Speech by Minister S Iswaran at the Singapore Institute of International Affairs 10th ASEAN and Asia Forum

​OPENING ADDRESS BY MR S. ISWARAN, MINISTER FOR TRADE AND INDUSTRY (INDUSTRY) AT THE SINGAPORE INSTITUTE OF INTERNATIONAL AFFAIRS 10TH ASEAN AND ASIA FORUM, THURSDAY, 5 OCTOBER 2017, 10.50AM, THE RITZ-CARLTON SINGAPORE

His Excellency, U Win Khaing, Myanmar Union Minister for Construction, and for Energy and Electricity,

Associate Professor Simon Tay, Chairman, Singapore Institute of International Affairs,

Mr Nicholas Fang, Executive Director, Singapore Institute of International Affairs,

Distinguished guests,

Ladies and gentlemen,

Introduction

1.                  Good morning. I am pleased to join you this morning at SIIA’s 10th ASEAN and Asia Forum. I congratulate SIIA on this milestone and for selecting a theme – “A Future Ready ASEAN: People & Growth in an Uncertain World” – that is particularly apt for the current global backdrop against which we celebrate ASEAN’s 50th Anniversary this year.

ASEAN Today

2.                  Since its founding in 1967, ASEAN, a region of considerable political, economic and cultural diversity, has made significant strides in its community building and economic integration efforts. The announcement in November 2015 of the realisation of the ASEAN Economic Community (AEC) marked an important milestone, even as ASEAN renewed its commitment to deepen regional economic integration by embarking on the AEC 2025 Blueprint. AEC 2025 builds on AEC 2015 by focusing on issues that are relevant to the future digital economy such as electronic commerce, technological change and the impact on global value chains and business models, as well as regulatory practices that are and should be conducive to innovation.

Leveraging on ASEAN’s Collective Strength to Navigate Challenges

3.                  ASEAN’s perseverance with economic integration takes on added significance in a world where anti-globalisation sentiments and protectionist rhetoric are on the rise. The advent of the Fourth Industrial Revolution and the digital economy have caused disruptions which are complex, multi-dimensional and occurring at an unprecedented rate. These developments present both challenges and opportunities.

4.                  In navigating the challenges, ASEAN must draw on its shared vision and collective strength to stay resolute in its commitment to regional economic integration. It is only through a sustained effort to build a seamless and connected region that we can anchor ASEAN’s relevance on the global stage, and compete internationally for trade and investments. It will help unlock the potential of our economies, enhance the competitiveness of our enterprises, and create opportunities for our people. It is imperative that ASEAN not only continues on the present trajectory, but in fact leads the way in charting a path to open trade and active participation in the global economy.

5.                  Let me highlight some areas where ASEAN can focus on and take some important steps. First, within ASEAN, as tariff levels fall, non-tariff barriers (NTBs) pose a greater obstacle to economic flows. To ensure that our businesses continue to benefit from improved market access, ASEAN will need to step up efforts to tackle NTBs to facilitate the free flow of goods in the region. In the same vein, we must press ahead with further liberalisation in services which is an important complement to manufacturing, in the context of economic development and growth. Indeed, manufacturing services is an area which offers significant opportunities and growth prospects. In fact, we are seeing many manufacturing models which are evolving from being mere purveyors of products, to being purveyors of sustained service solutions. Continued efforts to remove impediments to investment will also be essential to preserve ASEAN’s appeal as an attractive investment destination. ASEAN must also do more to be in step with the digital economy by ensuring open and easy access to the Internet, and supporting the flow of data – the new currency of the digital economy – to sustain growth and competitiveness. 

6.                  Second, externally, ASEAN must continue to forge strong connectivity with key markets, including with its Free Trade Agreement (FTA) Partners (China, Japan, Korea, India, Australia and New Zealand and more recently Hong Kong), as well as its four other Dialogue Partners – Canada, the European Union, Russia and the United States. ASEAN is also leading the Regional Comprehensive Economic Partnership (RCEP) negotiations with the aim of improving on ASEAN’s existing FTAs and more importantly, addressing newer global trade issues pertaining to e-Commerce, competition policy and intellectual property. These efforts to expand ASEAN’s external engagement will secure broader interest from world players in the AEC, while consolidating ASEAN’s central position in the evolving global trade architecture.

7.                  Third, to help businesses tap on the opportunities presented by the AEC, governments in ASEAN will need to take deliberate steps to build deep capabilities in industries and businesses to thrive against global competition. The dividends of economic integration and globalization are not always evenly spread. So it is important that we complement our external integration efforts with targeted domestic policies, which invests in the capabilities of our enterprises and the skills of our people, to ensure they too can partake of the benefits of inter-connected economies.  

