ASEAN Economic Community

ASEAN Services Report 2017 The Evolving LandscapeASEAN Community Progress Monitoring System
2017Global Megatrends Implications for the ASEAN Economic CommunityASEAN Good Regulatory
Practice (GRP) Core PrinciplesAEC Blueprint 2025AEC 2025 Consolidated Strategic Action Plan
(CSAP)ASEAN Economic Integration BriefCelebrating ASEAN: 50 Years of Evolution and Progress 1967 –
2017Towards ASEAN Economic Community 2025: Monitoring ASEAN Economic IntegrationA Journey
Towards Regional Economic Integration : 1967 – 2017ASEAN Statistical Report on Millennium
Development Goals 2017

The establishment of the ASEAN Economic Community (AEC) in 2015 is a major milestone in the regional
economic integration agenda in ASEAN, offering opportunities in the form of a huge market of US$2.6
trillion and over 622 million people. In 2014, AEC was collectively the third largest economy in Asia and
the seventh largest in the world.

The AEC Blueprint 2025, adopted by the ASEAN Leaders at the 27th ASEAN Summit on 22 November
2015 in Kuala Lumpur, Malaysia, provides broad directions through strategic measures for the AEC from
2016 to 2025. Along with the ASEAN Community Vision 2025, and the ASEAN Political-Security
Community (APSC) Blueprint 2025 and the ASEAN Socio-Cultural Community (ASCC) Blueprint 2025, the
AEC Blueprint 2025 forms part of ASEAN 2025: Forging Ahead Together. It succeeded the AEC Blueprint
(2008-2015), which was adopted in 2007.

The AEC Blueprint 2025 is aimed towards achieving the vision of having an AEC by 2025 that is highly
integrated and cohesive; competitive, innovative and dynamic; with enhanced connectivity and sectoral
cooperation; and a more resilient, inclusive, and people-oriented, people-centred community, integrated
with the global economy

The AEC Blueprint 2025 consists of five interrelated and mutually reinforcing characteristics, namely: (i) A
Highly Integrated and Cohesive Economy; (ii) A Competitive, Innovative, and Dynamic ASEAN; (iii)
Enhanced Connectivity and Sectoral Cooperation; (iv) A Resilient, Inclusive, People-Oriented, and People-
Centred ASEAN; and (v) A Global ASEAN. These characteristics support the vision for the AEC as
envisaged in the ASEAN Community Vision 2025.

The AEC Blueprint 2025 sets out the strategic measures under each of the five characteristics of AEC
2025. To operationalise the Blueprint’s implementation, these strategic measures will be further
elaborated in and implemented through the work plans of various sectoral bodies in ASEAN. The sectoral
work plans will be reviewed and updated periodically to ensure their relevance and effectiveness.
Partnership arrangements with the private sector, industry associations and the wider community at the
regional and national levels will also be actively sought and fostered to ensure an inclusive and
participatory approach to the integration process. Institutions will be strengthened and enhanced
approaches to monitoring and public outreach will likewise be developed to support the effective
implementation of the Blueprint.

The AEC 2025 Consolidated Strategic Action Plan (CSAP) comprises of key action lines that will
operationalise the strategic measures in the AEC Blueprint 2025. It takes into account the relevant
sectoral workplans, and will be reviewed periodically to account for developments in each sector.

The inaugural issue of the ASEAN Economic Integration Brief (AEIB) was released on 30 June 2017. The
AEIB provides regular updates on ASEAN economic integration progress and outcomes, and is a
demonstration of ASEAN’s commitment to strengthen communication and outreach to raise stakeholder
awareness of the AEC.

The AEC Blueprint 2025 will lead towards an ASEAN that is more proactive, having had in place the
structure and frameworks to operate as an economic community, cultivating its collective identity and
strength to engage with the world, responding to new developments, and seizing new opportunities. The
new Blueprint will not only ensure that the 10 ASEAN Member States are economically integrated, but
are also sustainably and gainfully integrated in the global economy, thus contributing to the goal of
shared prosperity.

The ASEAN Good Regulatory Practice (GRP) Core Principles was adopted at the 50th AEM Meeting in 29
August 2018 and subsequently endorsed by the AEC Council. ASEAN GRP Core Principles, which is a
practical, non-binding set of principles to serve as a guide to mainstream GRP into ASEAN work, and
assist ASEAN Member States in improving their regulatory practice and fostering ASEAN-wide regulatory
cooperation.

To access all publications, click here

ASEAN ECONOMIC monitoring

Latest News
The fourth issue of the ASEAN Economic Integration Brief (AEIB) is released in time for the 33rd ASEAN
Summit. Read more

The ASEAN Secretariat in collaboration with the Singapore Institute of International Affairs (SIIA) released
the Global Megatrends: Implications for the ASEAN Economic Community. Read more

The AEC 2025 Monitoring and Evaluation Framework serves as a key reference for institutionalising and
implementing monitoring and evaluation mechanism in the ASEAN Economic Community. Read more

ASEAN strengthens capacity in AEC monitoring and evaluation through a workshop on the ASEAN
Economic Community (AEC) 2025 Monitoring and Evaluation (M&E) on 7 February 2017 in Davao City,
Philippines. Read more

Following its first publication on 6 Feb 2017, the AEC 2025 CSAP has been updated to include action lines
from sectoral work plans that were endorsed after February 2017 and updates to the timelines and key
action lines of other AEC sectoral bodies. Read more

The ASEAN Economic Community

The formal establishment of the ASEAN Economic Community (AEC) on 31 December 2015 marks a key
milestone in ASEAN economic integration journey. ASEAN has since embarked on the next phase of its
economic integration agenda for the period of 2016-2025, guided by the AEC Blueprint 2025, which was
adopted by the ASEAN Leaders at the 27th ASEAN Summit on 22 November 2015 in Kuala Lumpur,
Malaysia.

