ASEAN Integration & ICT Opportunities. Mark Hefner

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1 ASEAN Integration & ICT Opportunities Mark Hefner

2 Contents Some ICT Information ASEAN Introduction AEC Introduction ICT & ASEAN Integration International Business International Trade Rules ASEAN Framework Agreement in Services United Nations (UN)Central Product Classification Finding the AFAS Schedules Student task Conclusion

3 What is ICT? Information Technology Communication

4 Global ICT 3 billion people use the internet Almost 7 billion cell phone subscriptions ICT is a key driver in economic and social transformation 10% increase in broadband penetration increases GDP on average 1.3% 10% increase in mobile tele-density increases GDP by 0.7%

5 ICT in ASEAN (2011) ICT employs 11.7 million people ICT contributes more than $32 billion (1.45%) to the ASEAN GDP 78% of people in ASEAN use ICT Mobile penetration average between 1 and 138% However it is 100% in 5 ASEAN states Source: ICT Master Plan 2015

6 ASEAN An Introduction

7 ASEAN Association of South East Asia Nations The ASEAN Declaration was signed on 8 August, 1967 Thailand, Indonesia, Philippines, Malaysia, Singapore Brunei, Vietnam, Cambodia, Myanmar and Laos Purpose: Regional Cooperation, economic growth, social progress, cultural development, collaboration, mutual assistance and raise the living standards ASEAN Today 2.2 Trillion US Dollars Trillion Baht 625 Million People

8 Number of People (000) 2013 Population 248, , , , , , , , ,399.2 Brunei Darussalam Cambodia Indonesia Lao PDR Malaysia Myanmar Philippines Singapore Thailand Viet Nam Country

9 Persons per km^ Population Density 7, Brunei Darussalam Cambodia Indonesia Lao PDR Malaysia Myanmar Philippines Singapore Thailand Viet Nam Country

10 In Millions of US Dollars 2013 Gross Domestic Product 862, , , , , , , , , ,408.0 Brunei Darussalam Cambodia Indonesia Lao PDR Malaysia Myanmar Philippines Singapore Thailand Viet Nam Country

11 GDP/Capita 2013 GDP per Capita 55, , , , , , , , ,908.6 Brunei Darussalam Cambodia Indonesia Lao PDR Malaysia Myanmar Philippines Singapore Thailand Viet Nam Country

12 Questions How many countries are in ASEAN? What are the names of the countries? Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam Which ASEAN country has the most people in one location? Singapore Which ASEAN country has the largest economy? Indonesia Which ASEAN country has the richest citizens? Singapore Which country has the fewest number of potential customers? Brunei Darussalam

13 ASEAN Integration

14 ASEAN Integration Timeline Kuala Lumpur Summit (1997) ASEAN Vision 2020 Bali Summit (2003) ASEAN Economic Community ASEAN Political Security Community ASEAN Social Cultural Community Cebu Summit (2007) Accelerate ASEAN Integration to 2015

15 ASEAN (Integration) Blueprints ASEAN Economic Community Blueprint(AEC) 2007 The AEC will transform ASEAN into a single market and production base, a highly competitive economic region, a region of equitable economic development, and a region fully integrated into the global economy ASEAN Political Security Blueprint (APSC) 2009 The APSC will ensure that the peoples and Member States of ASEAN live in peace with one another and with the world at large in a just, democratic and harmonious environment ASEAN Social Cultural Community Blueprint (ASCC) 2009 The primary goal of the ASCC is to contribute to realizing an ASEAN Community that is people centered and socially responsible with a view to achieving enduring solidarity and unity among the nations and peoples of ASEAN

16 ASEAN Economic Community An Introduction

17 ASEAN Economic Community (AEC) Goal Brunei Vietnam Cambodia Thailand Singapore Economic Integration Indonesia Laos Philippines Malaysia Myanmar SOURCE: AEC Blueprint

18 The 4 Pillars (Characteristics) of the ASEAN Economic Community A single market and production base A highly competitive economic region A region of equitable economic development A region fully integrated into the global economy. SOURCE: AEC Blueprint

19 Standards and Technical Barriers to Trade Tariffs Non-Tariff Barriers ASEAN Single Window Free Flow of Goods Rules of Origin Harmonizing & Standardization Free Flow of Skilled Labor Customs Integration e-customs Trade Facilitation Free Flow of Services Recognize Professional Qualifications Visas and Employment Passes for Skilled Labor PILLAR I Financial Services Liberalization Single Market and Production Base Greater Capital Mobility Investment Protection Free Flow of Capital Free Flow of Investment Capital Market Development and Integration Facilitation and Cooperation Liberalization Promotion and Awareness SOURCE: AEC Blueprint

