1.

0 Introduction
ASEAN Economics Community (AEC) is comprises 10 nations in Southern Asia. The 10
ASEAN member involved Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia,
Myanmar, Philippines, Thailand, Singapore and Thailand. The establishing of AEC is to
revolute the region into a single market and production base with create a highly
competitive advantage. This is to make it a stable and prosperous region. AEC had been
started since 1992 when ASEAN leaders mandated the creation of the ASEAN Free Trade
Area (AFTA). When 2003, ASEAN are agreed to improve the momentum and progress it
gained it AFTA to broader and deeper regional cooperation. The leaders also maximize the
chances for same beneficial regional integration. Besides that, the declaration happened and
make AEC as one of the three pillars of the ASEAN Community, Political-Security Community
and Socio-Cultural Community.
After several years, there are the signing of the several regional cooperation
agreements. ASEAN had signed few agreements to support the realisation of AEC. The
agreement involves ASEAN Trade in Good Agreement (ATIGA), ASEAN Framework
agreement on Services (AFAS), ASEAN Agreement on Movement of Natural Persons
(AAMNP), Mutual Recognition Arrangement on Services (MRAs) and ASEAN Comprehensive
Investment Agreement (ACIA). Moreover, there are few transportation-related agreements
such as ASEAN Framework Agreement on Multinational Transport (AFAMT), ASEAN
Framework Agreement on the Facilitation of Foods in Transit (AFAFGIT) and ASEAN
Framework Agreement on Facilitation of Inter-State Transport (AFAFIST). These agreements
are agreed for increase trade in goods and services and investment among the states
member. Furthermore, these agreements also help to promote and expand regional
production sharing and network while promote higher level of transparency. Last but not the
least, the agreements also improve the movement of the goods, services, investment,
capitals, and skills.
The AEC plan had bring a huge impact not only to other country but also us
especially in investment. ASEAN had launched various types of program or projects to
improve the investment of the country. One of the project that related is ASEAN Investment
Website. This projects are mainly highlight the viability of the region in the location of the
investment, ACIA Forum and the publication of the publication of the annual ASEAN
investment. On the other hand, investment also expected will bring other outcomes and
benefits to the region. For example, increase the access to regional export markets, raw

materials, low production fees, improve the logistic of the goods and increase the level of
competitiveness and efficiency to with the service supplier among there region..
2.0 Literature Review
ASEAN Economics Community had created a chance to let the countries become the new
hub of the global investment. There are 10 economic-diverse countries which able make
ASEAN as a single location for global investment with 500 million of domestic consumers.
This is help the establishing of AEC is to revolute the region into a single market and
production base with create a highly competitive advantage as mentioned before. According
to the Ishikawa (2015), the goal of AEC to create a community is to achieve a free and
open investment with minimize the restriction by 2015. As mentioned by him, the blueprint
of the AEC had the plan of minimal the restriction of the investment. AEC is try to reduce or
decrease investment restriction by create the ASEAN Comprehensive Investment Agreement
(ACIA). A modality for eliminating investment restriction also created to promoting and
facilitating investment had to be strengthen.
According to the (Petri, Plummer, & Zhai, 2010), as a comprehensive strategy for
deepening economic integration, the AEC start lowering barriers to trade and investment to
harmonizing regulations and policies. This can generate gains well beyond what could be
obtained through the tariff liberalization objectives of AFTA. Based on Corbett & Umezaki
(2009), various numbers of instruments had been created to make economic integration
such as trade agreements between the members of the countries. These trade agreement
are go beyond trade and look deep economic integration such as investment liberalization
and facilitation, economic cooperation, services liberalization and etc. In addition, the
reduction and elimination of the tariffs instead of forming the harmonization of domestic
rules and regulations. Foreign Direct Investment also contributed to enable the ASEAN
countries achieve high economic growth in production, procurement, and foreign
multinational corporations (MNCs). The coverage of FDI not only depends on the FDI
policies but also the elements of implementations and enforcement of these policies.
(Corbett & Umezaki, 2009)
From the perspective of the one of the automobile industry in Thailand which is
Toyota Automobile, they think that investment on AEC had given a huge impact to their
industry. Toyota has production base and marketing in most of the ASEAN countries which
included Malaysia, Philippines, Indonesia, Vietnam, Singapore and Thailand. When AEC fully
started, it will affect the investment of the FDI of the countries. This is because the changes