The AEC Blueprint 2025 envisions:

A highly integrated and cohesive economy;

A competitive, innovative and dynamic ASEAN;

Enhanced connectivity and sectoral cooperation;

A resilient, inclusive, and people-oriented, people-centred ASEAN; and

A global ASEAN.

Complementing the AEC Blueprint 2025 is the AEC 2025 Consolidated Strategic Action Plan (CSAP), which
was endorsed by the AEM and AEC Council Ministers on 6 February 2017 and is available to the public.
The AEC 2025 CSAP serves as a single reference document to inform stakeholders of the key action lines,
drawn from the sectoral work plans, which will be implemented in pursuit of the ASEAN economic
integration agenda from 2016 to 2025. The AEC 2025 CSAP will be periodically reviewed to account for
developments in each sector.

The implementation of the AEC Blueprint 2025 and its corresponding sectoral work plans will be
supported by effective and robust monitoring and evaluation. The development of an “enhanced
monitoring framework” is envisaged in the AEC Blueprint 2025:

“The monitoring/tracking of the implementation of strategic measures/action lines in the Blueprint will
be conducted by the ASEAN Secretariat through an enhanced monitoring framework using appropriate
approaches and robust methodology. The impact and outcomes of the AEC Blueprint 2025 will be
monitored, including with the support of the ASEAN Community Statistical System (ACSS)” – AEC
Blueprint 2025 Paragraph 82 (vi).

AEC 2025 Monitoring and Evaluation Framework

The AEC 2025 Monitoring and Evaluation (M&E) Framework was endorsed by ASEAN Economic Ministers
(AEM) at the 48th ASEAN Economic Ministers’ Meeting in August 2016 and the AEC Council in September
2016 to help ensure the timely and effective implementation of the AEC Blueprint 2025.

The objectives of the Framework are to:

describe the different components of the ASEAN Economic Community (AEC) 2025 Monitoring and
Evaluation (M&E) Framework;

serve as a key reference for institutionalising and implementing M&E mechanisms across AEC sectors,
and

promote sustainability, consistency, and continuity in the AEC 2025 M&E processes.

The AEC 2025 M&E Framework comprises of the following main components: compliance monitoring,
outcomes monitoring, and impact evaluation.
Compliance Monitoring measures implementation progress towards the achievement or delivery of key
outputs that are aligned with the strategic measures in the AEC Blueprint 2025 and relevant AEC sectoral
workplans.

Outcomes monitoring refers to periodic assessment of measures or approximation of changes in sectoral

or broad economic indicators as benefits that have resulted from the implementation of the AEC. In the
AEC, outcomes are measured through key performance indicators (KPIs) that are in line with the strategic
measures/objectives/goals in the AEC Blueprint 2025 and SWP as well as the broader economic
landscape.

Impact evaluation takes outcomes monitoring one step further by measuring how regional economic
integration strategic vision and goals affect/impact upon the broader socio-economic environment of the
ASEAN Member States, as validated through empirical research/studies/surveys. The overall outcomes
monitoring for the AEC Blueprint 2025 will be coordinated by the ASEAN Integration Monitoring
Directorate (AIMD) with inputs from the sectoral bodies.

An important part of the enhanced monitoring framework is improved transparency and stakeholder
outreach and feedback. To this end, the reporting of ASEAN economic integration progress and
outcomes will be undertaken and tailored for a wide-range of audiences. Informed by the M&E activities,
the AEC Blueprint 2025 will be reviewed periodically as decided by the AECC, but not more than every
three years, unless otherwise agreed with a view towards enhancing the level of economic integration in
ASEAN.

About ASEAN Integration Monitoring Directorate (AIMD)

“The overall monitoring of (i) implementation of strategic measures and (ii) outcomes and impact of the
AEC Blueprint 2025 will be conducted primarily by the ASEAN Secretariat, (specifically the ASEAN
Integration Monitoring Directorate), to support the AEC Council, which is the primary body responsible
for monitoring and ensuring compliance of the AEC Blueprint 2025. “– AEC 2025 M&E Framework

The ASEAN Integration Monitoring Directorate (AIMD) is one of the three directorates under the ASEAN
Economic Community Department of the ASEAN Secretariat.
The AIMD is responsible, among others, for spearheading the implementation of regional surveillance
and economic integration monitoring in ASEAN; providing high level policy and technical advice and
recommendations to support ASEAN economic integration initiatives; shaping the economic research
and policy analysis programme of ASEAN Secretariat; ensuring effective information dissemination,
communication and reporting on ASEAN economic integration; and providing in-house capacity
development for economic integration monitoring, analysis and research.

The Directorate comprises of four divisions, namely:

Monitoring, Surveillance, and Coordination Division

Analysis and Monitoring on Trade, Industry & Emerging Issues Division

Analysis and Monitoring on Finance & Socio-Economic Issues Division, and

Statistics Division (ASEANstats)

The genesis of the AIMD was the Macroeconomic and Finance Surveillance (MFSO), which was set up by
the ASEAN Finance Ministers in 2010. Taking into account relevant developments, the mandate of the
MFSO was refocused in 2011 on monitoring ASEAN economic integration, and was renamed as the
ASEAN Integration Monitoring Office (AIMO). AIMO was responsible for managing the AEC 2015
Scorecard.

Effective 1 January 2016, and following endorsement of the ASEC New Structure at the 17th Meeting of
the ASEAN Coordinating Council, AIMO was regularised as AIMD.