20 Competition Policy E-Commerce Consumer Protection Taxation PILLAR II Highly Competitive Economic Region (Free Market) Intellectual Property Rights (IPR) Infrastructure Development ASEAN IPR Action Plan

21 PILLAR III Equitable Economic Development SME Development SME Action Plan Initiative for ASEAN Integration (IAI) Infrastructure, HR Development, ICT, Capacity Building for Regional Economic Integration, Energy, Investment Climate, Tourism, Poverty Reduction, Improvement of Quality of Life. Implement the ASEAN Policy Blueprint for SME Development Promote networking of SME Promote best practices in SME development Identify where IAI is needed in CLMV ASEAN-6 to support CLMV Get support from other partners such as the ASIA Development Bank or World Bank Help government develop social programs to mitigate any negative impact of economic integration Conduct regular studies to assess/monitor the impact of economic integration

22 PILLAR IV Integration into the Global Economy Coherent Approach towards External Economic Relations Review FTAs and Comprehensive Economic Partnerships (CEP) in regards to ASEAN internal integration commitments Establish a system for common approaches to ASEAN external economic relations while maintaining ASEAN centrality Enhanced participation in global supply networks Continue the adoption of international best practices and standards in production and distribution Assist the CLMV countries upgrade their industrial capability and productivity in order to enhance their participation in regional and global integration

23 External Relations ASEAN Centrality

24 ASEAN Centrality EAS RCEP India ASEAN+3 China, Japan, Republic of Korea ASEAN Brunei Cambodia Indonesia Laos Malaysia Myanmar Philippines Singapore Thailand Vietnam AAZNFTA Australia New Zealand United States Russia APEC Hong Kong Taiwan TPP Chile Peru Mexico Canada Papua New Guinea Pacific Alliance Columbia

25 Responsibilities Implementation Relevant sectoral ministerial bodies responsible for the implementation of the Blueprint and monitoring of commitments under their respective purview ASEAN Economic Ministers as the Ministers in charge of Economic Integration in the Council of ASEAN Economic Community accountable for the overall implementation of the Blueprint ASEAN legal instruments shall be ratified within 6 months of signing Develop a monitoring system and statistical indicators to track AEC integration process Translate AEC targets and milestones into national targets and milestones Communications Explain the AEC objectives, benefits, and challenges to government officials, key stakeholders, and the general public

26 AEC Blueprint Strategy

27 Current AEC Status as of August 2014 Of 281 objectives 229 Objectives accomplished (82%) 52 remain and due by Dec 31, 2015 (18%) SOURCE: 46 th ASEAN Economic Ministers Meeting, August, 2014

28 ICT and the ASEAN Community Blueprints

29 ICT & the ASEAN Political Security Community Blueprint APSC

30 ASEAN Political Security Community (APSC) A Rules-based Community of shared values and norms A Cohesive, Peaceful, Stable and Resilient Region with shared responsibility for comprehensive security A Dynamic and Outward-looking Region in an increasingly integrated and interdependent world.

31 A Cohesive, Peaceful and Resilient Region with Shared Responsibility for Comprehensive Security Strengthen cooperation in addressing non-traditional security issues, particularly in combating transnational crimes and other trans boundary challenges (B.4.1) Strengthen cooperation and assistance in combating and suppressing cyber crimes including cooperation among law enforcement agencies, taking into account the need of each country to develop laws to address cyber crimes

32 ICT & the ASEAN Social Cultural Community Blueprint ASCC

33 ASEAN Social Cultural Community (ASCC) ASCC Characteristics Human Development Social Welfare and Protection Social Justice and Rights Ensuring Environmental Sustainability Building the ASEAN Identity Narrowing the Development Gap.

