ASEAN Economic Community (AEC): Challenges and...

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  • ASEANEconomicCommunity(AEC):Progress,ChallengesandOpportunities

    ASEANBusinessRoundtable:EngagingwiththeASEANOpportunity

    Jakarta,Indonesia25March2015

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  • Content

    I AEC : key achievements and progressI AEC : key achievements and progressII Impact of Integration III Opportunities in Infrastructure InvestmentIV ASEAN 2015 and Post-2015IV ASEAN 2015 and Post 2015

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  • ASEANEconomicCommunity:Key AchievementsKeyAchievements

    and ProgressandProgress

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  • AEC Milestones.

    ASEAN AECPreferential Trading

    Arrangement Vientiane Plan ofA i

    ASEAN Framework Agreement

    S iRoadmap for

    ASEAN

    ASEAN Investment Agreement

    Hanoi Plan of Action

    AEC

    Actionon Services an ASEAN Community

    1967 1992 1997 20031998 20091977 1995 2004 20082007 2011 2015

    Bali Concord

    Birth of ASEAN

    ASEAN Free

    Trade Area

    ASEAN Vision 2020

    AEC

    Bali Concord II

    (ASEAN ASEAN Ch

    III(RCEP/AFEED)

    2020 Blueprint (

    Community) Charter

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  • ASEAN ECONOMIC COMMUNITY

    STRATEGIC SCHEDULE OF THE AEC BLUEPRINT (2008-2015)

    Pillar 1Single Market

    Pillar 2 Competitive Economic

    Pillar 3Equitable Economic

    Pillar 4 Integration into Single Market

    & Production BaseCompetitive Economic

    RegionEquitable Economic

    DevelopmentIntegration into

    the Global Economy

    Free flow of goods Free flow of services Free flow of

    investment

    Competition policy Consumer

    protection Intellectual

    SME development Initiative for ASEAN

    Integration

    Coherent approach towards externaleconomic relations

    Enhanced Freer flow of capital Free flow of skilled

    labor Priority Integration

    Sectors

    property rights Infrastructure

    development Taxation

    E Commerce

    participation in global supply networks

    Sectors Food, agriculture

    and forestry

    E-Commerce

    HUMAN RESOURCE DEVELOPMENT RESEARCH AND DEVELOPMENT5

  • Single Market and Production Base

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  • Trade in Goods

    Tariffs .

    ASEAN-6 99.65% tariff lineseliminated CLMV almost 98% tariff lines

    reduced to 0-5%

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  • Trade in Goods

    Non-tariff barriers and processes b i i dbeing improved

    NTM

    ASEANTradeR itRepository

    SelfCertification

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  • Trade in Goods.

    Customs Standards Rules of Origin

    ASEANSingleWindow

    Singleregulatoryregime/framework

    RVC40%orWindow

    ASWPilotProject

    agreement(cosmetics,EEE,medicaldevices,tradtnlmedicines)

    i i f

    orChangeintariffclassification

    CustomsTransitSystem

    Harmonisation ofstandardsMRAs(pharmaceutical,EE)

    SelfCertification

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  • Trade in Services

    ASEAN FRAMEWORK AGREEMENT ON TRADE IN SERVICES (AFAS)

    Movement of Natural Persons (MNP) AgreementMovement of Natural Persons (MNP) AgreementMovementofNaturalPersons(MNP)AgreementMovementofNaturalPersons(MNP)Agreement

    9th PackageofCommitments9th PackageofCommitments

    Thefinal10th Packageby2015Thefinal10th Packageby2015

    NegotiationoftheASEANTradeinServicesAgreement(ATISA)by2015NegotiationoftheASEANTradeinServicesAgreement(ATISA)by2015

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  • Investment

    ASEAN COMPREHENSIVE INVESTMENT AGREEMENT (ACIA)

    l

    Progressiveliberalisation

    ACIAsignedin

    ProtocoltoamendACIAsigned in

    ofrestrictionsby2015

    g2009

    signedinAugust2014

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  • Competitive ASEAN Regionp g

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  • COMPETITION POLICY

    Strengthening Regulatory Environment in ASEAN

    Institutional-Building and Enforcement of CPL

    7 AMS have Competition Law (CPL) and Competition Authorities in place

    Kick-off Workshop on Sector Studies for the AEGC

    Advice on Drafting

    Guidelines on Developing Core Competencies

    Competition Regulatory Experts S d t

    in ASEAN of CPL

    Competition Laws and Implementing Regulations for the AEGC

    Secondment Building Competition Law

    Enforcement Capability

    AEGC WebsiteC

    ASEAN Competition Conferencef

    Strategy and Tools for Regional Competition Advocacy

    Cross-Cutting Regional Initiatives

    Phase II Regional Competition Advocacy

    In-Country Workshop in CLM to Raise Awareness and/ Study on Economic Benefits and Possible

