EU LARGEST EXTERNAL SOURCE OF FDI INFLOWS INTO ASEAN

Indonesia 2018 | DIPLOMACY | VIP INTERVIEW

TBY talks to HE Le Luong Minh, Secretary-General of ASEAN, on economic integration, cooperation among member nations, and celebrating 50 years existence.

How are the member states that participated in the ASEAN economic community (AEC) progressing in achieving the targets of becoming an economic integrated organization?

During the first year of the ASEAN Economic Community (AEC), the focus was on putting in place the fundamentals for effective operationalization of the AEC Blueprint 2025 through the adoption of most of the AEC sectoral work plans and the endorsement of the AEC 2025 Monitoring and Evaluation Framework that would support effective implementation of the Blueprint. The framework enhances the previous mechanism by not only tracking implementation progress but also the outcomes and impact of regional economic integration. The AEC Blueprint 2025 is accompanied by the AEC 2025 Consolidated Strategic Action Plan, which was endorsed on 6 Feb 2017 and is publically available. It comprises key action lines drawn from sectoral work plans and serves as a single reference document that will be updated periodically to inform stakeholders of the key action lines that will be implemented to pursue the ASEAN economic integration agenda from 2016 to 2025. ASEAN has also successfully achieved priority deliverables under the Chairmanship of Lao PDR in the strategic areas of trade facilitation (adoption of the ASEAN Trade Facilitation Framework), food safety (adoption of the ASEAN Food Safety Regulatory Framework), MSME development (adoption of the ASEAN Institutional Framework on Access to Finance for MSME), and tourism (adoption of the Pakse Declaration on ASEAN Roadmap for Strategic Development of Ecotourism Clusters and Tourism Corridors). Other notable achievements are the launch of the ASEAN Tariff Finder, a cost-free search engine for tariff-related information under the ASEAN Trade in Goods Agreement and other ASEAN +1 free trade agreements as well as the full operationalization of the ASEAN Solutions for Investments, Services and Trade (ASSIST), a fully internet-based and cost-free, non-binding consultative mechanism for the expedited and effective solution of operational problems encountered by ASEAN-based enterprises on cross-border issues related to the implementation of ASEAN economic agreements.

What sectors are being prioritized in the bid to increase cooperation between member states and their trade relationship with the wider region?

In parallel with initiatives of regional economic integration such as liberalization and facilitation of trade in goods, services, and investment, close cooperation in various other sectors, such as transport, energy, information communication technology, tourism, agriculture and science and technology, has been one of the important factors leading to the successful establishment of the ASEAN Economic Community. Entering into the next decade, ASEAN will continue to pursue vigorous sectoral cooperation in all those sectors as set out in the AEC Blueprint 2025. Each sector has already identified the priority deliverables for 2017. In transport, building further on the successful realisation of ASEAN Open Skies, ASEAN Member States will continue implementation of the ASEAN Single Aviation Market (ASAM) with focus on strengthening air traffic management and aviation safety and security. Efforts are also prioritized to further enhance transport facilitation with the targets of completing the pilot operationalization of the ASEAN Customs Transit System (ACTS) and conclusion of the ASEAN Framework Agreement on the Facilitation of Cross-Border Transport of Passengers by Road Vehicles (CBTP). In ICT, the priorities are placed on the expansion of broadband to under-served areas, reducing international roaming charges and strengthening cooperation in cyber security. Work has also been started on studying the feasibility of an ASEAN Single Telecommunication Market. In energy, cooperation in 2017 is being focused on institutional strengthening for the implementation of the two energy connectivity flagship projects: the ASEAN Power Grid (APG) and the Trans-ASEAN Gas Pipeline (TAGP). Work in the area of energy efficiency (EE) aims at harmonizing EE performance standards for air conditioners and developing a Policy Roadmap for Minimum Energy Performance Standards for Lighting. In the area of food, agriculture, and forestry, ASEAN Member States are working on a number of initiatives to pursue sustainable agricultural production, enhancing product competitiveness and at the same time ensuring food safety, such as developing a Public-Private Partnership (PPP) Regional Framework for Technology Development in the Agricultural Sector, Guidelines on Improving SPS Measures, Guidelines on Sustainable Forest Management, and Guidelines on Controlling the Use of Anti-Microbials in Livestock. In tourism, the Visit ASEAN@50 campaign is the main initiative with which ASEAN Member States join efforts in offering the best tourism products and services to international visitors to celebrate the 50th Anniversary of ASEAN. Cruise tourism development is another priority of ASEAN tourism cooperation. Science, technology, and innovation is another priority sector of cooperation in 2017. In order to realize the strategy of productivity-driven growth, innovation, research and development and technology commercialization as laid out in the AEC Blueprint 2025, ASEAN Member States are working on an ASEAN Declaration on Innovation for adoption by the ASEAN Leaders at the 31st ASEAN Summit in November 2017.

What is the status of your talks regarding the EU FTA, and what are the prospects for this regional corporation?

The economic relations between ASEAN and the EU are strong and resilient. The EU is ASEAN's third largest trading partner with two-way merchandise trade in 2015 amounting to USD228 billion, accounting for 10% of ASEAN's total trade. The EU is the largest external source of Foreign Direct Investment inflows into ASEAN, amounting to USD20 billion in 2015, or 16% of total ASEAN's FDI. Potentials exist for the growth of trade and investment between both sides and ASEAN and the EU will continue to explore initiatives to further strengthen and deepen economic relations including through conclusion of an FTA taking into account mutual benefits.

How will The Chinese One Belt, One Road initiative compliment ASEAN's trading goals?

ASEAN and China will continue to strengthen cooperation in the area of connectivity that will bring mutual benefits, including through capacity building and resource mobilisation for the Master Plan on ASEAN Connectivity 2025 (MPAC 2025), exploring ways to improve connectivity between both sides by synergizing common priorities identified in the MPAC 2025 and China's “Belt and Road” initiative, and encourage the active involvement of relevant multilateral financial institutions, particularly Asian Infrastructure Investment Bank.

Over its 50 years, how has the organization has stayed relevant and dynamic?

Five decades of cooperation and integration has made ASEAN one of the most successful regional organizations in the world. ASEAN works together through fostering deeper understanding, building trust and cooperating to pursue common interest in the context of diversity in full recognition of its varied but shared interests and aspirations that demonstrates its unique strength. ASEAN maintains its unity on the basis of shared commitments and collective responsibility for regional peace and prosperity, the principles of respect for national independence and sovereignty, non-interference in the internal affairs of its Member States. Decisions in ASEAN are made by consensus. This “ASEAN Way” is to ensure that no AMS is left behind in the solutions of issues of shared concerns or interests. ASEAN's strength lies in the fact that it has been able to manage and turn a disadvantage into an advantage. To keep itself relevant and maintain it centrality in the evolving regional architecture and enhance its capability to respond effectively to unfolding complicated regional and global developments, ASEAN is implementing measures to streamline its processes and improving its working methods including updating the ASEAN Charter.

 

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