Transcript AEC Blueprint Mid

Sothea Oum
Economist
Economic Research Institute for ASEAN and East Asia (ERIA)
IFRI- Institut Francais Des Relations Internationales,
Paris, France
February 12, 2015
1.
ASEAN Economic integration – ASEAN Economic
Community (AEC)
2.
AEC Measures and Implementation – Emphases on
the CLMV Countries
3.
Challenges and Ways Forward
2
Population 625 million
(World 7,162; EU 507)
Merchandise Trade
US$ 2.5 trillion (World 37.6, EU 11.2)
Growth Rate 5.1%
GDP (at current prices)
US$2.4 trillion
(World 74,699; EU17,512)
FDI US$ 122.4 billion
(World 1,452; EU 246)
(CLMV 7.0, World 3.3; EU-0.4)
Source : ASEANStats, 2013, IMF, and UNTACD
4
ASEAN Integration Matters:
Potential Economic Impact of AEC Measures on AMSs’ GDP
5.0
4.4
4.5
4.0
3.5
3.5
3.0
2.3
2.5
2.0
1.5
2.0
1.6
1.5
0.9
1.0
1.5
1.0
0.5
0.0
Tariff Elimination
Tariff Elimination+20% Services Liberalization
Tariff Elimination+20% Services Liberalization+20% Improved Trade Facilitation
Source: Computed by Itakura for MTR project.
5

Pillar 1: Single Market and Production Base
◦ Free flow of goods, services, investment & skilled labor; Freer
flow of capital. Focus on PIS

Pillar 2: Highly Competitive Economic Region
◦ Transport facilitation, infrastructure, ICT and connectivity;
IPR, taxation, competition policy

Pillar 3: Region of Equitable Economic Development
◦ SME development; Initiative for ASEAN Integration

Pillar 4: Region Fully Integrated into the Global
Economy
◦ Coherent approach to external economic relations
6
Common
Market
Economic &
Monetary Union
Customs
Union
Free Trade Area
7
Overall: A number of substantial achievements. A few
difficult ones. Much remains to be done.
Major examples





CEPT rates very low to
nearly zero
NSW operational in 5
AMSs
ATIGA ROOs business
friendly
ASEAN + 1 FTAs/RCEP
Chiang Mai Initiative
RIATS in force under
ASEAN - X
Average Common Effective Preferential Tariff Rates in ASEAN Countries: 2000-2012
8.00
7.51
7.00
6.00
5.00
%

Average CEPT Rate, 2000-2012
4.40
4.43
4.00
3.00
2.72
3.64
1.69
2.00
1.74
1.00
-
0.68
0.05
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
ASEAN
ASEAN-6
CLMV
Source: ASEAN Tariff Database 2013
9
Business
value
chain
ASEAN Single Window
Regional /
Global SW
Indonesia, Malaysia, Philippines, Singapore, Thailand
National Single Windows
Cambodia
Myanmar
Brunei Darussalam
Vietnam
Lao PDR
Customs
System
Tradepoint
Portals
Customs
Automation
Era
Start of
Trade
Information
Trade
EDI / VAN
Customs
Single
Window
National SW
with all OGAs
Integration scope
Start of
Trade
Information
Exchanges
Limited
B2G
Nationwide
Single Window
B2G / G2G
Source: UNECE – Ten Years of Single Window Implementation (Jonathan Koh Tat Tsen)
N2N
10