ASEAN Good Regulatory Practice (GRP) Core Principles

The ASEAN Good Regulatory Practice (GRP) Core Principles was adopted at the 50th AEM Meeting in 29
August 2018 and subsequently endorsed by the AEC Council. ASEAN GRP Core Principles, which is a
practical, non-binding set of principles to serve as a guide to mainstream GRP into ASEAN work, and
assist ASEAN Member States in improving their regulatory practice and fostering ASEAN-wide regulatory
cooperation.

Icon-ASEANStats
ASEANstats is one of the divisions under the AIMD. Its primary function is to manage ASEAN cooperation
in statistics, including the setting up of regional guidelines and frameworks and other initiatives to
promote the development, availability, dissemination and communication of comparable and timely
ASEAN statistics, and development of statistical methodology and capacity across the region.

Through its database, ASEANstats provides the latest statistical updates on selected key indicators in
ASEAN including: International Merchandise Trade Statistics (IMTS), Foreign Direct Investment Statistics
(FDIS), Statistics of International Trade in Services (SITS), and select macroeconomic indicators.

ASEANstats releases regular publications including:

ASEAN Statistical Yearbook 2015

ASEAN Community in Figures (ACIF) 2016

ASEAN Statistical Leaflet 2016

AEC at a Glance

Joint Media Statement of The 50th ASEAN Economic Ministers’ Meeting (AEM)

1. The 50th Meeting of the ASEAN Economic Ministers (AEM) was held on 29 August 2018. It was chaired
by H.E. Chan Chun Sing, Minister for Trade and Industry, Singapore. The 50th AEM was preceded by a
preparatory meeting of the ASEAN Senior Economic Officials (SEOM). The AEM also held joint meetings
with the 32nd ASEAN Free Trade Area (AFTA) Council and the 21st ASEAN Investment Area (AIA) Council.

2. The Ministers exchanged views on global and regional developments and reviewed the
implementation of the ASEAN Economic Community (AEC) Blueprint 2025, including progress in ASEAN’s
external economic relations. The Ministers highlighted that Singapore’s Chairmanship theme of “resilient
and innovative” has created the momentum for ASEAN to make strides in its work on the digital
economy and e-commerce, among others, which contributed to the region’s long-term competitiveness
amidst the threat of escalating trade tensions and continued global uncertainties.

The Special ASEAN Economic Ministers Meeting Kuala Lumpur, 22 February 1979
The Special ASEAN Economic Ministers Meeting Kuala Lumpur, 22 February 1979

1. A Special Meeting of the ASEAN Economic Ministers to discuss the Australian International Civil
Aviation Policy as convened in Kuala Lumpur on 22 February 1979.

2. The Meeting was attended by H.E. Mr. Roesmin Nurjadin, Minister of communications of Indonesia;
H.E. Mr. Alfredo L. Juinio, Minister of Public Works, Transportation and Communications of the
Philippines; H.E. Mr. Hon Sui Sen, Minister for Finance of Singapore; H.E. Mr. Ong Teng Cheong, Minister
for Communications of Singapore; H.E. Mr. Goh Chok Tong, Senior Minister of State for Finance of
Singapore; H.E. Mr. S. Dhanabalan, Senior Minister of State for Foreign Affairs of Singapore; H.E. General
Surakij’ Mayalarp, Minister of Communications of Thailand; H.E. Dato’ Seri Dr. Mahathir bin Mohamad,
Deputy Prime Minister/Minister of Trade and Industry of Malaysia; H.E. Tan Sri Dato V. Manickavasagam,
Minister of Transport of Malaysia; and H.E. Datuk Lew Sip Hon, Deputy Minister of Trade and industry of
Malaysia.

3. H.E. Datuk Ali bin Abdullah, Secretary- General of the ASEAN’ Secretariat, was also present.

4. During the course of the discussion on the Australian ICAP, the ASEAN Economic Ministers noted that
the problem arising out of the imple- mentation of the Australian international Civil Aviation Policy
(ICAP) would not be confined to ASEAN and Australia alone but will also involve other countries. The
ASEAN Economic Ministers noted that the implementation of the new Australian ICAP, if allowed to go
unchallenged would set a precedent for other developed countries to adopt a similar policy. The Meeting
emphasized that the ICAP is a manifestation of the tendency of developed countries to change the rules
as soon as the developing counties have mastered the Id rules and overcome the obstruction posed by
them. Accordingly it as agreed that ASEAN should not only present a common front but also should take
stock of their economic strength so as to protect their economic interests.

5. The ASEAN Economic Ministers reiterated their commitment to the ASEAN common stand adopted at
the Seventh Meeting of the ASEAN Economic Ministers . They agreed on the following principles for
negotiations on the Australian Inter- national Civil Aviation Policy;

(a) The ASEAN airlines should be allowed to participate in the new low far, scheme between Australia
and Europe with or without stopovers in ASEAN countries. There should be no reduction in the present
capacity of ASEAN air. lines. With the reducation in fares, there is likely to be an increase in traffic which
necessitates extra capacity. In order to enable equitable participation, such in. crease in the capacity
would initially be taken up by the airlines of Indonesia, Malaysia, the Philippines and Thailand.

(b) The new Australian ICAP low fare scheme would not be viable for participation by the national
airlines of Indonesia Malaysia, Philippines-and Thailand because of their present limited capacity and
landing rights. To overcome this, ASEAN should :

(i) seek stopover rights at reasonable surcharge based on the 10% proposed by Singapore; and

(ii) obtain additional landing rights.

