Professor Walter Woon, SC, Chairman and Senior Consultant, RHTLaw Taylor Wessing 

Mr Tan Chong Huat, Managing Partner, RHTLaw Taylor Wessing

Distinguished Guests

Ladies and Gentlemen

Introduction

1.            Good morning. I would first like to thank the RHTLaw Taylor Wessing for inviting me to participate in the ASEAN Summit 2017. This Summit provides a valuable platform for us to come together as a community to generate conversations on how businesses can seize new opportunities in ASEAN. I am particularly heartened that the topics to be covered dove-tail with Singapore’s efforts to open up networks for businesses to access the ASEAN market, leveraging on the ASEAN Economic Community (AEC) and Singapore’s chairmanship of ASEAN in 2018.

The ASEAN Growth Story

2.            The AEC remains the cornerstone of Singapore’s foreign economic policy. ASEAN has consistently been Singapore’s largest trading partner, accounting for 25.7% (S$217.1 billion) of Singapore’s world trade. This year marks an important milestone for ASEAN as it celebrates its 50th anniversary. Looking back, ASEAN has achieved remarkable economic growth since its founding in 1967. ASEAN’s share of global GDP has almost doubled from 3.3% in 1967 to 6.2% in 2016. Today, ASEAN is the 6th largest economy in the world with a combined GDP of US$ 2.55 trillion, and real GDP growth of 4.8%.

3.            The reasons for doing business in ASEAN are compelling. First, ASEAN’s economic fundamentals are sound. ASEAN has recorded annual GDP growth of between 4.5% and 6.1% from 2012 to 2016. ASEAN is also expected to grow at a yearly average of 5.2% in the coming years (i.e. from 2017 to 2020). Second, prospects for ASEAN’s future growth are promising. ASEAN is expected to surpass Japan to become the fourth largest single market in the world by 2030 (after the EU, US and China). Third, ASEAN comprises a market of more than 600 million people and enjoys a demographic dividend. According to the Asian Development Bank (ADB), the size of the middle class in Southeast Asia is expected to rise from 24% in 2010, to 65% in 2030. By end this year, the number of middle class households in ASEAN will reach 85 million, up from 40 million in 2010.

Moving Towards AEC 2025

4.            Given its promising economic outlook, the question then is whether ASEAN can fully realise its potential collectively. This will largely depend on ASEAN’s efforts in deepening regional economic integration.

5.            In November 2015, we welcomed the realisation of the AEC. ASEAN’s journey towards deeper economic integration has in fact been a continuous one. This has created considerable opportunities for our businesses. Let me elaborate.

(a)             Virtually all goods in ASEAN already move throughout the region tariff-free. Exports to ASEAN Member States have also benefited from liberal rules of origin and ASEAN cumulation under the ASEAN Trade in Goods Agreement (ATIGA).

(b)             Businesses have also reaped benefits from services regulations that are less stringent and more transparent under the ASEAN Framework Agreement on Services (AFAS), and from more pro-business investment rules under the ASEAN Comprehensive Investment Agreement (ACIA).

(c)             The AEC has helped to improve the regulatory environment by harmonising and reducing complexity of standards for exports across a wide range of sectors including automotives, cosmetics and medical devices. ASEAN has also signed mutual recognition arrangements (MRAs) such as the ASEAN Sectoral MRA for Electrical and Electronic Equipment. Most recently, the ASEAN Sectoral MRA for Inspection and Certification Systems on Food Hygiene for Prepared Foodstuff Products was signed. This MRA will help eliminate duplicative testing and facilitate the movement of such food products across borders, thereby reducing time to market and production cost.

6.            ASEAN has also taken concerted efforts to address non-tariff measures (NTMs). Last August, ASEAN launched an online portal – the ASEAN Solutions for Investments, Services and Trade, in short “ASSIST”, for ASEAN-based companies to raise operational problems encountered on NTMs when exporting within the ASEAN region. The feedback received will thereafter be sent directly to the respective governments of ASEAN Member States for resolution. We encourage businesses to take advantage of this portal to raise feedback on the problems you may encounter when doing business in ASEAN.

7.           ASEAN is now embarking on its next phase of economic integration under the AEC 2025 Blueprint. The AEC 2025 Blueprint builds on the AEC 2015 Roadmap while focusing on newer issues that will meet modern business needs in the future global economy such as e-Commerce, global value chains and good regulatory practices, amongst others. It is vital for ASEAN to stay the course in deepening regional economic integration to enhance our value proposition as a compelling destination for economic activities and to fully realise our growth potential.

