1. Regional and global developments

• Aggregate growth in ASEAN was sustained at 5.2% in 2018, the same as the previous year. Growth expected to moderate in 2019 and 2020, at 4.8% and 4.9%, respectively.
• Regional trade in goods increased by 8.7% year-on-year while trade in services expanded by 10.6% year-on-year.
• Total FDI inflows into ASEAN increased by 5.3% year-on-year to reach US$154.7 billion.
• Intra-ASEAN accounted for the highest share of both trade and investments, at 23.0% and 15.9%, respectively. China, the EU, and the US accounted for the region’s top three largest external trading partners, while the EU, Japan, and China were the top three largest external sources of investment.

 

 

2. ASEAN Economic Community

• The AEC Monitoring and Evaluation (M&E) Country Visits to Brunei Darussalam and Malaysia were completed in 2018, while Country Visits to Myanmar and Singapore are expected to be completed in 2019.
• The forthcoming ASEAN Integration Report (AIR) 2019 will assess the progress and achievements of the first three years of the implementation of the AEC Blueprint 2025 with a chapter on the Fourth Industrial Revolution (4IR).
• Preparations for the AEC Blueprint 2025 Mid-Term Review is in line with the mandate in the AEC Blueprint 2025 and the AEC 2025 M&E Framework. Once the concept note for the Mid-term Review is endorsed by the AEC Council later this year, the work will be undertaken by the ASEAN Secretariat from 2020 to early 2021, with oversight from the High-Level Task Force for ASEAN Economic Integration (HLTF-EI).

3. Priority Economic Deliverables under Thailand’s Chairmanship of ASEAN

• Three out of13 deliverables under Thailand’s 2019 ASEAN Chairmanship theme of ‘Advancing Partnership for Sustainability’ were completed. The three deliverables include:
  • ASEAN Infrastructure Financing Mechanisms
  • Roadmap of ASEAN Sustainable Capital Market
  • Signing of the memorandum of understanding between the ASEAN Centre for Energy (ACE) and the National Science and Technology Development Agency of Thailand to support the eventual establishment of the Center on Biofuels and Bioenergy.
• ASEAN Single Window (ASW):
  • Brunei Darussalam and Cambodia participated in the live exchange of the ATIGA e-Form D through the ASEAN Single Window (ASW) this year, joining Indonesia, Singapore, Malaysia, Thailand, and Vietnam.
  • The three remaining ASEAN Member States to join the live operations later in 2019.
• The following declaration, action plan have been adopted:
  • ASEAN Declaration on Industrial Transformation to Industry 4.0
  • ASEAN Guideline on Skilled Labour/Professional Services Development in Response to the Fourth Industrial Revolution
  • Policy Guideline on Digitalisation of ASEAN Micro Enterprises
  • ASEAN Digital Integration Framework Action Plan (DIFAP) 2019-2025, to be endorsed by the AEC Council later in 2019. DIFAP translates the six priority areas of the ASEAN Digital Integration Framework into an action plan to be implemented from 2019 to 2025.
• The issuance of the following Declaration and the notation of the two Guidelines to be conducted by ASEAN leaders at the 35th ASEAN Summit in November 2019:
  • ASEAN Declaration on Industrial Transformation to Industry 4.0
  • ASEAN Guideline on Skilled Labour/Professional Services Development in Response to the Fourth Industrial Revolution
  • Policy Guideline on Digitalisation of ASEAN Micro Enterprises
• Progress in other priority economic deliverables:
  • ASEAN Innovation Roadmap 2019-2025,
  • Deliverables in finance, tourism, and fisheries areas
  • Ongoing effort to conclude of the Regional Comprehensive Economic Partnership (RCEP) negotiations.

4. Fourth Industrial Revolution

• Support for the development of a consolidated strategy on the 4IR for ASEAN as a follow up to the Special Meeting of the Committee of the Whole (CoW) for the AEC on the 4IR.

5. Trade in Goods

• Progress made under the ASEAN Trade in Goods Agreement (ATIGA):
  • To date, 99.3% of import duties have been eliminated for the ASEAN-6 countries.
  • 97.7% of import duties have been eliminated for the CLMV countries.
  • In 2019, 98.6% of import duties has been eliminated for ASEAN as a whole.
• The ATIGA Information Technology Agreement (ITA) List in the AHTN 2017 was endorsed by the ASEAN Member States.
• The ATIGA Operational Certification Procedures (OCP) to allow ASEAN Wide Self-Certification (AWSC) Scheme and Certificate of Origin (CO) Form D, was endorsed in principle.
• The Ratification of the First Protocol to amend the ATIGA will allow the AWSC Scheme by all AMS to meet the target implementation of the scheme by March 2020.
• The Terms of Reference (TOR) for a General Review of ATIGA was endorsed to assess and enhance ATIGA provisions to further bring down barriers to intra-regional trade, and increase trade and investment.

