Economic Policy Priority of the ASEAN Indonesian Chairmanship in 2023: Strengthening Regional Value Chains

The Project at A Glance

Trade has been a major driver of the Association of Southeast Asian Nations (ASEAN) economic growth in the last decades. The ASEAN Framework Agreement for the Integration of Priority Sectors (Framework Agreement) identifying the priority sectors, further strengthens ASEAN’s position as a major trade bloc and enables the progressive, expeditious and systematic integration of these sectors in ASEAN.
International Economics Consulting Ltd. with a funding from the ARISE+ Indonesia provided recommendations to develop ASEAN into a center of GVCs.

What We Found

The need for ASEAN Member States to work together to tackle cross- border challenges to remove frictions in regional value chains is critical to promote regional competitiveness and forge more resilient industries.
Through a detailed quantitative analysis, as well as extensive consultation with the industry leaders and supply chain operators in ASEAN, our Team looked into the sectoral analysis from a regional perspective. The aim was to help to align the national strategy with the regional strategy and to enable ASEAN firm to seize the opportunities to better integrate into the unexploited segments of the ASEAN RVCs.
The study looked on the reinforcement of regional cooperation on three potential sectors for RVCs, namely Electronics, Automotive, and Medical devices.

Our Strategy and Impact

ASEAN intra-regional trade in the three sectors has been increasing over the years. Our study shows the diversified participation of ASEAN Member States in GVC and RVC in the three selected sectors, but it also reported some collaborations that can support deeper regional value chains, such as the “complementarity schemes” and twinning models that were observed in the automotive and electronics industries.
The recommendations were structured around five key areas:

Enhancing policy framework for ASEAN RVC integration
Leveraging RCEP and FTA opportunities for enhancing regional trade and investment
Improving NTM transparency, monitoring, harmonization, and recognition mechanisms
Upgrading technological and innovative capability
Promoting responsible and sustainable investment and RVCs

Our Core Solutions

As businesses seek to expand operations into new markets, the need to explore global supply chains and understand the international regulatory framework becomes crucial. At International Economics Consulting, we build tailor-made strategies for both import and export-oriented business solutions.