ASEAN-EU Economic Relations:
Maximizing Mutual Benefits
DIAN TRIANSYAH DJANI
DIRECTOR GENERAL FOR
ASEAN COOPERATION
DEPARTMENT OF FOREIGN AFFAIRS
OF THE REPUBLIC OF INDONESIA
Vienna
July 19, 2007
Outline of the Presentation
I.
II.
III.
IV.
V.
VI.
VII.
VIII.
IX.
X.
Introduction
ASEAN Economic Community
Economic Performance of ASEAN
ASEAN-FTA with Dialogue Partners
ASEAN-EU Economic Cooperation
Economic Features of ASEAN-EU
The Future of ASEAN-EU FTA
Conditions/Challenges
Way Forward
Conclusion
I. Introduction
y
The ASEAN Vision 2020 envisions an
outward-looking ASEAN playing a pivotal
role in the international community and
advancing ASEAN’s common interests,
including with EU
y
ASEAN is in the process of building an
ASEAN Community by 2015, consisting of 3
pillars (ASEAN Security Community, ASEAN
Economic Community, ASEAN Socio
Cultural Community Æ greater integration
II. ASEAN Economic Community (AEC)
y
AEM 2006 - develop “a single and coherent
blueprint for advancing the AEC”;
y
12th ASEAN Summit - Agreed to accelerate the
establishment of the ASEAN Community to
2015;
y
13th AEM Retreat (May 2007) - AEC Blueprint
shall be a legally binding document through a
Declaration to be signed by Leaders at 13th
ASEAN Summit in November 2007 in
Singapore.
AEC Blueprint
y
4 characteristics:
◦
◦
◦
◦
Single Market and Production Base
Competitive Economic Region
Narrowing the development Gaps
Fully Integrated into the Global Economy
Strategic Schedule- clear timelines and
specific milestones
y Implementation arrangements
y
AEC Blueprint (Cont.)
y
y
y
y
Single Market and Production Base:
◦ Free flow of goods, services, investment and skilled
labour and freer flow of capital
◦ Priority Integration Sectors
Competitive Economic region
◦ Competition policy, IPR, infrastructure development,
e-commerce, taxation
Narrowing the Development Gap
◦ IAI, SME development
Fully Integrated in the Global Economy
◦ FTAs, centrality of ASEAN in regional economic
integration
ASEAN External Economic Relations
ASEAN-Russia
ASEAN-EU
ASEAN-Canada
ASEAN-China FTA
ASEAN-US TIFA
ASEAN-Korea FTA
ASEAN-Japan CEP
ASEAN-Pakistan
ASEAN-India FTA
ASEAN-AustraliaNew Zealand FTA
Myanmar
Pop : 57,3 mil
GDP : US$
11,951 mil
GDP Per Capita:
US$ 209
Source: ASEAN Statistical
Yearbook 2006
III. Economic Performance of ASEAN
Lao PDR
Pop : 6,1 mil
GDP : US$
3,527
GDP Per Capita:
US$ 575
Thailand
Pop : 65,2 mil
GDP : US$
206,552 mil
GDP Per Capita:
US$ 2,726
Philippines
Pop : 86,9 mil
GDP : US$ 117,132
mil
GDP Per Capita:
US$ 1,348
Brunei
Darussalam
Pop : 383,000
GDP : US$ 11,846
mil
GDP Per Capita:
US$ 30,929
Cambodia
Pop : 14 mil
GDP : US$ 6,105
mil
GDP Per Capita:
US$ 436
Malaysia
Pop : 26,7 mil
GDP : US$ 149,
729 mil
GDP Per Capita:
US$ 5,611
Viet Nam
Pop : 84,2 mil
GDP : US$ 60,965
mil
GDP Per Capita:
US$ 724
Singapore
Pop : 4,5 mil
GDP : US$ 132,273 mil
GDP Per Capita:
US$ 29,499
Indonesia
Pop : 222,1 mil
GDP : US$ 364,288
mil
GDP Per Capita:
US$ 1,641
REGIONAL AND SUB REGIONAL ORGANIZATIONS
CHILE
PERU
MEXICO
CHINESE TAIPEI
HONGKONG CHINA
JAPAN
CHINA
SOUTH KOREA
UNITED STATES
CANADA
RUSSIA
FIJI
VANUATU
TUVALU
NAURU
TONGA
SOLOMAN ISLAND
SAMOA
KIRIBATI
ARGENTINA
COLOMBIA
ECUADOR
EL SALVADOR
THAILAND
MALAYSIA
BRUNEI
DARUSSALAM
CAMBODIA
CAMBODIA
NEW ZEALAND
TIMOR LESTE
NIUE
PALAU
MICRONESIA
COOK ISLAND
NEW CALEDONIA
MARSHALL ISLAND
NORTHERN MARIANAS
ALGERIA
SUDAN
BAHRAIN
TURKEY
EGYPT
UZBEKISTAN
IRAQ
SRILANGKA
TUNISIA
JORDAN
LEBANON
BHUTAN
MALDIVES
KAZAKHSTAN
MAURITANIA
KUWAIT
MOROCCO
QATAR
NEPAL
PALESTINE
SAUDI ARABIA
PHILIPPINES
PAPUA NEW GUINEA
INDONESIA
MYANMAR
LAOS
AUSTRALIA
SINGAPORE
PAKISTAN
MONGOLIA
INDIA
BANGLADESH
IRAN
OMAN
SRI LANKA
UNI ARAB
EMIRATES
VIETNAM
YEMEN
MAURITIUS
KENYA
MOZAMBIQUE
SOUTH AFRIKA
TANZANIA
EUROPEAN UNION
NORTH KOREA
BOLIVIA
COSTA RICA
PARAGUAY
PANAMA
BRAZIL
CUBA
Economic Growth of ASEAN & ASEAN Member Countries
Economic Growth of BCLMV
Major Market of ASEAN Export
Major Supplier of ASEAN Imports
Free Flow of Goods
•
In order to realize AFTA (as of 1 January
2002), 98.99% of products ASEAN-6 are
included in CEPT Inclusion List (IL) tariff
reaching 0-5%
•
67,19% tariff products included in the
inclusion list has been eliminatedÆ Average
tariff for products within 1,87% (note: average
in 1993 is 12,76%)
•
For CLMV countries, 90,96% products of
their products have been included in the IL
where 76,78% have reached tariff of 0-5%
Trade Facilitation
y
ASEAN Harmonized Tariffs Nomenclature (AHTN) 2007----uniformity of tariffs classification system of ASEAN Countries.
