Regional Economic Cooperation in Asia
Title: Support of Regional Economic Cooperation in Asia
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Countries: China, Laos, Cambodia, Viet Nam, Mongolia
Lead executing agencies: Ministry of Agriculture, Forestry and Fisheries (Cambodia), Ministry of Commerce (China), Ministry of Planning and Investment (Laos), Ministry of Finance (Mongolia), Ministry of Industry and Trade (Viet Nam)
Overall term: 2019 to 2022
Reducing tariff and non-tariff barriers is key in encouraging the free flow of trade and stimulating cross-border investment between countries. The implementation of trade facilitation measures and increasing trade-related services is crucial to overcome limited domestic markets, especially for small and medium enterprises (SMEs).
Regional economic integration processes in Asia have led to a significant reduction of trade barriers. The rapid development and still increasing number of bilateral and multilateral free trade agreements in the region shows Asia’s growing importance for global trade liberalisation. Still, so far intra-regional trade flows in Asia remain relatively low.
Given the development gaps in the region, countries such as Lao People’s Democratic Republic, Viet Nam, Cambodia and Mongolia encounter obstacles in fully reaping the potential benefits of regional economic integration, with businesses lacking the capacity to overcome trade obstacles and national administrations facing difficulties in implementing rules and regulations for cross-border exchange.
To utilise Asia’s dynamism, an intensified dialogue between global development partners in the region, which includes economically smaller countries, is essential. To ensure those countries can fully benefit from regional integration, barriers to big markets need to be reduced.
The conditions for regional and global trade, especially in agricultural products, in the selected focus countries in Asia is improved and innovative trilateral cooperation projects in the area of economic cooperation are piloted.
The project works with four selected focus countries: Cambodia, Lao People’s Democratic Republic (PDR), Viet Nam, Mongolia, and with China. China is both an economic and development partner of the countries and included to ensure the equal inclusion of the focus countries’ interests in regional and global integration processes. Mongolia is supported especially in the framework of the Greater Tumen Initiative (GTI).
Within the frame of German Aid for Trade and to contribute to the achievement of trade-related Sustainable Development Goals, public stakeholders at the regional, national, and provincial levels, export-oriented business associations, and SMEs are supported.
Main activities include providing capacity building, organising training and dialogue events on agricultural trade facilitation, cross-border cooperation and private sector promotion.
The three key areas of engagement are:
- enhancing the access to trade-related services for agricultural export for small and medium enterprises in Cambodia, Lao PDR, Mongolia and Viet Nam,
- strengthening the structures for cross-border (sub-) regional cooperation between the focus countries and China,
- fostering regional and trilateral measures among the focus countries and with China in the field of regional economic cooperation.
A special focus is put on the inclusion of female entrepreneurs in regional economic integration processes and the utilisation of digital applications and tools.
The project is affiliated with the Sino-German Center for Sustainable Development.
To support private sector development within ASEAN-China Free Trade Area, Cambodian and Vietnamese businesses were strengthened in exporting agricultural goods to the Chinese market. Seven product specific export guidelines were introduced to the business community and utilised for training.
The introduction and implementation of trade promotion measures, such as the Authorized Economic Operator (AEO) in Mongolia. In cooperation with the Asian Development Bank (ADB) and Korean Customs Service (KCS), regional experiences from the Republic of Korea were incorporated into a bill to renew the Mongolian Customs Act.
The GTI Trade and Investment Committee AEO Working Group was supported in drafting a regional GTI AEO mutual recognition agreement (MRA) among all member customs.
Regional exchange on sanitary and phytosanitary standards improved understanding of these standards and compliance with them in China among actors from Cambodia, Lao PDR and Viet Nam. The exchange was accompanied by a study on the status-quo of standard setting and implementation in the region.
Training and advice to the GTI Secretariat led to further professionalisation in regional project implementation.