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ASEAN Economic Community and Trade Facilitation NEAT Working Group on Trade and Investment Facilitation China Foreign Affairs University 25 June 2010 Pitirat OSOTSAPA Trade and Facilitation Division ASEAN Secretariat OUTLINE ASEAN in the World: ASEAN in world trade, our trading partners, intra- and extra-ASEAN trade ASEAN Economic Community: ASEAN economic integration, what we are trying to achieve, what are the issues Trade Facilitation in ASEAN: our current focus, what we aim to do, benefits to ASEAN and our trading partners and investors ASEAN Connectivity: upcoming agenda, improving physical and institutional linkages Conclusion 1. ASEAN in the World Share of World GDP Source: AEC Chartbook 2009 ASEAN Economic Outlook Real GDP Grow th (% annual change) 2009 2010 Actual Low High Brunei Darussalam -0.4 0.7 2.3 Cambodia 0.1 5.0 5.0 Indonesia 4.5 5.5 5.7 Lao PDR 7.6 7.5 7.5 Malaysia -1.7 4.5 5.5 Myanmar 10.0 12.1 12.1 Philippines 0.9 2.6 3.6 Singapore -2.0 4.5 6.5 Thailand -2.3 4.0 5.0 Vietnam 5.3 6.5 6.5 ASEAN 1.5 4.9 5.6 Source: ASEAN Surveillance Report, April 2010 1. ASEAN in the World Trend of ASEAN Trade and top trading partners Source: AEC Chartbook 2009 1. ASEAN in the World Top traded products Top Exports Top Imports 1. Electronic integrated 1. Electronic integrated circuits & microassemblies circuits & microassemblies (9%) (9%) 2. Petroleum products (7%) 2. Petroleum products (9%) 3. Automatic data processing 3. Crude oil (7%) machines (5%) 4. Office machines parts and 4. Crude oil (4%) accessories (3%) 5. Petroleum gases and 5. Electric parts for telephony gaseous hydrocarbons (4%) (2%) Source: ASEAN Trade Database 2009 Why Integration? • Recognise the need to not only build resilience to cushion ASEAN from the adverse impact of any internal and/or external shocks but also sustainable growth. • Ensuring ASEAN Centrality in evolving regional architecture 2. ASEAN Economic Community Declining CEPT tariff supports intra-ASEAN trade Source: AEC Chartbook 2009 Ford in ASEAN Vehicle and Parts Complementation THAILAND pick-up, SUV Vehicle OUTSIDE ASEAN CKD, various parts Parts / CKD Manufacturing Parts supply VIETNAM cars, SUV, light commercial vehicle various parts INDONESIA MALAYSIA PHILIPPINES various parts various parts small SUVs, cars, engines OUTSIDE ASEAN CKD, various parts Source: Ford 2. ASEAN Economic Community ASEAN Economic Community Blueprint Creation of AEC by 2015 - single market and production base - competitive economic region - equitable economic development - integrated into the global economy Single Market and Production Base - goods, services, skilled labor, capital - trade liberalization and facilitation - ATIGA, AFAS, ACIA ASEAN ECONOMIC COMMUNITY SINGLE MARKET AND COMPETITIVE PRODUCTION BASE EQUITABLE ECONOMIC Integration into the ECONOMIC REGION Global Economy DEVELOPMENT Free flow of goods SME development Coherent Competition policy Approach towards Free flow of External Economic services Relations Initiative for Consumer ASEAN Integration Protection Free flow of (IAI) Enhanced investment participation in Intellectual global supply Property Rights networks Freer flow of capital Infrastructure development Free flow of skilled labor Taxation Priority Integration Sectors e-Commerce Food, Agriculture and Forestry Human Resource Development Research and Development 2. ASEAN Economic Community Single Market and Production Base ASEAN Trade in Goods Agreement (ATIGA) Free flow of goods: tariff liberalization, non-tariff barriers (NTBs) elimination, rules of origin, trade facilitation, customs, standards and conformance, and sanitary and phytosanitary measures. Consolidates and streamline various provisions on trade in goods into a single reference document Full tariff reduction schedule to 2015 for each ASEAN Member State, spelling out the tariff rates to be applied for each year over the next 5 years 3. Trade Facilitation Focus of ASEAN economic integration Guided by the ATIGA: - relevant chapters - Trade Facilitation Work Programme - Trade Facilitation Framework and Indicators Priority areas are: - Elimination of Non-Tariff Barriers - Customs - Standards and conformance - Transparency 3. Trade Facilitation 1. ASEAN Trade Facilitation questionnaire - to assess the export/import conditions on the ground - opportunity for economic operators to highlight issues of importance 2. ASEAN Trade Repository (ATR) - there is currently no single website where trade information and regulations of all ASEAN Member states can be found - ATR to fully address this issue by 2015 - tariff rates and code, rules of origin, technical regulations etc. 3. Trade Facilitation 3. Rules of origin - Original ASEAN ROOs: RVC 40% - Today: RVC 40% or Change in Tariff Classification - Co-equal methods: wider options for traders to comply 4. ASEAN Single Window - a common platform for regulatory agencies - save time for exporters - still in early stage of development 4. ASEAN CONNECTIVITY A holistic way of looking at inter-linkages in ASEAN Development of an ASEAN Master Plan on Connectivity Report to be finalised by October 2010: - Physical Connectivity - Institutional Connectivity - People-to-people Connectivity 4. ASEAN CONNECTIVITY Transport Maritime Transport Services Adoption of Roadmap towards an Integrated and Competitive Maritime Transport in ASEAN Air Freight Services ASEAN Multilateral Agreement on the Full Liberalisation of Air Freight Services and the ASEAN Multilateral Agreement on Air Services ASEAN Open Sky Policy Transport Facilitation ASEAN Framework Agreement on the Facilitation of Inter-State Transport Roadmap for Integration of Logistics Services Sector Conclusions ASEAN economic integration continues: AEC Single market and production base Focus on trade facilitation Benefits to investors and traders ASEAN centrality in evolving regional architecture THANK YOU! One Vision One Identity One Community STARBUCKS in ASEAN 90 stores 133 stores 117 stores 65 stores 76 stores Source: Starbucks website Foreign Direct Investors in 2008 British Virgin Islands 1.8% Taiwan (ROC) 2.4% Others China 26.3% Republic of 2.7% Korea 2.8% Bermuda 2.3% European Union USA 22.7% 4.6% Cayman Island 5.9% Japan ASEAN 11.5% 17.1% Source: ASEAN Secretariat Database
"ASEAN Economic Community and Trade Facilitation"