ASEAN ECONOMIC COMMUNITY 2015 Thinking Globally, Prospering Regionally 1 ASEAN Awareness Forum II 30 September 2015, Milan, Italy

Outline of Presentation I. ASEAN – An OverviewII. What we set out to doIII. Where are we nowIV. AEC beyond

ASEAN – AN OVERVIEW 3 Source: en.wikipedia.org Population – 622 million GDP – US$ 2.6 trillion Trade in Goods – US$ 2.5 trillion Trade in Services -US$ billion Foreign Direct Investment – US$ billion 3

1992 Framework Agreement on Enhancing ASEAN Economic Cooperation 1997 ASEAN Vision Hanoi Plan of Action 2003 Declaration of ASEAN Concord II 2007 ASEAN Economic Community Blueprint AEC 2015 and Post 2015 Agenda 4 ASEAN – AN OVERVIEW

WHAT WE SET OUT TO DO ASEAN ECONOMIC COMMUNITY STRATEGIC SCHEDULE OF THE AEC BLUEPRINT ( ) Pillar 1 Single Market & Production Base Free flow of goods Free flow of services Free flow of investment Freer flow of capital Free flow of skilled labor Priority Integration Sectors Food, agriculture and forestry Pillar 2 Competitive Economic Region Competition policy Consumer protection Intellectual property rights Infrastructure development Taxation E-Commerce Pillar 3 Equitable Economic Development SME development Initiative for ASEAN Integration Pillar 4 Integration into the Global Economy Coherent approach towards external economic relations Enhanced participation in global supply networks HUMAN RESOURCE DEVELOPMENT RESEARCH AND DEVELOPMENT 5

6 WHERE ARE WE NOW - IMPLEMENTATION RATE 2007 AEC Blueprint Launched * 316 measures * Timeline shorten by 5 years to 2015 * Regular review to ensure measures are relevant * addition/deletion of measures 2015 * 506 measures * As of end July, 463 out of 506 measures implemented (91.5%)

7 WHERE ARE WE NOW - LOW HANGING FRUITS Tariff Elimination ASEAN % CLMV 90.86% Rules of Origin 40% local content Change in tariff subheading Self Certification Manufacturer and trader to decide 2 pilot projects in place ASEAN Single Window Scale down pilot project concluded Full-fledged pilot project commenced

8 WHERE ARE WE NOW - LOW HANGING FRUITS Harmonization of standards & technical requirements EEE (121) AU (15) PF (5) TMHS (17) PM (7) MD (15) RB (46) Accreditation & Conformity Assessment EEE  16 Testing Laboratories  5 Certification Bodies GP  4 inspection services Mutual Recognition Arrangement Implemented EEE GP Development Auto Products Food Hygiene Building & Construction Harmonization of Regulatory Regime Implemented EEE CS MD Development PF TMHS AU – Automotive CS – Cosmetic EEE – Electrical & Electronic Equipment GP – GMP Inspection of Manufacturers of Medicinal Products MD – Medical Device PF – Prepared Foodstuff PM – Pharmaceuticals RB – Rubber Based TMHS – Traditional Medicine & Health Supplement One Product, One Test, Accepted Everywhere

9 WHERE ARE WE NOW - LOW HANGING FRUITS National Trade Repository Tariff - MFN - Preferential (FTA/CEP) ROO NTMs Trade & Customs Law and Rules Services 8 packages concluded (WTO Plus) 9 th package being finalized 10 th package being negotiated Movement of Natural Person Concluded Architecture, Accountant, Engineer, Dental, Medical, Nursing, Surveyor, Tourism Professional Operationalized Architect Engineer Financial Integration 6 packages of financial services concluded (WTO Plus) ASEAN Banking Integration Framework ASEAN Exchanges

10 WHERE ARE WE NOW - LOW HANGING FRUITS Investment Liberalization Facilitation Promotion Protection Annual Peer Review Investment Policy Review Competition 8 ASEAN Member States have competition policy and law in place Cambodia and Laos will their policy & law in place next year Consumer Protection 9 ASEAN Member States have consumer protection law in place Cambodia’s law will be put in place next year Intellectual Property Right ASEAN Patent Examination Cooperation ASEAN TM View

Entry Into Force Size of Market Size of Economy ($) Total Trade ($) ASEAN B2.57 T608 B ACFTA (China) B12.95 T366.5 B AKFTA (Korea) B3.98 T131.4 B AJCEP (Japan) B7.18 T229.9 B AANZFTA (Aus-Nzl) B4.21 T81 B AIFTA (India) B4.61 T67.7 B AHKFTA (Hong Kong)Jul 2014 * 0.63 B2.89 T99.3 B RCEPMay 2013 * 3.45 B22.67 T875.8 B * On-going negotiations US$ 2.46 T 11 WHERE ARE WE NOW - LOW HANGING FRUITS

ELIMINATION OF NON-TARIFF BARRIERS INTEGRATION OF SMES INTO REGIONAL PRODUCTION NETWORKS AND GLOBAL SUPPLY CHAIN ENHANCEMENT AND DEVELOPMENT OF EXISTING/NEW INFRASTRUCTURE TO SUPPORT SUSTAINABLE GROWTH NARROWING OF DEVELOPMENT GAPS WITHIN AND BETWEEN ASEAN MEMBER STATES CONCLUSION OF RCEP NEGOTIATIONS TO SERVE AS A BUILDING BLOCK TO REGION-WIDE FTA 12 WHERE ARE WE NOW - UNFINISHED AGENDA

WHERE ARE WE NOW – IMPACTS ON ASEAN ECONOMIC PERFORMANCE 13 THIRD LARGEST ECONOMY IN ASIA SEVENTH LARGEST ECONOMY IN THE WORLD 622 MILLION PEOPLE (53% BELOW 30 YRS OLD) GDPUS$ 1.33 TUS$ 2.57 T GDP PER CAPITAUS$ 2,308US$ 4,130 TRADEUS$ 1.61 TUS$ 2.53 T INVESTMENTUS$ 85 B (5% OF WORLD FDI) US$ 136 B (11% OF WORLD FDI)

AEC BEYOND 2015 Stronger and renewed emphasis on enhanced connectivity and sectoral cooperation Global megatrends and emerging trade-related issues Good governance, transparency and responsive regulations Active engagement with private sector and other stakeholders 14

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