(c) It would be necessary for the ASEAN countries to act collectively in their negotiations with Australia
as well as other countries to secure better landing rights for the ASEAN airlines in general. (d) The
Meeting agreed the proposals on the ASEAN – Australia fares in the Singapore working paper be used as
a basis for’ computing these fares.

6. The Meeting agreed that the form of retaliatory measures to be taken will be indicated and effected
should the meeting of ASEAN Ministers and the Australian Ministers fail to yield the desired results.

7. The Meeting agreed that negotiations with Australia shall be held in Jakarta during the second week of
March 1.979. This Meeting will be attended by ASEAN Economic Ministers and Foreign Ministers and the
Australian Foreign Ministers and Minister of Transport.

8. The Meeting was briefed on the progress made by Malaysia towards implementing the ASEAN – Urea
Project (Malaysia). In this respect, a Meeting of shareholders Entities f the ASEAN – Urea Project
(Malaysia) would be held in April 1979 to negotiate a joint-venture agreement for the project.

9. in order to study the factors that could contribute to the strength of ASEAN for the purpose of
Protecting its economic growth, the Meeting agreed to establish a panel of experts to gather data and
conduct the studies.
10. The Delegation of Indonesia, Philippines, Singapore and Thailand express their sincere appreciation
to the government and people of Malaysia for the hospitality accorded to them and for the excellent
arrangements made for the Meeting.

The Meeting was held in the traditional spirit of ASEAN cordiality and solidarity.

The Special ASEAN Economic Ministers Meeting Bangkok, 16 October 1985

The ASEAN Economic Ministers held a special meeting in Bangkok on 16 October 1985 and considered
the issue, f rising protectionism in international trade especially in the US, with particular reference to
the Jenkins-Thurmond Bill.

The Ministers noted that,- ASEAN member countries collectively an, individually, have been making their,
utmost efforts in urging the US Administration, Congress and interested parties concerned to appreciate
the extent of the repercussions of the Bill. if passed, on the economic a-d social development of ASEAN
countries and the overall close and friendly relations between ASEAN and the US.

The Ministers reiterated ASEAN’s strong opposition to the Bill which, is discriminatory and contrary to
existing international law and US bilateral agreements. At the same time, the Ministers welcomed with
great appreciation within and explicit and firm stand of the US Administration in opposing the Bill. The
Ministers e-re also encouraged by the rising recognition. within and the understanding of members of
the Congress of the negative consequences of the Bill. The Ministers, however, recognize that the danger
is far from over. They, therefor further urge the US Administration and members of the Congress to
continue efforts toward the eventual rejection of the Bill which poses a grave danger not only to ASEAN
but also to the free international. trading framework from which all countries jointly benefit.

The Ministers further pointed out that the Bill, in adversely affecting the ASEAN economies’ ability to e-
port, will provide them with o alternative but to curtail trade in order to maintain eternal balance.
Moreover, ASEAN’s export -led economies will be considerably damaged and destabilized. Accordingly,
each ASEAN country will have to consider adopting measures to counter the damaging effect of the Bill.

The ASEAN Economic Ministers finally pointed out that beyond the economic impact which is real and
immediate, the Jenkins-Turmond and other protectionist bills have already and in- evitably created
within ASEAN a sense of uncertainty and disappointment with the United States. The constructive efforts
and progress made to nurture and consolidate US – ASEAN relations wi’II undoubtedly suffer a setback
with the passage of the Jenkins-Thurmond Bill.

The Informal ASEAN Economic Ministers Meeting Singapore, 29-30 October 1987
1. The Informal Meeting of the ASEAN Economic Ministers was held in Singapore on 29 – 30 October
1987. The Meeting was preceded by the Senior Economic Officials Meeting (SEOM) on 26 – 27 October
1987.

2. The Meeting was attended by H.E. Pengiran Dato Seri Laila Jasa Dr. Ismail bin Pengiran Haji Damit,
Minister of Development of Brunei Darussalam: H.E. Prof. Dr. Ali Wardhana, Minister Coordinator for
Economy, Finance, Industry and Development Supervision of Indonesia; H.E. Mr. Rachmat Saleh, Minister
of Trade of Indonesia; H.E. Mr. Hartarto, Minister of Industry of Indonesia; H.E. Datin Paduka Rafidah
Aziz. Minister of Trade and Industry of Malaysia; H.E. Datuk Dr. Lim Keng Yaik, Minister of Primary
Industries of Malaysia; H.E. Mr. Jose S Concepcion Jr., Secretary of Trade and Industry of the Philippines;
Hon. Miss Lilia R Bautista, Under secretary of Trade & Industry of the Philippines; Hon. Dr. Florian Alburo,
Deputy Director-General of Economic Planning of the Philippines; Hon. Mr. Roberto Ansaldo,
Undersecretary of Agriculture & Food of the Philippines; H.E. Brig-Gen (Res) Lee Hsien Loong, Minister
for Trade & Industry of Singapore; H.E. Dr. Lee Boon Yang, Minister of State for National Development of
Singapore; H.E. Dr. Arun Panupong, Minister Attached to Prime Minister’s Office of Thailand; H.E. Dr.
Supachal Panitchpakdl, Deputy Minister of Finance of Thailand; H.E. Mr. Prachuab Chaiyasan, Deputy
Minister of Commerce of Thailand: H.E. Mr. Korn Dabbarangsi. Deputy Minister of Industry of Thailand-,
and their delegations.