of the tariffs gems and accessories. Besides that, the impact of Free Trade Agreement
between Thailand and Europe Union had a bit impact because Thailand has had open policy
to support foreigner for investing in Thailand. (Meadhapithakwong, 2013)
3.0 Discussion
In ASEAN Economics Community, the AIA Council is the Ministerial body for investigating the
implementation of the ASEAN Comprehensive Investment Agreement (ACIA) which is the
ASEANs main economic instrument to make sure a free and open investment regime. It is
composed of Ministers from the ten Member States responsible for investment and the
Secretary-General of ASEAN. The Coordinating Committee on Investment (CCI) is officials
responsible for investment and other officials from other government agencies supports the
AIA Council in carrying out its functions. The most important of establishing ASEAN as a
single market and production base is having a free and open investment regime where there
will be non-discriminatory treatment is extended to ASEAN and ASEAN-based investors, save
for limited exceptions that are also due for elimination of the progressive, the transparency
of the rules and regulations and make sure the investors and their investments get their
protection. In addition, there are many related agreement had been signed. These
agreement had given some outcomes or benefit to the investment of the countries.
In this situation, ASEAN Comprehensive Investment Agreement (ACIA) had been
created to reduce and eliminate the impediments to investment. This allow the investor to
have wide sector or choices to invest in. ASEAN will improve the environment of investment
by implementing reservation list of the reduction restriction. By this reservation list, the
investor will have an opportunities to invest into a greater industrial complementation and
specialization. Besides that, this agreement will also increase the foreigner in participant in
this liberalization sectors. Moreover, the facilitation which mentioned in the agreement also
help adopting the best practices of internationalization on investment. ASEAN countries will
commits to develop and use the measurement that give a better facilitation for the
investment. Thru this way, the investor will have chance to increase procedures when they
want to run the business such as the start-up of the business in terms of licensing and
incentive scheme before they start investing.
Furthermore, ASEAN Economics Community also give some benefits to invest in
goods and services. There are two agreements involve which are ASEAN Trade in Goods
Agreement (ATIGA) and ASEAN Framework Agreement on Services (AFAS). In ATIGA, the
AEC will reduce or eliminate the tariffs and non-tariffs measures in liberalisation area. ASEAN

is try to simplify the rules, regulations and policies. For the previous record, there are total
of 6 ASEAN countries had been totally eliminated ASEAN import duties for 99.65% of the
tariffs since January of 2010. On the other hand, the ASEAN will also broadening and
deepening the level of the binding services to improve the coverage and higher level of
liberalisation commitment in every sectors. These situation allow the investor to increase
access to regional export market, materials, and input of the productions. In addition, this
will make the cost of the production become cheaper than usual and save the business costs
directly.
In addition, the benefit of AEC in investment also related to the ATIGA and AFAS. In
both agreement, ASEAN work towards customs integration and make ASEAN as a single
window. In AFAS policy, ASEAN will enhance the cooperation in services among the ASEAN
State. This will bring to the improvement of logistics and the good move fasters. Next the
benefits of AEC also improved the efficiency and competitiveness of service suppliers among
the countries.
For the perspective of the Australia, AEC also encourage the other nation of the
investor to invest in the ASEAN. As mentioned by (Ressa, 2014) the Singapore is the top
ASEAN countries which attracting the investor. However, Malaysia, Philippines, and Vietnam,
now become one of the attracting investor country. This is because the high GDP growth
rate, low rates in location destination of investment. Therefore, it is possible that after AEC
fully operated, there will be a lots of investor invest in the country.
In Vietnam, Nguyen Anh Thu which is the associate dean of Faculty International
Business and Economics of VNU University of Economics and Business was mentioned on
that the Vietnam are now gradually open few of sectors for foreign direct investment by
mergers or acquisitions. The foreign invest also allowed them to buy unlimited of the shares
in certain domestic companies. As mentioned by her that Japan is the largest and important
FDI investor in Vietnam which had invested $5.14 billion in 2012, followed by the Singapore
($1.73 billion) and South Korea with $1.18 billion. Vietnam also expected that the FDI from
ASEAN member will increased. Vietnam had started focusing on some field for example
transportation, postal, hotels, tourism, banking and financial. (Matsutani, 2014)
In a nutshell, I think that the AEC project is bring a lot of benefit on investment of
the ASEAN countries. The people of the Association of Southern East Asia should be

