ASEAN Economic Community 2015
ASEAN Strategic Plan of Action – Direction and Action needed –
SUPHAT SAQUANDEEKUL Executive Director, Bureau of ASEAN Affairs Department of Trade Negotiations Ministry of Commerce
CONTENT 1. 2. 3. 4. 5. 6. 7.
ASEAN -- background & key indicators -Towards ASEAN Economic Community 2015 What will be the changes in AECs? ASEAN with ASEAN Plus What are benefits / impacts from AEC Are you ready for AEC 2015? Opportunities & Challenges for ASEAN Food Industry in AEC
ASEAN – background & key indicators –
ASEAN (Association of South East Asian Nations) Established in 1967
CAMBODIA CAMBODIA
ASEAN -6
CLMV
Country
Populations (million)
Country
GDP (million$)
Country
GDP per Capita ($)
Country
Export (million$)
Country
FDI (million$)
546,527 1. Singapore
36,631 1.Singapore
269,832 1.Singapore
16,809
92,2 2.Thailand
264,230 2. Brunei
26,486 2. Malaysia
156,891 2. Vietnam
7,600
3.Vietnam
86.0 3.Malaysia
191,618 3. Malaysia
6,822 3. Thailand
152,497 3. Thailand
4,976
4.Thailand
66.9 4.Singapore
177,569 4. Thailand
3,951 4. Indonesia
116,510 4. Indonesia
4,877
5.Myanmar
59.5 5.Philippines
161,357 5. Indonesia
2,364 5. Vietnam
56,691 5.Philippines
1,948
6.Malaysia
28.3 6.Vietnam
96,317 6.Philippines
1,750 6 Philippines
38,335 6. Malaysia
1,381
7.Cambodia
14.9 7.Myanmar
24.024 7. Vietnam
1,120 7. Brunei
1.Indonesia
231,4 1.Indonesia
2.Philippines
7,169 7. Myanmar
579
8.Singapore
6.1 8.Brunei
14,147 8. Lao PDR
910 8. Myanmar
6,341 8. Cambodia
530
9.Lao PDR
5.0 9.Cambodia
10,368 9. Cambodia
693 9. Cambodia
4,986 9. Brunei
370
10.Brunei
0.4 10.Lao PDR
5,742 10.Myanmar
419 10. Lao PDR
1,237 10. Lao PDR
319
GDP: Gross Domestic Productions / FDI : Foreign Direct Investment Source: ASEAN Secretariat , Statistics of Year 2009
5
Towards AEC 2015
One Vision One Identity One Community
ASEAN COMMUNITY AC : 2015
ASEAN Security Community (ASC)
ASEAN Economic Community (AEC) ASEAN Social-Cultural Community (ASCC)
AEC BLUEPRINT & Strategic Schedule
What will be the changes in AEC ?
(Common Effective Preferential Tariff)
AEC GOALS ASEAN Economic Community : AEC 1. Single Market & Production Base
2. Competitive Economic Region
Free flow of services
e-ASEAN Taxation
Free flow of investment
Competition Policy
Free flow of goods
Free flow of skilled labor Freer flow of capitals
Year 2015
3. Equitable Economic Development Narrowing development gap between ASEAN-6 & CLMV Supporting development of SMEs
Intellectual Property Consumer Protection Infrastructure Development
4. Integration into Global Economy Coherent approach toward external economic relations Enhanced Participation in global supply network FTA with Non-ASEAN Countries
AEC Blueprint : Free Flow of Goods
1 January 2010
ASEAN-6 reduced Import duty to 0%
1 January 2015
CLMV will reduce Import duty to 0%
Except for Products in Sensitive List : import duties must be ≤ 5% Products in Highly Sensitive List : more flexible tariff rates but must be agreed upon by other member states. Products :
Rice & Sugar
Countries :
Malaysia, Indonesia, Philippines
AEC Blueprint : Free Flow of Goods Products in Sensitive List : import duties must be ≤ 5% ASEAN–6 by 1 January 2010 CLMV by 1 January 2015
Tariff rate To be reduced to
Thailand
coffee, potato, copra, cut flowers
5%
Brunei
coffee, tea
5%
Malaysia
some animals, swine, poultry, eggs, some plants and fruits, tobacco
5%
Philippines
some animals, swine, poultry, tapioca, corn
5%
Singapore and Indonesia
none
--
Cambodia
poultry, fish, some vegetables and fruits
5%
Lao
some animals, meat of bovine, swine, poultry, some vegetables and fruits, rice, tobacco
5%
Myanmar
bean, coffee, sugar, silk, cotton
5%
Vietnam
some animals, poultry, eggs, some plants, processed meat, sugar
5%
AEC Blueprint : Free Flow of Goods Products in Highly Sensitive List : more flexible tariff rates but must be agreed upon by other member states. Products :
Rice & Sugar
Countries :
Malaysia, Indonesia, Philippines
Malaysia
Rice at 20% in 2010
Indonesia
Rice at 25% in 2010
Philippines
Sugar: from 40% to 5-10% in 2010
Sugar: 38% till 2011, from 2012 be reduced gradually to 5% in 2015 Rice: 40% till 2014, then be reduced to 35% in 2015
AEC Blueprint : Free Flow of Services
ICT, Health, Tourism, Air Transport Logistics sector
51%
other sectors
51%
AEC Blueprint : Free Flow of Investment Investment :
1. Agriculture 2. Fisheries 3. Forestry 4. Mining 5. Manufacturing
Extend non-discriminatory treatment to investors in ASEAN
Revise AIA Æ ACIA (ASEAN Comprehensive Investment Agreement )
ACIA covers liberalization, protection, facilitation, and promotion
AEC Blueprint : Free Flow of Skilled Labor
MRAs enables the qualifications of services suppliers recognised by one ASEAN country to be mutually recognised by another ASEAN member
ASEAN and ASEAN Plus
Enhancing ASEAN External Economic Relations Future possible FTA