34 Human Development Advancing and Prioritizing Education (A1): Use ICT to promote education and life-long learning particularly in underserved communities through open, distance education and e-learning Investing in human resource development (A2) Enhance the IT skills of the workforce in ASEAN through joint training programs and courses Promoting ICT (A4) Increase ICT literacy in ASEAN exp., women, children, the elderly and people with disabilities Promote positive use of the internet Encourage the introduction of ICT at all levels of education Initiate the early use of ICT at the primary school Enhance the use of ICT to promote e-learning Develop a workforce and manpower with high levels of ICT proficiency and expertise Facilitating access to applied Science and Technology (A5) Promote the development, use and sharing of digital content among ASEAN Member States

35 ICT & the ASEAN Economic Community Blueprint ASCC

36 ASEAN Economic Community A single market and production base A highly competitive economic region A region of equitable economic development A region fully integrated into the global economy

37 Single Market and Production Base ASEAN Single Window Accelerate the introduction of ICT for digitalized processing and exchange of trade information Information Infrastructure Facilitate high-speed connection among all national systems Intensify capacity building and training programs for national Computer Emergency Response Teams (CERTS) Strengthen the capacity, cooperation and coverage of ASEAN s cyber-security network Encourage ICT stakeholder participation in using and developing regional ICT infrastructure

38 Other ASEAN ICT Initiatives

39 E-ASEAN Framework Agreement 2011 To develop, strengthen and enhance the competitiveness of the ICT sector To reduce the digital divide within and amongst ASEAN Member Countries To promote cooperation between the public and private sectors To develop ASEAN Information Infrastructure.

40 ASEAN ICT Master Plan (AIM2015) ICT is an engine of growth for ASEAN countries Recognition for ASEAN as a global ICT hub Enhanced quality of life for peoples of ASEAN Contribute towards ASEAN integration

41 ASEAN E-Commerce Database Project To establish an ASEAN E-Commerce database - in order to gather and consolidate sufficient and comprehensive information on the state E- Commerce activities within ASEAN The establishment of a baseline for measuring E-Commerce readiness To provide the cooperating agencies of the ASEAN with this data collection model for simultaneous gathering of information To upload the findings to the ASEAN online database

42 ASEAN Connect Website A platform for the exchange of information on all aspects relating to the development of ICT policy and regulation in ASEAN

43 International Trade

44 Business Trades-Two Types Goods Food Electronics Houses & Cars Services Education Hospitality Internet

45 Goods (Products) The end result of the manufacturing process, to be offered to the marketplace to satisfy a need or want (1) For example, Televisions (1)

46 SERVICE A type of economic activity that is intangible, not stored, does not result in ownership and which is consumed at the point of sale (1). For example, tourism (1)

47 Domestic Business Markets Markets that are local or nearby Markets in their Province or state Markets that are National

48 Business-International National Market International Market Entry Strategies Exporting Turnkey Licensing Franchising Joint Ventures Wholly Owned Subsidiaries

49 International Trade Rules GATT, the WTO & GATS

50 General Agreement on Tariffs and Trade (GATT) For the selling of Goods PURPOSE: The substantial reduction of tariffs and other trade barriers and the elimination of preferences, on a reciprocal and mutually advantageous basis GATT agreements are negotiated and signed by most of the world s trading nations and ratified in their parliaments. A multilateral agreement regulating international trade by 8 rounds of negotiation that lasted about 47 years

51 Percentage of time used to negotiate/country Number of countries negotiating GATT Trade Rounds 25.00% Year Place/name Subjects covered Length of Negotiations per Country Qty Value Countries 1947 Geneva, Switzerland % time allowed each country to negotiate Countries Negotiating Tariffs 45,000 $ Annecy, France Tariffs % 1951 Torquay Tariffs Billion % 10.00% 5.00% 1956 Geneva II Tariffs $2.5 Billion Dillon Round Tariffs 4.9 Billion Geneva Kennedy Round Geneva Tokyo Round % Geneva Geneva 1945 (2 Years) Present Uruguay Round Doha Annecy 1949 (2 Years) Tariffs and anti-dumping measures $40 Billion Tariffs, non-tariff measures, framework agreements Tariffs, non-tariff measures, rules, services, intellectual property, dispute settlement, textiles, agriculture, creation of WTO, etc Torquay 1951 (2 Years) Geneva II 1956 (5 Years) Dillon Round 1961 Geneva, Kennedy (5 Years) Round 1967 (6 Years) Geneva, Tokyo Round 1979 (10 Years) Tariffs, non-tariff measures, agriculture, labor standards, environment, competition, investment, Round of Talks transparency, patents etc Geneva, Uruguay Round 1994 (15 Years) $300 Billion Doha 2001 (14 Years) SOURCE:

52 Questions What treaty helped to reduce tariffs and other trade barriers? GATT What does GATT stand for? General Agreement on Tariffs and Trade

53 GATT WTO Led to the creation of the World Trade Organization in 1995

54 World Trade Organization (WTO) 1995-Present An international organization dealing with the rules of trade (of goods AND SERVICES) between nations. WTO agreements are negotiated and signed by most of the world s trading nations and ratified in their parliaments. Its main function is to ensure that trade (goods and services) flows as smoothly, predictably and freely as possible. The goal is to help producers of goods and services, exporters, and importers conduct their business.

