Who is ASEAN?What does it do?Why was it formed? Early reaction to Vietnam war, etc.Where is it? Secretariat in Jakarta.
The world, not just the U.S. is paying a lot more attention to ASEAN.Part of ‘Pivot” to Asia.
Exports and imports are recovering from the 2008 financial crisis.U.S. was the largest trading partner of ASEAN as recently as 2004 with trade totallng $192 billion at the time. China is now ASEAN’s largest trading partner at $293 billion in 2010.
U.S. is the largest foreign investor in ASEAN. ASEAN is one of the largest destinations in the world for U.S. private investment.
Although ASEAN is not yet a community, investment already reflects the regional market.Although the country of Singapore is about the size of Manhattan and has a population of about 5 million, it is by far the largest destination for investment. Much is for regional operations.Investment in Singapore reflects free market, rule of law, ease of doing business.
Former Foreign Minister Yeo said it most clearly.
Study on the ASEAN Economic Community by ADVANCE, and other studies by McKinsey, estimate the benefits of integration.
ASEAN has been slowly integrating for 44 years.Integration is a largely top down process, Heads of State and Government at the top, Foreign Ministers and line agency Ministers provide ongoing political push, senior official and technical experts do the work. More than 600 meetings a year. These are the key documents from the Heads of State and Government eventually leading to the ASEAN Community. Informal organization until 2007.The ASEAN Charter provided legal identity.Blueprints provide very detailed list of actions to be accomplished in order to create the ASEAN Community by 2015.
Details of the planned ASEAN community are naturally complex. These are of most interest to U.S. business and govern much of our work.
The U.S. has an interest in successful ASEAN integrationPolitical/StrategicEconomic, including our commercial interestsDavid Carden, U.S. Ambassador to ASEAN, is from the private sector and is very active in representing U.S. business interests in the developing organization.
Over the years business has identified problems with doing business in ASEAN.Our work aims to reduce these problems.
U.S. engagement is at all levels, like ASEAN.Meetings of senior officials issue statements and decisions that guide our work.
Summit level meetings have changed relations with ASEAN dramatically.The man with the President is ASEAN Secretary General SurinPitsuwan. He manages the ASEAN Secretariat in Jakarta and represents the organization during his 5-year term.
This is the book that Secretary General Surin is handing to the President. It was produced by the ADVANCE program.
ADVANCE is the program that manages most of our cooperation with ASEAN.Principal funding comes from USAID and the State Department.In addition, there is growing cooperation from many other USG agencies with ASEAN. Nathan Associates implements ADVANCE for the USG. We work with numerous contractors and experts.
The Facility reaches out the and consults with the American business community.
The work in these ADVANCE programs aims to solve the problems separately identified by American business.
There has always been a lot of skepticism about ASEAN.Will it succeed? No one has mentioned Europe as an example, but there are many differences with ASEAN. No currency plans.No political pressure.Plans would implement easily identifiable economic benefits and address issues rasiedby business.
2015ASEAN EconomicIntegration & Implicationsfor ExportersJACK ANDRE, NATHAN ASSOCIATES INC.Southeast Asia NOW!Business Outlook ConferenceNovember 9, 2011 w w w. n a t h a n i n c . c o m
ASEAN • Five original members ―Indonesia, Malaysia, Philippines, Singapore, and Thailand ―Newer members are Brunei, Vietnam, Laos, Burma (Myanmar) and Cambodia • Founded in 1967 to ―Accelerate regional economic growth, social progress and cultural development ―Promote regional peace and stability 2
Why Is ASEAN Important to theU.S.? • Population about 620 million, total area of 4.5 million sq. km • Combined GDP approaching US$ 2.0 trillion, strong growth • U.S. two-way trade with ASEAN was about US$178 billion in 2010 • ASEAN is our 4th largest overall trading partner, also 4th largest market outside NAFTA • Accounts for 440,000 U.S. jobs 3
Trade Details • 2010 U.S. Exports to ASEAN were $ 70 billion, up 31% over 2009 ― Electronic products like unfinished semiconductors and integrated circuits ― Commercial aircraft and related equipment ― Other products include chemicals, agricultural products and machinery • 2010 Imports from ASEAN were $ 107.8 billion, up 17% over 2009 ― Electronic products, computer, peripherals and parts, though trade shifting to China ― Textiles/apparel 4
ASEAN Compared to otherRegional Investment Destinations • $157 billion U.S. Direct Investment in ASEAN in 2010 Is More than: ―China - $60 billion ―Japan - $113 billion ―Korea - $30 billion ―Australia - $134 billion 5
