Passay City, Philippines: The 49th Meeting of the ASEAN Economic Minister (AEM) and related meetings was held on 7-11 September 2017 in Pasay City, the Philippines. For this high level meeting, the Cambodian Delegation is lead by H.E. PAN Sorasak, Minister of Commerce that also include representatives from Ministry Economy and Finance and Ministry of Foreign Affairs and International Cooperation. The 49th Meeting of the ASEAN Economic Minister (AEM) also include other related meetings with the ASEAN Dialogue Partners (Australia, China, India, Japan, Korea, New Zealand, Russia and U.S.).
Some of the noticeable meetings are:
The 49th ASEAN Economic Ministers Meeting (AEM)
• To date, under the ASEAN Trade in Goods Agreement (ATIGA), import duties on 99.2% of tariffs of Brunei Darussalam, Indonesia, Malaysia, the Philippines, Singapore and Thailand (ASEAN 6) have been eliminated, while the corresponding figure for Cambodia, Lao PDR, Myanmar and Viet Nam (CLMV) stood at 90.9%. Overall, 96.01% of all tariffs in ASEAN have been eliminated.
• The Ministers encouraged ASEAN Member States to redouble efforts and work towards the full implementation of the transposed ATIGA TRSs, ITA products, and PSRs in HS 2017 before 1 January 2018.
• The Ministers adopted the ASEAN Seamless Trade Facilitation Indicators (ASTFI), which was designed to measure and monitor the extent to which trade facilitation measures are implemented in the region through various ASEAN agreements, such as the ATIGA, The ASEAN Framework Agreement on Facilitation of Goods in Transit (AFAFGIT) and the various sectoral work plans relevant to trade facilitation.
• The Ministers welcomed the significant progress in the endorsement of the ASEAN Harmonised Tariff Nomenclature (AHTN) 2017 and its implementation towards a simplified uniformed classification of goods.
• The Ministers also welcomed the endorsed “Terms of Reference (TOR) on the Engagement of Private Sector in ASEAN Customs Meetings,” which provides clear guidelines to the private sector and addresses the increasing number of requests for consultations, and the Strategic Action Plans for Customs Integration Key Performance Indicators to guide ASEAN Member States in the implementation of ASEAN Customs Broad Direction for 2016-2025. The TOR is available on the ASEAN website.
• The Ministers welcomed the establishment of a Task Force for the development of the legal instrument for the implementation of the ASEAN Food Safety Regulatory Framework (TF AFSRF), which consists of relevant focal points from trade, agriculture and health, to develop instruments for implementation of the AFSRF, which was adopted collectively by the AEM, ASEAN Ministerial Meeting on Agriculture and Forestry (AMAF) and ASEAN Health Ministers Meeting (AHMM) in 2016.
• The Ministers noted the progress made in finalising the ASEAN Agreement on Regulatory Framework for Traditional Medicines and ASEAN Agreement on Regulatory Framework for Health Supplements and agreed on the importance of expediting the conclusion of negotiations for these two (2) Agreements in order to, implement the harmonised technical requirements on traditional medicines and health supplements in the region.
The 6th AEM-Canada Consultations (Including Dialogue with Canada – ASEAN Business Council (CABC))
• According to Canadian statistics, two-way merchandise trade was CAD 21.6 billion (USD 17.8 billion) in 2016. As a group, ASEAN ranked as Canada’s sixth largest merchandise trading partner. Meanwhile, the stock of Foreign Direct Investment (FDI) from Canada to ASEAN amounted to over CAD 8.5 billion (USD 7 billion) at the end of 2016, and the stock of FDI from ASEAN to Canada exceeded CAD 1 billion (USD 0.82 billion).
• The Ministers welcomed the the completion of the Preliminary Joint Feasibility Study for an ASEAN-Canada FTA, which was jointly conducted by the Economic Research Institute for ASEAN and East Asia (ERIA) on ASEAN’s behalf and the Global Affairs Canada.
• The Ministers welcomed the progress made in the implementation of the 2016-2020 Work Plan to Implement the ASEAN-Canada Joint Declaration on Trade and Investment, which is bolstering the ASEAN-Canada dialogue on trade and investment, stimulating growing bilateral trade and investment activities, and supporting private sector initiatives.