6. Trade Facilitation

• Progress has been made in the work toward the twin goals of reducing trade transaction costs by 10% by 2020 and doubling intra-ASEAN trade between 2017 and 2025.
• The importance of the ASEAN Seamless Trade Facilitation Indicators (ASTFI) and its proxies in determining progress in the reduction of trade transaction costs and monitoring the implementation of the trade facilitation measures in the region was reiterated.
• As part of the assessment, AMS are currently in different stages of conducting two rounds of Time Release Studies each, to be completed by 2020.
• Progress to tackle Non-Tariff Barriers (NTBs):
  • Implementation of the Guidelines for the Implementation of ASEAN Commitments on Non-Tariff Measures on Goods (NTM Guidelines) to address trade distortions,
  • Efforts to strengthen National Trade Facilitation Committees or similar organisations.

7. ASEAN Customs Integration

• The Sub-Working Group on ASEAN Authorised Economic Operator (AEO) Mutual Recognition Arrangement (MRA) was established to commence work on an ASEAN AEO MRA on a pathfinder approach by 2020. The ASEAN AEO MRA will serve as a platform to recognise AMS’ national AEO programme, facilitate the secure movement of goods, and contribute to the reduction of regional trade transaction costs.
• Intensified efforts were made to put in place the legal framework of the ASEAN Customs Transit System (ACTS)
  • Implementation of the pilot ‘Go Live’ in:
    • the North-South corridor (Malaysia, Singapore, Thailand)
    • the East-West corridor (Cambodia, Lao PDR, Viet Nam)
  • ‘Full Live Operation’ among the AMS by April 2020.
  • Myanmar is expected to join the ACTS by end-2020.
• The review of AHTN 2017 to develop the AHTN 2022 version together with accompanying Supplementary Explanatory Notes has commenced in July 2019. In line with the HS (Harmonised System) 2022 version, the AHTN 2022 is targeted for all AMS implementation by 1 January 2022.

8. Standards and Conformance

• The ASEAN Guidelines on Good Regulatory Practice (GRP) was completed. The GRP considered:
  • The ASEAN GRP Core Principles, endorsed in 2018
  • The development of the ASEAN General Principles for Harmonisation of Regulatory Regimes that provides parameters and elements in pursuing harmonisation of technical regulations in ASEAN.
• Progress was made in the discussion of the ASEAN Mutual Recognition Arrangement on Building and Construction Materials, which is expected to be finalised in 2019.
• The long-standing issue of the scope of the ASEAN Mutual Recognition Arrangement (MRA) on Type Approval for Automotive Products has been resolved and is expected to be signed in 2019.

9. Trade in Services

• The ASEAN Trade in Services Agreement (ATISA) was concluded and is expected to be signed by the Member States by the end of 2019.
  • Officials to finalise the work plans for submission of Schedules of Non-Conforming Measures taking into account provisions of ATISA to be finalised within this year.
• The trade in services component of the ASEAN Solutions for Investments, Services and Trade (ASSIST) started operations since May 1, 2019. The inclusion of the services component in the ASSIST facility allows ASEAN-based businesses and companies to find practical solutions for their services trade issues.
• The review process of schedules of commitments under the ASEAN Agreement of Natural Persons (MNP) is currently underway and is expected to be completed by 2020.
• Recognition of progress in the implementation of the ASEAN Qualifications Reference Framework (AQRF). The AQRF has successfully referenced reports from Malaysia and the Philippines to-date.

10. Investment

• The Fourth Protocol to Amend the ASEAN Comprehensive Investment Agreement (ACIA) was concluded and expected to be signed within 2019. This Protocol provides for incorporation of TRIMs-plus Prohibition of Performance Requirements obligations into the ACIA and will ensure that ASEAN investors continue to get the best treatment through the ACIA.
• Malaysia’s modified Reservation List was endorsed, in support of larger efforts of AMS to implement reforms and progressively reduce or eliminate investment restrictions.