3. H.E. Mr. Roderick Yong, Secretary-General of the ASEAN Secretariat and members of his staff were also
present.

4. The ASEAN Economic Ministers at their 19th Meeting recommended to submit to the Third ASEAN
Summit in December 1987 initiatives to improve the ASEAN Preferential Trading Arrangement and to
implement a standstill and rollback of non tariff barriers (NTBs). As a follow-up to these
recommendations, the Ministers agreed to work out 5-year programmes to:

i) Introduce new items into the PTA Such that items remaining in tile exclusion lists should not account
for more than 10% of the traded items of individual countries, and that items remaining in exclusion lists
do not account for more than 50% of intra-ASEAN trade value. Efforts would also be made to achieve
harmonisation of the exclusion lists, and

ii) Deepen margins of preference for existing items in the PTA to 50%.
5. The Ministers agreed to recommend that the above programmes be implemented from I January
1988. In order to make the improvements to tile PTA scheme ignore predictable and transparent to the
private sector, the ASEAN Economic Ministers agreed to publicise the above programmes and their
respective product lists before the commencement of the programmes.

6. On the implementation of standstill and rollback of NTBS, the Ministers agreed to draw up a
Memorandum of Understanding containing the following salient principles and elements:

i) ASEAN’s commitmeiits on standstill and rollback should go beyond measurcs inconsistent with the
General Agreement on Tariffs and Trade (GATT).

ii) As member countries have agreed to a standstill on GATT inconsistent measures in the Uruguay
Round, only new measures that are GATT consistent may be introduced.

iii) Member countries should unilaterally rollback all GATT inconsistent measures However, with respect
to GATT consistent NTBS, ASEAN should negotiate on a preferential basis the rollback of such NTBS.
There will be a Surveillance Body responsible for monitoring the adherence of member countries
obligations and commitments to the agreement as well as provisions for constiltations and negotiations
to take place between member countries in the event of a stispeiisloii and violation of commitments to
the agreement.

7. The Ministers recommended that the implementation of the standstill commitments should apply
initially for a period of five years within which the negotiation for rollback. of non-tariff measures shall
be completed.

8. To enhance intra-ASEAN investments, the Ministers agreed to finalise an ASEAN Investiment

Guarantee Agreement before the Third ASEAN Summit. They also endorsed an improved AIJV agreement
to be signed before the Summit.

9. The Metting also noted the liberalization of the use of ASEAN Currencies in intra-ASEAN trade which
coidd be extended to intra-ASEAN investmient. In order to encourage this development, the Meeting
requested ASEAN countries to look further into any existing administrative practices or rules which
discourage the private sector from availliig themselves of tile facility.
10. In the ares of transportation and communications, the Ministers agreed the private sector should be
encouraged to establish a Broker Telegraph System to facilitate the exchange of information between
shipowners and shippers on the availability of shipping space and cargo.

11. The Ministers agreed that ASEAN should enhance closer cooperation and formulate a joint approach
on trade in services in the light of its growing importance.

12. The Ministers also reviewed other areas of cooperation discussed at the last meeting, especially
commodities, tourism, food, agriculture, forestry, and energy.

13. With regard to Japan’s proposal to set up an ASEAN Development Fund under its new economic
cooperation programme to assist in ASEAN economic cooperation and development, the Meeting
endorsed a common ASEAN position, Officials from ASEAN and Japan will be meeting in Kuala Lumpur on
12 – 13 November 1987 to discuss the proposed Fund.

14. The Ministers agreed that the ASEAN US Initiative (AUI) should aim to achieve a more predictable
access to the US Market for ASEAN Products, to promote greater investment flow and transfer of
technology to ASEAN and to provide an additional consultative- mechanism for ASEAN to resolve
economic issues with the US. The Ministers further agreed that exploratory discussion on the AUI
between coordinators should take place back-to-back with the 8th ASEAN – US Dialogue.

15. The Ministers expressed concern with the anti-tropical oil campaigns in the US and agreed that
ASEAN should enhance joint efforts and activities against such campaigns. ASEAN will be sending a,
Ministerial delegation to the EC in November 1987 to seew the dropping of the proposed levy on
vegetable oils as well as to raise other economic lssues of concern to ASEAN. The delegation will be led
by the Minister of Primary Industries, Malaysia, H.E. Dato Dr. Lim Keng Yaik.

16. The Ministers had an informal meeting With the United States Trade Representative, H.E. Mr. Clayton
Yeutter, where issues of concern to ASEAN were discussed. These included:

i) US Trade Legislation
ii) ASEAN – US Initiative (AUI)

lii) US GSP

iv) Shipping

v) Uruguay Round

The Department of SME Promotion (DOSMEP) under the Ministry of Industry and Commerce (MoIC),
supported by the Regional Economic Integration of Laos into ASEAN, Trade and Entrepreneurship
Development (RELATED) Project of the Lao – German Development Cooperation, ADB and World Bank,
organized a Seminar on the International MSME Day and the Dissemination of the SME Development
Plan 2016 – 2020 on 27 June 2018 in Vientiane.

The objectives of the workshop were to mark the celebration of the International MSME Day 2018 and
to disseminate the policies of the Five-Year SME Development Plan 2016-2020 at the central level for
their further actions in view of its implementation. More than 200 delegates, including senior leaders,
from the Ministry of Industry and Commerce, relevant line ministries, the Prime Minister’s Office,
development partners, the National Assembly, the Lao National Chamber of Commerce and Industry
(LNCCI), the Young Entrepreneurs’ Association of Laos (YEAL), business associations as well as companies
participated in the event.

