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ASEAN Economic Community (AEC): Progress, Challenges and Opportunities
ASEAN Business Roundtable:
Engaging with the ASEAN Opportunity
Jakarta, Indonesia
25 March 2015
1
Content
I
II
III
IV
AEC : key achievements and progress
Impact of Integration
Opportunities in Infrastructure Investment
ASEAN 2015 and Post
Post-2015
2015
2
ASEAN Economic Community: Key Achievements
Key Achievements and Progress
and Progress 3
AEC Milestones….
ASEAN
Preferential
Trading
Arrangement
1967
1977
Birth of
ASEAN
ASEAN
Framework
Agreement
on Services
S
i
1992
1995
ASEAN
Free
Trade Area
ASEAN
Investment
Agreement
1997
ASEAN
Vision
2020
Hanoi
Plan of
Action
1998
AEC
Vientiane
Plan of
A i
Action
2003
Bali Concord
II
((ASEAN
Community)
2004
Roadmap for
an ASEAN
Community
2007
2008
2009 2011
2015
Bali Concord
III
(RCEP/AFEED)
ASEAN
AEC
Ch
Blueprint Charter
4
ASEAN ECONOMIC COMMUNITY
STRATEGIC SCHEDULE OF THE AEC BLUEPRINT (2008-2015)
Pillar 1
Single Market
& Production Base
•
•
•
•
•
•
•
Free flow of goods
Free flow of services
Free flow of
investment
Freer flow of capital
Free flow of skilled
labor
Priority Integration
Sectors
Food, agriculture
and forestry
Pillar 2
Competitive Economic
Region
•
•
•
•
•
•
Competition policy
Consumer
protection
Intellectual
property rights
Infrastructure
development
Taxation
E Commerce
E-Commerce
HUMAN RESOURCE DEVELOPMENT
Pillar 3
Equitable Economic
Development
•
•
SME development
Initiative for ASEAN
Integration
Pillar 4
Integration into
the Global Economy
•
•
Coherent approach
towards external
economic relations
Enhanced
participation in
global supply
networks
RESEARCH AND DEVELOPMENT
5
Single Market and Production Base
6
Trade in Goods
Tariffs …….
 ASEAN-6  99.65% tariff lines
eliminated
 CLMV  almost 98% tariff lines
reduced to 0-5%
7
Trade in Goods
Non-tariff barriers and processes
b i improved…
being
i
d
NTM
ASEAN Trade R
Repository
it
Self Certification
8
Trade in Goods….
Customs
ASEAN Single Window
ASW Pilot Project
Customs Transit System
Standards
Single regulatory regime/framework agreement (cosmetics, EEE, medical devices, tradtnl’ medicines) Harmonisation
i i of f
standards MRAs (pharmaceutical, EE)
Rules of Origin
RVC 40%
or
Change in tariff classification
Self‐Certification
9
Trade in Services
ASEAN FRAMEWORK AGREEMENT ON TRADE IN SERVICES (AFAS)
Movement of Natural Persons (MNP) Agreement
Movement of Natural Persons (MNP) Agreement 9th Package of Commitments
The final 10th Package by 2015
Negotiation of the ASEAN Trade in Services Agreement (ATISA) by 2015
10
Investment
ASEAN COMPREHENSIVE INVESTMENT AGREEMENT (ACIA)
ACIA signed in g
2009
Protocol to l
amend ACIA signed in
signed in August 2014
Progressive liberalisation
of restrictions by 2015
11
Competitive
p
ASEAN Region
g
12
COMPETITION POLICY
7 AMS have Competition Law (CPL) and Competition Authorities in place
Strengthening Regulatory Environment
in ASEAN
▪
▪
Kick-off Workshop on Sector
Studies for the AEGC
Advice on Drafting
Competition Laws and
Implementing Regulations for
the AEGC
Strategy and Tools for Regional Competition
Advocacy
▪
▪
▪
▪
AEGC Website
Phase II Regional Competition
C
Advocacy
In-Country Workshop in CLM to
Raise Awareness and/ Study on
Economic Benefits and Possible
Challenges of CPL
Workshop on Promoting
Business Compliance for CPL in
ASEAN
Institutional-Building and Enforcement
of CPL
▪
▪
▪
Guidelines on Developing Core
Competencies
Competition Regulatory Experts
S
Secondment
d
t
Building Competition Law
Enforcement Capability
Cross-Cutting Regional Initiatives
▪
▪
ASEAN Competition Conference
Development off a Regional
Cooperation Framework on
Enforcement, InformationSharing, and Technical
Assistance Relative to CPL
CONSUMER PROTECTION
Promoting consumer welfare and interests …
9 AMS have consumer protection laws
