Asean Econ. Community

ASEAN ECONOMIC COMMUNITY

Datuk Dr. Rebecca Fatima Sta Maria Secretary-General

Ministry of International Trade and Industry

‘Driving Transformation, Powering Growth’

ASEAN – at a glance

2 Driving Transforma.on, Powering Growth

Population 625 million

- Youth 60%

GDP USD2,398 billion

GDP Growth 5.1%

GDP per capita USD3,837

Total Trade USD2,511 billion

- Intra-ASEAN USD608 billion

- Ratio to GDP 104.7%

Total FDI USD122.4 billion

- Intra-ASEAN USD21.8 billion

Tourist Arrivals 89.3 million

- Intra-ASEAN 39.9 million

ASEAN: Growing through economic integration

334

606

1,898

2,395

GDP (US$ mil)

760

1,172

3,162

3,832

GDP per capita (US$)

317

519

593

625

Population (mil)

1990

2000

2010

2013

Source: ASEANStat, IMF, WB, UNCTAD

306

759

2,009

2,511

Total Trade (US$ bil)

144

167

511

609

Intra-ASEAN Trade (US$ bil)

13

23

100

122

FDI Inflows (US$ bil)

Driving Transforma.on, Powering Growth 3

1990

2000

2010

2013

387.6 (16.2%) 860.8 (35.9%)

312.1 (13.0%)

297.9 (12.4%)

269.0 (11.2%)

171.2 (7.1%)

54.7 (2.3%)

16.1 (0.7%)

15.5 (0.6%)

10.3 (0.4%) Source: ASEANStat

ASEAN GDP 2013 (US$ billion)

The 6 b igges t ASEAN Member States accounted for more than 95% of ASEAN GDP in 2013

860.8 (35.9%)

Economies at different stages of development

4

888

1,037

1,548

1,909

2,707

3,460

5,679

10,421

39,679

55,183

ASEAN GDP PER CAPITA 2013 (US$)

ASEAN Av GDP Per Capita was US$3,832 in 2013

Source: ASEANStat

5

Economies at different stages of development

3rd largest market in the world Population in million

JAPAN 128

EU 502

INDIA 1,195

CHINA 1,340

USA 310

ASEAN 625

7th largest economy in the world GDP 2013 in US$ trillion

Brazil ASEAN United France

Germany Japan China

United States 16.8 9.2

4.9 3.7

2.8 2.7 2.4 2.2

Fast growing economy Real GDP Growth 2013 (%)

7.7

5.2

5.0 Japan

United States

India

ASEAN

China 7.7 5.2

5.0

2.2

1.6

… the whole is greater than the sum of its parts

6

Source: ASEANStat, IMF, WB

ASEAN’s Journey towards economic integration


TIMELINE LIBERALISATION PROCESS 1977-1992 Preferential Trading Arrangement (PTA) – 25-50% Margin of Preference on 1000

tariff lines 1993 ASEAN Free Trade Area (AFTA) – key was the Agreement on Common Effective

Preferential Tariff. Revised as ASEAN Trade In Goods Agreement in 2010 1995 ASEAN Framework Agreement on Services (AFAS) – Progressive Liberalisation

1998 ASEAN Investment Area (AIA) – Investment Liberalisation . Revised as the ASEAN Comprehensive Investment Agreement (ACIA) in 2009

2004-2010 ASEAN FTAs with Dialogue Partners (China, Japan, Korea, India, Australia & New Zealand) - RCEP with existing ASEAN’s FTA Partners under negotiations (target substantial completion by end of 2015)

1993 Sub – Regional Economic Growth Areas (IMGT, BIMP EAGA,SIJORI, AMBDC)

2008-2015 Integration through ASEAN Economic Community (AEC)


ASEAN Economic

Community

ASEAN Socio-Cultural Community

ASEAN Political-Security

Community

•  Rules-based Community of Shared Values and Norms

•  Good Governance •  Human Rights •  Adherence to the

Principles of Democracy

•  Single Market and Production Base

•  Competitive Economic Region

•  Equitable Economic Development

•  Linkages to Global Economy

•  Education and Human Resource Development

•  Science and ICT •  Entrepreneurship •  Poverty Alleviation & Social

Safety Net

•  Health •  Natural Disasters & Environment •  ASEAN’s Cultural Heritage and

Regional Identity

The 3 Pillars of the ASEAN Community

ASEAN Economic Community (AEC)


•  FTAs •  G l o b a l S u p p l y

Networks

•  SME Development •  Initiative for

ASEAN Integration

•  Competition Policy •  Consumer

Protection •  IPR, Taxation •  e-Commerce •  Infrastructure

•  Free flow of goods •  Free flow of services •  Free flow of

investment •  Freer flow of capital •  Freer flow of skilled

labour

Single Market &

Production Base

Competitive Economic

Region

Linkages with Global Economy

Equitable Economic

Development

AEC is a work in progress…working to make it easier to do business


Elimination of import duties for intra-ASEAN trade: q  ASEAN-6: 99.65% duties

eliminated (1 January 2010)

q  C L M V 9 3 % d u t i e s eliminated (1 January 2015; 7% by 2018)

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Elimination of duties: Tip of the iceberg

Driving Transforma.on, Powering Growth

Guiding Principle: Progressive liberalisation



q  Removal of equity restrictions on services and investments in ASEAN;

q  Removal of other forms of impediments, such as limiting the number o f serv ices providers, etc.;

q  T r a d e a n d i n v e s t m e n t facilitation through removing cumbersome procedures, rules and regulations; and

q  Facilitating the mobility of skilled people.