y
Simplification of customs procedure.
◦ Establishment of ASEAN Single Window (ASW).
Agreement To Establish and Implement the ASW
was signed at AEM, Kuala Lumpur, December 2007.
Protocol to Establish and Implement ASW was signed
at AFMM, October 2006
◦ Implementation of Green Lane System for CEPT product
(2006-2007)
◦ Simplification of Customs Declaration Form. ASEAN
Customs Declaration Document was implemented in
December 2005.
◦ Standardization through Mutual Recognition
Arrangements/MRA in various sectors, i.e. Electrical and
Equipment, Telecommunication Equipment, Cosmetics,
Pharmaceuticals and Prepared Food Stuff
IV. ASEAN-FTA with Dialogue Partners
y
y
ASEAN-China
y
ASEAN-India
y
ASEAN-Japan
y
ASEAN-Korea
ASEAN-Australia & New Zealand
V. ASEAN-EU Economic Cooperation
Background
1972 Æ Special Coordinating Committee of
ASEAN (SCCAN)
y 1978 Æ 1st Ministerial Meeting of ASEAN-EU,
Brussels
y 1980 Æ ASEAN-EU Cooperation Agreement
established Æ Joint Cooperation Committee
Mechanism on economy, trade, industry,
forestry, environment, science & technology
(Institutionalized ASEAN-EU Cooperation)
y
Background (Cont.)
1998 Æ HPA, EU-ASEAN Partnership
towards ASEAN Vision 2020
y EC’s Communication entitled “A New
Partnership with Southeast Asia” containing
6 EU Strategies, among others: Promoting a
New Dynamism in Regional Trade and
Investment Relations, Continuing to
Support the development of Less
Prosperous Countries
y
ASEAN-EU Economic Cooperation (Cont.)
Framework
1. TREATI AND READI
y
2001 Æ EC new initiatives on board: “Europe and Asia: A
Strategic Framework for Enhancing Partnerships”
y
2003 Æ 3rd AEM-EU Consultation, agreed to launch “Trans
Regional EU-ASEAN Trade Initiative” (TREATI) Æ addressing
trade facilitation & investment issues:
◦ ASEAN-EU Cooperation Program for Regional Integration
Support (APRIS),
◦ ASEAN-EU Cooperation Program on Standards, Quality and
Conformity Assessment (APSQCA),
◦ ASEAN-EU Intellectual Property Rights Cooperation Program
(AIPR).
TREATI AND READI (Cont.)
y
2004 Æ 5TH AEM-EC 2004, agreed on TREATI activities
supporting four ASEAN priority integration sectors:
Agriculture, Electronics, Fisheries and Wood-based products.
y
2005 Æ Regional EU-ASEAN Dialogue Instrument (READI)
was established to facilitate non-trade cooperation
y
2007 Æ 16th ASEAN-EU Ministerial Meeting, Nuremberg Æ
Joint Vision Statement ASEAN-EU Æ Nuremberg Declaration
on an ASEAN-EU Enhanced Partnership
◦ Enhanced Cooperation through multilateral framework such
as UN and WTO;
◦ Recognized and enhanced economic cooperation through
“Trans Regional ASEAN-EU Trade Initiative (TREATI)”
2. ASEAN Programme for Regional Integration
Support (APRIS II)
APRIS I terminated in Sept. 2006 contributed in 4
ASEAN priority integration sectors Æ
Agriculture, Electronics, Fisheries and Woodbased products
y APRIS II (2006-2009) Æ follow up of APRIS I Æ
focuses on 5 priority sectors agreed under
TREATI Æ agriculture-food, electronics, fisheries,
wood products and cosmetics
y Allocated budget: 7.2 million euros to support
the program of ASEAN integration process.
y
APRIS, a project worth € 4.5 million, is a framework programme to assist ASEAN Member
Countries in regional integration. It aims to draw lessons from the experience of the EC in
forging regional economic integration, contribute to improving ASEAN mechanisms and
communications systems, and supporting capacity building activities for the ASEAN
Secretariat and ASEAN Member Countries. The APRIS Financing Agreement was signed in
early 2003
VI. Economic Features of ASEAN-EU
y
EU
◦ 27 member states
◦ EU represents a market of over 450 million people and a 9,739
billion euro GDP of combined economy.