Cross border consumer redress
Rapid Alert System
Rapid Alert System 14
INTELLECTUAL PROPERTY
Main Elements
Trademarks
Patents
C
Copyrights
IIndustrial
d ti l
Designs
Activities
▪
▪
▪
▪
▪
6 months turnaround time by 2015 (filing to registration)
Best practices in eliminating backlog
Improved IT system/ manual of substantive examination
Accession to Madrid Protocol/advocacy/usage
Use of the regional classification of ethnic goods and services as supplement
to Nice classification
▪
▪
▪
▪
ASEAN Patent Search and Examination Cooperation (ASPEC), a regional
patent work-sharing program, has been operational since 2012
ASPEC is utilized by at least 5% of patent applicants by 2015
Accession to the Patent Cooperation Treaty by AMS
Establish network of patent libraries
▪
▪
▪
Effective use of copyright system by 2015
Studyy on contribution of copyrights
y g
in each AMS
Establishment of collective management societies
▪
Accession to the Hague/advocacy/usage by 7 AMS by 2015
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Infrastructure Development
Air
Land
Sea
Transport




Liberalization of Air Transport Services
ASEAN Highway Network
Singapore
g p
Kunming
g Rail Link
ASEAN Transport Facilitation Agreement
 Lower Intra-ASEAN Mobile Roaming Charges
 Digitalization
Di it li ti
off Business
B i
th
through
h ASEAN
Broadband Corridor
Energy
gy
 ASEAN Power Grid
 Trans-ASEAN Gas Pipeline
l
ICT
EQUITABLE
Q
ECONOMIC REGION
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Initiative for ASEAN Integration
 Narrowing the Development Gap in ASEAN across the three ASEAN Communities
ASEAN Political‐
Security Community
ASEAN Economic Community
ASEAN Socio‐
cultural Community
Initiative for ASEAN Integration




Cambodia, Lao PDR, Myanmar, Viet Nam or CLMV assisted in implementing their
commitments ensuring that benefits of ASEAN integration are equitably shared.
A S&D/Positive-bias approach: Growing the ASEAN cake and increasing the share going to the
CLMV countries.
Publication on “Narrowing the Development Gap in ASEAN: Drivers and Policy Options (2013)
Mid-term Review of the IAI Work Plan II (2009-2015)  Completed
18
18
SME DEVELOPMENT
Development of small and medium enterprises

P
Progress:
 Strategic





Action
Plan
for
SME
Development (2010‐2015)
SME Service Center Web Portal, with
Regional, Sub‐regional Linkages
SME Guidebook Towards AEC 2015
ASEAN Benchmark for SME Credit Rating
Methodology
gy
ASEAN Business Incubation Network
(ABINet)
The ASEAN Business Awards, focusing on
Young and Innovative SMEs,
SMEs
in
collaboration with ASEAN Business
Advisory Council (ASEAN‐BAC)
19
INTEGRATION INTO GLOBAL ECONOMY
20
Emerging Regional Architecture
AFTA
ACFTA
AKFTA
AJCEP
AIFTA
AANZFTA
AHKFTA
ASEAN’s
other
external
economic
partners
21
9
R i
Regional
l FTAs
FTA
Entry
Into Force
Size of
Market
Size of
Economy ($)
Total
Trade ($)
ACFTA (China)
2005
1.98 B
11.3 T
351 B
AKFTA (Korea)
2007
0.67 B
3.59 T
135 B
AJCEP (Japan)
2008
0.75 B
7.41 T
241 B
AANZFTA (Aus
(Aus-Nzl)
Nzl)
2010
0 65 B
0.65
4 07 T
4.07
78 B
AIFTA (India)
2010
1.87 B
4.16 T
68 B
AHKFTA (Hong Kong)
Jul 2014*
0.63 B
2.67 T
97 B
RCEP
May 2013*
3.4 B
20.9 T
872 B
*
First round of negotiations
Impact of Integration
p
g
23
ASEAN Economic Performance
ASEAN GDP
9%
7.8%
8%
7%
5.8%
6%
5%
5.1%
4.9%
4 7%
4.7%
4%
3%
1.8%
2%
1%
0%
2008
008
2009
009
2010
0 0
Source: ASEAN Integration Monitoring Office (AIMO)
2011
0
2012
0
2013
0 3
24
Net Inflow of FDIs to ASEAN
( 2009-2013)
by receiving country
by major source country
Brunei
Darussalam
0.8%
Cambodia
Viet Nam
1.0%
8.4%
Thailand
8.6%
China,
5.8%
EU,,
21.2%
Japan,
Japan
14.8%
ASEAN,
16.4%
USA,
8.6%
Malaysia
9 2%
9.2%
Myanmar
Indonesia
1.9%
15.6% Lao PDR
0.4%
Philippines
2.4%
Others,
33.2%
Singapore
51.6%
Notes: Data for 2013 are preliminary figures; Lao PDR's data on 'by source country' are not yet available.
