ASEAN report highlights actions, deliverables under AEC 2025

ASEAN report highlights actions, deliverables under AEC 2025

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Amid global economic uncertainties, ASEAN’s combined GDP reached US$3.0 trillion in 2018 as compared to $2.5 trillion in 2015, making the region the fifth largest economy in the world, according to the new “ASEAN Integration Report (AIR) 2019.”

The region’s total trade reached $2.8 trillion in 2018, an increase of 23.9% from the 2015 figure of $2.3 trillion, and total investment inflows were $154.7 billion—the highest in history—and a 30.4% increase from total FDI inflows of $118.7 billion in 2015.

Intra-ASEAN trade accounted for the largest share of ASEAN’s total trade and FDI inflows in 2018 at 23.0% and 15.9%, respectively.

The report highlights that four years into the implementation of the ASEAN Economic Community (AEC) Blueprint 2025, ASEAN economic integration has borne results in a number of areas but overall remains a work in progress.

“There is a need for ASEAN to deepen and broaden intra-ASEAN trade and investment linkages, while simultaneously keeping markets open through strengthened partnerships with economies around the world. [The report] likewise indicates the need for ASEAN to be a more proactive global player,” the ASEAN Secretarial said in a statement.

The report also underscores the need for ASEAN to prepare itself for the future, including in the context of the fourth industrial revolution and sustainability considerations.

4 years of progress

In terms of trade in goods, full operationalization of the overdue ASEAN Single Window initiative continues. To date, seven ASEAN member states (AMSs) have joined the live operation, with the rest expected to come on board within 2019.

Meanwhile, the ASEAN-wide Self Certification project is now at its final stage, with expected operationalization in 2020.

Other initiatives on trade facilitation include the ASEAN Seamless Trade Facilitation Indicators, adopted in 2017; the ASEAN Tariff Finder; and the ASEAN Solutions for Investments, Services, and Trade, a consultative mechanism for ASEAN-based enterprises on ASEAN economic agreements.

Meanwhile, key developments towards ASEAN customs cooperation are the signing of the ASEAN Framework Agreement on the Facilitation of Goods in Transit (AFAFGIT) Protocol 2, and the ratification by all AMSs of Protocol 7 (Customs Transit System) to support the implementation of the AFAFGIT.

Implementation of the ASEAN Customs Transit System (ACTS), which aims to enable free movement of trucked goods between participating countries, is piloted in two corridors i.e. North-South and East-West, with expected “full live operation” in 2020.

Moreover, preparations are underway to implement the ASEAN Food Safety Regulatory Framework, while negotiation on the ASEAN Agreements on Regulatory Framework for Traditional Medicines and Health Supplements is ongoing.

On investment, the Second, Third, and Fourth Protocols to Amend the ASEAN Comprehensive Investment Agreement to improve investment cooperation have been signed.

On financial integration, key achievements include the completion of the eight packages of commitments on financial services liberalization under the ASEAN Framework Agreement in Services (AFAS); the start of negotiations on the Ninth Package of Commitments; and the signing of the Financial Services Annex in the ASEAN Trade in Services Agreement (ATISA).

Competition law

On efforts toward a competitive ASEAN region, currently nine out of ten AMSs have competition laws in place, with Cambodia expected to enact its competition law in the near term.

Other major initiatives on competition policy and law include the ASEAN Regional Cooperation Framework on Competition, the implementation of which forms the pathway to an ASEAN Regional Cooperation Agreement.

Others are the ASEAN Self-Assessment Toolkit on Competition Enforcement and Advocacy, the ASEAN Regional Capacity Building Roadmap 2017-2020, the Virtual ASEAN Competition Research Centre, and the ASEAN Competition Enforcers Network.

Meantime, as of now, nine AMSs have enacted their Consumer Protection Act, while Cambodia’s consumer protection legislation is expected to be enacted in 2020.

At the regional level, the ASEAN High-Level Principles for Consumer Protection provide a common baseline for cooperation and exchange of experiences and best practices.

Other recent milestones in ASEAN’s cooperation in consumer protection include the development of the ASEAN Self-Assessment Toolkit, the launch of the Handbook on Consumer Protection Laws in ASEAN, and the linking of the ASEAN Product Recalls Portal with the Product Recalls Portal of the Organisation for Economic Co-operation and Development.

Noteworthy intellectual property (IP)-related initiatives since 2016 include the ASEAN Common Guidelines for the Substantive Examination of Trademarks and of Industrial Designs in 2017 and 2018, respectively; work under the ASEAN Patent Examination Cooperation; enhancements to the databases on registered trademarks and design registrations, namely the ASEAN TMView and DesignView platforms and the development of the ASEAN Geographical Indications Database; and the establishment of the ASEAN Network of Enforcement Experts.

GRP a new focus

Further, good regulatory practices (GRP) are newly embraced in the AEC agenda, appearing as a new focus area in the AEC Blueprint 2025.

Key achievements in this area are the adoption of the non-binding ASEAN GRP Core Principles in 2018 to assist AMS in improving their regulatory practice, and finalizing of the Baseline Study on Regulatory Management Systems in ASEAN.

