By Sherine Chen    Photo：CANVA

The Association of Southeast Asian Nations, ASEAN is a group of ten Southeast Asian nations working together on economic and security cooperation. The organization has been pivotal in promoting economic integration in Asia, participating in negotiations for the creation of the world’s largest free trade agreement and securing six free trade agreements with neighboring economies.

When it comes to economic growth, ASEAN is often ignored compared to big players like China and the United States. But in recent times, ASEAN has shown it's a fast-growing region, able to adapt well even during tough times like the COVID-19 pandemic. ASEAN is even projected to be the fourth largest economy in the world by 2030.

Apart from being the target of the China Plus One strategy, ASEAN also prioritizes the promotion of cross-border trade. In order to enhance efficiency in the movement of goods across borders, ASEAN created the ASEAN Customs Transit System (ACTS).

This system aims to simplify the transportation of goods between ASEAN member countries by road, with the goal of increasing regional trade and providing savings in both time and expenses. ACTS removes the need for multiple customs declarations at borders. 

ACTS requires only one electronic declaration, one guarantee, and one truck for the entire journey. This system allows a truck to travel smoothly from where it starts (Departure) to its destination in another country without obstacles or delays. There's no requirement for separate customs declarations at each border, and no need to change trucks in different countries.

A single guarantee covers the duties and taxes for all countries involved in the transit process, reducing complexity and ensuring efficiency. Moreover, the transport costs are lower.

ACTS play a crucial role in positioning ASEAN as a key player in the global economy. By promoting cross-border trade towards global trade, ASEAN countries can leverage their collective strengths and enhance their competitiveness on the world stage. However, while the benefits of ACTS are significant, challenges remain, including the need for continued commitment from member states, infrastructure development, and addressing disparities in economic development among ASEAN countries. 

Despite these challenges, ACTS represent a promising framework for promoting cross-border trade and advancing economic integration within ASEAN. Moreover, ASEAN countries have also emerged as attractive destinations for nearshoring. By fostering closer cooperation, reducing barriers, and embracing the opportunities of global trade, ASEAN is poised to unlock new levels of growth, prosperity, and resilience in the years to come.
 

Appreciate if you could share TGL Blog among your friends who are interested in first-hand market information of supply chain and updated economic incidents.

Related Articles to Read