8.                  For example, in Singapore, we encourage technology adoption and innovation among our small and medium-sized enterprises (SMEs) to strengthen their value proposition. The government also fosters partnerships between SMEs, start-ups and multinational corporations (MNCs) to leverage on their complementary strengths. SMEs and start-ups, which are more nimble and able to embrace new ideas, can harness the resources, experience and commercial channels of the MNCs and LLEs, to access higher value supply chains and global markets.

9.                   Lifelong learning is also key for citizens to remain adaptable in the face of changing technologies and jobs. Skills upgrading is therefore a priority for Singapore as we seek to build a future-ready workforce equipped with the skillsets to tap on new opportunities from globalisation. We encourage our workers to consistently enhance their industry-relevant core competencies to remain relevant in the global job market. We are also redesigning courses to integrate work and study, and developing an online portal to combine information about skills needs and jobs available. This will ensure that workers have the information they need to develop their skills and careers by adapting to the changing needs of industry.

10.              Lastly, the government is also re-organising our economic agencies to provide businesses with better support. Last month, I announced that SPRING Singapore and IE Singapore, the two agencies responsible for supporting capability development and internationalisation of our enterprises, will merge to form Enterprise Singapore. Capability development and overseas expansion are deeply intertwined in the digital economy and many companies, including startups, embark on both from the very onset. Enterprise Singapore will bring together resources, expertise and networks to support our businesses to sharpen their competitiveness and better navigate the dynamics of global markets.

Singapore’s 2018 Chairmanship

11.              As Singapore takes on the role of ASEAN Chair in 2018, we will focus on the twin themes of resilience and innovation. Our aim is to position ASEAN as a region for seamless economic activity and growing opportunities, especially in the areas of the innovation and the digital economy. To this end, we want to work with ASEAN Member States on a set of tangible and meaningful economic deliverables.

12.              First, initiatives on e-Commerce will be a key focus for our Chairmanship, given the rise of digitalisation. ASEAN has established a Coordinating Committee on Electronic Commerce (ACCEC) and Singapore will work closely with ASEAN Member States to strengthen digital connectivity and promote e-Commerce flows within ASEAN to benefit businesses, especially the micro, small and medium-sized enterprises (MSMEs). We will seek to streamline regional trade rules governing e-Commerce to support the untrammeled movement of goods and services across the ASEAN region.

13.              An example of a home-grown company that has benefited from opportunities in e-Commerce and done well in ASEAN is Fitson Singapore Pte Ltd. The company, which manufactures ‘Hegen’ brand of baby products, most notably its patented baby milk bottle which allows a combination of bottle and breastfeeding, went through a branding exercise assisted by IE Singapore in 2012. Beyond distributors, e-Commerce is an important platform for Fitson to reach a wider clientele. Currently, Hegen is tapping on China’s Tmall platform, USA’s Amazon exclusives, as well as Lazada to reach out to its end-consumers in Southeast-Asian markets. Currently, 70 – 80% of the company’s total revenue is generated via sales on e-Commerce platforms.

14.              Second, Singapore will pursue trade facilitation initiatives with ASEAN to bolster internationalisation especially of the SMEs. In that regard, we want to advance the ASEAN-wide Self-Certification regime and the ASEAN Single Window. 

15.              With an ASEAN-wide Self-Certification scheme, businesses can look forward to reduced transaction costs for exports within ASEAN. Once authorised, businesses can self-certify goods that they export, instead of having to apply for Certificate of Origin forms so as to qualify for tariff concessions under the ASEAN Trade in Goods Agreement (ATIGA). The ASEAN Single Window is a unique regional initiative aimed at linking ASEAN Member States’ National Single Windows (NSWs). Individual ASEAN countries have made significant strides in establishing their respective NSWs. Once the ASW is established, businesses can enjoy expedited customs clearance via the electronic exchange of information across borders, thereby reducing costs for businesses and facilitating the movement of goods within ASEAN.

16.              Third, we will focus on deepening ASEAN’s integration in the areas of services and investment through continued efforts to liberalise services trade and pursuing initiatives targeted at reducing impediments to investment. We hope that these efforts will boost business confidence as well as trade and investment in the region.  

17.              Finally, Singapore will continue work on strengthening ASEAN’s relations with its dialogue partners. Our businesses have reaped benefits from ASEAN’s strong connections within and outside the region, and we must maintain the momentum of broader and deeper economic linkages.

Conclusion

18.              As the world around us continues to change, ASEAN must sustain its regional integration efforts, build on its successes to date, forge stronger ties with external partners, and deepen the capabilities of our industries and workforce. To succeed, it is essential that all stakeholders are actively engaged in this process, and this forum, and others like it, is a good opportunity to exchange views on how ASEAN can navigate the fast-changing global environment for long-term growth. 

19.              As we head into Singapore’s 2018 ASEAN Chairmanship next year, we also invite your views and ideas on the work agenda and priorities to ensure that we achieve tangible and productive outcomes that are beneficial to all our citizens. Thank you. ​