ASEAN states create community larger than EU

Southeast Asian nations have created a unified economic community larger than the European Union and North America.

Leaders of the 10-member Association Southeast Asian Nations signed a declaration in Kuala Lumpur to set up the ASEAN Community in an area of 625 million people with a GDP of $2.6 trillion.

It aims to allow free movement of goods, services and skilled labor as part of an EU-style integration plan, without a common currency.

The community, known by its acronym AEC, is comprised of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.

The landmark formation caps the 48-year history of a group founded at the height of the Cold War as an anti-communist bulwark.

Prime Minister Najib Razak of Malaysia hailed AEC as a "landmark achievement" which hopes to compete with China and India, urging members to accelerate integration.

Members are already implementing removal of tariff barriers and visa restrictions and seek further to bolster income and employment, and provide the region with stronger economic muscle.

"We now have to ensure that we create a truly single market and production base, with freer movement of goods and services," Najib said after signing of the declaration.

The combined GDP of the ASEAN economies, he said, will grow to $4.7 trillion by 2020, and the bloc will become the world's fourth-largest economy as early as 2030.

Challenges to integration 

However, political sensitivities and other differences are believed to dog the formation.

ASEAN nations have various systems of government including communism in Laos and Vietnam, a military junta in Thailand, an authoritarian regime in Cambodia, a quasi-civilian system in Myanmar and a monarchy in Brunei.

The countries also speak different languages and follow various faiths amid diplomatic flare-ups among each other such as border disputes between Cambodia and Vietnam.

"Time will tell if today's signing ceremony is just more style over substance,” Curtis Chin, a former US ambassador to the Asian Development Bank, said.

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