Finalizing Federal Tax Authority Would Be A Great Shot At Improving Trade For SE Asian Companies

The recent turn of events had led to collateral damage to world economies. The turn of events has let to collateral damage across businesses over every level. Now, as the trade and businesses make their way back at the dawn of Corona virus, the trading policies are being revised to focus more on kick-starting economies from triage.

In a recent event, the International Monetary Fund estimated that South-east Asia might see a fall in its average as its five largest economies will experience a fall by 2 per cent in the current year. However, as per the Monetary Fund, it was on a better side when compared to the global average of minus 5 percent.

However, the hit of trades by 5 per cent will still put a huge impact on these trading regions as this would be their first time at such low levels since the 1960s.

As per several experts who keep an eye on the graph and performances over the world trade, rebuilding the South-east Asia's growth engine could be the key to bring out change which again, might be a challenge. SE Asia's major trade sectors (electronics, commodities and textiles) have had a major blow due to the current turn of events and the economical collapse due to the uncertain lockdowns that put an halt to the demand and supply chain.

Considering the chain of events that have happened across the past few months, the investment in such markets will face a severe downturn and drag the effectiveness of important economic growth drivers. The growth drivers are said to fall dramatically across South-east Asia, putting halt to the region's manufacturing growth.

Looking at the turn of trade events, the EU-Asean Business Council estimated that “10 members of the Association of SouthEast Asian Nations had imposed some 6,000 separate non-tariff barriers to trade across the region”, back in 2019.

The barriers built to prevent the economies across the globe from uncertainty might also prove to be a barrier of growth. While recovery from the current pandemic seems to be a challenging situation, it also gives ways to reset policies which have proved to stand the test of time.

The current situation demands a new era of creating a more transparent and well organized low-tariff trade environment that emphasizes on short-term recovery and sets the stage for
long-term prosperity.

As per the suggestions, the key to such growth lies in free trade agreements (FTAs), specifically the Regional Comprehensive Economic Partnership (RCEP) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
The RCEP comprises 30 percent of the world's population besides acquiring 29 percent of global GDP. On the other hand, CPTPP pact brings together 11 economies from both sides of the Pacific, making up an average of 14 percent of the global economy.

Lastly, taking a shot at the FTA might not be an easy task but it is one of the best times to reform the trade policies.

Source: https://www.thejakartapost.com/academia/2020/09/21/finalizing-ftas-will-be-a-boost-for-southeast-asian-economy.html

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