The 2003 Declaration of ASEAN Concord II declared “The ASEAN Economic Community shall establish ASEAN as a single market and production base”. The achievement of the declared goal of a single market can be made only if political decision-makers and bureaucrats understand fully the meaning of a single market and the measures required to implement it. The meaning of the term, therefore, requires careful examination.

A SINGLE MARKET = THE LAW OF ONE PRICE

The idea of a single market comes of course from the European Economic Community (EEC)/EU. Initially the EEC created by the 1957 Treaty of Rome was a Common Market. This European concept of a common market was expressed in terms of the “four freedoms”, that is, freedom of trade in goods, services, capital, and labour. A Common Market required the abolition of all border restrictions on the movement of goods, services, capital, and labour. It also required the establishment of “common policies” in four designated areas: external trade, agriculture, transport, and competition. The Single European Act describes the Single Market as “an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured”. The central idea of a single market is that there should be no discrimination according to source in the regional markets for goods, services or factors, thus creating a market that should be a single market with no geographic segmentation. It was realized that the cross-border freedoms were not sufficient for foreign suppliers to have access equal to that of domestic suppliers.

The elimination of border controls, important as it is, does not of itself create a genuine common market. Goods and people moving within the Community should not find obstacles inside the different member States as opposed to meeting them at the border. The restriction of imports by measures applying beyond-the-border is usually couched in terms of the principle of National Treatment. National Treatment is the rule that a good or factor that crosses the border should receive the same treatment as a like product produced domestically or a like factor owned by domestic residents with respect to taxes and charges and regulations.