11. Competition Policy

• The ongoing implementation of the four AEGC key priority deliverables for 2019 include:
  • Guidance Document for the ASEAN Competition Policy Peer Review
  • the ASEAN Toolkit on Enforcement Strategies
  • the Trainers Guide to Market Studies
  • a research paper on commonalities and differences in competition legislations in ASEAN, which will include a Strategy Paper on Areas for Regional Convergence.
• The 2nd ASEAN Competition Enforcers Network (ACEN) Meeting was convened to:
  • Discuss the template for the exchange of case related information for the purpose of enforcement and merger cooperation
  • Prepare a study on recommended procedures for joint investigations and decisions on cross-border cases to be conducted by 2020.
  • The 8th ASEAN Competition Conference to be convened in November, 2019. It will serve as a platform to discuss important developments in the ASEAN competition landscape, as well as the challenges faced by ASEAN’s younger competition authorities.

12. Consumer Protection

• Three ACCP priority deliverables for 2019 were identified and comprise the adoption of:
  • Online Business Code of Conduct
  • ASEAN Framework on Cross-Border Cooperation
  • ASEAN Capacity Building Roadmap for Consumer Protection 2019-2025.
• Following the development of the Guidance Document for the ASEAN Consumer Empowerment Index (ACEI), the ACCP is currently conducting an ACEI survey to measure the level of empowerment of ASEAN consumers, with the aim of gauging the effectiveness of consumer protection policies in each AMS.
• The ASEAN Voluntary Peer Review of Consumer Protection Policy and Law is being arranged for November and will be preceded by ongoing pilot peer review exercise in the Philippines. The Peer Reviews aim to assess the effectiveness of the national consumer protection enforcement and their implications, identify gaps and weaknesses in reviewed areas, and to make recommendations for potential follow-up.

13. Intellectual Property

• Malaysia’s accession to the Madrid Protocol to take place before end-2019.
• Proposal to set up an ASEAN IP Academy to provide IP training for AMS.
• The ASEAN Patent Examination Co-operation (ASPEC)- AIM Programme launched in August 2019.
  • Under programme, members to give precedence to ASPEC requests queue that fall under a set of International Patent Classification codes corresponding to patent fields relating to infrastructure and manufacturing, and to process them within six months.

14. Good Regulatory Practises (GRP)

• Progress was made in the Baseline Study on Regulatory Management Systems (RMS) in ASEAN, which was prepared with the assistance of the Economic Research Institute for ASEAN and East Asia (ERIA). The Baseline Study is a deliverable under the ASEAN Work Plan on GRP 2016-2025.

15. Electronic Commerce

• ASEAN Work Programme on Electronic Commerce (AWPEC) 2017-2025 has been implemented.
• The ASEAN Digital Integration Framework Action Plan (DIFAP) 2019 – 2025, which comprise of initiatives to implement the priority areas of the ASEAN Digital Integration Framework was adopted.
• The ASEAN DIFAP 2019-2025 will be submitted for endorsement to the AEC Council in November 2019. It will be a living document that will be updated biannually.

16. Micro, Small and Medium Enterprises

• Ongoing work in the implementation of the ASEAN Strategic Action Plan on SME Development (2016-2025), with notable efforts including:
  • The development of a set of regional policy guidelines on digitalisation of micro enterprises to promote conducive eco-systems for their participation in the digital economy
  • Action Agenda to strengthen the capacities of MSMEs and MSME enablers towards taking advantage and tackling challenges brought forth by the digital economy.
• Enabling framework to leverage upon resources of private and public sectors to provide capacity building initiatives in three key main areas:
  • Increasing access to skills and knowledge,
  • Facilitating access to experts,
  • Improving access to technology.
• Capacity building measures carried out to equip MSMEs and MSME enablers with knowledge and skills in areas such as:
  • Increasing awareness and compliance of international prepared food standards,
  • Development of business accelerators and incubators,
  • Mentorship training programmes through public-private sector collaborations.
• Ongoing effort to mainstream Inclusive Business models in ASEAN to encourage large and medium enterprises to adopt the model and improve sustainable livelihood of people at the base of economic pyramid, which includes supporting the development of micro and small businesses

17. ASEAN Community Statistical System

• Continued efforts by the ASEAN Community Statistical System’s (ACSS) in the harmonisation of key statistical areas relevant to AEC integration monitoring, including in:
  • Trade in goods and services,
  • International investment,
  • System of national accounts,
  • Sustainable Development Goals Indicators.
• Recognition of the progress made in:
  • The development of the Implementation Framework of ACSS Open Data Initiative for Statistics,
  • Concept note on the potential use of Big Data for further enhancement of the ACSS official statistics,
  • KPIs in the Monitoring and Evaluation (M&E) of the ACSS Strategic Plan and Annual Work Plan 2019 monitoring report.
• AMS were encouraged to organise ASEAN-help-ASEAN activities to support the sustainability of the ASEAN regional statistical cooperation through the ACSS.

