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ASEAN steps up to the plate
Lim Jock Hoi,
Association of Southeast Asian Nations (ASEAN)
What are some of the achievements/milestones which ASEAN has achieved in its economic integration efforts?
AS the ASEAN Economic Community (AEC) Blueprint 2025 enters its third year of implementation, ASEAN continues our focus on fostering long-term competitiveness and sustainability.
On goods, by 2018, 98.7 per cent of intra-ASEAN tariffs have been eliminated, while ASEAN intensifies efforts to advance its trade facilitation work.
Recent milestones include the live operation of the ASEAN Single Window on Jan 1, 2018 for Indonesia, Malaysia, Singapore, Thailand, and Vietnam. We look forward to all ASEAN Member States being on board by the end of the year, and to expanding operations to include other trade and customs-related documents.
Preparations for the operationalisation of the ASEAN-wide Self-Certification Scheme have also entered into its final stage. Ten National Trade Repositories are up and running and are being linked with the ASEAN Trade Repository, which offers a one-stop platform for trade and customs-related information.
The ASEAN Solutions for Investments, Services, and Trade platform is also fully operational for trade in goods, providing businesses with a no-cost online consultation platform for the expedited resolution of cross-border issues related to the implementation of ASEAN economic agreements.
On services, the ASEAN Framework Agreement on Services has paved the way for the gradual opening of the services market, and the 10th (and final) package of commitments is being completed.
In parallel, ASEAN is negotiating an ASEAN Trade in Services Agreement, which will elevate ASEAN's services integration into the next level, taking into consideration regional and global developments and boosting ASEAN's capacity in ensuring the services sector bolsters the region's competitiveness. The mobility of services professionals also continues to be enhanced through the review of the ASEAN Agreement on Movement of Natural Persons and the implementation of various Mutual Recognition Arrangements for professional services. Implementation of the ASEAN Qualifications Reference Framework has also started.
Efforts to make ASEAN a preferred investment destination are underway under the four-pronged approach of investment liberalisation, facilitation, promotion, and protection. The most recent is through the implementation of the Focused and Strategic Action Agenda on Investment in 2017, and enhancements to the ASEAN Comprehensive Investment Agreement this year.
Acknowledging the growing importance of e-commerce and in preparing for the new digital economy, ASEAN has intensified the efforts to finalise the ASEAN Agreement on e-Commerce, a priority deliverable under Singapore's ASEAN chairmanship and part of the ASEAN Work Programme on Electronic Commerce 2017-2025. This agreement aims to facilitate cross-border e-commerce transactions and deepen cooperation between ASEAN member states to instil confidence in e-commerce to drive regional economic growth and social development.
Given the current global challenges, what can ASEAN do to ensure that it stays relevant?
As the world faces increasing challenges, the region must be prepared to face the geo-strategic shifts, embrace the fourth industrial revolution, and strive for long- term competitiveness that works in tandem with sustainable and inclusive development.
The biggest challenge today to the global economy is the escalating trade tensions, driven largely by unilateral actions by a major player and retaliations by its affected partners. Recent developments brought about uncertainties to business and investment.
On a fundamental level, ASEAN must continue to voice its unequivocal support to an open, rules-based and non-discriminatory multilateral trading system, which has helped to deliver growth and prosperity to economies in the region.
It is estimated that more than 50 per cent of ASEAN's trade with China involves intermediate goods, so even if the trade wars are not directly targeted at ASEAN, given its involvement in the global production networks, the region may have to bear some of the repercussions. To this end, ASEAN needs to remain steadfast in its integration efforts. Regional trade and investment have continued to grow amidst these uncertainties, strengthening collective regional resilience which provides a buffer against external shocks.
In parallel, such developments have provided an opening for a more vocal and proactive ASEAN as the region is increasingly seen as a beacon of open regionalism.
The centrepiece of ASEAN's external economic strategy is the Regional Comprehensive Economic Partnership (RCEP), currently negotiated between ASEAN and its six trading partners (Australia, China, India, Japan, South Korea, and New Zealand). The potential of RCEP is immense. Once concluded, the RCEP will create the world's largest trade bloc covering almost half of the world's population and a third of global trade and output. It will signify ASEAN's centrality and leadership in the new regional economic architecture, to show that trade can be mutually beneficial for countries at different levels of development.
The phenomenon must be considered and responded to holistically, not in silos. ASEAN needs to do so by ensuring adequate regulatory and institutional capacity and responsiveness, strengthening infrastructure and connectivity, and building a future-ready workforce. But the potential of these figures can only be realised if there is a considered and coordinated response from all stakeholders in the public and private sector alike. Additionally, there is much leverage that can be built upon regional platform and coordination, from information and best practice sharing, to joint initiatives and regulatory cooperation, as appropriate.
Last but not least, in its pursuit of competitiveness, ASEAN must continue to put its peoples and their well-being at its core. Becoming a competitive economic region should not come at the expense of sustainability and inclusivity. This calls for closer coordination across the ASEAN Community Pillars, as the issues of poverty or of environment cannot be addressed separately or in silos from economic development.
What are some of your hopes for ASEAN's future working towards the AEC 2025 Blueprint?
To realise the full potential of the AEC, there is a need for closer cross-pillar and cross-sectoral coordination as issues or work areas become increasingly interrelated and interdependent. For example, for e-commerce to thrive, the issue of electronic payments is critical but this will call for cooperation on payment and settlement systems.
Similarly, to fully embrace the fourth industrial revolution, ASEAN will need to take a long-term perspective, including by ensuring that the region has in place education curricula and systems that can respond to the needs of a new economy.
These are just some examples. At the practical level, this will call for better agility in institutions as well as in policy and decision-making processes.
Additionally, there is a real need for ASEAN to step up its global engagement and visibility. We have seen this in the context of other major emerging economies, where growing economic prowess necessitates a more proactive engagement and taking of positions where appropriate.
ASEAN is now collectively the world's sixth largest economy, and with the challenges faced in the EU, it may be deemed as an example of successful regional integration. It would be necessary for ASEAN as an economic community to be more responsive to and to take prompt collective stance in the face of global economic challenges. The same goes in the context of its FTA negotiations. It is important for ASEAN to come to the table ready with what it wants.