ASEAN has increased sectoral coverage of by adopting new
packages every another year.
With the 9th package, it reaches 104 sectors (out of 128).
Mode 4 is covered in the new MNP Agreement.
7th Package
# of sectors
Total
FE ratio
8th Package
# of sectors
65
FE ratio
9th Package
# of sectors
80
FE ratio
10th Package
# of sectors
104
FE ratio
128
Priority Integration Sectors
29
51%
29
70%
Logistics
9
49%
9
51%
9
70%
Others
27
49%
42
51%
66
51%
90
70%
12
• Engineering Services (signed December, 2005)
• Nursing Services (signed December, 2006)
• Architectural Services (signed November 2007)
• Surveying Qualifications (signed November 2007)
• Accountancy services (signed February 2009)
• Dental Practitioners (signed February 2009)
• Medical Practitioners (signed February 2009)
• ASEAN Agreement on Movement of Natural Persons (signed
November 19,2012) – Business visitors, intra-corporate
transferees, contractual service supplier)
13
ASEAN Progress and EU Position
2,512
1,225
759
122
43
22
Source: ASEAN Secretariat (2014)
14
EU Position in the CLMV Countries
Source: ASEAN Secretariat (2014) and UNTACD (2012)
15
ASEAN Progress
Source: IMF and ASEAN Secretariat (2014)
16
ASEAN Progress
60
57.14
50
45.25
42.59
40
Percent
ASEAN - 7 Poverty Rate:
1990:
45%
2010:
14%
(15.6% incl Myanmar)
54.4
52.45
34.6
36.64
35.02 30.8331.82
30
20
10
25.36
27.69
20.6819.92
24
16.57
18.91
14.77
12.1512.6812.37
17.2 14.24
17.69
15.5314.92
12.32
10.54
8.52 8.8 8.72
0
ASEAN - 7 Poverty Gap:
1990: 14%
2010: 3%
ASEAN Middle Class:
1990: 15% (11%)
2010: 37% (28%)
1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2010
Reference Year
Poor (<1.25)
Middle Class (3<x<12)
ASEAN 3rd largest EA economy
ASEAN 3rd most populous in
world
Middle Class (4<x<30)
17
Overall: Completion of Core AEC Measures, Hard and Soft
Infrastructure, SME Development, Domestic Reforms
1
2
Building a fully functioning ASEAN economic
community
Need to improve competitiveness of ASEAN
3
Need to ensure a more resilient, equitable and
sustainably growing ASEAN
4
Still large number of poor & marginally non-poor
in most AMSs
5
Mixed record on income inequality
19
Priority AEC Measures for 2015
•Tariffs (almost done)
•NTMs/NTBs
•Trade Facilitation
•Services Liberalization
•Investment Liberalization
•Investment Facilitation
•Transport Facilitation
Rationale:
Central and foundational elements of
ASEAN economic integration and
connectivity
•IAI
•SMEs
Leaders’ initiatives for equitable development
•RCEP (negotiations)
“Open regionalism”. ASEAN benefits more from
East Asia integration
20
AEC Measures for mainly Beyond
2015
• Standards and Conformance
• MRAs on Professional Services
• Financial integration and market
access
• Competition Policy and Consumer
Protection
• IPR
•Energy
•ICT
• Agriculture
•Taxation
Possible “Success Stories” by 2015
•MRAs on engineering services, and
architectural services
• MRAs in electronic and electrical
equipment (EEE)and in pharmaceuticals
• Agreement on harmonized technical
requirements in EEE
• ASEAN
regional
guidelines
on
competition policy
• Many cooperation
initiatives on
agriculture, food and forestry
Mixed Record on Income Inequality
22
• Wide gaps between global best performers (Singapore, Malaysia) and poor
ones (Cambodia, Lao, Myanmar)
• Mixed improvements in Competitiveness and Business environment, setbacks
in logistics and Innovation Indices
23
Overall quality of infrastructure
7
6
5
4
3
2
1
ya
nm
ar
M
na
m
Vi
et
pp
in
es
Ph
ili
di
a
ia
In
Ca
m
bo
do
ne
s
PD
R
o
La
nd
Th
ai
la
ei
Br
un
Si
ng
ap
or
e
M
al
ay
s ia
0
Source: World Economic Forum 2013-2014
24
Infrastructure Investment Needs as % of GDP (est.), 2010-2020
Transport
Electricity
ICT
Water and
Sanitation
Total
Cambodia
4.43
0.95
2.97
0.36
8.71
Indonesia
3.88
0.98
0.97
0.35
6.18
Lao PDR
10.62
0.00
2.40
0.60
13.61
Malaysia
1.94
4.42
0.27
0.04
6.68
Myanmar
2.70
0.00
1.46
1.88
6.04
Philippines
2.30
1.87
1.22
0.65
6.04
Thailand
0.58
3.69
0.45
0.19
4.91
Viet Nam
2.07
3.12
2.38
0.54
8.12
Source: Bhattacharyay, ADBI Working Paper, 2010
25
ASEAN SME Policy Index – Policy Gaps
6.0
5.0
4.1
4.0
3.7
3.0
3.0
4.2
4.1
3.6
2.7
3.6
2.9
4.6
4.3
4.2
3.6
2.6
3.5
4.1
3.8
3.4
4.1
3.3
3.8
3.3
2.6
2.5
2.0
1.0
0.0
1. Institutional
Framework
2. Access to
3. Cheaper and
Support Services Faster Start up and
Better Regulations
CLMV


4. Access to
Finance
5. Technology and 6. International
Technology
Market Expansion
Transfer
ASEAN -6
ASEAN
7. Promotion of
Entrepreneurial
Education
8. More effective
representation of
small enterprises’
interests
Big gaps between more developed member states (ASEAN 6) and CLMV countries,
and ASEAN as a region.
Specific policies and actions for individual member country and the region – to
prioritize, provide mutual supports, and allocate resources, i.e., to improve
‘Technology and Technology Transfer’, ‘Access to finance’ , ‘Access to support
service’, ‘Promotion of entrepreneurship’, and make ‘Cheaper, Faster Start-up and
Better regulations’, closer to good practices.
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
Use AEC as a reform platform- domestic reforms
 Trade and investment (liberalization) facilitations, IPR, competition
policy, consumer protection, standard and conformance
 Public administrative reforms – quality public services deliveries
 Land and natural resources management – particularly in Myanmar,
Cambodia, and Lao PDR, state-owned enterprises in Viet Nam

Graduation from low income, avoiding lower and
middle income trap
 Reversing the current race-to-the bottom: competition for FDIs
based on cheap, unskilled labor, and blanket incentives, Lewisturning point
 Development of domestic industries and SMEs
 Human resources, skills, and industrial upgrading
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Email: [email protected]
Economic Research Institute for ASEAN and East Asia
28
www.eria.org