◦ ASEAN share 11.4 % of EU total trade (2006)
◦ ASEAN is EU 6th largest trading partner in 2005
y
ASEAN
◦ 10 member states wth more than 540 million people
◦ USD 876.102 million GDP at current market prices with 567,39
million people.
◦ If the region is able to achieve an average growth rate of 6% a
year, it will have a combined GDP exceeding USD 1 trillion by
2010.
◦ EU is the largest investor in ASEAN
Source: ASEAN statistical book 2006 and www.bilateral.org
Economic Features (Cont.)
y
y
y
y
y
ASEAN bought 44.9 billion Euros of goods from the
EU in 2005, and sold 70.5 billion Euros of products,
Most of the goods — both ways — were
telecommunications and office equipment.
Taken as a whole, EU trade with ASEAN was about
equal to its trade with Japan, its No. 5 trading
partner.
European companies have been aggressively tapping
into ASEAN’s market of more than half a billion
people.
The EU buys 15 percent of ASEAN exports, making it
ASEAN’s second-largest market after the US.
Foreign Direct Investment EU to ASEAN
The EU remains as one of ASEAN’s major
FDI contributor partners
y FDI to ASEAN in 2003 increased 48% yearon-year to reach US$20.3 billion
(approximately, 16.8 billion euro), with EU
contributing 35% (US$7.1 billion or
approximately, 5.9 billion euro) of total FDI
in 2003.
y EU shared 34,5% FDI inflows to ASEAN
during 1995-2004 periods (largest
contributor on FDI inflows)
y
VII. The Future of ASEAN-EU FTA
According to the Joint feasibility study on
ASEAN-EU FTA research, reported at the 6th
AEM-EU, 2005:
•
The ASEAN-EU FTA agreements would boost
EU exports to ASEAN by 24.2
•
ASEAN would see an increase of its exports to
the EU market of 18.5%
The future (Cont.)
•
AEM-EU Retreat in Bandar Seri Begawan, May
2007, ASEAN-EU agreed to launch FTA
negotiations.
•
To develop modalities, approach, work program
and time schedule for negotiating the ASEANEU FTA, both sides agreed to establish Joint
Committee
VIII. Conditions/Challenges
y
y
y
y
y
Different level of integration: Community vs Union Æ
this year ASEAN is celebrating 40 years of cooperation
while EU is celebrating 50 years of Rome Treaty.
ASEAN-EU relations already 30 years.
Building Constitution (Legal): Charter vs Treaty Æ EU
more legally binding while ASEAN is still at the
Association stage (pending completion of Charter)
Development Gap and differences of political system
between ASEAN-EU and amongst ASEAN members
Physical Distance between EU and ASEAN still quite
afar although not significant with technology
development .
etc
IX. Way forward
y
y
y
y
y
y
y
Cooperation between region becoming necessity, but need to avoid
spaghetti bowl effect Æ regional cooperation should be building bloc in
support of multilateral trading system (WTO)
Disparity between ASEAN-EU as well as among members of SEAN should
be taken into account when designing enhanced/future partnership (special
differential treatment, longer time span, etc)
Area/scope of cooperation should be as comprehensive as possible, taking
into account the comparative advantages that each region may offer
(ASEAN: manufacturing; EU: Knowledge based services)Æ work on the
most possible/practical ones Î “fill in the blank approach”
Enhanced cooperation not limited to trade and investment liberalization, but
also trade and investment facilitation as well as development cooperation
and capacity building Æ need to strengthen rules and harmonize standards
Need to focus/tackle specific interest or issue that may be potential trade
barriers: ASEAN obstacle to export to EU: high technical standards
requirement (safety and enviromental); EU difficulties to ASEAN:
restrictions in services sector
Need to involve all layer of society and cooperate not only G to G
(Business to business, SMEs to SMEs, other stakeholders)
etc
X. Conclusion
Noting that ASEAN and EU are quite successful organizations
in their respective region, enhanced cooperation and
partnership between the two organizations will not only bring
benefit for them but also set a good example of regional
integration. Each region should support the other integration
process
• ASEAN is quite heterogeneous as an economic grouping thus
approach should be multifaceted to gain maximal benefits of
ASEAN – EU Economic Cooperation while recognizing each
partner’s developing needs, priorities and strategies.
• Adopt a pragmatic and flexible approach. Focus more on each
comparative advantage while taking into account differentiated
treatment for lesser developed members.
y Data and studies conducted is in support of taking the
economic partnership between ASEAN and EU to a higher
level Æ through FTA
•
THANK YOU