Khemmani Pholsena, Minister of Industry and Commerce, highlighted during her opening remark that
MSMEs were a major force in terms of generating income and employment and in improving livelihood.
MSMEs cover more than 90 percent of the world economy and generate more than 70 percent of the
world employment. Therefore, the International MSME Day was marked and celebrated each year on 27
June to highlight the strong contribution of the MSMEs worldwide and the need to support MSMEs on
the way to their success, she said.
Khemmani Pholsena proposed herself to the relevant line ministries to translate the relevant SME
policies in coherence with their mandates into their respective prioritized action plans and to implement
them to help Lao SMEs to continuously grow and penetrate the ASEAN and the international markets.

Christian Olk, Head of Development Cooperation at the German Embassy in Vientiane, stated that the
German Development Cooperation was very proud to support the SME development in Laos. The
German “Mittelstand” was proverbial in English language and a worldwide success model, he
mentioned. Furthermore, he considered the SME Development Plan 2016 – 2020 an excellent tool to
prioritize, coordinate and monitor efforts to strengthen the development of Lao SMEs. At the same time,
the success of the SME Development Plan 2016 – 2020 depended on its effective implementation by all
relevant public and private sector stakeholders.

The seminar covered five main parts. During its first part, the seminar introduced the seven policies with
43 measures of the SME Development Plan 2016-2020. The second part focused on its implementation
at the provincial level. In preceding workshops held between January – March 2018, relevant provincial
departments deliberated the development and implementation of Provincial SME Development Plans
2018-2020 in the Centre, North, and South of Laos.

The third part of the seminar focused on the implementation of the SME Development Plan by the Lao
National Chamber of Commerce and Industry (LNCCI) and the establishment of SME Services Centres at
the provincial level. In the fourth part, delegates of relevant line ministries (Ministry of Finance, Ministry
of Education and Sports) and the Bank of Laos presented their commitments in realizing the top five
prioritized measures of the SME Development Plan in 2019.

The final part of the seminar was dedicated to Lao young entrepreneurs, as this year’s MSME Day
commemorates the contributions of youth entrepreneurship with the slogan, “The Youth Dimension”.
Young entrepreneurs representing Bizgital and Lao IT Development presented their best practices and
shared their business experiences in the areas of innovation and adoption of technology by SMEs in Lao
PDR. “Her Works” shared their experiences in quality enhancement in the ethnic handicraft business,
whereas, representatives of Smart Math showcased their creative services and market development
strategy in the smart education sector. Lao Specialty Products featured their market access approach in
the coffee sector. Xayyaloun Steel Formworks and Shore Rental Service Shop reported their experiences
with access to finance. Finally, MeAsia shared their innovative and new service delivery for SMEs.

Overview
Energy is key to the realisation of the ASEAN Economic Community (AEC) that calls for a well-connected
ASEAN to drive an integrated, competitive and resilient region.

The primary energy demand for ASEAN energy is expected to grow by an average of 4.7% per year from
2013 and to reach 1,685 million tonnes of oil equivalent (Mtoe) in 2035, according to the 4th ASEAN
Energy Outlook (2015). Both economic and demographic factors drive this energy demand and meeting
this successfully will require a balance of economic and supply security with due regard to social and
environmental impacts.

The challenge for ASEAN– to sustainably address this growing energy demand ahead of realising the
AEC– provides the continuing context for implementing the current ASEAN Plan of Action for Energy
Cooperation (APAEC) 2016-2025. The APAEC, which is the blueprint for energy sector cooperation, was
endorsed by the 32nd ASEAN Ministers on Energy Meeting (AMEM) on 23rd September 2014 in
Vientiane, Lao PDR and pursues the theme of “Enhancing Energy Connectivity and Market Integration in
ASEAN to Achieve Energy Security, Accessibility, Affordability and Sustainability for All”.

APAEC is implemented in two phases: Phase I covers the period 2016-2020 and consists of short to
medium-term measures to enhance energy security cooperation and to take further steps towards
connectivity and integration. Phase II covers the period 2021-2025 and will be developed based on the
progress of Phase I implementation. The APAEC Mid-Term Review in 2018 is expected to help guide
ASEAN to chart the pathways and directives for Phase II.

The key strategies of the seven Programme Areas of APAEC 2016-2025 Phase I are as follows:

1) ASEAN Power Grid: To initiate multilateral electricity trade in at least one sub-region by 2018.

2) Trans ASEAN Gas Pipeline: To enhance connectivity for energy security and accessibility via
pipelines and regasification terminals.

3) Coal and Clean Coal Technology: To enhance the image of coal through promotion of clean coal
technologies (CCT).

4) Energy Efficiency and Conservation: To reduce energy intensity[1] by 20% in 2020 based on 2005
level.

5) Renewable Energy: Aspirational target to increase the component of renewable energy[2] to 23% by
2025 in ASEAN Energy Mix[3].
6) Regional Energy Policy and Planning: To better profile the energy sector internationally.

7) Civilian Nuclear Energy: To build capabilities in policy, technology and regulatory aspects of
nuclear energy

The APAEC 2016-2025 is the third instalment in the APAEC series. The first APAEC was adopted at the
17th AMEM held on 3 July 1999 in Bangkok, Thailand. Meanwhile, the ASEAN Economic Ministers on
Energy Cooperation (precursor to the AMEM) was inaugurated on 29-30 September 1980. ASEAN began
back then by agreeing to implement a framework for cooperation in energy to enable ASEAN countries
to obtain security of supply, whereby AMS work towards lessening dependence on imported oil and
towards accelerating the development of indigenous energy sources and energy conservation.
Implementation of the APAEC continues to evolve amidst an increasingly complex balance of economic,
environmental and social objectives.

[1] Energy Intensity is calculated as Total Primary Energy Supply (TPES) per GDP PPP at constant 2005
USD.

[2] All sources of renewables, including hydro power of all sizes, but excluding traditional biomass.

[3] ASEAN Energy Mix is based on TPES.

