Joon Joon Lian Lian WAN WAN External Economic Relations Division External Economic Relations Division ASEAN Secretariat ASEAN Secretariat ASEAN Secretariat ASEAN Secretariat Managing Regional and Global Governance (MRGG) in Asia: Opportunities and Challenges for the ASEAN Economic Community 5 October 2011, Jakarta
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Managing Regional and Global Governance (MRGG) in Asia: Opportunities and Challenges for the ASEAN Economic Community
5 October 2011, Jakarta
ASEAN Economic Integration Framework
Internal Integration – ASEAN Economic Community– Single market and production baseSingle market and production base– Competitive economic region– Equitable economic developmentq p– Integration into the global economy
External – FTAs and CEPs– Enhance market access– To remain competitive vis-à-vis countries/blocs
directly competing with ASEANdirectly competing with ASEAN– ASEAN Centrality
US$ billionASEAN’s TOTAL TRADE 2005-2010
US$ billion
2 042 8
2,500
1,610.8
1,897.2
2,042.82,000
1,224.9
1,404.8
,1,536.9
1,500
1,000
500
02005 2006 2007 2008 2009 2010
ASEAN’s Trade with Plus 3 (2005-2010)US$ million
600,000.0
Plus 3
US$ million
400 000 0
500,000.0Intra ASEAN
300,000.0
400,000.0
200,000.0
China
Japan
100,000.0Korea
0.0
2005 2006 2007 2008 2009 2010
Source of FDI into ASEAN 2010
Rest of the
Intra ASEAN,16.0%
USA, 11.3%
Rest of the World, 30.7%
EU 27,
Korea,5.0% ,
22.4%Japan,11.1%
China, 3.6%
FDI Flows into ASEAN 2005-2010US$ million
14 000
16,000
Plus 3
US$ million
12,000
14,000
Intra ASEAN
8,000
10,000ASEAN
Japan
4 000
6,000
Korea
2,000
4,000
China
02005 2006 2007 2008 2009 2010
ASEAN Economic Communityy
A Historical Account TowardsASEAN Economic Community (AEC)ASEAN Economic Community (AEC)
ASEAN Vientiane
ASEAN Framework
Cha-am Hua Hin Declaration on the Roadmap for the ASEAN
Entry into Force of ASEAN Ch tInitiative(AFTA) Blueprint
(Acceleration of AEC to 2015)
CharterInitiative for ASEAN Integration
(IAI)
Main Elements of AEC
AEC Progress and Achievements
• Phase I (2008-2009) and Phase II (2010-2011)73 43% f l t d b d f J l 201173.43% of measures completed by end of July 2011.
AEC Scorecard:2008-2009: currently at 83 8%2008-2009: currently at 83.8%2010-2011: currently at 64.1%A total of 114 measures yet to be implemented by end
f 2011of 2011.
• Phase III (2012-2013)
• Phase IV (2014-2015)
AEC Progress and Achievements
As of 1 January 2010 tariff liberalisation within ASEAN:
• Self-Certification Pilot Project - Brunei Darussalam, Malaysia, Singapore and Thailand y g
• The FOB value in the Certificate of Origin will be waived.
• ASEAN Single Window - Legal framework for the ASW Pilot Project is in
placeplace. - The implementation of the ASW Pilot Project will
take place by September 2012, involving the exchange of ATIGA Form D and ASEAN Customs Declaration Document (ACDD) among 7 Member States.
AEC Progress and Achievements
Trade in Services8th P k hi h l l f lib li ti i• 8th Package: higher levels of liberalisation i.e. towards 70% foreign equity for priority sectors and 51% for all the other sectors.51% for all the other sectors.
ASEAN Comprehensive Investment Agreement
• Continuous efforts are underway to further liberalise investment regimes in ASEAN through the ASEAN Comprehensive Investment Agreement (ACIA).
AEC Progress and Achievements
Finance• Aseanexchanges.org website: an initiative to link
seven stock market exchanges launched at the 15th
AFMM in April 2011.AFMM in April 2011.
Malaysia Singapore
PhilippinesPhilippinesViet Nam
IndonesiaThailand
AEC Progress and Achievements
Finance• Discussion is underway for the establishment of an
ASEAN Infrastructure Fund (AIF).
ASEAN+3• Chiang Mai Initiative Multilaterisation (CMI) US$120Chiang Mai Initiative Multilaterisation (CMI) US$120
billion fund – 24 March 2010• ASEAN+3 Bond Market Forum (ABMF) and the ( )
Credit Guarantee and Investment Facility (CGIF).