18. Narrowing the Development Gap

• ASEAN Member States, ASEAN Partners, and external parties continue to provide assistance to Cambodia, Lao PDR, Myanmar, and Vietnam (CLMV) to enhance their capacity to promote inclusive development.
• The economic progress of the CLMV countries in the past 20 years has been captured in the Assessment of the Progress in Narrowing the Development Gap in ASEAN. The assessment was conducted by the ASEAN Secretariat in collaboration with the Asian Development Bank.

19. Public-Private Sector Engagement

• Recognition of the active support by the ASEAN Business Advisory Council (ASEAN-BAC) in developing ASEAN human capital to embrace the Fourth Industrial Revolution through the “ASEAN Human Empowerment and Development” (AHEAD) project.
• ASEAN-BAC and the Ministry of Commerce of Thailand join effort in developing the Guideline on Skilled Labour/Professional Services Development in Response to The Fourth Industrial Revolution (4IR) as part of Thailand’s ASEAN Chairmanship Priority Economic Deliverables and is recognised as an example of strong collaboration between the public and private sectors.
• ASEAN-BAC’s active role in coordinating private sector engagement with ASEAN sectoral bodies through the Joint Business Council mechanism was noted.

20. External Economic Relations

• The implementation of ASEAN’s FTA with China, Japan, Korea, India, Australia, and New Zealand was reviewed.

China	ACFTA Upgrading Protocol for all Parties has entered into force: Further progress on unfinished elements to be done under the Future Work Programme, in order for the effective implementation of the ACFTA Upgrading Protocol. Further discussions on the further liberalisation of trade in goods as well as investment liberalisation and protection may commence at the 21st ACFTA JC in 2020.
New Zealand	Full implementation of the First Protocol to Amend the AANZFTA Agreement was carried out in March 2019. The AANZFTA Joint Committee Work Plan for the upgrading of the AANZFTA Agreement, was endorsed, with negotiations to commence at the 12th AANZFTA Joint Committee Meeting in June 2020.
Korea	Negotiations concerning the further liberalisation of Sensitive Track products under the AKTIGA to be concluded by the end of 2019.
India	Officials tasked with the review of the ASEAN-India Trade in Goods Agreement to resume work in 2020 following the conclusion of RCEP negotiations.
Japan	The First Protocol to Amend the ASEAN-Japan Comprehensive Economic Partnership Agreement (AJCEP) to incorporate the Chapters on Trade in Services, Movement of Natural Persons (MNP), and Investment to enter into force by end-2019.
Hong Kong, China	The ASEAN-Hong Kong, China Free Trade Agreement and the ASEAN-Hong Kong, China Investment Agreement entered into force on 11 and 17 June 2019 respectively, involving Hong Kong, Thailand, Singapore, Myanmar, Viet Nam, and Lao PDR
EU	The 3rd Meeting of the Joint Working Group for the ASEAN-EU FTA to discuss EU’s counterproposal to ASEAN’s draft text for the Framework on the parameters for a future ASEAN-EU FTA tentatively scheduled for November 2019.
Canada	Implementation of 2016-2020 Work Plan to implement the ASEAN-Canada Joint Declaration on Trade and Investment is on-going
U.S.	Implementation of 2018-2019 ASEAN-U.S. Trade and Investment Framework Arrangement (TIFA) and the Expanded Economic Engagement (E3) Initiatives Work Plan is on-going
Russia	Implementation of Post-2017 ASEAN-Russia Trade and Investment Cooperation Work Programme is on-going
Eurasian Economic Community (EEC)	Programme of Cooperation between ASEAN and Eurasian Economic Community (EEC) to be endorsed in order to operationalise the Memorandum of Understanding (MoU) between ASEAN and the EEC on Economic Cooperation signed in November 2018.

• ASEAN Economic ministers reaffirmed the support for the rules-based multilateral trading system and of contributing to discussions on WTO Reform.

21. Regional Comprehensive Economic Partnership (RCEP)

• AEM reaffirmed priority and commitment in concluding negotiations for the RCEP in 2019, in line with the Leaders’ mandate.

22. Dispute Settlement Mechanism

• Completion of the ASEAN Protocol on Enhanced Dispute Settlement Mechanism to replace the 2004 ASEAN Protocol on Enhanced Dispute Settlement Mechanism.