Speech by Minister Lim Hng Kiang at the American Chamber of Commerce in Singapore 2018 ASEAN Business Outlook Survey Results Launch Event

SPEECH BY MR LIM HNG KIANG, MINISTER FOR TRADE AND INDUSTRY (TRADE) AT THE AMERICAN CHAMBER OF COMMERCE IN SINGAPORE 2018 ASEAN BUSINESS OUTLOOK SURVEY RESULTS LAUNCH EVENT ON TUESDAY 12 SEP 2017 1045HRS AT THE FOUR SEASONS SINGAPORE

Ms Stephanie Syptak-Ramnath, Chargé d’Affaires, US Embassy Singapore,

Mr Dwight Hutchins, Chairman, AmCham Singapore,

Distinguished guests,

Introduction

A very good morning to all of you. I am glad to join you today at the launch of the ASEAN Business Outlook Survey (ABOS) 2018 results.

ASEAN is growing, and will be a bright spot for businesses

This year marks the 50th Anniversary of ASEAN’s formation. Even as we celebrate this important milestone, we look forward with optimism at ASEAN’s growth prospects that promises greater prosperity for this region.

The figures speak to ASEAN’s potential. ASEAN recorded an annual GDP growth of between 4.5% and 6.1% from 2012 to 2016[1], and is expected to grow at a yearly average of 5.2% over the next five years[2]. By 2030, ASEAN is projected to become the fourth largest single market in the world, after the EU, US, and China.[3]

ASEAN will be a bright spot for businesses as the region continues to integrate. The establishment of the ASEAN Economic Community (AEC) in 2015 has already created a more seamless business operating environment by reducing trade barriers and improving market access. ASEAN member states are presently working with our six dialogue partners, Australia, China, Japan, Korea, India, and New Zealand, to further deepen regional economic integration, through the Regional Comprehensive Economic Partnership (RCEP). A more economically-integrated region will bring opportunities for our businesses and citizens, through the elimination of tariffs, and preferential access in these markets.

ASEAN and the US stand to gain from deeper economic integration with each other

2017 also marks a special year for ASEAN and the US as we celebrate 40 years of relations. Our trade and investment relations are strong. ASEAN was the US’ fourth largest trading partner in 2016, and two-way trade in goods accounted for nearly 10 per cent of ASEAN’s total trade.[4] US stock investment in ASEAN has reached more than US$300 billion. These have brought benefits for the US. According to the Office of the US Trade Representative, US goods and services trade with ASEAN now supports more than 500,000 American jobs.[5] This trend is expected to grow.

I am heartened that the 2018 ASEAN Business Outlook Survey results show that US business sentiments on ASEAN’s prospects remain optimistic. Over the next five years, 80 per cent of US business representatives surveyed expect their level of trade and investment in ASEAN to increase. This region is also expected to grow in economic significance relative to the rest of the world. Nearly 60 per cent say that ASEAN’s share of worldwide revenue will increase over the next two years.

ASEAN and the US must continue to deepen ties and enhance our linkages, to realise the potential of economic cooperation and enable more business flows. Particularly in this increasingly digitalised global environment, we will need to work together to leverage our strengths, learn from each other’s best practices, and streamline our regulatory regimes to enhance the opportunities for businesses.

Economic Deliverables during Singapore’s 2018 ASEAN Chairmanship

Singapore will take on ASEAN Chairmanship in 2018. This comes at a very important juncture as ASEAN embarks on the next lap of its integration journey guided by the AEC Blueprint 2025. As Chair, Singapore will pursue a set of tangible deliverables that aim to deepen regional connectivity, and position ASEAN as a region for seamless economic activity. Let me highlight two priority areas for our chairmanship year.

First, e-commerce and the digital economy. This is a relatively new area of focus under the AEC 2025, and there is interest among most ASEAN Member States to develop their e-commerce capabilities to tap on emerging opportunities. Singapore will work with the ASEAN Member States to streamline regional trade rules governing e-commerce to promote greater digital connectivity, which will help companies more easily access new markets and overseas customers. In this regard, the US-ASEAN Connect initiative will both complement and reinforce our integration efforts in the digital age.

