How does the AEC affect the multinational firms investing in AEC members?
The creation of the ASEAN European Community opened a range of investing options for the states that became the members of the specified organization. Primarily, the importance of the financial support, which the AEC members provide to each other, deserves to be mentioned as the key implication of the agreement signed between the AEC states (Daniels, Radebaugh, & Sullivan, 2011).
Another alteration, which the introduction of the ASEAN principles into the framework of the international trading process, the removal of barriers, both physical and economic, should be listed at the top of the major accomplishments. There is no need to stress that the process of goods transportation has always been a major impediment to the enhancement of international trade. Because of the issues regarding the customs services, specifically, the time and money required to transport the products, the process of trade used to be disrupted quite often. By signing the AEC agreement, its members removed the aforementioned obstacles on their way to trade (Daniels et al., 2011).
Finally, the AEC agreement has created the premises for the banking business development in the states that have become the members of the ASEAN. As a result, the processes of financial transactions are comparatively much faster to carry out. Seeing that in the modern world of global economy time is of essence, the fact that certain processes may occur on a faster pace is essential to the success of organizations involved in the economic partnership (Das, 2012). While claiming that the AEC removed every obstacle from the way of international business making would be wrong, one still must admit that the AEC members have impressive advantages in the international trade.
What is the effect of AEC on the U.S. economy?
Despite the fact that the AEC agreement presupposed that the document should be signed among the Asian states for the most part, the role of the agreement on the United States economy cannot possibly be doubted. A brief overview of the present-day U.S. business world will reveal that the AEC affects the American economy in a very direct and straightforward fashion (Daniels et al., 2011).
The strong economic ties, which the United States have with most of the AEC countries, is, perhaps, the key factor that defines the powerful influence that the AEC states have on the American economy. Unless these ties are secured and maintained relevant, a range of the American businesses ceases to prosper. However, as soon as these links are destroyed, a range of the U.S. companies will have to shut down, which will trigger a major economic recession (Howley, 2009).
The recent announcement of the European Union to cooperate with the AEC can also be considered a solid reason for the United States to be invested into the processes that occur in the AEC countries. By inviting the EU to participate in the trading process, the AEC contributes to the enhancement of the relationships between the EU and the United States (Daniels et al., 2011).
The process is, in fact, mutual. While the AEC states contribute to the economic growth of the United States, the latter also promote a faster increase in the SMEs evolution (). Their collaboration has triggered a range of improvements in the design of international trade; for instance, the ASEAN–US Technical Assistance and Trading Facility (Plummer & Yue, 2009, p. 21) allows for avoiding some of the major technical misconceptions in the process. Therefore, encouraging the cooperation between the U.S. and the AEC is an important stage in the process of global economy development.
Reference List
Daniels, J., Radebaugh, L., & Sullivan, D. (2011). International business (13th ed.). Upper Saddle River, NJ: Prentice Hall. Web.
Das, S. B. (2012). Achieving the ASEAN economic community 2015: Challenges for member countries & business. Pasir Panjang, Singapore: Institute of Southeast Asian Studies. Web.
Howley, E. (2009). 2010 AEC Industry outlook: Strategy and insight for design and construction firms. Chicago, IL: ZweigWhite. Web.
Plummer, M. G. & Yue, C. S. (2009). Realizing the ASEAN economic community: A comprehensive assessment. Pasir Panjang, Singapore: Institute of Southeast Asian Studies. Web.