ASEAN Markets Now More Accessible Than Developed Market Peers: WEF

Increased integration into the global economy of those economies that comprise the Association of Southeast Asian Nations (ASEAN) has made the region a “more accessible market for trading goods than either the European Union or United States,” according to a new report published by the World Economic Forum (WEF). The report, entitled Global Enabling Trade Report 2016 was published by the World Economic Forum and the Global Alliance for Trade Facilitation on November 30.

Featuring the Enabling Trade Index (ETI), which the WEF explains assesses the performance of 136 economies on domestic and foreign market access, it also highlights border administration, transport and digital infrastructure. Respective operating environments transport services; and operating environment. Produced every two years, the report is a benchmark for leaders looking to boost growth and development through trade.

ASEAN’s progress as an economic power comes at a time when the United States and European Union (EU) are becoming less open, according to the WEF report. In contrast, ASEAN’s progress in other areas measured by the index is less pronounced. As a result, the best economies for enabling trade tend to be in Northern and Western Europe, with the notable exception of Singapore and Hong Kong SAR, in first and third places, respectively, the WEF explains in a statement.

“Free trade remains the most powerful driver of global economic development and social progress.”

The challenge for leaders today is to confront protectionism but they also have a duty to make trade a source for more inclusive growth,” Klaus Schwab, Founder and Executive Chairman of the World Economic Forum said.

A key finding of the report is the limited success with which governments are confronting border administration efficiency. Reforming administration is recognized as a “low-hanging fruit” capable of producing disproportionate gains for both small and large businesses compared to the financial and political capital required to implement them. This lack of momentum could be seen as a cause for concern as the World Trade Organization’s 2014 Trade Facilitation Agreement comes into force in 2017.

“Businesses and entrepreneurs in many developing and emerging economies are being constrained from the global marketplace due to costly and inefficient border processes. Governments must consider trade facilitation reforms as a strategic priority to make trade work for all,” Philippe Isler, Director of the Global Alliance for Trade Facilitation said in a statement released on November 30.

The Enabling Trade Index was created to assesses the extent to which economies have in place the factors facilitating the free flow of goods over borders and to their destination. Comprised of seven pillars, the Index looks at Domestic market access, foreign market access, transport infrastructure and other critical components related to global trade flows. The WEF explains that due to changes in methodology and data availability, the 2016 results are not fully comparable with the results published in 2014. The results for 2014 were therefore re-calculated based on the new methodology.