After twelve years of negotiations the ASEAN Economic Community (AEC) agreement has finally been signed by all ten Association of Southeast Asian Nations (ASEAN) member states (Indonesia, Malaysia, Philippines, Singapore, Thailand, Brunei, Cambodia, Laos, Vietnam and Myanmar).
Modelled loosely on the European Community — but without a powerful central court or single currency — the AEC has the free movement of skilled labour as one of its fundamental freedoms. Huge differences remain, however, between the laws of the ten member states and it is estimated that it will take at least ten years before a true economic community is achieved.
The AEC agreement requires ASEAN states to allow enterprises in most sectors to be majority foreign owned, however this is still far from being realised in Cambodia and Singapore, whilst countries such as Thailand, Malaysia and Singapore have laws that prevent the hiring of foreign workers unless no suitable local worker can be found. There is also a huge pool of workers in the Philippines who are relatively well educated, speak English to a high standard and are willing to work for less than most existing skilled workers in the more developed ASEAN countries like Singapore. Their threat to take over local jobs is already leading to much social unrest in several ASEAN countries.
November also saw the upgrading of the China-ASEAN free trade Agreement which seeks to open up the service sector and allow all signatory countries to establish solely-owned or joint-venture companies. Since the first trade agreement with China in 2002 the total value of trade surged from 54.8 billion US dollars in 2002 to 480.4 billion in 2014. However, Singapore has refused to sign the latest upgrade and four of the ASEAN countries (Malaysia, Singapore, Vietnam and Brunei) are part of the new American-led Trans-Pacific Economic Partnership — which could well serve to undermine the AEC and lead to great economic rivalry with China.