• The ASEAN Ministers expressed their appreciation for Canada’s ongoing support to ASEAN’s efforts to promote inclusive and innovation-led growth through technical assistance. The Ministers noted that CAD 22.9 million (USD 18.8 million) is being channeled by Canada to support the various initiatives being pursued in collaboration with relevant ASEAN sectoral bodies such as Canada-OECD Project for ASEAN SMEs, which is a Canada-ASEAN initiative aimed at creating more competitive, resilient and innovative SMEs.
The 16th AEM-MOFCOM (China) Consultations
• The merchandise trade between ASEAN and China, reached USD 368 billion in 2016, accounting for 16.5 per cent of ASEAN’s total merchandise trade. Foreign Direct Investment (FDI) flows from China to ASEAN amounted to USD 9.2 billion in 2016 accounting for 9.5% of total ASEAN’s FDI.
• Ministers welcomed the continued strong levels of trade and investment, and noted that China maintained its position as ASEAN’s largest trading partner since 2009 and continued to be ASEAN’s fourth largest external source of FDI.
• The Ministers noted the implementation status of the Protocol to Amend the Framework Agreement on Comprehensive Economic Cooperation and Certain Agreements thereunder between ASEAN and China (ACFTA Upgrading Protocol).
• The Ministers noted the activities undertaken to implement the Joint Statement between ASEAN and China on Production Capacity Cooperation, including the development of industrial parks, which stimulated the growth of businesses in the concerned ASEAN Member States. After the release in September 2016, the bilateral investment and economic cooperation between ASEAN and China has been stronger, shown by the increase of China’s direct investment to ASEAN reached USD 4.8 billion during the first seven months of 2017.
• The ASEAN Ministers congratulated China for the successful conclusion of the 13th China-ASEAN Expo 2016 under the theme of “Building the 21st Century Maritime Silk Road, Forging an Even Closer China-ASEAN Community of Common Destiny” in Nanning, China on 11–14 September 2016.
• The Ministers noted the developments in the ASEAN-China Connectivity Cooperation and the outcomes of the Belt and Road Forum held in May 2017, which was attended by Heads of Government/State from 29 countries.
• The Ministers welcomed China’s proposal to better synergise the Belt and Road Initiative with ASEAN’s development strategy in order to further enhance China-ASEAN economic and trade relations.
• The Ministers noted the progress made in the discussion on the proposed Joint Statement between China and ASEAN on Further Deepening the Cooperation of Infrastructure Connectivity, andtasked officials to work on a joint statement to be issued during the 20th China-ASEAN Summit.
• The Ministers noted with appreciation for China effort to organise the first China International Import and Expo in 2018, and encouraged the active participation of the ASEAN Member States.
The 14th AEM-ROK Consultations (Including Dialogue with ASEAN-Korea Business Council (AKBC))
• The Ministers noted that since the AKFTA took effect in 2007, according to Korean statistics, ASEAN-Korea bilateral trade has increased by 92.3 per cent to USD 118.84 billion in 2016, up from USD 61.81 billion in 2006. Foreign Direct Investment (FDI) flows from Korea to ASEAN stood at an annual average of USD 6 billion in the past 10 years (from 2007 to 2016), a 5.4 times increase compared to the past 10 years before AKFTA took effect (from 1997 to 2006). With these developments, ASEAN took its position as Korea’s second largest trading partner and Korea’s second largest investment destination. Among ASEAN’s Dialogue Partners, Korea maintained its position as ASEAN’s fifth largest trading partner and ASEAN’s fifth largest external source of FDI.
• The Ministers noted the progress made towards the implementation of the Third Protocol to Amend the ASEAN-Korea Trade in Goods Agreement (AKTIGA). Recalling the two-way trade target of USD 200 billion by 2020 as set by the Leaders, the Ministers looked forward to the early ratification and full implementation of the Third Protocol, which will further facilitate trade between ASEAN and Korea.
• The Ministers noted the progress in the negotiations for further liberalisation of Sensitive Track products under the AKTIGA and looked forward to substantive outcomes from the negotiation.
• The Ministers underlined the importance of the timely completion and implementation of the transposition of the AKFTA Tariff Reduction Schedules (TRS) and Rules of Origin Product Specific Rules (PSRs) from Harmonised System Codes (HS) 2012 into HS 2017 to facilitate cross-border transactions. In this regard, the Ministers were pleased to note the finalisation of the transposition of AKFTA PSRs from HS 2012 into HS 2017.
