ASEAN Ministers Approves to Strengthen Investment, Trade Services
The Economic Ministers of Southeast Asian countries (ASEAN) at the 25th ASEAN Economic Minister (AEM) Retreat meeting in Phuket, Thailand, on Tuesday (04/23). Photo by The Ministry.

JAKARTA (TheInsiderStories) – The economic ministers of Southeast Asian countries (ASEAN) agreed to strengthening trade and investment between the countries in the Southeast Asia region. This was manifested in the signing of the ASEAN Trade in Services Agreement (ATISA) and ASEAN Comprehensive Investment Agreement (ACIA).

Indonesian Minister of Trade Engartiasto Lukita said that the agreement could overcome the obstacles for service providers in ASEAN, especially Indonesia. In addition, it can create a stable and predictable climate for trade service and prepare for the integration and liberalization of the service sector in the future.

The Ministers hoped that the implementation in the framework of the ASEAN Economic Community could reduce trade barriers, especially market access among member countries, thereby strengthening the growth of intra-ASEAN trade.

With that, Lukita said, Indonesia would also benefit from resolving export barriers to countries such as Vietnam, the Philippines and Thailand.

This agreement, according to him, is a follow-up of the ASEAN Framework Agreement on Services (AFAS) framework agreed at the 44th AEM session in Siem Reap, Cambodia in 2012, which consists of the 10th AFAS package, 9th AFAS Finance Package and the 11th AFAS Air Transport Package.

Meanwhile, the fourth amendment to the ACIA protocol is an investment agreement in the ASEAN region consisting of four aspects of investment, namely protection, promotion, facilitation and liberalization of investment.

In the future, said Lukita, it is expected to increase the flow of investment directly to Indonesia from ASEAN countries.

ACIA contains more detailed arrangements for the element of Prohibition of Performance Requirements (PPR) as well as elements of the Trade Related Investment Measures (TRIMS) of World Trade Organization (WTO).

In addition, regarding the prohibition agreement related elements of the article “to supply exclusively from the territory of goods produced by the investment to certain regions or to the world market” in the PPR article and the transition of the ACIA reservation list from the single annex negative list format to two negative annex list within five years.

Furthermore, the Ministers also discussed some of ASEAN’ economic integration commitments that must be implemented this year, including ASEAN special priorities in the Thailand leadership in 2019 which took the theme “Advancing Partnership for Sustainability”.

Minister Lukita said that along with the development of the 4.0 industrial revolution, there would be potential interference with the ASEAN labor sector because technology would take over the role of humans. ASEAN needs to develop a flexible workforce that can move across sectors and adapt easily to the changes brought about by technological advances and innovation.

“Therefore, ASEAN must not only be defensive but also need to be more offensive on a number of issues. For example, trade and sustainable development because ASEAN also has interests,” he continued.

In addition, the Ministers also discussed and formulated a strategy for the completion of the Regional Comprehensive Economic Partnership (RCEP) by the end of 2019 by emphasizing the centrality of ASEAN and consolidating ASEAN’s joint position to be submitted to FTA partner countries.

The Ministers will meet again on the sidelines of the ASEAN Summit in June to ensure the progress of the negotiations is in accordance with the targets set and will approach India after the Indian election in the Troika format to ensure the completion of the RCEP negotiations in 2019.

In addition, the Ministers also exchanged ideas regarding the issue of the WTO Reformation. ASEAN basically supports the WTO reform agenda in order to ensure the continuation of the multilateral trading system, not because of the emergence of trade wars between the US and China.

Therefore, the Ministers stressed that ASEAN would encourage the need for the “Appellate Body” membership of the WTO to be immediately filled, as a top priority in the WTO Reformation, so that the system for handling trade disputes could function again.

Finally, the Ministers also discussed the trade policies of the European Union (EU) which tended to be protectionist and hampered the flow of trade in products of developing countries such as ASEAN.

The Ministers agreed that each ASEAN member country instructed its representatives in Geneva to jointly compile a statement on ASEAN’s tough stance on EU discriminatory and protectionist policies that were very detrimental to ASEAN.

Written by Daniel Deha, Email: daniel@theinsiderstories.com