Susan Walsh, Associated Press
U.S. President Barack Obama and other leaders participate in the East Asia Summit family photo in Kuala Lumpur, Malaysia, Sunday, Nov. 22, 2015.

KUALA LUMPUR, Malaysia — Southeast Asian leaders on Sunday formally created a unified economic community in a diverse region far larger than the European Union or North America, with hopes of competing with China and India.

The 10 leaders in the Association of Southeast Asian Nations signed a declaration during their summit establishing the ASEAN Economic Community, originally envisioned in 2002.

The community, known by its acronym AEC, is already a reality and many of its fundamentals have been applied in the region such as removal of tariff barriers and visa restrictions among others. It has also led to greater political and cultural cooperation.

Still, there is a long way to go before the AEC becomes fully functional after becoming a legal entity on Dec. 31. It falls short in more politically sensitive areas such as opening up agriculture, steel, auto production and other protected sectors.

Intra-regional trade has remained at around 24 percent of ASEAN's total global trade for the last decade, far lower than 60 percent in the European Union.

AEC "is not the finished article. Neither is it officially claimed to be. There is much work to be done," said Mohamad Munir Abdul Majid, chairman of a council that advises ASEAN on business matters. "There is a disparity between what is officially recorded as having been achieved ... and what the private sector reports as their experience."

There are also other hurdles, such as corruption, uneven infrastructure and unequal costs of transportation and shipping. A wide economic gulf divides Southeast Asia's rich and middle income economies — Malaysia, Indonesia, Singapore, Brunei, Thailand and the Philippines — and its four less developed members, Communist Vietnam and Laos, Myanmar and Cambodia.

The AEC was envisaged in 2002 — and a blueprint created in 2007 — to face competition from China and India for market share and investments. While China's economic growth is expected to slow to an average of 6 percent annually over the next five years, India's expansion is likely to pick up to 7.3 percent in the same period, according to the Organization of Economic Cooperation and Development.