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AEC Updates: December 2018 to June 2019

Taking over ASEAN chairmanship from Singapore and building on last year’s theme of ‘innovative and resilient’, Thailand’s overall theme this year is ‘Advancing Partnership for Sustainability’. The priority economic deliverables of the Thailand’s ASEAN Chairmanship are anchored on three strategic drivers, namely: (1) future-orientation; (2) enhanced connectivity; and (3) sustainable in all dimensions.

Following through on the good progress made last year to deepen services and investment integration, two key agreements were signed at the 25th ASEAN Economic Ministers’ Retreat on 23 April 2019. First is the ASEAN Trade in Services Agreement, which consolidates achievements under the ASEAN Framework Agreement on Services (AFAS), provides for a transition to an eventual negative list approach in liberalising services, and will eventually supersede the AFAS. Second is the Fourth Protocol to Amend the ASEAN Comprehensive Investment Agreement (ACIA), which incorporates TRIMS-plus prohibitions on performance requirements commitments into the ACIA to ensure that ASEAN Member States (AMS) enjoy better treatment under the ACIA. In addition, the ASEAN Solutions for Investments, Services and Trade (ASSIST) has been expanded to cover trade in services, building on the trade in goods module which has been in operation since August 2016.

The Protocol to Implement the Eighth Package of Commitments on Financial Services under AFAS was signed by ASEAN Finance Ministers at the 23rd ASEAN Finance Ministers Meeting (AFMM) on 5 April 2019, showing ASEAN’s commitment to advance linkages among AMS through further market opening. Two new bilateral arrangements under the ASEAN Banking Integration Framework were concluded and will come into effect after the signing of the aforementioned Protocol.

Progress continues to bring all AMS on board the live operation of the ASEAN Single Window (ASW). On 1 April 2019, Brunei Darussalam became the sixth AMS to join the live exchange of electronic Certificates of Origin Form D (e-Form D) under the ASEAN Trade in Goods Agreement through the ASW, along with Indonesia, Malaysia, Singapore, Thailand and Viet Nam.

Featuring robustly in this year Thailand’s Chairmanship is the Fourth Industrial Revolution (4IR). The year started with the holding of a Special Session on the 4IR in ASEAN on 14 January 2019 on the sidelines of the 9th Committee of the Whole for the AEC, which brought together regional, national, industry, and private sector’s perspectives on 4IR-related issues.

The ASEAN Digital Ministers’ Retreat was also held on 28-29 March 2019 in Phuket, Thailand, where ASEAN Telecommunications and ICT Ministers (TELMIN) discussed the future of digital ASEAN and implications to regional initiatives on ICT and telecommunications.

The specific 4IR-related deliverables that are under development for completion before the end of the year are the ASEAN Digital Integration Framework Action Plan, ASEAN Innovation Roadmap 2019-2025, ASEAN Declaration on Industrial Transformation to Industry 4.0, and Guideline on Skilled Labour/ Professional Services Development in Response to 4IR. There are also ongoing initiatives related to the digitalisation of ASEAN micro, small and medium enterprises (MSMEs).

Following the main theme of sustainability, different dimensions of sustainability are addressed across ASEAN cooperation areas. On finance, the Roadmap for ASEAN Sustainable Capital Markets was endorsed at the 23rd ASEAN Finance Ministers Meeting (AFMM), and is aimed at promoting ASEAN asset classes for sustainable investment.

The ASEAN Infrastructure Fund’s two new innovative windows were also launched, namely: (1) Inclusive Finance Facility, which would offer limited concessional loans to Cambodia, Myanmar and Lao PDR; and (2) ASEAN Catalytic Green Finance Facility to help catalyse private sector financing into regional infrastructure projects. The Phase 2 Plan of Action of the ASEAN Disaster Risk Financing and Insurance, which would support the provision of disaster risk financing and insurance solutions in the region, was also endorsed by the Ministers.

On tourism, a sector with strong links to local economic development, the Strategy on Participation of Local Communities and Private Sector in Tourism Development and the ASEAN Mutual Recognition Arrangement on Tourism Professionals Work Plan 2019-2023 were adopted by ASEAN National Tourism Organisations and noted by the ASEAN Tourism Ministers (ATM) at the 22nd Meeting of ATM on 17 January 2019.

On the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) and wildlife law enforcement, the Special ASEAN Ministerial Meeting on Illegal Wildlife Trade on 21-22 March 2019 endorsed the Chiang Mai Statement of ASEAN Ministers Responsible for the CITES and Wildlife Enforcement on Illegal Wildlife Trade. The Statement commits to strengthen ASEAN cooperation in advancing the fight against illegal wildlife trade, especially through: (1) global and regional wildlife trade policy; (2) demand reduction; (3) law enforcement; and (4) addressing wildlife cybercrime.

On transport, ASEAN stepped up efforts in advancing sustainable transport by publishing three documents that were adopted by the ASEAN Transport Ministers at the 24th ASEAN Transport Ministers’ Meeting on 8 November 2018, namely the ASEAN Regional Strategy on Sustainable Land Transport, the ASEAN Fuel Economy Roadmap for the Transport Sector, and the Guidelines for Sustainable Land Transport Indicators.

The Feasibility Study for ASEAN Multilateral Power Trade is currently underway and will provide frameworks and schemes supportive of the market mechanism, institutions, and interconnection infrastructure needed to accelerate the realisation of the ASEAN Power Grid multilateral power trade. The Study is a key deliverable of the Heads of ASEAN Power Utilities/Authorities for 2019 and supports the energyrelated priorities of Thailand’s ASEAN Chairmanship.

On ASEAN’s external engagement, the conclusion of the Regional Comprehensive Economic Partnership (RCEP) negotiations is a priority economic deliverable for this year following the Leaders mandate at the 2nd RCEP Summit on 14 November 2018. The 7th RCEP Intersessional Ministerial Meeting was held on 2 March 2019 where the Ministers agreed to intensify engagements for the remainder of the year towards meeting the Leaders’ mandate. Other progress includes the signing of the First Protocol to Amend ASEAN-Japan Comprehensive Economic Partnership (AJCEP) Agreement earlier this year, which would incorporate commitments on trade in services,  investment, and movement of natural persons to the AJCEP, and the commencement of the implementation of recommendations under the General Review of the ASEAN-Australia-New Zealand FTA Agreement.