AEC Progress and Achievements
Transport
• Brunei Action Plan (BAP) - referred to as ASEAN Strategic Transport Plan 2011-2015, charting t t t t i ti t t th li titransport strategic actions to support the realisation of the AEC and the Master Plan on ASEAN Connectivity.y
• ASEAN Open Skies: Completion of the framework.• ASEAN-China Air Transport Agreement: unlimited 3rdASEAN China Air Transport Agreement: unlimited 3
and 4th traffic right freedoms.
AEC Progress and Achievements
SME Development
• Strategic Plan of Action for ASEAN Small and Medium Enterprises (SME) Development 2010-2015Enterprises (SME) Development 2010 2015
• SME Advisory Board
• ASEAN SME Awards (in collaboration with ASEAN Business Advisory Council)
Established in 1992, realised on 1 January 2010 (ASEAN 6) as 99% of total tariff lines eliminated for(ASEAN-6) as 99% of total tariff lines eliminated for intra-ASEAN tradeAverage tariff for ASEAN-6 is now 0.95% from 12% in g1992AFTA for CLMV will be realised as early as 1 January 2015 (part of the S&D given to CLMV as new ASEAN2015 (part of the S&D given to CLMV as new ASEAN members and as least developed ASEAN Members)Ultimate goal is free flow of goods in 2015 as ASEAN g grealises the ASEAN Economic Community
ASEAN Trade in Goods Agreement (ATIGA)
Signed in Thailand on 26 February 2009 and entered into force on 17 May 2010into force on 17 May 2010Supersedes the 1993 Agreement on Common Effective Preferential Tariff Scheme (CEPT)( )Provides the legal framework to realise free flow of goods in the ASEAN Economic CommunityC ffCovers more than tariff liberalisation; includes substantive Chapters on enhanced ROO, trade facilitation work programme, Customs p g ,procedures, STRACAP (standards, technical regulations and conformity assessment procedures)and SPSand SPS
ASEAN-China Free Trade Agreement
• Negotiated using a “sequential approach” • ASEAN’s only FTA that provided for an Early Harvest
Programme, implemented in 2004• Trade in Goods Agreement signed in 2004 and
implemented in 2005; ROO enhanced in 2011implemented in 2005; ROO enhanced in 2011• Trade in Services Agreement signed 2007; 2nd
Package of Specific Commitments to be signed in August 2011
• Investment Agreement signed in 2009• ACFTA realised on 1 January 2010• ACFTA realised on 1 January 2010• Total population of 1.91 billion with a combined
GDP of US$7.6 trillion (2010)
ASEAN-Korea Free Trade Agreement
• Negotiated using a “sequential approach” • Introduced the concept of Product Specific RulesIntroduced the concept of Product Specific Rules• Trade in Goods Agreement implemented in
2007, without Thailand• Trade in Services Agreement signed 2007, without
Thailand • Thailand acceded to both the Goods and ServicesThailand acceded to both the Goods and Services
Agreements in 2009• Investment Agreement signed in 2009• AKFTA realised on 1 January 2010• Total population of 632.1 million with a combined
GDP of US$2 8 trillion (2010)GDP of US$2.8 trillion (2010)
Negotiated as a single undertaking g g gAgreement establishing the AANZFTA signed in Feb 2009 and entry into force on 1 Jan 2010Considered the most comprehensive, most ambitious FTA ASEAN has to-dateIncludes chapters not in any of ASEAN’s FTAs:Includes chapters not in any of ASEAN s FTAs: IP, MNP, electronic commerce and competitionFTA to be realised in 2015Total population of 626.2 million with combined GDP of US$3.2 trillion (2010)
ASEAN-India Free Trade Area
Negotiated using a “sequential approach” similar to ACFTA and AKFTAACFTA and AKFTATrade in Goods Agreement signed in August 2009 and entry into force on 1 January 2010 y yGeneral ROO: 35% + CTSHAgreement on Services and Investment currently being negotiatedFTA to be realised by 2016Total population of 1 8 billion with combined GDP ofTotal population of 1.8 billion with combined GDP of US$3.3 trillion (2010)
Emerging Regional Architecture
• Next step: EAFTA (?)R id i l d l b l d l t• Rapid regional and global developments
• Ministerial decision: pragmatic and ASEAN Plus FTAs as building blocksFTAs as building blocks
• Consolidation exercise – priority given to ROO; Customs-related matters; tariff nomenclature and economic cooperation
• Narrowing the development gap critical to ensure less-developed countries benefit from economicless developed countries benefit from economic integration