Source of data: ASEAN FDI Database
27
Opportunities in Infrastructure Investment
Infrastructure Investment
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Public-Private Partnership
- Investment Opportunities
• Infrastructure investment has been identified as a critical component
in fostering economic and social development.
de elopment
• ASEAN’s infrastructure requires USD 60 billion annually until 2020.
• Private participation in infrastructure provision can enhance existing
public
capacity
in
providing
economic
(e.g.
transport, telecommunication, power, water and sanitation) and social
(e.g. health and education) infrastructures.
• The role of the private sector in infrastructure financing is seen to be
vital to help meet this ASEAN
ASEAN’ss infrastructure requirements.
requirements
• A set of non‐binding Public‐Private Partnership (PPP) Principles to
facilitate a predictable and efficient PPP environment was adopted.
29
ASEAN 2015 and Post‐2015
d
30
ASEAN Economic Community (AEC) Scorecard and ASEAN
Economic Community (AEC) Scorecard and
Prioritised Key Deliverables
82.1% of Prioritised Key Deliverables 188 out of 229 (82.1%) by 2013 have been implemented
Prioritised Key Deliverables by 2013
Prioritised Key Deliverables by 2013 have been implemented
Phase • 2008
1
• 2009
Phase • 2010
2
• 2011
Phase • 2012
3
• 2013
61 Key Deliverables for li
bl f
2014 to 2015* have been implemented
Phase • 2014
4
• 2015
Status as of October 2014
* 2015 deliverables are also Prioritised Key Deliverables by 2015, in response to the Phnom Penh Agenda (2012)
Source: Chairman's Statement of the 25th ASEAN Summit: "Moving Forward in Unity to a Peaceful and Prosperous
Community," Nay Pyi Taw, Myanmar, 12 November 2014.
31
Key
y Challenges
g
in Achieving
g AEC 2015
• Diversityy of its Member States and the economic status of such a
huge segment of the ASEAN population.
• Gap between rich and poor AMSs remains very large and AMSs
have a mixed record on income inequality.
• Many regional initiatives which were not able to be incorporated
into national plans, as the less developed countries faced resource
constraints to implement the regional commitments.
• Different
iff
l l off legal
levels
l l framework
f
k development
d l
and
d lack
l k off
institutional capacity in AMSs hindered their effective and timely
implementation of regional commitments.
commitments
• Lack of engagements with private sector can pose a big challenge
for a successful implementation of the AEC.
32
Way
y Forward
• Acceleratingg the ratification of signed
g
ASEAN agreements/protocol.
g
/p
• Advancing judiciously the alignment of regional initiatives and
domestic laws and regulations.
• Providing adequate support and resources to implement country‐
specific and regional measures.
• Maintaining the momentum towards a fully functioning AEC, by
following through on commitments with effective implementation.
• Ensuring that the AMS effectively implement measures to deepen
economic integration and provide conducive environment for
b siness activities
business
acti ities to boost economic growth
gro th and the region’s
development.
33
P i iti
Priorities
towards
t
d AEC 2015
•Fast track the implementation the prioritised AEC deliverables:
• Beyond tariffs: Improved trade facilitation – ASW, self certification, NTBs
• Beyond commitments: making rules & regulations work y
g
g
• The missing links: transport networks and the quality of transport infrastructure
•Improve communication and outreach to stakeholders:
•Improve communication and outreach to stakeholders:
• Access to Information on benefits of AEC is suboptimal
• Appropriate key messages to national & regional audiences needed
•Finalise the AEC’s post‐2015 agenda for deeper REI:
• To ensure expeditious completion of outstanding AEC 2015 measures
• To incorporate lessons and experiences from AEC 2015 and be forward looking 34
Beyond AEC 2015
• In 2013, Leaders committed to creating a “Post‐2015 Vision” to realise: •
“A community that is “politically cohesive, economically integrated, socially responsible and a truly people‐oriented, people‐centred and rules‐based ASEAN.”
•Nay Pyi Taw Declaration on ASEAN Community’s Post‐2015 Vision:
• Adopted by Leaders at the 25th Summit on 12 November 2014.
• Central elements endorsed as a basis for full development; a High Level Task Force to further develop the Post 2015 Vision; cross‐pillar coordination enhanced.
•AEC 2025:
•AEC 2025:
(i)
Integrated and Highly Cohesive Economy; (ii)
Competitive, Innovative and Dynamic ASEAN;
(iii) Enhanced Sectoral Integration and Cooperation;
(iv) Resilient, Inclusive and People‐Oriented and People‐Centred ASEAN; and (v)
Global ASEAN. 35
Thank you!
Thank you!