Existing FTA
Others Dialogue Partners ASEAN-Canada
ASEAN-Russia ASEAN-EU ASEAN-China FTA
ASEAN-US
ASEAN-Korea FTA ASEAN-Japan CEP
ASEAN-GCC
ASEANIndia FTA
Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, United Arab Emirates
ASEANMERCOSUR ASEANAustralia- New Zealand FTA
Argentina, Brazil, Paraguay, Uruguay, Venezuela
FTA between ASEAN and Dialogue Partners-at present ASEAN Plus 6
India China Goods : Since July 2005 ~ Services : Since 2007 ~ Investment : Signed on 13 Aug 09
AC
FTA
AEC E C J A
P
Japan
Goods / Services / Investment : Signed in 2008 For Thailand effective on 2 June 09 ASEAN Plus3
AIFTA Goods : Signed on 13 Aug 09, Effective on 1 Jan 10 Services/Investment : under negotiations
AA
AKFTA
Korea
NZ F
TA
Australia & New Zealand Goods / Services / Investment: Signed on 26 Feb 09, Effective on 1 Jan 10
Goods / Services : ASEAN except Thailand since 2007 For Thailand Services : Signed on 26 Feb 09, Effective on 1 June 09 / Goods effective on 1 Oct 09 Investment all ASEAN :Signed on 2 June 09 Effective on 31 Oct. 09
Enhancing ASEAN FTA CEPEA (Comprehensive Economic Partnership in East Asia) (ASEAN +6) EAFTA (East Asia FTA) (ASEAN +3) China
Japan
AEC
Australia
New Zealand
Korea India
ASEAN 10 : Population: 590 ml. ( 9% of global population) GDP :1,499 billion US$ ( 2% of global GDP) EAFTA (ASEAN +3) : Population: 2,068 ml. ( 31% of global population) GDP :9,901 billion US$ ( 18% of global GDP) CEPEA (ASEAN +6) : Population: 3,268 ml. ( 50% of global population) GDP : 12,250 billion US$ ( 22% of global GDP)
What are benefits / impacts from AEC?
Who will benefit from AEC ? Stakeholders Manufacturer
Impacts ¾ Larger economies of scale Æ reduce production costs Æ enhance competitiveness ¾ More choice of inputs/materials from other ASEAN at lower prices ¾ Greater demand for exports
Exporter
¾ Strengthen business networks & partnerships across ASEAN ¾ Expanded markets for services
Service Provider
¾ Enhance competitiveness ¾ More choice of services experts
Farmer
¾ Expanded markets for agricultural products both within and outside ASEAN ¾ Increase of income
Consumer
Greater choices and varieties of goods and services through increase in intra-regional trade
Who will be affected by AEC? Stakeholders Manufacturer
Impacts Uncompetitive manufacturers with high cost of production may be defeated by other competitors in ASEAN. ¾ More intense competition
Exporter
¾ High possibility of going out of market unless having measures for improving efficiency, quality, and innovation. ¾ More competitors in the market
Service Provider Farmer
¾ Valuable human resources may be taken by other ASEAN. ¾ Will be competed with better quality goods at competitive prices ¾ Income might decrease
Consumer
Exposed to harm from low quality products unless measures for consumer protection are in place.
Are you ready for AEC 2015?
How to Draw Your Strengths from AEC ?
Cut down costs
Raw material / inputs from ASEAN at lower prices Improve efficiency & management
Know your markets Know yourself & your rivals
Study consumers’ behavior in AEC Increase your strength / reduce weakness Try to turn “rivals” into “partners” Become a part of ASEAN food supply chain
Creativity and Sustainability Differentiate your products & services Emphasis on quality, design, standards etc
Thinking out of a box
Do not overlook “ Unseen Opportunities”
How to Draw Your Strengths from AEC ? Search for suitable markets for your products & services
Expand Business in ASEAN
Whether joint venture or wholly owned enterprise ? Whether local employees or dispatch ones ?
Ensure the readiness of Human Resources
Learn culture, attitude, social value , ways of thinking etc of other ASEAN people
Maintain your “precious” personals
“How to retain them with us?”
Opportunities & Challenges For Food Industry in AEC
Opportunities for Food Industry in AEC 9 Larger market Æ increased demand for food 9 Greater access to the ASEAN (& Asian) market 9 Economy of scale Æ reduce cost of productions Æ enhanced competitiveness 9 More choices to import raw materials/semi-final products from other ASEAN at lower prices 9 Creation of ASEAN production networks through partnerships with ASEAN food producers 9 Complete or partly relocation of manufacturing base to CLMV 9 Solving professional/skilled-labor shortage problem in the region
Challenges for Food Industry in AEC 9 Increased competition in trade, investment and resources 9 Risk to exposure to low-quality products & services from other ASEAN & ASEAN Plus countries 9 Encouragement on improvement of products and services 9 R&D and Innovation 9 Encouragement of administrative reforms in pace with rapidly changing environment in ASEAN 9 Higher competition in professional/skilled labor market
Thank You
One Vision One Identity One Community
