T

he Trade Ministry officially launched the ASEAN Economic Community (AEC) Center on Monday to provide consultation and information, a move aimed at boosting Indonesia'€™s readiness to enter the upcoming ASEAN single market.

'€œThe establishment of the center is a very important step as the AEC will be implemented at the end of this year. It will be a historic event,'€ said Trade Minister Thomas Trikasih Lembong during the launch on Monday.

Thomas said the center would help the government educate the public about the AEC, in which there will be freer movement of goods, services and people among ASEAN member countries.

The AEC will combine the markets of the 10 ASEAN member countries into one giant bloc with combined gross domestic product (GDP) of US$2.7 trillion.

The Trade Ministry'€™s director general for international trade cooperation, Bachrul Chairi, said that the center would facilitate business consultation, public outreach and business advocacy.

The center could, for example, offer solutions and recommend export markets within the Southeast Asian region for Indonesian exporters, he added.

Indonesia'€™s non-oil and gas exports to ASEAN countries hit around $39.8 billion last year, with Singapore becoming the largest export destination, followed by Malaysia and Thailand, according to Trade Ministry data.

Its non-oil and gas imports from ASEAN topped $50.66 billion last year, making it book a $10.86 billion trade deficit with ASEAN.

While there was no particular target for increased exports, Bachrul hinted that his ministry expected the center would help the country boost its intra-ASEAN trade as local exporters would become more informed about the ASEAN market.

Indonesian Flour Producers Association (Aptindo) executive director Ratna Sari Lopes said on the sidelines of the launch that from her association'€™s point of view, local flour makers were ready to face the single market.

'€œWe imported wheat worth around Rp 2.2 trillion [$149.6 million] last year and exported processed wheat worth $550 billion,'€ she told reporters.

Ratna added that there would be no big difference in the trade of flour during the AEC as most tariffs on goods among ASEAN countries had been reduced to 0 percent.

Bachrul said while tariff liberalization had reached over 90 percent at present, ASEAN member countries were now improving trade facilitation to ease the flow of goods, with Indonesia carrying out deregulation and '€œde-bureaucratization'€ on a number of regulations.

Liberalization of trade in services, meanwhile, remains the most sensitive issue for most ASEAN member countries.

The trade in services includes four models '€” cross border supply, consumption abroad, commercial presence and presence of natural persons '€” with the last two models still under discussion.

The ministry'€™s director for ASEAN cooperation, Donna Gultom, said Singapore and Thailand were the only member countries that had met targets to open foreign ownership up to 70 percent.

The launch of the AEC, according to her, would stimulate other member countries to further discuss the matter and boost their readiness to achieve the target.