Presentation : Free Flow of Services Asean Economic Community on 31 May 2011

1. presents
by
Ronnarong Phoolpipat
(รณรงค์ พูลพิพัฒน์ )
Director of Strategy on Trade in Services Division
Department of Trade Negotiations
ronnarong@moc.go.th

2. Members Accession
1) Thailand 1967
2) Malaysia 1967
3) Indonesia 1967
4) Philippines 1967
5) Singapore 1967
6) Brunei 1984
7) Vietnam 1995
8) Laos PDR 1997
9) Myanmar 1997
10) Cambodia 1999

3. Overview about ASEAN
ASEAN, was established on 8 August 1967 in Bangkok, Thailand, with
the signing of the ASEAN Declaration (Bangkok Declaration) by the Founding
Fathers of ASEAN, namely Indonesia, Malaysia, Philippines, Singapore and
Thailand. Brunei Darussalam then joined on 7 January 1984, Viet Nam on 28
July 1995, Lao PDR and Myanmar on 23 July 1997, and Cambodia on 30 April
1999, making up what is today the ten Member States of ASEAN.
ASEAN covers an area of 4.46 million km2, 3% of the total land a area of
Earth, with a population of approximately 600 million people, 8.8% of the
world population. In 2010, its combined nominal GDP had grown to USD $1.8
trillion. If ASEAN were a Single country, it would rank as the 9th largest
economy in the world and the 3rd largest in Asia in terms of nominal GDP.

4. ASEAN Community
 The ASEAN Vision 2020, adopted by the ASEAN Leaders.,
 At the 9th ASEAN Summit in 2003, the ASEAN Leaders resolved
that an ASEAN Community shall be established.
 At the 12th ASEAN Summit in January 2007, the Leaders
affirmed their strong commitment to accelerate the
establishment of an ASEAN Community by 2015 and signed the
Cebu Declaration on the Acceleration of the Establishment of an
ASEAN Community by 2015.
 The ASEAN Community is comprised of three pillars, namely
the ASEAN Political-Security Community, ASEAN Economic
Community and ASEAN Socio-Cultural Community. Each pillar
has its own Blueprint, and, together with the Initiative for
ASEAN Integration (IAI) Strategic Framework and IAI Work
Plan Phase II (2009-2015), they form the Roadmap for and
ASEAN Community 2009-2015.

6.  The ASEAN Charter is a constitution for ASEAN.
 The Charter came into force in December 2008
 The ASEAN Charter serves as a firm foundation in
achieving the ASEAN Community by providing legal status
and institutional framework for ASEAN.
 The ASEAN Charter has become a legally binding
agreement among the 10 ASEAN Member States.
 AMSs committed to build regional cooperation and
integration by establishing an ASEAN community
comprising the ASEAN Security Community, ASEAN
Economic Community and ASEAN Socio-Cultural
Community.

7. ASEAN Community ASEAN Security
Community
ASEAN
in year 2015 ASC
Socio-Cultural
Community
(ASCC)
ASEAN Economic
Community
(AEC)
ASEAN COMMUNITY
Year 2015

8. Economic : Major Trade Agreements
ASEAN Free Trade Area (AFTA) 1993
The ASEAN Trade in Goods Agreement (ATIGA)
ASEAN
ASEAN Framework Agreement on Services
(AFAS) 1995
Economic
Integrations
ASEAN Investment Area (AIA) 1998
The ASEAN Comprehensive Investment Agreement (ACIA)

10. Main objective of AEC
characteristic
AEC Single Market and
Production base
objective
To create a stable, Free flow of goods
prosperous and highly services, investment,
competitive ASEAN and skilled labour
economic region as
outlined in
Bali Concord II Freer flow of capital

11. KEY CHARACTERIS AND ELEMENTS OF AEC
Region of equitable Region Fully
Single Market and High competitive
economic Integrated into
production base economic region
development global economy
- Competition policy
- Free flow of goods - Consumer - Coherent
- Free flow of services protection approach
- Free flow of - Intellectual property towards external
investment - SME development
rights economic relations
- Free flow of capital - Initiative for
- Infrastructure ASEAN Integration - Enhanced
- Free flow of skilled development participation
labour - Energy cooperation in global supply
- Taxation networks
- E-commerce

12. ASEAN Economic Community
Liberalisation
Free Free Freer Free
Free
flow of flow of flow of flow of
flow of
goods investment capital skilled
services
labour

