Mr Lee Yi Shyan at the ASEAN Cosmetics Association Cosmetic Leaders Forum 2011, 17 Feb 2011

SPEECH BY MR LEE YI SHYAN, MINISTER OF STATE, MINISTRY OF TRADE & INDUSTRY AND MANPOWER AT THE ASEAN COSMETICS ASSOCIATION COSMETIC LEADERS FORUM 2011 ON 17 FEBRUARY 2011 AT MARINA BAY SANDS HOTEL

Mr. Pushpanathan Sundram, Deputy Secretary-General of ASEAN,

Mr. Edy Putra Irawady, Deputy Minister for Industry and Trade Affairs, Coordinating Ministry for Economic Affairs of Indonesia

Ladies and Gentlemen

Introduction

My warmest welcome all of you to the inaugural Cosmetics Leaders Forum in Singapore.

Importance of the ASEAN Market

The global economy is on a path of long-term economic rebalancing. The centre of global economic gravity is gradually shifting from the advanced economies in the West to the emerging economies in Asia. Within Asia, China has just overtaken Japan as the world’s second largest economy.

In GDP terms, the combined GDP of China, Japan, India, ASEAN is US$14.45 trillion. This is about the size of USA GDP of US$14.62 trillion. The difference though, countries in Asia Pacific are projected to grow at a much faster rate of 5.1% versus the 3.2% projected for USA. It is clear therefore that much of the new consumption in the world will come from the emerging economies in Asia.

ASEAN is an important part of the equation of the emerging Asian economies. It recovered quickly from the economic recession – posting a modest 1.3 per cent growth in 2009, followed by a stronger 7.4 per cent year-on-year growth in 2010. This year, ASEAN’s economy is expected to achieve a healthy growth rate of 5.4 per cent.

With a sizeable and young population of 600 million, ASEAN is a market for many consumer goods including household and personal care industry. According to Data monitor, the industry is expected to grow at a compounded rate of 3.8 percent in the next 5 years in Asia, much faster than the US’s 1.4 percent and Europe’s 3.1 percent.

Against the backdrop of a fast growing Asia, it is exciting to consider the vision of ASEAN building a single market and production base by 2015. The ASEAN Economic Community will allow goods, services, investments and capital to flow more seamlessly within the region. It will mean lower transaction costs and larger market for our businesses. Our companies should re-configure their value and supply chains based on the complementary strengths of ASEAN countries.

ASEAN remains committed to the implementation of the ASEAN Economic Community (AEC) Blueprint

ASEAN has made much progress in the implementation of the ASEAN Economic Community (“AEC”) Blueprint, as reflected in its achievements in 2010.

On the 1 Jan 2010, the ASEAN-6 countries eliminated tariffs on 99 percent of goods. Similarly, Cambodia, Laos, Myanmar and Vietnam also committed to trade 98.6 percent of goods at zero to five percent of the tariff rate.

In May 2010, the ASEAN Trade in Goods Agreement came into effect. It was a landmark economic agreement, which improved upon the previous Common Effective Preferential Tariff Scheme for the ASEAN Free Trade (CEPT-AFTA). It further lowered the cost of doing business and simplifying trade-related transactions.

Moving forward, ASEAN remains committed to implementing the AEC Blueprint. Targets for 2011 include further liberalizing services, removing non-tariff barriers, implementing the ASEAN Comprehensive Investment Agreement and the self-certification pilot project.

Naturally, challenges remain for the member states in implementing these initiatives, but ASEAN must continue to remain liberal and progressive to stay relevant to the global economy.

Industry participation and support are integral to a well functioning market. In this respect, I must commend the ASEAN Cosmetics Association (“ACA”) for having successfully harmonized technical regulations governing the cosmetics industry in ASEAN since 1997.

Singapore – an ideal base for the household and personal care industry in the region

Today, Singapore is pleased to host the inaugural Cosmetics Leaders Forum. This event adds to the vibrancy of the household and personal care industry here.

Singapore is well connected within ASEAN and Asia. It is the home to 8,000 multinationals and a major convention city in the world. Singapore offers a conducive environment for businesses to establish their Asian headquarters here.

Companies can also tap into Singapore’s 18 free trade agreements and sell their products in markets such as Australia, New Zealand, China, India, Japan and Korea under preferential terms.

Conclusion

Finally, I would like to congratulate the ACA for successfully creating this forum – a platform which facilitates open dialogue between the public and private sectors, on the opportunities and challenges for the household and personal care industry.

May I wish you all a productive session ahead.

Thank you.