    Development of a Regional Cooperation Framework on Enforcement, Information-Sharing, and Technical Assistance Relative to CPL

    Challenges of CPL Workshop on Promoting

    Business Compliance for CPL in ASEAN

  • CONSUMER PROTECTION

    Promoting consumer welfare and interests

    9 AMShaveconsumerprotectionlaws

    Crossborderconsumerredress

    Rapid Alert SystemRapidAlertSystem

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  • INTELLECTUAL PROPERTY

    ActivitiesMain Elements 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

    Trademarks

    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 2015Patents

    Use of the regional classification of ethnic goods and services as supplement to Nice classification

    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 Study on contribution of copyrights in each AMS

    Cy y g

    Establishment of collective management societiesCopyrights

    Accession to the Hague/advocacy/usage by 7 AMS by 2015I d t i l Accession to the Hague/advocacy/usage by 7 AMS by 2015Industrial Designs

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  • Infrastructure Development

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    Infrastructure Development

    AirLandSea

    Liberalization of Air Transport Services ASEAN Highway Network Singapore Kunming Rail LinkSea

    Transportg p g

    ASEAN Transport Facilitation Agreement

    Lower Intra-ASEAN Mobile Roaming Charges Di it li ti f B i th h ASEAN ICT Digitalization of Business through ASEAN

    Broadband CorridorICT

    ASEAN Power Gridl

    Energy Trans-ASEAN Gas Pipeline

    gy

  • EQUITABLE ECONOMIC REGIONQ

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  • Initiative for ASEAN Integration

    Narrowing the Development Gap in ASEAN across the three ASEAN Communities

    ASEANEconomicCommunity

    ASEANSociocultural

    Community

    ASEANPoliticalSecurity

    Community

    InitiativeforASEANIntegrationInitiativeforASEANIntegration

    Cambodia, Lao PDR, Myanmar, Viet Nam or CLMV assisted in implementing theircommitments 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 theCLMV 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

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  • SME DEVELOPMENT

    Developmentofsmallandmediumenterprises

    P Progress: Strategic Action Plan for SME

    Development (20102015) SME Service Center Web Portal, with

    Regional, Subregional Linkages SME Guidebook Towards AEC 2015 ASEAN Benchmark for SME Credit Rating

    Methodologygy ASEAN Business Incubation Network

    (ABINet) The ASEAN Business Awards, focusing on

    Young and Innovative SMEs inYoung and Innovative SMEs, incollaboration with ASEAN BusinessAdvisory Council (ASEANBAC)

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  • INTEGRATION INTO GLOBAL ECONOMY

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  • Emerging Regional Architecture

    ASEANs

    AFTA ACFTA AKFTA AJCEP AIFTA AANZFTA AHKFTA

    ASEANsother

    external economic partnerspartners

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  • R i l FTA

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    Regional FTAsEntry

    Into ForceSize of Market

    Size of Economy ($)

    Total Trade ($)Into Force Market Economy ($) 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-Nzl) 2010 0 65 B 4 07 T 78 BAANZFTA (Aus Nzl) 2010 0.65 B 4.07 T 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

  • ImpactofIntegrationp g

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  • ASEAN Economic Performance

    ASEAN GDP

    7.8%8%

    9%

    4 7% 4.9%

    5.8%5.1%

    6%

    7%

    4.7% 4.9%

    3%

    4%

    5%

    1.8%

    1%

    2%

    3%

    0%

    1%

    2008 2009 2010 2011 2012 2013

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    008 009 0 0 0 0 0 3

    Source:ASEANIntegrationMonitoringOffice(AIMO)

  • Net Inflow of FDIs to ASEAN ( 2009-2013)

    by major source country

    Brunei Darussalam Malaysia

    9 2%

    by receiving country

    EU, Japan

    China,5.8%

    0.8%Cambodia

    1.0%Indonesia

    15.6% Lao PDR0.4%

    9.2%Myanmar

    1.9%

    Philippines

    Thailand8.6%

    Viet Nam8.4%

    ,21.2%

    ASEAN,16.4%

    Japan,14.8%

    USA,8.6%

    Others,33.2%

    Philippines2.4%

    Singapore51.6%

    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

  • OpportunitiesinInfrastructure InvestmentInfrastructureInvestment

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  • Public-Private Partnership- Investment OpportunitiesInvestment Opportunities

    Infrastructure investment has been identified as a critical componentin fostering economic and social de elopmentin fostering economic and social development.