Indonesia Becomes 9th ASEAN Member State to Deposit Instrument of Ratification of the ASEAN Charter
ASEAN Secretariat, 13 November 2008

Indonesia today deposited its instrument of ratification of the ASEAN Charter at the ASEAN Secretariat in
Jakarta. Mr Haris Nugroho, Acting Director for Political, Security and Territorial Treaties, Department of
Foreign Affairs of the Republic of Indonesia, handed over the instrument of ratification to Mr Nicholas T.
Dammen, Deputy Secretary-General of ASEAN, who received it on behalf of Dr Surin Pitsuwan, Secretary-
General of ASEAN.

Expressing delight at the news, Dr Surin said, “I would like to thank Indonesia for their support of the
ASEAN Charter process. Counting Indonesia, nine ASEAN Member States have now deposited their
instruments of ratification. We are right on track to have the entry into force of the ASEAN Charter by the
14th ASEAN Summit.”

Thailand is the remaining ASEAN Member State who has yet to deposit its instrument of ratification. The
ASEAN Charter shall enter into force on the thirtieth day following the date of deposit of the last
instrument of ratification with the Secretary-General of ASEAN.
The ASEAN Free Trade Area (AFTA)

The ASEAN Free Trade Area (AFTA) has now been virtually established. ASEAN Member Countries have
made significant progress in the lowering of intra-regional tariffs through the Common Effective
Preferential Tariff (CEPT) Scheme for AFTA. More than 99 percent of the products in the CEPT Inclusion
List (IL) of ASEAN-6, comprising Brunei Darussalam, Indonesia, Malaysia, the Philippines, Singapore and
Thailand, have been brought down to the 0-5 percent tariff range. [Figure 1]

ASEAN’s newer members, namely Cambodia, Laos, Myanmar and Viet Nam, are not far behind in the
implementation of their CEPT commitments with almost 80 percent of their products having been
moved into their respective CEPT ILS. Of these items, about 66 percent already have tariffs within the 0-5
percent tariff band. Viet Nam has until 2006 to bring down tariff of products in the Inclusion List to no
more than 5 percent duties, Laos and Myanmar in 2008 and Cambodia in 2010.

Following the signing of the Protocol to Amend the CEPT-AFTA Agreement for the Elimination of Import
Duties on 30 January 2003, ASEAN-6 has committed to eliminate tariffs on 60 percent of their products
in the IL by the year 2003. As of this date, tariffs on 64.12 percent of the products in the IL of ASEAN-6
have been eliminated. The average tariff for ASEAN-6 under the CEPT Scheme is now down to 1.51
percent from 12.76 percent when the tariff cutting exercise started in 1993.

The implementation of the CEPT-AFTA Scheme was significantly boosted in January 2004 when Malaysia
announced its tariff reduction for completely built up (CBUs) and completely knocked down (CKDs)
automotive units to gradually meet its CEPT commitment one year earlier than schedule. Malaysia has
previously been allowed to defer the transfer of 218 tariff lines of CBUs and CKDs until 1 January 2005.

Products that remain out of the CEPT-AFTA Scheme are those in the Highly Sensitive List (i.e. rice) and
the General Exception List. The Coordinating Committee on the Implementation of the CEPTScheme for
AFTA (CCCA) is currently undertaking a review of all the General Exception Lists to ensure that only those
consistent with Article 9(b)1 of the CEPT Agreement are included in the lists.

ASEAN Member Countries have also resolved to work on the elimination of non-tariff barriers. A work
programme on the elimination of non-tariff barriers, which includes, among others, the process of
verification and cross-notification; updating the working definition of Non-Tariff Measures (NTMs)/Non-
Tariff Barriers (NTBs) in ASEAN; the setting-up of a database on all NTMs maintained by Member
Countries; and the eventual elimination of unnecessary and unjustifiable non-tariff measures, is
currently being finalized.

In an effort to improve and strengthen the rules governing the implementation of the CEPT Scheme, to
make the Scheme more attractive to regional businessmen and prospective investors, the CEPT Rules of
Origin and its Operational Certification Procedures have been revised and implemented since 1 January
2004. Among the features of the revised CEPT Rules of Origin and Operational Certification Procedures
include: (a) a standardized method of calculating local/ASEAN content; (b) a set of principles for
determining the cost of ASEAN origin and the guidelines for costing methodologies; (c) treatment of
locally-procured materials; and (d) improved verification process, including on-site verification.

In order to promote greater utilization of the CEPTAFTA Scheme, substantial transformation has also
been adopted as an alternative rule in determining origin for CEPT products. The Task Force on the CEPT
Rules of Origin is currently working out substantial transformation rules for certain product sectors,
including wheat flour, iron and steel and the 11 priority integration sectors covered under the Bali
Concord II. Direction of Trade ASEAN’s exports had regained its upward trend in the two years following
the financial crisis of 1997- 1998 reaching its peak in 2000 when total exports was valued at US$ 408
billion. After declining to US$ 366.8 billion in 2001, as a result of the economic slowdown in the United
States and Europe and the recession in Japan, ASEAN exports recovered in 2002 when it was valued at
US$ 380.2 billion. The upward trend for ASEAN-6 continued up to the first two quarters of 2003. Intra-
ASEAN trade for the first two quarters of 2003 registered an increase of 4.2 and 1.6 percent for exports
and imports respectively. [Figures 2, 3 & 4]