The rest of the iceberg…

Now to step-up work on Non-Tariff Barriers (NTBs)


Examples of NTBs in ASEAN:

§  Import quotas §  Restrictions on import/distribution licensing agreements §  Product regulatory standards Measures to address NTBs:

§  Adoption of regional and national level of NTM Work Programme

§  Structure to resolve NTM cases faced by businesses

§  Establishment of an interagency body at the national level in each Member State to strengthen coordination of domestic efforts to address NTM/NTBs.


Trade in services: What has been achieved?

AFAS Packages Date of signing 1st Package 15 Dec 1997, Kuala Lumpur, Malaysia 2nd Package 16 December 1998, Ha Noi, Viet Nam 3rd Package 31 December 2001 (Ad-‐Referendum Signing);

4th Package 3 September 2004, Jakarta, Indonesia 5th Package 8 December 2006, Cebu, the Philippines 6th Package 19 November 2007, Singapore 7th Package 26 February 2009, Cha-‐am, Thailand 8th Package 28 October 2010, Ha Noi, Viet Nam

9th Package 26 August 2014, Nay Pyi Taw, Myanmar

§  Final AFAS Package: 2015


Facilitating Movement of Professionals and Talent

ASEAN Movement of Natural Persons Agreement (MNP) outlines the immigration formalities for the temporary entry or temporary stay of natural persons: ü  limited to business visitors,

intra-corporate transferees, and con t rac tua l se rv i ce suppliers;

ü  does not cover permanent entry and unskilled labour.


§  MRA – Agreement to facilitate movement of ASEAN professionals across the region.

§  ASEAN has concluded 7 MRAs; in various stages of operationalization:

NO. MRA DATE OF SIGNING 1. MRA for Engineering Services 9 Dec 2005 2. MRA for Nursing Services 8 Dec 2006 3. MRA for Architectural Services 19 Nov 2007 4. Framework MRA for Surveying Qualifica[ons 19 Nov 2007 5. MRA for Medical Prac[[oners Services 26 Feb 2009 6. MRA for Dental Prac[[oners Services 26 Feb 2009 7. MRA for Accountancy Services 26 Aug 2014

Mutual Recognition Agreements (MRA)


Evolution of Investment Liberalisation and Protection in ASEAN

1987 Agreement for Promotion and Protection of Investments (IGA)

1998 ASEAN Investment Area Agreement (AIA)

2009 ASEAN Comprehensive Investment Agreement (ACIA)


Investment: What has been Achieved?

§  ASEAN Comprehensive Investment Agreement (ACIA) signed in February 2009 Providing for investment liberalization, protection, promotion and facilitation.

§  ACIA will:

•  benefit investors and their investments based in ASEAN;

•  maintains and accords preferential treatment among ASEAN Member States; and

•  preserves commitments made under the Framework Agreement on the ASEAN Investment Area (AIA) and the ASEAN Investment Guarantee Agreement (IGA).


§  Intellectual Property Rights (IPR):

o  strengthening domestic IP systems to deliver timely, quality and accessible IP services through a strong IP regime; and

o  acceding to core international agreements.

§  Competition Policy: National competition law in all Member States

§  Consumer Protection: Focus on ensure consumer legislation in all Member States, consumer access to information, information exchange mechanism for recalled/banned products and consumer redress mechanism.

Other Areas Covered under the AEC


§  Taxation: Network of bilateral agreements to address issues on double-taxation.

§  SME Development: SME Master Plan, SME Development Council (Public and Private Sector representatives) and information exchange on best practices.

§  Narrowing the Development Gap: Initiative for ASEAN

Integration (IAI) and capacity-building programs.

Other Areas Covered under the AEC


Cooperation in Other Economic Sectors: Strengthening Connectivity

►  Development of rail/road/highways/port networks. ►  Regional power transmission grid & Trans-ASEAN gas pipeline. ►  ICT – Broadband corridors. ►  Transport Agreements/Protocols, e.g.

§  ASEAN Framework Agreement on Multimodal Transport (AFAMT)

§  ASEAN Framework Agreement on Facilitation of Goods in Transit (AFAFGIT)

§  ASEAN Framework Agreement on the Facilitation of Inter-State Transport (AFAFIST)

§  Open Skies Policy §  Single Shipping Market


Post-2015 Economic Vision: consolidation and going beyond…

•  incorporate unfinished commitments

•  Framework of the ASEAN Economic Community 2025: covers 5 main sections: o  Integrated and Highly Cohesive

Economy; o  Compet i t i ve , Innovat ive and

Dynamic ASEAN; o  Resilient, Inclusive and People

Centered ASEAN o  Enhanced Sectoral Integration and

Cooperation; and o  Global ASEAN.

Thank You [email protected]

Block 10, Government Offices Complex, Jalan Duta, 50622 Kuala Lumpur, Malaysia

Tel: 603-8000 8000 | Fax: 603-6201 2337 Email: [email protected] | Website: www.miti.gov.my

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