Second, Singapore will focus on improving trade facilitation so that businesses can reap efficiency gains. We will work closely with the rest of ASEAN to realise an ASEAN-wide Self-Certification regime and the ASEAN Single Window (ASW),[6] to facilitate the smooth movement of goods within ASEAN. This will help companies enjoy lower compliance and time-to-market costs.

We believe that these efforts will contribute towards enhancing ASEAN’s economic competitiveness and resilience, as well as its position as an attractive business and investment destination.

Singapore is a longstanding partner for companies and talent to access the opportunities here and in our neighbouring markets

Within ASEAN, Singapore is the largest recipient of US foreign direct investment (FDI), hosting more than US$250 billion in stock investments in 2016[7]. Singapore is also the US’ largest trading partner in ASEAN, where we account for a quarter of the US’ total trade in goods with our region[8].

Singapore has had a long track record as a trusted partner for US companies and talent accessing the opportunities in our region. US investors and talent have been an integral part of Singapore’s growth story since our beginning, and our success is in part credited to the global leaders who have chosen to come here to share their expertise and grow with us.

Meanwhile, Singapore has developed in-depth market experience, and strong regional connectivity through our membership in ASEAN. Coupled with our good governance, strong rule of law, and transparent and pro-business regulatory regime, Singapore remains a valuable partner to the US and its businesses who are keen to tap on the opportunities in our region.

Today, we have over 4,200 US companies present in Singapore involved in many sectors. Many have leveraged Singapore as their regional headquarters to gain access to business opportunities in the region, and create good jobs for Americans back home through their business expansions here.

Many US companies have used Singapore as a living lab to develop and test-bed solutions, before scaling up and exporting their products to the region. With partners and a talent pool that understand Asian consumers, Singapore, as a hub, can help US companies navigate the diverse markets in our region. For example, Coca-Cola recently opened a new highly-automated distribution centre in Singapore to support their growing business in the Asia-Pacific. Other US firms such as Estée Lauder and P&G have also chosen Singapore as a base to manage their regional supply chains, and develop consumer products specially catered to the region. Amazon launched its Prime Now service in Singapore based on a new operating model. If successfully implemented, this will be its most cost-competitive and agile model, which will help Amazon scale its presence for its Prime and Marketplace businesses in metropolitan cities in this region. 

Conclusion

Ladies and gentlemen, ASEAN will continue to be a region of opportunities as it grows and integrates further. As we look to the next chapter of the ASEAN story, we look forward to deepening ASEAN-US relations, so businesses on both sides can benefit from the growing opportunities in the region. Finally, Singapore is a prime location for US businesses to tap on ASEAN’s growth. We welcome US businesses to leverage our role as a gateway to the region to connect with the rest of ASEAN.

Once again, let me express my appreciation to AmCham Singapore for their efforts and for representing the business interests of US companies here. I look forward to our continued partnership.

Thank you.

[1]              Source: The ASEAN Secretariat “Global and Regional Economic Outlook”, 2017

[2]              Source: OECD

[3]              Source: HSBC, Investing in ASEAN, 2017

[4]              Source: ASEANstats Database (Accessed 21 Aug 2017)

[5]              Source: United States Trade Representative Resource Center page on ASEAN (Accessed 16 Aug 2017)

[6]              The ASEAN-wide Self-Certification scheme will allow authorised companies to self-certify that their goods meet ASEAN’s requirements for preferential treatment. In addition, the ASEAN Single Window will expedite customs clearance, reduce transaction time and costs, and make trade seamless through the cross-border electronic exchange of information among ASEAN Member States. 

[7]              Source: US Bureau of Economic Analysis, Singapore Country Fact Sheet

[8]              Source: ASEANstats Database (Accessed 21 Aug 2017)

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