In addition, there are also GRP-related initiatives in specific sectors, such as the adoption of the NTM (Non-Tariff Measures) Guidelines, and the updating in 2018 of the 2009 ASEAN Guidelines on GRP.

In the transport sector, ASEAN’s air transport cooperation achieved a significant milestone with the full ratification of the ASEAN open skies agreements in April 2016, establishing the ASEAN open sky.

Continued progress has also been made to upgrade the ASEAN Highway Network road networks as well as complete the missing links of the Singapore-Kunming Rail Link, two key land transport initiatives in the region.

In 2017, the region also saw the signing of the ASEAN Framework Agreement on the Facilitation of Cross-Border Transport of Passengers by Road Vehicles, along with the adoption of key documents on sustainable transport.

In maritime transport cooperation, key achievements include the launching of the ASEAN Roll-on Roll-off Sea Linkage Route between Davao-General Santos, the Philippines, and Bitung, Indonesia, in 2017.

ICT and e-commerce

Among the major milestones in ASEAN’s ICT cooperation are the adoption of the ASEAN Framework on Personal Data Protection in 2016, the ASEAN International Mobile Roaming Framework in 2017, and the ASEAN Framework on Digital Data Governance in 2018.

On e-commerce, a key milestone was the signing of the ASEAN Agreement on Electronic Commerce in 2018 to contribute to creating an environment of trust and confidence in the use of e-commerce in the region.

A closely related initiative is the ASEAN Digital Integration Framework, which was adopted in 2018, and for which an action plan is being finalized.

In the energy sector, the region achieved a 21.9% reduction in energy intensity in 2016, surpassing the 2020 target of 20.0%. The region has also set an aspirational target of 23.0% share of renewable energy in the ASEAN energy mix by 2025, and is working on accelerating the deployment of renewable energy, which, as of 2016, stood at 12.4% of ASEAN’s total energy mix. ASEAN also actively promotes the use of clean coal technologies.

To further enhance the sustainability and competitiveness of the region’s food, agriculture, and forestry (FAF) sector, initiatives include in the case of agricultural sector, the ASEAN Public-Private Partnership Regional Framework for Technology in FAF Sectors and the ASEAN Roadmap for Enhancing the Role of Agricultural Cooperatives in Global Agricultural Chains, launched in 2017 and 2018 respectively; and the Work Plan for Forest Law Enforcement and Governance, adopted in 2016, in the case of forestry sector.

To advance food security in the region, the ASEAN Plus Three Food Security Information System has been further strengthened since 2016 to allow data collection and dissemination among the participating countries.

A number of initiatives were also pursued to meet ASEAN’s objective to become a sustainable tourism destination, namely, the Pakse Declaration on ASEAN Roadmap for Strategic Development of Ecotourism Clusters and Tourism Corridors (2016) and the ASEAN Sustainable Tourism Award (2016).

Moreover, ASEAN is cultivating high-potential tourism market segments such as gastronomy tourism and cruise tourism.

ASEAN’s cooperation in the area of science and technology (S&T) saw the adoption of the ASEAN Declaration on Innovation by ASEAN Leaders in 2018, followed by the development of the ASEAN Innovation Roadmap in 2019.

In 2018, the sectoral ministerial and senior official bodies overseeing S&T matters also saw the inclusion of the term “innovation” into their name, reflecting the long-term commitment of the S&T agenda towards productivity-driven growth and innovation.

Work continues to develop MSMEs, especially with the adoption of the ASEAN Regional Principles on Good Business Registration Practices and the setting up of various platforms to assist MSMEs, such as the ASEAN Online Academy, ASEAN Business Incubator Network and the ASEAN Mentorship for Entrepreneurs.

ASEAN, recognizing the role of inclusive business in fostering MSME development, launched the ASEAN Inclusive Business Framework in 2017.

Trade deals and 4IR

To promote open regionalism, some of the key highlights include the signing of the ASEAN-Hong Kong Free Trade Agreement and the ASEAN-Hong Kong Investment Agreement, as well as the conducting of upgrading or review of existing ASEAN Plus One agreements, such as the ongoing implementation of the ASEAN-China Free Trade Agreement upgrading protocol, the completion of the general review of the ASEAN-Australia-New Zealand Free Trade Agreement and the endorsement of a Work Plan for AANZFTA Upgrade Negotiations, as well as the signing of the first protocol to amend the ASEAN-Japan Comprehensive Economic Partnership by all AMSs in April 2019 to incorporate the chapters on services, investment and Movement of Natural Persons.

On the Regional Comprehensive Economic Partnership (RCEP), negotiations are being intensified to conclude the deal.

The Fourth Industrial Revolution(4IR) has been high on ASEAN’s agenda since 2017. In 2018 alone, the region saw the completion of the “Assessment of ASEAN’s Readiness for the 4IR,” along with the signing of the ASEAN Agreement on Electronic Commerce, as well as the endorsement of the ASEAN Digital Integration Framework and the ASEAN Framework on Digital Data Governance.

The 4IR has also featured prominently in Thailand’s 2019 ASEAN Chairmanship, where five out 13 priority economic deliverables this year are focused on this emerging issue.

As a next step, ASEAN will develop a consolidated strategy on the 4IR, which will articulate clearly and holistically ASEAN’s 4IR agenda and directions.

Photo courtesy of ASEAN

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