COMMON norms and practices developed by the Asian Business Law Institute can ease cross-border trade in Asia and facilitate dialogue between countries, which can lower costs and increase business flows, Minister for Law K Shanmugam has said.
In his closing address at the Singapore Academy of Law conference on legal convergence in Asia, he cited surveys done in the last three years as having concluded that the region's diversity in legal and regulatory regimes was a major barrier holding back investment into Asia and hindering the growth of businesses.
Mr Shanmugam said the United Nations Commission on International Trade Law is an example of a framework that gives businesses "greater confidence that their cross-border commercial contracts will be enforceable, and they have a system which is predictable".
Meanwhile, ASEAN's potential is clear: It was the world's seventh largest economy by 2014, with more than 600 million people and a gross domestic product (GDP) exceeding US$2.4 trillion (S$3.4 trillion). By 2020, this is expected to hit US$4 trillion, and by 2050, it could well be the world's fourth largest economy, he said.
Already, regional pacts such as the Trans-Pacific Partnership (TPP) and the Regional Comprehensive Economic Partnership (RCEP) promise to set up trade networks in the region, he noted.
Turning to the newly-formed ASEAN Economic Community, the minister said it commits ASEAN to legal convergence on e-commerce and other regulatory standards, "but to fully address ASEAN's existing challenges and deepen integration, serious action has to be taken to improve its current legal infrastructure".
Legal convergence is a key step to unlocking the region's full economic potential, he said.
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