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Oudet Souvannavong
Executive Vice-President,
Lao National Chamber of Commerce and Industry (LNCCI)
East Asia Business and Investment Forum
24 August 2015, Kuala Lumpur, Malaysia
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* Since the financial crisis and economic turn down in the USA
and Europe has enhanced regional economic integration in
East Asia
* The ASEAN launched the ASEAN Economic Community (AEC)
* ASEAN-FTAs has increased its scope through Regional
Comprehensible Economic Partnership (RCEP / ASEAN + 6)
* Intra ASEAN trade and investment has grown drastically
following the expansion of Global Value Chains (GVC) industry
networks driven by Trans-National Companies.
* Intra ASEAN and East Asia FDIs increased following the of capital
flow to East Asia
* The expansion of GVC in ASEAN and East Asia was facilitated by
the ASEAN FTAs and is anticipated to be further expanded under
the RCEP
Population (millions)
Brunei
0.408
Cambodia
15.178
Indonesia
250.585
Lao PDR
6.828
Malaysia
29.769
Myanmar
53.377
Philippines
98.735
Singapore
5.408
Thailand
67.108
Vietnam
91.949
ASEAN
619.345
China
1,384.694
Japan
126.981
S. Korea
ASEAN+3
India
Australia
N. Zealand
ASEAN+6
49.159
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ASEAN
RCEP (ASEAN+6)
2,180.179
1,210.193
23.345
4.512
3,418.229
47.5% of World Population in 2013
East Asia Regional Economic Integration
Anticipated Impacts
Economic Impacts
•
Deepen the liberalization commitments (goods, services and
ROO);
•
Ease the “noodle-bowl” situation (not only in ROO but huge
number of tariff schedules, and different rules) and thus enhance
the utilization of FTA;
•
Further ease the use of FTAs via its “accumulation”;
•
Deepen economic cooperation for facilitation measures; and,
•
Prevent the potential loss from competing initiatives (e.g., CJK
FTA).
+ Political Impact for ASEAN and East Asia
•
Maintain and strengthen the “ASEAN Centrality” (politically)
under the pressure from TPP and CJK.
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How Economic Gains Can be Maximized
Under East Asia regional Economic Integration?
* Trade in Goods
* “Common concession” in tariff schedules: common in A+1 FTA
* Consolidated ROOs with “co-equal” rules
* Cumulation rules: common in A+1 FTA
* Higher level of tariff elimination, e.g., 95%
* Trade in Services
* Substantive “WTO Plus” components (more than A+1 FTAs)
* Trade Facilitation
* Meaningful programs (many in ASEAN; but rare in A+1 FTAs)
* Speed
* Speedy conclusion the key for “ASEAN Centrality”
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* Connectivity between the regions to facilitate the flow of goods and
intra-regional trade and investment
* Infrastructure (road, bridge, ports, logistics facilities, etc.) linking need
to be put into place, this requires large investment to be made under PPP.
* Trade in Goods facilitation: WTO agreements bind all members to
decreasing the barriers in trade in goods
* Reduction and Elimination of tariffs, Harmonize ROO, Elimination of NTM
and NTBs, Facilitate Cross Border Transportation
* Trade in Services: ASEAN FTAs need to focus more on the
liberalization of trade in services and investment.
* MRAs guaranteeing the standard of professional workers allowed to move
across borders
* SME Promotions
* Young entrepreneurs promotions, SME information discrimination, SME
finance schemes
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* Further Improve Policy Environment and Public Service System
* Harmonize and ensure the continuity and stability of fiscal system, financial
and trade incentives
* Establish joint public investment promotion service systems with bilateral or
multilateral information service institutions for mutual investment.
* Further Improve Investment Cooperation Mechanisms and Substances
* Add, improve and sign the related legal agreements
* Establish a multilevel standing institution to promote trade and investment
cooperation
* Establish a dispute settlement mechanism and a standing arbitration
institution modeled NAFTA
* Establish a security cooperation mechanism
* Improve the standards for product tests, certification and traceability.
* Sign relevant Mutual Recognition Agreements (MRA)
* Strengthen cooperation in human resources development
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* Strengthen Public Guidance for Investment Cooperation
* Formulate a master blueprint for the development of related
industries and a basic plan for development and construction in
ASEAN
* Jointly identify priority sectors for investment in ASEAN for
promoting industrial development and use key and priority projects
as the leverage and use cross-border economic cooperation zones
and other important nodes as the platform to promote industrial
investment
* Develop competitive and special projects to enrich investment
substances.
* Establish Efficient Logistics Systems
* In ASEAN Government should quickly harmonize freight transport
and logistics standards
* In the GMS Region it is the implementation of the CBTA
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* Success Factors
* The Progress of ASEAN Economic Integration – ASEAN Centrality –
economy of scale with one single market
* ASEAN FTAs with China, Korea and the Comprehensible Economic
Relation with Japan
* Improved conducive business environment and cost of “doing
business” in CMLV countries
* Improved cross-border trade and transport facilitation in ASEAN
* Challenges
* Increased NTBs and NTMs – “protectionism attitude”
* Slow implementation of ASEAN Single Window, Cross Border Transport
Agreement
* MSMEs capacity to access East Asia Supply Chains, Finance and
innovation technology.
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* Shaping the East Asia Tourism Value Chains
* Tourism in all East Asian countries covers more than 5% of GDP
* Tourism creates jobs, farm production, SMEs and MSMEs creations
in handicraft, retails and other services
* Intra East Asia tourism increased and could be enhanced – benefit
all countries
* Challenges and what should be done
* Open air policy – to reduce the cost of air fares and travelling
* Ease the VISA procedures for tourism groups, one single VISA,
implement the special immigration lane for East Asia – ASEAN
Travel Cards -GMS Travel Cards
* Promote investment in tourism infrastructure: airports, road
access, hotels and other service facilities
* Create join program within East Asia, ASEAN for Europe, USA, and
the Rest of the World markets.
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