The prospect of complete integration into a single market and production base under the ASEAN Economic Community (AEC) seems doubtful by 2015. Petrochemicals are among 12 sectors to be liberalised within ASEAN as agreed by the 10 members, scheduled originally to start from next year.
This integration has met a possible hurdle with new attempts by Indonesia and the Philippines to delay a plan to remove all petrochemical tariffs, as petrochemical majors in these countries are lobbying their government to postpone the tariff elimination by a couple of years. The move is aimed especially at protecting polyvinyl chloride (PVC) production.
The Asean Business Advisory Council, however, has adopted an unflexible stance and remains committed to eliminate the tariffs next year. A delay this time could have a cascading effect on other issues already agreed.