Mr Lim Hng Kiang at the ASEAN Economic Community Forum

KEYNOTE SPEECH BY MR LIM HNG KIANG, MINISTER FOR TRADE AND INDUSTRY AT THE ASEAN ECONOMIC COMMUNITY FORUM ON WEDNESDAY 24 SEPTEMBER 2008, 9.10 AM, AT SUNTEC CITY CONVENTION CENTRE

Distinguished Guests,

Ladies and Gentlemen,

I am very happy to see so many of you at the ASEAN Economic Community, or AEC, Forum. Your interest in the AEC Forum is heartening as this will be a useful platform for you to discuss and look at effective ways to play a key role in the AEC initiative. It is important to us that you benefit from our initiatives, and that you remain actively engaged in the development and growth of ASEAN as an economic community.

Implementation of the AEC Blueprint – Progress and Status

Some of you were here last year when ASEAN Leaders signed the landmark declaration on the AEC Blueprint at the ASEAN Summit in Singapore. The Blueprint outlines specific economic integration measures with timelines by which the measures are to be implemented. Since its signing last year, economic officials have been working hard to ensure the timely and effective implementation of the Blueprint by all ASEAN Member States. The ASEAN Economic Ministers, or AEM, recently met in Singapore a month ago, and one of the key topics we discussed was engaging the private sector in our work towards the AEC. We recalled how we had consulted the private sector when we were developing the Blueprint, and reaffirmed the importance of continuing to engage you as we implement it.

2008 was the first year of implementation for the Blueprint, and hence, the most crucial part of ASEAN’s economic journey towards the AEC. The momentum of implementation this year has been an indicator for how we take the Blueprint forward through to 2015. We have made several achievements this year, announcements of which we made at the AEM Meeting in Singapore. We have concluded the ASEAN Trade in Goods Agreement; the ASEAN Comprehensive Investment Agreement; the ASEAN-Australia-New Zealand FTA; and the ASEAN-India Trade in Goods agreement. We have also signed the Mutual Recognition Arrangements, or MRAs, on Accountancy, Dental and Medical Practitioners.

The ASEAN Trade in Goods Agreement, or the ATIGA, is an improvement over the current ASEAN Free Trade Area-Common Effective Preferential Tariff Scheme, which has been in existence since 1993. Most of you using the preferential tariffs for trade would know this more familiarly as the AFTA CEPT. Feedback we had received before revising it was that businesses did not take this to be akin to an FTA, but merely a tariff schedule. The AFTA CEPT did certainly succeed in eliminating tariffs on almost all products traded among the ASEAN-6 countries, and reducing average tariff rates from 12.8% in 1993 to 0.97% this year. Last year, more than 500 companies based in Singapore benefitted from AFTA, which yielded tariff savings amounting to $250 million. But the enhanced version – the ATIGA – covers more than just tariffs. With this, the business community can also benefit from non-tariff barrier liberalization; focused rules of origin; trade facilitation initiatives; and consistent and transparent customs procedures, standards and conformance, and Sanitary and Phytosanitary (SPS) measures, for a more comprehensive treatment of trade transactions. We hope of course that traders will make good use of the ATIGA.

The ASEAN Comprehensive Investment Agreement, or ACIA, is our revised investment agreement, the benefits of which can be enjoyed by both ASEAN and ASEAN-based foreign investors. Its predecessors, the ASEAN Investment Area, or AIA, and the ASEAN Investment Guarantee Agreement, or IGA, were implemented in 1998 and 1996 respectively. It was timely thus to replace those with the ACIA that encapsulates both protection and liberalization elements, and more importantly, ensures that investment policies in ASEAN remain current and relevant. In developing the ACIA, we were helped enormously by private sector inputs such as those from the AIA Assessment Study, and consultations with business groupings such as the US-ASEAN Business Council. From these inputs, we knew how crucial transparency, consistency, and detailed mechanisms to address disputes were to investors, and the ACIA now includes these elements. Our aim was for an agreement with provisions of international standard, offering investment security and enhancing the region’s overall competitiveness as an investment destination.