13.  Business services
 Communications
 Construction
 Distribution
 Education
 Environmental services
 Finance
 Health-related & social services
 Tourism & travel-related services
 Recreation, culture, sport
 Transport
 Other services

14. Mode 1 Country A
Country A Country B
The service crosses the border
Supplier A Consumer B
The consumer
Mode 2
crosses the
Supplier A Consumer B Consumer B
border
Supplier A established
Mode 3
a commercial presence Consumer B
Supplier A Supplier A
in country B
Service supplied through
Mode 4
presence of natural persons
Supplier A Supplier A Consumer B
of country A in territory of
country B

15. Types of Limitations to : MA
To remove limitations or
restrictions to the supply of - Number of services suppliers
services of Foreign service - Value of transactions or assets
suppliers
- Total number of operations or outputs
Market access - Total number of natural persons
Mode 1 (MA) - Type of legal entity
- Foreign capital participation
Mode 2 Example of measures inconsistent with National
Treatment Principle
Mode 3 National - Nationality requirement
Treatment - Land code
(NT ) - Minimum capital requirement
Mode 4 - Taxation measures
- Licensing requirement
- Transfer of technology requirement
- Ratio of capital and loans requirement

16. - Blueprint the and Strategic Schedule that each
ASEAN Member Country shall abide by and
implement the AEC by 2015.
- ASEAN Framework Agreement on Services
(AFAS) is as the rule applies to measures by
Member Countries affecting trade in services,
embarking rounds of negotiations to open up
trade in services among Member Countries.
- Coordinating Committee on Services (CCS) is
the technical working group carries out
liberalization of services through negotiations.

17. All AFAS rules are consistent with GATS
Nearly all provisions missing from AFAS
may be referred to GATS
The objective of AFAS is considered as a
GATS plus principle.
Package of Schedule of Commitments
under AFAS is similar to GATS
Schedule.

18. - ASEAN integration in services is generally carried out
through liberalisation process negotiated under CCS
- The outcome of negotiation reports to the AEM through
the SEOM.
-There are 6 Sectoral working groups under the CCS.
- The liberalisation of air transport, financial and
services incidental to non-services are undertaken by
ASEAN sectoral bodies such as ATWG, WC-FSL and CCI
respectively.
- CCS established Ad-hoc Expert Group on MRA under its
Business Services SWG.

19. There will be substantially no restrictions to
ASEAN services suppliers in providing services
and in establishing companies across national
borders within the region
The main action is to remove substantially all
restrictions on trade in services for the priority
services sectors (air transport, e-ASEAN,
healthcare and tourism) by 2010, Logistics
services by 2013 and all other services sectors by
2015

20. Package7th Package 8th Package 9th Package 10th
-Equity
Equity - Equity -Equity
Participation
participation Participation Participation
-Remaining
- Remaining -Remaining
-MA limitations
MA limitation -MA limitations
-NT limitations
- NT limitations
-Mode 4
limitations

21. 70%
PIS 49% 70% LOGISTICS
2008 2010 2013
Non-
70
49% 51% 70%
PIS
2008 2010 2015

22. PRIORITY SECTORS OTHER SECTORS
2008 : 51% 2008 : 49%
2010 : 70% 2010 : 51%
2013 : 70% 2015 : 70%
(LOGISTICS)

23. 2015
8 sub-sectors = total 128 sub-sectors
2014
20 sub-sectors = total 120 sub-sectors
2012
20 sub-sectors = total 100 sub-sectors
2010
15 sub-sectors = total 80 sub-sectors

24. ASEAN
Free Flow of
Framework
SEOM/AEM Services
Agreement on
in
services
AEC Blueprint
(AFAS)
Coordinating Committee
on Services (CCS)
Opening of Services market among ASEAN member
States (AMS)
MRAs
1. Removal of restrictions on Trade in Services for service suppliers
2. Liberalized sectors to be bound within a Schedule of commitment
3. Reservation of some remained limitations in a Schedule
4. Submission of a Schedule to ASEAN Secretarial (ASEC)
5. ASEC and AMS assess the Schedule of commitment
6. Conclusion and preparation for signature and implementation

25. Year 1967 – 2015
and beyond

26. More information :
Mr. Ronnarong Phoolpipat
0815651139
ronnarong@moc.go.th