55 WTO Membership Map WTO Membership 160 Countries

56 General Agreement for Trade in Services (GATS) 1995 Service Sectors Business Communication PURPOSE of GATS: Create a credible and reliable system of international trade rules (for services) Ensuring fair and equitable treatment of all participants Stimulating economic activity through guaranteed policy bindings Promoting trade and development through progressive liberalization Construction and Related Engineering Educational Financial Distribution Environmental Health Related and Social Tourism and Travel Related Recreational, Cultural and Sporting Transport Other Services Not Included Elsewhere

57 GATS 4 Modes of Supply Mode 1 Mode 2 Mode 3 Mode 4 Cross Border Supply Consumption Abroad Commercial Presence Presence of Natural Persons Correspondence courses Internet Streaming Movie Service Tele-Medicine Website Developers Tourist Activities Medical treatment Language courses taken abroad. Medical services provided by a foreignowned hospital Courses in a foreignowned school Services supplied by a domestic branch or subsidiary of a foreign bank Doctors or teachers Intra-corporate staff transfers Short-term employment of foreign staff in foreign affiliates Short-term employment of construction workers or paid domestic helpers

58 Questions What does the acronym WTO stand for? World Trade Organization How many member countries are there in the WTO? 160 What is the name of the agreement that covers the trade in services? General Agreement for Trade in Services (GATS) How many service sectors are there? 12 What mode of supplying a service establishes a commercial presence? Mode 3

59 ASEAN Framework Agreement of Services (AFAS)

60 Based on GATS ASEAN Framework Agreement in Services (AFAS) 1995 Eliminate substantially, restrictions on ASEAN trade in services with the end goal of an ASEAN FTA in services (GATS Plus) Progressive negotiations on the liberalization of trade in services Currently, 8 rounds of negotiations completed; 72 sectors liberalized ASEAN Trade in Services Export of Services: 2005 $US Billion to 2011 $US Billion Import of Services: 2005 $US Billion to 2011 $US Billion Business Communication Construction and Related Engineering Distribution EDUCATIONAL Environmental Financial Health Related and Social Tourism And Travel Related Recreational, Cultural and Sporting Transport Other Services Not Included Elsewhere

61 Questions What is the purpose of the ASEAN Framework Agreement in Services? To remove restrictions from ASEAN trade in services

62 Schedule of Specific Commitments Business Services

63 International Trade Terms Liberalization None Unbound Commitments Schedule of Specific Commitments Horizontal

64

65

66

67

68 Horizontal Commitments Applies to all sectors

69

70

71

72 Please turn on your computers If they are not already on

73 Central Product Classification (CPC) United Nations Statistics Division Used to classify Goods and Services CPC Ver Google (Verb) CPC Ver.1.1 EXAMPLE: Hardware consultancy services (CPC Version 1.1: part of 83141)

74

75 CPC 83141

76 CPC 83141

77 CPC 83141

78 CPC 83141

79 CPC 83141

80 How to find the Schedules of Specific Commitments

81

82

83

84

85

86

87

88

89 Your Task You re an ICT business owner Either You have money to invest abroad in ASEAN (You will want to see a business plan from a potential investor) You need money to expand in Thailand (You will need a business plan to give to the potential investor) Look at the Member Countries' Horizontal Commitments and Schedules of Specific Commitments for the 8 th Package of Commitments under the ASEAN Framework Agreement in Services Find a country to either invest in another person s ICT business or attract to Thailand to invest in your ICT business Using the internet Try to find a real business to invest in from another ASEAN country Or Find a business that might want to invest in your business from another ASEAN country

90 Conclusion Don t expect 100% success from the AEC Integration Process Everything in ASEAN does not apply to you Understanding how ASEAN works can be beneficial If you have question please feel free to send them to me at Thank you for your interest in my presentation. Mark Hefner

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