U.S. FDI by ASEAN Country U.S. Foreign Direct Investment in ASEAN, 2010 Indonesia 15,502 Malaysia 15,982 Philippines 6,579 Singapore 106,042 Thailand 12,701 Brunei 34 Burma (*) Cambodia 4 Laos (3) Vietnam 623 Total 157,464 $ million, Cumulative, Historical Cost Basis, Source: USDOC Survey of Current Business, September 2011, Table 14; (*) = + or - $500 k 6
ASEAN Integration • ASEAN is aiming at economic, political-security and socio-cultural integration by 2015. Why? ―Singapore Foreign Minister Yeo: ―By 2017 we know that China and India will be the major powers. By 2027, they will be very big powers…Our survival chances are higher if we have ASEAN, than if we don’t have ASEAN. And it is this which is really what is galvanising us.” 7
ASEAN Integration cont. • The economic case itself is compelling. Integration would: ―Raise GDP by 0.5% to 1% ―Greatly increase foreign investment, by an estimated 28% to 63% ― Provide greater efficiencies, cost of producing consumer goods down by 20% ―Benefit poorest member countries the most 8
Key ASEAN Documents • Bangkok Declaration (August 8,1967) • ASEAN Charter (2007) ― Provides ASEAN a stronger legal personality and makes it rules-based THE ASEAN ― Calls for creation of a human rights CHARTER body • Roadmap for an ASEAN Community ― Three community blueprints and the Initiative for ASEAN Integration (IAI) Strategic Framework and the IAI Work Plan 2. 9
Elements of the ASEAN Community ofInterest to Business Political Security Economic Socio-Cultural Pillar Pillar Pillar • Good governance • Economic • Regional integration environmental • Rule of law issues • Judicial systems • Trade and investment • Public health • Legal facilitation • Disaster infrastructure • SME integration management • Strengthen • Sustainable energy financial systems management and capital markets 10
U.S. Role • U.S. supports ASEAN integration ―Focus on major interests of U.S. business ―Approximately160 areas of cooperation ―State and USAID assistance of about $7 million per year ―The U.S. was first to name an Ambassador to ASEAN and opened a mission in Jakarta where the ASEAN Secretariat is located. 11
Problems Identified by Business • ASEAN has: ― Subscale markets. Companies can’t manufacture and market goods for the whole region. ― Unnecessary costs. Different product standards across member countries prevent businesses from standardizing products—adding 10 to 15% to costs. ― Unpredictable policies. Tariff rates can be determined by the judgment of customs officials rather than government policy, adding to costs and customs clearance times. 12
US Cooperation with ASEAN –Agreements • Joint Vision Statement for the ASEAN–U.S. Enhanced Partnership (AEP 2005) ― Set out broad goals for all pillars of ASEAN integration under the Vientiane Action Program • AEP Plan of Action (2006) ― 5 year plan; a new plan is will be approved this month • Trade and Investment Framework Arrangement (2006) - Led by USTR • Joint Declaration at each of the ASEAN-U.S. Leaders Meetings (2009 and 2010) 13
First ASEAN–U.S. LeadersMeeting, November 2009 ASEAN Secretary General Surin Pitsuwan shares with President Obama a copy of Realizing the ASEAN Community at the first ASEAN-U.S. Leaders Meeting in November 2010. 14
Detailed Information Available Virtual Copy Available at Google 15
U.S. Cooperation with ASEAN —Mechanisms ADVANCE Program (September 26, 2007) • Led by Nathan Associates ― With 15 US-based partners like East-West Center, Pacific Disaster Center, Louis Berger, Social Impact ― And 6 regional partners like Kenan Institute Asia, Asia Disaster Preparedness Center, Center for Strategic and International Studies (Jakarta) ― Operates for up to 8 years ― Four projects ASEAN-U.S. Technical Assistance and Training Facility ASEAN Single Window Project ASEAN Value Chain Project Lao BTA Compliance/WTO Accession Project 16
ADVANCE Activities of Interest toBusiness • Technical Assistance and Training Facility (TATF) ― The major part of our cooperation with ASEAN ― Key work areas include industrial standards development, trade facilitation, customs cooperation. ― Organizes meetings with ASEAN technical and Ministerial level officials ― Arranges for business meetings with key ASEAN and member government officials 17
ADVANCE Activities of Interest toBusiness, cont. • ASEAN Single Window: ― Support ASEAN goals to simplify submission, processing and decision-making for import and export procedures ― Private sector consultations include email news, case studies, brainstorming sessions, ASW web portal content requirements, etc.) • VALUE Project: ― Promotes integration of supply/value chains. ― Works with governments and companies. • Lao Project: ― Works with Lao officials on accession to WTO, ASEAN Community, Bilateral Trade Agreement with the U.S. 18
Which Pressures Are Centrifugal CentripetalGreatest? Economic Sovereignty Pressure advantages concerns from China India? Pressure from other partners, Japan,Intra-ASEAN U.S., EUdisputes,Preah Vihear,SCS, etc. Enhanced influence Indonesia’s “Post via G-20, UN, etc. ASEAN” policy ? 19