The coming integration of the Association of Southeast Asian Nations (Asean) economies to create the Asean Economic Community (AEC) is an exciting development and will multiply business opportunities in our regional and global economic landscape.

The integration process, expected to be completed by 2015, will create one of the biggest economic blocs in the world and opens exciting possibilities and challenges to businesses. The creation of the AEC promises to pave the way for free trade across the region not just in terms of goods but also in terms of services and labor. Overall, it will also lead to a unified capital market which would facilitate a greater influx of investments into the region.

To help ease the transition, the member­countries of Asean have taken concrete steps to implement a blueprint to harmonize legislative and political items that will make sure that the plan pushes ahead. While great progress has been made, there is still much to be done given the complex political and economic issues that need to be threshed out. While the AEC looks similar to the European Union (EU), it will primarily be an economic rather than a political entity, which should make integration easier though presenting its own set of challenges.

As the president of the European Chamber of Commerce of the Philippines (ECCP), I am involved in observing the progress of the integration efforts and have realized its potentials, taking concrete steps to harness those for my own company.  A lot of efforts are geared towards facilitating communication and cooperation between Asean and the European Union to promote reciprocal expanded market access.

Apart from intergovernmental efforts, companies should take steps to prepare for 2015. This is because while the creation of the AEC promises to create opportunities for companies seeking to tap the Asean market, it also opens the floodgates to new levels of intense competition for the benefit of the general Asean population.

Our company, Royal Cargo Combined Logistics Inc. has recognized these facts, which is why we take steps to capitalize on the transition to better position ourselves to take advantage of the AEC. Our company is the only multinational freight forwarding company based in the Philippines with offices in several Asean countries, namely, Vietnam, Cambodia and Singapore. Our company provides specialized logistics in the fields of freight forwarding, contract logistics, warehousing and distribution, cold storage, and the Philippine market leader for handling projects and heavy lifts.

Of particular interest to us are the growing consumer goods markets within Asia and Asean which progressed as living conditions in these countries continue to improve. With the formation of the AEC, Asean­based exporters now look at new and fast growing markets beyond £he traditional markets like Europe and the United States. This in turn triggers a growth in demand for logistics companies like ours. A sure sign of this is the marked and continuing increase in intra­Asian trade which was practically non­existent just a decade ago.

We are expecting to further expand within Asia specifically in Asean to take advantage of the new trade links between the member­countries. An example of this would be the creation of a Roro (roll­on/roll­off) network that will connect the region starting with connecting the Philippines and Indonesia (Davao/Bitung).  Among our plans is to open an Indonesian office to capitalize on increased seaborne trade between the country and Mindanao.

In order to take advantage of the increasing opportunities, the Philippines should promote and develop diversified export products to Asean to include non­traditional exports such as fashion design products, furniture, Philippine brands of consumer products, agricultural products, etc. This would increase the volume of exchange of goods between the country and the rest of the region. The country can't provide enough jobs in the service industry alone; manufacturing needs to grow as well.

Geographically the Philippines would be well placed acting as a distribution hub, which could be realized by making Subic a real Freeport and relegating the Bureau of Customs guarding its boundaries.

But, most important, businesses and the government should adopt long term perspectives by planning ahead, anticipating change and shifting market and trade patterns by itself. Only by being prepared would the country reap the fruits promised by the
AEC. On our end, we have created a network of offices outside the Philippines that is continually growing to allow us to better respond to changes brought about by the increase in trade activities.

Through careful preparation we can make sure that the Philippines comes out ahead as we join Asean in charting a new course towards a unified economic union. Rather than fear the inevitable, let us embrace and gear up for the effects of the 2015 integration.

Michael K. Raeuber is the chief executive officer of Royal Cargo Combined Logistics Inc. and president of the Board of Directors of ECCP.

Source: Business Mirror; Asia; 02 May 2013