Direction of Trade

ASEAN’s exports had regained its upward trend in the two years following the financial crisis of 1997-
1998 reaching its peak in 2000 when total exports was valued US$ 408 billion. After declining to US$
366.8 billion in 2001, as a result of the economic slowdon in the United States and Europe and the
recession in Japan, ASEAN expots recovered in 2002 when it was valued at US$ 380.2 billion. The upward
trend for ASEAN-6 continued up to first two quaters of 2003. Intra-ASEAN trade for the first two quarters
of 2003 registered an increase of 4.2 and 1.6 percent for exports and imports respectively. [Figures 2,3 &
4]

ASEAN Trade with Selected Trading Partners

The United States, the European Union and Japan continued to be ASEAN’s largest export markets.
Japan, followed by the U.S. and EU, were the largest sources of ASEAN imports. During the first half of
2002-2003, ASEAN-6 trade with major markets as a whole increased by 11.71 percent for exports and
6.91 percent for imports. However, ASEAN exports to the U.S. and India and imports from Canada and
India declined during the same period

ASEAN Investment Area (AIA) Council

The AIA Council is the Ministerial body under the ASEAN Economic Ministers responsible for overseeing
the implementation of the ASEAN Comprehensive Investment Agreement (ACIA), ASEAN’s main
economic instrument to realise a free and open investment regime. It is composed of Ministers from the
ten Member States responsible for investment and the Secretary-General of ASEAN.

The Coordinating Committee on Investment (CCI) composed of senior officials responsible for investment
and other officials from other government agencies supports the AIA Council in carrying out its
functions.

Free Flow of Investment

A key element to establishing ASEAN as a single market and production base is having a free and open
investment regime where (a) non-discriminatory treatment is extended to ASEAN and ASEAN-based
investors, save for limited exceptions that are also due for progressive elimination; (b) rules and
regulations are made transparent; and (c) investors and their investments (i.e. covered investments)
enjoy protection.

ASEAN is achieving these via the implementation of the ACIA, which took effect on 29 March 2012. The
ACIA, as one of the economic instruments for realising regional economic integration, aims to create a
liberal, facilitative, transparent and competitive investment environment in ASEAN.

Comprehensive in scope it covers investment liberalisation, protection, promotion and facilitation. At

par with international best practices it adopts a single negative list approach, extends automatic most-
favoured nation treatment to all Member States, and carries a comprehensive and detailed investor-
state dispute settlement mechanism, among others. Forward looking, it prohibits performance
requirements, and contains provision on senior manager and board of directors (SMBD) to encourage
inflow of key foreign managerial and senior management personnel. Comprehensive and integrated in
approach, it revised, merged and improved upon theASEAN Investment Guarantee Agreement (ASEAN
IGA) and the Framework Agreement on ASEAN Investment Area(AIA Framework Agreement) and
provides a clearer interaction of provisions pertaining to investment liberalisation and protection under a
single investment agreement. ACIA supersedes these two precursor investment agreements (issued in
1987 and 1998, respectively) including their subsequent amendments.

ASEAN’s task now is to effectively implement the ACIA to ensure that the benefits from the Agreement
are realised with ASEAN and ASEAN-based foreign investors taking advantage of the opportunities that
the ACIA provides. ASEAN through the AIA Council and its subsidiary body (the CCI) has intensified its
efforts to support the implementation of the Agreement cognisant of the importance of the ACIA in
keeping ASEAN’s competitive strength vis-à-vis the changing economic landscape, and in achieving
ASEAN’s economic integration goal. It has given focus to: (a) completing the work pertaining to the build-
in agenda items; (b) promoting the ACIA and reaching out to businessmen and investors to create
awareness about the benefits of ACIA; (c) enhancing the capacity of ASEAN and its Member States in
implementing the Agreement; and (d) developing a regional cooperation work programme aimed at
supporting the work of ASEAN on investment liberalization, protection, promotion and facilitation.

Key Developments in the Implementation of ACIA

At the entry into force of the ACIA on 29 March 2012, ASEAN also issued the ACIA Schedule or the
Member States Reservation Lists. The Lists contains measures that are maintained by Member States
that do not conform to the National Treatment and SMBD provisions of the Lists are required to be
reduced or eliminated as prescribed in the Agreement.

The AIA Council endorsed the Modality to Improve and Eliminate the Impediments to Investment, which
sets out the process in carrying out the task to progressively reduce and/or eliminate non-conforming
measures in the Lists.

A vital component of the Modality is the adoption of the ASEAN Investment Peer Review Process that
enhances the operation of the transparency provisions of the ACIA. The Peer Review Process requires
the regular reporting of any changes in the law, rules and regulations, policies and administrative
guidelines that may significantly affect investments or commitments of Member States under the
Agreement. It also demands the reporting of any international agreement that a Member States has
entered into and grants preferential treatment.

Underway is the development of a mechanism by which changes or modification in the Schedule or

reservations of Member States could be effected.
ASEAN has implemented various activities to promote and create awareness on the new investment
agreement. It published an introductory booklet on ACIA in April 2012 and an ACIA Guidebook for
Businessmen and Investors in March 2013. It also recently organized an ACIA Socialization Forum in
cooperation with the Malaysia Investment Development Authority in Kuala Lumpur.

To have a greater reach in the promotion of ASEAN as a single investment destination, ASEAN is also
developing an ASEAN investment website that will serve as ASEAN’s gateway for sharing information on
investing in the region, and as a window for investors to learn and know more about ASEAN, its
opportunities and potentials.

ASEAN has stated a platform for strategic discussion among the Heads of the ASEAN Investment
Promotion Agencies on enhancing investment facilitation and promotion in ASEAN via the annual event
“The ASEAN Investment Forum”.

The link to the Fact Sheet on ACIA can be accessed here

The link to the ASEAN Comprehensive Investment Agreement and its Schedule can be accessed here