prepared well to face the challenge that might be happen even though AEC brings many
benefits to the development of the countries. Besides that, I also feel that the AEC will
attract investor from other countries such as Japan, South Korea and Australia to invest into
ASEAN counties thru FDI.
4.0 Conclusion
AEC is a community which realisations of the regions that end goal of economic integration.
AEC also envision as a single market and production base, competitive economic region,
equitable economic development and fully integrated region in the global economy. ASEAN
will be free movement of goods, services, and investments as well as the capital and skills.
AEC had signed several agreement to support and let the AEC achieve realisation. These
agreement included AFAS, ACIA, AAMNP and so forth. These agreement are related to the

investment of the AEC. These agreement aim to facilitation the movement of goods, services,
investments, capital and skills. Next, it is also increase trade and investment among the
member state and promote the network and production sharing. In addition, it is promote
higher level of transparency and predictability. AEC also organized some programs to
promote investment.
ASEAN Comprehensive Investment Agreement (ACIA) had been created to reduce
and eliminate the impediments to investment which allow the investor to have wide sector
or option to invest into country. Besides that, this agreement will also increase the foreigner
in participant in this liberalization sectors. The investor will have chance to increase
procedures when they want to run the business. Other than that, AEC also allow the
investor to increase access to regional export market, materials, and input of the
productions. In addition, this will save the business costs by reduce of the cost of production.
AEC will bring to the improvement of logistics and the good move fasters. Next the benefits
of AEC also improved the efficiency and competitiveness of service suppliers among the
countries.
The AEC also attracting the outsider from other countries to invest into the ASEAN
countries. When AEC had been introduced, there are a lot of country that feeling interested
to invest into the ASEAN. They believed that the free trade investment is quite interesting.
Many country start keep on eye the situation of the ASEAN countries to find a chance to
invest into the ASEAN. The AEC had encourage the people from Europe Union or other
country to increase their investment into the ASEAN.

As a conclusion, I think AEC project is very important to ASEAN. This is because it

was bringing different types of benefits to each of the sector such as good and services,
transportation, and so forth. These agreements should be created to make sure every
investor being protected. The program which related to the investment should be
maintained to promote the AEC project and protect the investor.
5.0 References
About AEC ASEAN Economic Community ASEAN Investment. (n.d.). Retrieved from
http://investasean.asean.org/index.php/page/view/asean-economiccommunity/view/670/newsid/755/about-aec.html
Aldaba, R. M. (2012). Investment Liberalization and Facilitation toward AEC 2015.
Philippines Journal of Development, XXXIX, 25.
ASEAN
Investment
Area
(AIA)
Council.
(n.d.).
Retrieved
from
http://www.asean.org/communities/asean-economic-community/category/aseaninvestment-area-aia-council
Corbett, J., & Umezaki, S. (2009). Deepening East Asian Economic Integration (Vol. 1, pp.
1525).
Ishikawa, K. (2015). ASEAN , Aiming to Create an Economic Community ( AEC ), 1328.
Matsutani, M. (2014). ASEAN Works to Overcome Challenges. The Japan Times. Retrieved
from
http://investasean.asean.org/index.php/page/view/asean-economiccommunity/view/670/newsid/755/about-aec.html
Meadhapithakwong, S. (2013). AEC Impact on Investment and Production of Automobile
Industry: Toyota Motor Thailand Co., Ltd ., 253256.
Petri, P. A., Plummer, M. G., & Zhai, F. (2010). The Economics of the ASEAN Economic
Community, (September), 130.
Pupphavesa, W. (2008). Investment Liberalization and Facilitation: Contribution to te ASEAN
Economic Community Blueprint, 121134.
Ressa, M. A. (2014). Australian Investors on AEC 2015. Retrieved from
http://www.rappler.com/world/specials/southeast-asia/54790-australian-investorsasean-community