The major aim of economic integration in Southeast Asia is to shift economic integration from intra-regional trade to intra-regional investment before it achieves the common market. This article attempts to analyze the two essential factors in Southeast Asia's economic integration: intra-regional trade and an economic community. In the first analysis, this article observes three selected countries: Indonesia, Malaysia, and Thailand; while in the second analysis it focuses on Indonesia as a case study. Findings from this article showed that free trade agreement is effective to increase intra-regional trade but not effective to attract investment; therefore suggesting that Southeast Asia needs to amplify its open-regionalism principle. This article also found that the private sector is ready for the economic community; therefore the ASEAN Economic Community (AEC) is fit for Southeast Asia's economic integration exemplary.
- Economic integration, International investment (long-term capital-FDI inflows), ASEAN Free Trade Area (AFTA), Bilateral Free Trade Agreements (BFTA), Asian noodle bowl phenomenon