Times are changing, and will continue to change on the fly as we continue to grow into a more connected and global economy. One of the greatest issues as of recent is the debate over expanded free trade and the banishing of tariffs between regions.
According to a new economic report by General Motors and the Oxford Economics’ Study, the reduction of tariffs and increased free trade within the ASEAN (Association of Southeast Asian Nations) could create over 500,000 new jobs within the automotive industry. The numbers and statistics equate to a 0.5-percent increase in economic output.
The study also showed a decrease in tariffs across the region, but an increase in non-tariff measures has plagued the region. Between 2009 and 2013, 190 new non-tariff measures were put into place.
“ASEAN countries should be commended for their significant progress bringing down tariffs,” said GM International Vice President of Government Relations and Public Policy Matt Hobbs.
“However, NTMs remain a significant impediment to achieving the fundamental aims of the ASEAN Economic Community (AEC) to establish the free movement of goods across borders.”
The study portrayed that with full liberalization, non-tariff measures fully removed and output tax reduced by 20 percent, 500,000 additional jobs would be generated and GDP would be 0.5-percent higher in 2025 than currently forecast by Oxford Economics.
“Almost 4 million vehicles were produced in ASEAN in 2014. This is on par with South America, India and South Korea,” said Hobbs.
“But it does not act as one market, denying the region’s industry the ability to achieve the scale needed to be globally competitive.”
He added: “If it acted as one region, ASEAN would have the size, scale and expertise to become a globally competitive automotive manufacturing base that could export to major markets around the world.”