In last week's column, I discussed how the new round of US tariff discussions and other uncertainties may impact our local economies. As we follow this continuing story, let me feature an area that I believe will bring greater certainty. This is the ASEAN Economic Community (AEC).

The AEC is one of ASEAN’s three pillars, which have defined much of its work and articulated as blueprints that inform subsequent plans. These lay out a vision that is refreshed with every ASEAN Summit, the most recent of which in Kuala Lumpur, reiterated the need for deeper economic integration and sustainable development, among others, in light of global uncertainties.

Initially proposed in various meetings to give flesh to socioeconomic development goals of ASEAN, the AEC’s objective is to make ASEAN a vital platform for manufacturing and trade, the end of which is to help usher in higher levels of economic development for member states. This was further developed in the ASEAN Concord II in 2003, with its AEC blueprint ironed out in 2007, making it one of three pillars to include the Political Security and Cultural Community, with their respective blueprints, development milestones, and objectives.

The steps to building the AEC included crafting of the Common Effective preferential Tarriff (CEPT) scheme in 1992 for the ASEAN Free Trade Area (AFTA), the ASEAN Trade in Goods Agreement (ATIGA) in 2010, which removed almost all tariffs among its member states, and the ASEAN Trade in Services Agreement (ATISA) in 2020, which envisions the freer flow of services within the 700 million strong 11-member bloc.

Manifesting the AEC's vision means spurring local manufacturing and sourcing materials and components from within the regional bloc, since the cost of transport and trade are lower when compared to sourcing from outside ASEAN due to higher fuel prices and conflicts, which force higher costs.

In my view, building the ASEAN Economic Community is logical since it reignites the natural economic relations of precolonial Southeast Asia, when the various maritime kingdoms such as Sri Vijaya in Sumatra and the Javan Madjapahit and Mataram kingdoms, as well as similar polities in Luzon, the Visayas and Mindanao traded freely with Indian, Arab and Chinese merchants, and with Kingdoms of Champa in present day southern Vietnam.

After western colonists took hold in the 16th century, they organized these Southeast Asian nations into different nation-states and encouraged the growing of commodities traded with the rest of the World right into the 19th century. Most of these states gained self-rule after World War 2 and are now the countries we know today.

The case for stronger trade within ASEAN is not only established by history, it is also bolstered by the lower costs of proximity. This can make our trade more secure and competitive. I believe it is time to fortify such relations more fully as we face global economic challenges.

With complicated geopolitics and evolving new trade dynamics, the emergence of Artificial Intelligence, the world is changing at a pace that will make it so different from the post-World War 2 plant we know. These include risks that may cause us to pay more to trade, export, and even consume. At this critical inflection point, we will need the ASEAN Economic Community to come forward.

You are all invited to the upcoming Davao Investment Conference. This coincides with the Davao Agri Trade Expo, the largest such event in Southern Philippines. This will happen from Sept. 17 to 21 at the SMX Convention Center in Davao City.