    ASEANs infrastructure requires USD 60 billion annually until 2020.

    Private participation in infrastructure provision can enhance existing Private participation in infrastructure provision can enhance existingpublic 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 bevital to help meet this ASEANs infrastructure requirementsvital to help meet this ASEAN s infrastructure requirements.

    A set of nonbinding PublicPrivate Partnership (PPP) Principles tofacilitate a predictable and efficient PPP environment was adopted.

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  • dASEAN2015andPost2015

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  • ASEAN Economic Community (AEC) Scorecard andASEANEconomicCommunity(AEC)ScorecardandPrioritisedKeyDeliverables

    82.1%ofPrioritised KeyDeliverablesby2013havebeenimplemented188outof229(82.1%)

    Prioritised Key Deliverables by 201361Key

    li bl fPrioritisedKeyDeliverablesby2013havebeenimplemented

    Deliverablesfor2014to2015*havebeen

    implemented

    2008 2009

    Phase1

    2010 2011

    Phase2

    2012 2013

    Phase3

    2014 2015

    Phase4

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    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.

  • Key Challenges in Achieving AEC 2015y g g

    Diversity of its Member States and the economic status of such ayhuge segment of the ASEAN population.

    Gap between rich and poor AMSs remains very large and AMSshave a mixed record on income inequality.

    Many regional initiatives which were not able to be incorporatedinto national plans, as the less developed countries faced resourceconstraints to implement the regional commitments.

    iff l l f l l f k d l d l k f Different levels of legal framework development and lack ofinstitutional capacity in AMSs hindered their effective and timelyimplementation of regional commitmentsimplementation of regional commitments.

    Lack of engagements with private sector can pose a big challengefor a successful implementation of the AEC.for a successful implementation of the AEC.

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  • Way Forwardy

    Accelerating the ratification of signed ASEAN agreements/protocol.g g g /p Advancing judiciously the alignment of regional initiatives and

    domestic laws and regulations.

    Providing adequate support and resources to implement countryspecific and regional measures.

    Maintaining the momentum towards a fully functioning AEC, byfollowing through on commitments with effective implementation.

    Ensuring that the AMS effectively implement measures to deepeneconomic integration and provide conducive environment forb siness acti ities to boost economic gro th and the regionsbusiness activities to boost economic growth and the regionsdevelopment.

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  • P i iti t d AEC 2015 Priorities towards AEC 2015

    Fasttracktheimplementationtheprioritised AECdeliverables: Beyondtariffs:Improvedtradefacilitation ASW,selfcertification,NTBs Beyondcommitments:makingrules&regulationsworky g g Themissinglinks:transportnetworksandthequalityoftransportinfrastructure

    Improve communication and outreach to stakeholders:Improvecommunicationandoutreachtostakeholders: AccesstoInformationonbenefitsofAECissuboptimal Appropriatekeymessagestonational&regionalaudiencesneeded

    Finalise theAECspost2015agendafordeeperREI: ToensureexpeditiouscompletionofoutstandingAEC2015measures ToincorporatelessonsandexperiencesfromAEC2015andbeforwardlooking

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  • Beyond AEC 2015Beyond AEC 2015

    In2013,LeaderscommittedtocreatingaPost2015Visiontorealise: Acommunitythatispoliticallycohesive,economicallyintegrated,sociallyresponsibleandatrulypeopleoriented,peoplecentred andrulesbasedASEAN.

    NayPyi TawDeclarationonASEANCommunitysPost2015Vision: AdoptedbyLeadersatthe25thSummiton12November2014. Centralelementsendorsed asabasisforfulldevelopment;aHighLevelTaskForcetofurtherdevelopthePost2015Vision;crosspillarcoordinationenhanced.

    AEC 2025:AEC2025:(i) IntegratedandHighlyCohesiveEconomy;

    (ii) Competitive,InnovativeandDynamicASEAN;

    (iii) EnhancedSectoral IntegrationandCooperation;

    (iv) Resilient,InclusiveandPeopleOrientedandPeopleCentred ASEAN;and

    (v) GlobalASEAN.

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  • Thank you!Thankyou!