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As the deadline for an Asean single market grows closer, scepticism remains as to whether it will satisfy its ambitious objectives for regional trade.

Billed by some as the “EU of the East”, the Asean Economic Community (AEC) will consist of 10 nations, with negotiators having set a December 31 deadline for ironing out the details of the union. It is earmarked to remove the bulk of tariff barriers, as well as significant boundaries to the movement of people and non-tariff-related barriers.

Most economists agree that all participants could reap potentially huge benefits, with exporters and importers alike enjoying cheaper trade, which should be eventually passed on to the end consumer in the form of cheaper goods.

Official projections claim that the union would create an effective free trade area worth around US$1tn, with a combined GDP of US$2.5tn.

But despite the Asean secretary general Surin Pitsuwan saying this week that “the AEC remains on track and a top priority”, some expressed doubts as to the political will to seal an agreement while the regional economy is staring down the barrel of an economic downturn.

China remains the biggest trading partner of Asean as a collective and of each of the individual member states. As fears mount over its economic wellbeing, it has raised question marks over the AEC.

“The worst time to undertake policy reform is when the economy is in downturn. In times of upturn, it is easier to get things done,” ADB lead economist Jayant Menon tells GTR.

“It depends on how much each country wants it, and that will determine how successful it will be,” Jayant Menon, ADB

Menon also voiced concerns over the political manoeuvring some member states may undertake in order to secure the greater benefit.

“These things are up to national reforms. It depends on how much each country wants it, and that will determine how successful it will be,” he adds. “It will be very hard to be sure about the benefits until we have a better idea of how much of the implementation comes into plan, and how soon.”

Even if an agreement is reached, Menon says that some of the key points could take up to 25 years to implement. Asean has already eliminated tariffs on the majority of its trade and exports, but the remainder are politically and nationally sensitive such as agricultural produce and commodities, many of which provide the lion’s share of employment in some of the member states.

Some measures were already due to have taken shape, such as the removal of tariffs from an additional 128 sectors, but these have yet to be realised. Labour groups around Asean are likely to oppose any agreement, adding to political uncertainty in some nations.

Meanwhile, just months before an agreement is due to be signed, exporters around the region are reportedly none the wiser as to the benefits that could be felt.

“As a concept it is very good,” says RJ Liow, founder of the AYS Group, a halal manufacturer, “But there is no awareness in the region among SMEs.”

A report this week authored by CBRE Singapore, a consultancy, argued that real estate and logistics would be the first beneficiaries of the AEC.

“In particular, the logistics market is expected to grow and develop in Asean given the strong emphasis under the AEC blueprint for infrastructure development and the gradual elimination of non-tariff barriers across member countries,” the authors wrote.

The plan for the AEC was first laid out in 2012 and the 10 member states are: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.