• The Ministers welcomed participation of Indonesia, Myanmar, and Thailand in the Technical Advice and Solutions from Korea (TASK) Programme and the approval of eight (8) projects under AKEC Fund to support the implementation of the AKFTA and to improve AMS’ capacity in the areas of trade facilitation, agriculture and fisheries, healthcare, tourism, and sustainable development. ASEAN Ministers expressed their appreciation to Korea for its continued support.
The 2nd AEM-Hong Kong, China Consultations:
• The negotiations for the ASEAN-HKC Free Trade Agreement (AHKFTA) and the ASEAN-HKC Investment Agreement (AHKIA) had been concluded as AHKFTA and AHKIA are important in strengthening economic integration and stimulating development in the region as they seek to leverage on ASEAN’s integrated market as well as HKC’s position as one of the world’s leading trade powerhouses.
• The Ministers also noted that the AHKFTA included a Chapter on Economic and Technical Co-operation (ECOTECH), which would be implemented through an ECOTECH Work Programme. The least developed members of ASEAN, including Cambodia will also benefit from the implementation of this programme. Hong Kong will spend HKD 25 million (3.2USD) over five years to implement the ECOTECH Work Programme upon the entry into force of the AHKFTA.
The AEM-USTR (ASEAN-U.S.) Consultations:
• The Ministers congratulate two-way merchandise trade between ASEAN and the U.S. continues to grow in 2016 to reach USD 211.8 billion, which accounted for 9.5 per cent of ASEAN’s total trade making the United States the third largest trading partner of ASEAN. The Foreign Direct Investment (FDI) flows from the U.S. to ASEAN amounted to USD 11.7 billion in 2016, placing the U.S. as ASEAN’s third largest external source of FDI.
• The Ministers endorsed the 2017-2018 ASEAN-U.S. Trade and Investment Framework Arrangement (TIFA) and the Expanded Economic Engagement (E3) Initiatives Work Plan, and encouraged officials to focus on developing concrete initiatives that will expand free and fair trade, and increase jobs and economic growth in the United States and ASEAN.
• The Ministers supported the conclusion of the ASEAN-U.S. Cooperation in Fostering Trade in Telecommunications and Information Technology Services and welcomed the launch of the U.S.-ASEAN Connect framework in September 2016 through the four areas of energy, innovation, policy and business, and the establishment of the U.S.-ASEAN Connect Center in Jakarta. U.S.-ASEAN Connect has been providing opportunities for ASEAN and the United States to stay connected through better access to expertise, information and resources of the U.S. government and private sector.
• The U.S. and ASEAN Ministers welcomed the ratification of the Protocol on the Legal Framework to Implement the ASEAN Single Window (ASW) which enables the exchange-ready Member States to transition to Live Operation.
The 22nd AEM – CER (ASEAN-Australia-New Zealand) Consultations:
• Australia has been ASEAN’s seventh largest trade partner since 2015. Total trade between ASEAN-Australia was recorded at USD 52.8 billion in 2016, while the total trade between ASEAN and New Zealand reached USD 7.9 billion in 2016. During the same period, the FDI inflow from Australia amounted to USD 3.4 billion, while FDI inflow from New Zealand amounted to USD 1.2 billion.
• Ministers adopted the Guidelines for Transposing Tariff Reduction Schedules under AANZFTA to streamline the transposition process and improve transparency and reaffirmed the importance of AANZFTA remaining relevant to business and of Parties continuing to engage with business on ASEAN-CER trade and investment issues.
• Ministers also welcomed New Zealand’s proposal for Parties in the future to enhance two-way information-sharing on how CER and ASEAN are pursuing their respective integration processes, in view of the significant developments in ASEAN integration since the Integration Partnership Forum began in 2011.
The 5th East Asia Summit (EAS) (ASEAN-Australia-China-India-Japan-New Zealand-Korea-Russia-U.S.) Economic Ministers Meeting:
• There are strong macroeconomic fundamentals of EAS economies and their resilient economic linkages will enable East Asia countries to withstand challenges emanating from the ever-shifting global dynamics.
• The Ministers recognised the importance of bilateral, regional, and plurilateral trade agreements being open, transparent, and WTO-consistent. They committed to work together with all WTO members to make the eleventh WTO Ministerial Conference achieve success.