Singapore’s 2018 ASEAN Chairmanship

8.            Singapore will assume the ASEAN Chairmanship next year, taking over from the Philippines. We are looking to deepen regional connectivity to position the ASEAN region for increasingly seamless economic activity and growing opportunities, especially in the areas of the digital economy and innovation. Singapore has identified several areas of focus for our chairmanship.                                                                                                                                       

9.            First, initiatives on e-Commerce and the digital economy will be a key focus for our Chairmanship. Innovation and e-Commerce present immense opportunities as new growth sectors and enablers that businesses can tap into.

10.         Under the AEC 2025 Blueprint, ASEAN has established an ASEAN Coordinating Committee on Electronic Commerce (ACCEC) to further ASEAN’s work on e-Commerce. Singapore will work closely with ASEAN Member States to promote innovation, build up digital connectivity and facilitate e-Commerce flows in ASEAN to benefit businesses, especially the micro, small and medium-sized enterprises (MSMEs). This will include stream-lining regional trade rules governing e-Commerce to promote greater digital connectivity and lowering operating barriers to entry, so as to realise seamless movement of e-Commerce goods across the region.

11.         One example of a home-grown company that has done well in ASEAN through digitalisation is the e-Commerce start-up ShopBack, which offers cash rebates to customers who shop online. Since it started in 2014, ShopBack has outgrown its competitors and expanded their business to countries across ASEAN - Malaysia, Indonesia, the Philippines and Thailand. ShopBack has successfully immersed itself in regional markets and established connections and partnerships with regional e-Commerce merchants.

12.         Second, Singapore will pursue initiatives with ASEAN to improve trade facilitation to support internationalisation plans including for MSMEs. We intend to work closely with other ASEAN Member States towards the realisation of an ASEAN-wide Self-Certification regime and the ASEAN Single Window. 

13.         Under the ASEAN-wide Self-Certification scheme, businesses can look forward to lower transaction costs when exporting goods within ASEAN. Once authorised, businesses can self-certify goods that they export, instead of having to apply for Certificate of Origin forms so as to qualify for tariff concessions under the ATIGA. The ASEAN Single Window is a unique regional initiative aimed at linking the National Single Windows (NSWs) of ASEAN Member States. ASEAN countries have made significant strides in establishing their NSWs. Once the ASW is established, businesses can enjoy expedited customs clearance via the electronic exchange of information across borders, thereby improving the movement of goods and lowering administrative and time-to-market costs for businesses.

14.         Third, we will focus on deepening services and investment integration. Businesses in ASEAN will benefit from widened opportunities and enhanced investment environment in the ASEAN region.

15.     Lastly, Singapore will continue to improve ASEAN’s ties with external partners while preserving ASEAN centrality. ASEAN’s active participation in the global economy has anchored its relevance on the global stage. Our businesses have reaped benefits from ASEAN’s strong connections within and outside the region. ASEAN has maintained longstanding relations with its 10 dialogue partners which include the six dialogue partners with whom ASEAN has established Free Trade Agreements with - Australia, China, India, Japan, Korea and New Zealand. Negotiations are also ongoing for the Regional Comprehensive Economic Partnership (RCEP) Agreement.

16.         Ultimately, ASEAN businesses will drive the AEC while governments of the ASEAN Member States play the role of catalysts to support their internationalisation. Businesses will therefore need to continue to be nimble and adaptable, and attuned to new trends emerging from disruptive technologies and global developments. Together, we must stay open to trade, talent and ideas, and build deep capabilities to stay innovative, competitive and future-ready.

17.         On the part of the government, Singapore maintains strong commitment towards ASEAN’s vision of deepening economic integration and connectivity, and strengthening our partnership with ASEAN counterparts in pursuing these focus areas and plans.

Conclusion

18.         In closing, I will like to take this opportunity to thank the RHTLaw Taylor Wessing, for organising this conference. I am confident that the combined efforts of businesses, industries, policymakers, government and partners will allow us to better seize the vast opportunities in ASEAN. I am confident that today’s Summit will prove fruitful and yield valuable insights as you consider expanding your footprint in ASEAN.   

19.         Thank you.