, mostly Japanese and Chinese, used FDI as mechanism to facilitate trade in parts and components in countries where they operate.

The prevalence of FDI-based production networks has led to rapid increase o FDI inflows among ASEAN+3 countries over the years, as well as the greater expansion o exports and imports of intermediate goods of members of this production network. (FREEMAN)