Working with professional bodies was also invaluable in our development of services MRAs. At last month’s AEM Meeting, we signed MRAs on Accountancy, Medical and Dental Practitioners, which are platforms for information exchange, training, and sharing of best practices to ensure services provided in the region are of high quality. These complement ASEAN’s work towards progressively liberalizing trade in services through market access commitments.

With our Dialogue Partners, ASEAN is also committed to the goal of deepening economic relations with global trading partners such as China, India, Japan, Korea, Australia, New Zealand, the EU and the US. The AEM met with our Dialogue Partner Ministers here in Singapore last month, to take stock of our economic partnerships and to discuss how to bring these forward. We announced the conclusion of ASEAN’s Free Trade Agreement with Australia and New Zealand – a milestone achievement, as this is a comprehensive agreement with elements that go beyond goods, services, and investment, into areas that are newer for ASEAN, such as Intellectual Property and Competition. We also announced the conclusion of the ASEAN-India Trade in Goods agreement. These FTAs not only mean wider and diversified markets for trade and investments, but also contribute to an open and inclusive wider regional architecture in which ASEAN remains at the center. This is especially important for businesses based in the region, wherein benefits are maximized when well connected to the globe.

Implementation of the AEC Blueprint – Moving Forward

Our focus on the first pillar of the Blueprint so far has resulted in enhanced trade and investment agreements for ASEAN and the continued commitment to ensuring a steady momentum towards services liberalization. Our ongoing efforts in the fourth pillar of the Blueprint are manifested in the conclusion of ASEAN-plus FTAs with key dialogue partners and dedicated work in wider regional architecture. Having built the foundation, it is now time for ASEAN to go forward into the 2nd pillar areas and to delve deeper into the achievements we have already made.

2nd pillar elements such infrastructure development, e-Commerce, consumer protection, intellectual property and competition policy, are new areas that ASEAN is just venturing into, and it is inevitable that we will need your help in providing your views and perspectives. In parallel with this, we also want traders and investors to be able to reap the best benefits possible from our existing agreements and initiatives, and for this we are focusing on ways to ease business processes. For instance, while the ATIGA is being implemented, we will also look at trade facilitation measures like doing away with cumbersome documentation and trade procedures to further ease transactions. For these too, we will need your help as users of our policies and agreements, on where improvements can be made. ASEAN Member States have posted on the ASEAN Secretariat website a list of non-tariff measures, or NTMs, with the aim of being transparent to traders, so you can let us know should you feel that any of these have been barriers to your business operations.

Monitoring (Scorecard) and Engaging (Outreach)

One of our challenges now is to ensure that businesses are able to benefit from our initiatives and policies in a timely manner. We are working with the ASEAN Secretariat on outreach programmes and feedback sessions such as this forum, on both national and regional levels. In order to keep track of our compliance with the Blueprint, economic officials have devised and are using an AEC Scorecard. The Scorecard will enable us to monitor our implementation efforts, engage users through a feedback mechanism, and address issues that may cause delays. Through the Scorecard, the AEM and Leaders will also be kept regularly apprised of progress.

Conclusion

With the signing of the declaration on the AEC Blueprint, ASEAN has embarked on a journey to update itself as a regional grouping, ensuring that each Member State is able to maintain competitiveness in today’s dynamic global trading arena. To do this effectively, we will need the active participation of the industries, to provide feedback and serve as the yardstick against which ASEAN’s integration efforts are measured against. As the main consumer of the trade facilitative measures under the Blueprint, businesses are the best gauge for how much improvement has been made and where gaps still exist. We do hope that you will take advantage of ASEAN’s outreach activities and programmes to actively engage in consultation with policy makers. This will enable effective dialogue and exchange of views between those who develop policies, and those who are intended to benefit from them.

I hope that you will find the next few hours useful and informative. We hope that with this update, you can provide us with insights from your experiences, as well as ideas that you generate from these discussions. With this, I wish you all a fruitful forum.

Thank you.