Opening Remarks by Minister Chan Chun Sing at the Signing Ceremony of ASEAN Agreements

OPENING REMARKS BY MINISTER CHAN CHUN SING AT THE SIGNING CEREMONY OF ASEAN AGREEMENTS ON WEDNESDAY 29 AUG 2018, 6.00PM AT SHANGRI-LA HOTEL SINGAPORE

Your Excellencies,

Distinguished Delegates,

Friends of the Media,

Ladies and Gentlemen,

1.             I am pleased to welcome you to the signing ceremony of two agreements that ASEAN has achieved this year.

a.    ASEAN’s success in concluding these areas are testament to a year of hard work by our officials, built upon the strong foundations laid down by the preceding chairmanships of my fellow ASEAN colleagues.

b.    Both of these agreements are long-standing initiatives, and have been much anticipated by the private sector. 

Protocol to Implement the Tenth Package of Commitments under the ASEAN Framework Agreement on Services (AFAS)

2.             The first agreement we are signing today is the Protocol to Implement the Tenth Package of Commitments under the ASEAN Framework Agreement on Services (AFAS).

3.             The AFAS was first signed on 15 December 1995 in Bangkok, Thailand. 

a.    ASEAN Member States recognised that intra-ASEAN services liberalisation will strengthen the flow of trade and investment in the services sector among us, boost the competitiveness of our services exports, and contribute to overall economic integration in the region.

4.             In line with the ASEAN Economic Community (AEC) 2015 and 2025 Blueprints, ASEAN Member States have progressively reduced or eliminated restrictions on trade in services through “Packages” of commitments under the AFAS.

a.    To date, ASEAN Member States have concluded nine Packages of Commitments, the latest of which was signed on 27 November 2015 in Makati City, the Philippines. 

5.             Today, we sign the Protocol to Implement the Tenth Package of Commitments under the AFAS.

a.    This Protocol formalises our final Package of services commitments under the AFAS.

b.    Under this tenth Package, ASEAN Member States have not only increased the depth of their services commitments for sectors previously committed under previous Packages, but also opened up new services sectors to market access. 

c.     What this means is that ASEAN services providers will now enjoy a legally-binding guarantee of the widest preferential services market access into ASEAN markets in our history.

d.    ASEAN services providers will also face fewer discriminatory barriers in ASEAN services markets.

e.    It will become easier for service providers, including those based in Singapore, to participate in services sectors that were previously closed in the ASEAN Member States, such as in logistics, air transport, maritime transport, computer, telecommunications, tourism, construction services, and professional services. 

6.             This is a deliverable that is 23 years in the making.

a.    During this time, the AFAS can be credited as transforming ASEAN from a net importer to a net exporter of services, and has also strengthened our attractiveness as a destination for Foreign Direct Investment.^[1] 

b.    ASEAN’s total trade in services has also more than quadrupled since then.^[2] 

c.     The AFAS has transformed the business landscape for the better in our countries in concrete ways, and yielded tangible benefits for our businesses and communities.

 7.             This tenth and final Package of Commitments will continue to propel the growth of trade in services in the region, and we are pleased to be able to achieve this in the year of Singapore’s Chairmanship.

First Protocol to Amend the ASEAN Trade in Goods Agreement (ATIGA)

8.             The second agreement we are signing today is the First Protocol to Amend the ASEAN Trade in Goods Agreement (ATIGA).

a.    The Protocol legally incorporates the ASEAN-wide Self-Certification (AWSC) scheme as an additional option that businesses can utilise when attesting to the originating status of their goods.

9.             The AWSC scheme was first mooted by the ASEAN Economic Ministers at the 23rd ASEAN Free Trade Area (AFTA) Council Meeting in August 2009, in Bangkok, Thailand.

a.    The AWSC differs from the conventional ways for attesting originating status of goods provided for in the ATIGA and many more traditional Free Trade Agreements around the world, as it allows certified exporters to self-certify the origin of their exports to enjoy preferential tariffs under the ATIGA.

10.          The AWSC benefits businesses – exporters and importers alike – and the issuing authorities of Certificates of Origin in our respective countries. 

a.    Certified exporters and traders will no longer need to apply for an authorised, hardcopy Certificate of Origin, thus saving cost and administrative hassle. 

b.    There will also be no need to pay additional application fees – so businesses will save costs.

c.     And since self-certification can be performed anytime at the trader’s convenience – it will also will save time.

d.    Issuing authorities will enjoy improved efficiency as they can now devote more resources to risk management.

e.    With the implementation of the AWSC, Singapore-based exporters could potentially enjoy annual savings of approximately half a million dollars, which would otherwise have been incurred when applying for Certificates of Origin^.[3]

i.     These savings will potentially increase as more users of the ATIGA across all ten ASEAN Member countries opt to use the AWSC. 

11.          Our collective hard work over a decade is coming to fruition today, and we are pleased to deliver this positive outcome during our ASEAN Chairmanship this year.

Conclusion

12.          We have seen many positive initiatives and outcomes in ASEAN’s economic integration agenda this year.

a.    These reflect the ever evolving nature of trade, and ASEAN’s collective determination to capture these new growth frontiers.

b.    That said, goods and services trade continue to be integral part of our regional economic integration journey, and are the foundations of our regional trade architecture. 

c.     We are confident that the completion of AFAS and AWSC will contribute to a more open and facilitative business environment in ASEAN.

d.    They form the rudder that will help us navigate the issues of today and the tomorrow, and continue to help us seize opportunities. 

13.          Let us now proceed with signing these landmark ASEAN agreements.

Thank you.

[1]           Source: ASEAN Secretariat Publication, “ASEAN Services Integration Report 2017”, 2017. 

[2]           Source: ASEAN Secretariat Publication, “50 Years of ASEAN in Figures: Economic Progress”, 2017.

[3]           This figure is derived based on the 81,275 Form Ds issued annually (Mar 17 – Apr 18) and taking into account that the application cost of a Certificate of Origin (excluding permit) typically costs SGD5.98. It was derived based on the assumption that all existing Singapore-based exporters would utilise the AWSC and it does not take into account cancellations, amendments or requests for additional copies of Form D.