• The Ministers also welcomed the contribution of newly established ERIA’s Policy Design Department and the report of the 10th ERIA Governing Board Meeting held on 9 June 2017 in Jakarta, Indonesia. The Meeting appreciated the efforts of ERIA to publish the five volume-book set to commemorate the fifty years’ anniversary of ASEAN.
The 23rd AEM – METI Consultation (ASEAN-Japan)
• The merchandise trade between ASEAN and Japan reached USD 201.9 billion in 2016, accounting for nine per cent of ASEAN’s total merchandise trade, and placing Japan as ASEAN’s fourth largest trading partner. The Ministers also noted that Japan was ASEAN’s second largest external source of Foreign Direct Investment (FDI) in 2016 with FDI flows from Japan to ASEAN amounted to USD 14 billion, accounting for 14.5 per cent of total FDI flows to ASEAN.
• The Ministers welcomed following further ASEAN-Japan cooperation to realize inclusive and innovation-oriented growth. i) ASEAN-Japan cooperation for further innovation through ASEAN-Japan Innovation Platform (e.g. Introduction of ASEAN-Japan-wide Connected Industries): ii) support for MSME’s inclusive growth: iii) support for introducing the rules for trade and investment facilitation on RCEP (e.g. promoting e-commerce, strengthening enforcement of intellectual property, and improving customs procedures): iv) support for ERIA to contribute economic integration of ASEAN. The Ministers also welcomed that ASEAN-Japan Fair will be held in Manila this November.
• The Ministers commended the activities undertaken by the ASEAN-Japan Innovation Network, including MOC signed by ASEAN Japan Business Council (AJBC) and the AJIN members on 7th April, namely survey on e-commerce utilization in East Asia and the policy proposal thereof by business jointly conducted with Japan External Trade Organization (JETRO), East-Asia Business Council (EABC) and ASEAN Business Advisory Council (ABAC), the initiative to enhance business matching in nurturing new industries by taking an active role from the planning stage of ASEAN Business and Investment Summit (ABIS) and the establishment of newly proposed ASEAN-BAC JBC Innovation Working Group to be co-chaired by AJBC.
Signing Two Documents during the 49th AEM:
H.E. PAN Sorasak has provided his views on global and regional developments with other Ministers as well as the progress made in implementing the ASEAN Economic Community (AEC) Blueprint 2025 including ASEAN’s external economic relations. The Ministers reaffirmed ASEAN’s commitment to open regionalism and the AEC 2025 agenda, notwithstanding the uncertainties surrounding global economic recovery, the rising trends of protectionism, and global policy uncertainties.
To further deepen the ASEAN Economic Integration, H.E. PAN Sorasak, with full power of delegation from Samdech Techo Prime Minister, has also signed two significant documents:
• The ASEAN Sectorial Mutual Recognition Arrangement for Inspection and Certification Systems on Food Hygiene for Prepared Foodstuff Products
• Third Protocol to Amendment the ASEAN Comprehensive on Investment Agreement (ACIA)
Bilateral Meeting with the U.S.-ASEAN Business Council Delegates:
At the side line of the 49th AEM, Cambodian delegation also held bilateral meeting with the U.S.-ASEAN Business Council delegation at noon on September 9th, 2017. The agenda of the meeting focuses mainly on Cambodian Information Communication Technology and Business Environment in Cambodia, specifically on the on-going discussion on E-Commerce and electronic payment.
H.E. PAN Sorasak briefly presented the meeting with the overview of E-commerce status in Cambodia, especially stressing on the rapid growth of the Internet users in Cambodia from 1.7 million users in 2011 to 7.16 million users in 2016, serving as potential opportunities for e-commerce. He has encouraged and welcomed these leading companies to invest in Cambodia.
HE. PAN Sorasak and the U.S. Business Council have shared positive views on such great business opportunities while at the same time acknowledged some challenges on e-commerce, taking into account the outburst technological innovation, which deemed to be at the early stage in IT infrastructure development, legal framework and e-payment for the country.
The U.S. ASEAN Business Council expressed their sincerest interest and welcomed the opportunity to do business in Cambodia and agreed to concertedly collaborate with related ministries and agencies to address the challenges and to improve e-commerce environment in Cambodia.