Secretary-General of ASEAN
at the
Second ASEAN Services Forum
“Raising the Competitiveness of ASEAN Services Industry”
Singapore, 9 May 2007
First of all, let me thank Minister Lim Hng Kiang for taking time off his busy schedule to join us this morning.
I would also like to thank our host, the Ministry of Trade and Industry of Singapore, and our main sponsor, the Government of Japan, for their precious support and cooperation that make this Forum possible. In addition, several reliable supporters of ASEAN have also chipped in. Our sincere appreciation for such continuous backing from good friends.
I am very pleased to see that this year we have again a well attended forum with excellent speakers and distinguished participants from the region and other parts of the world.
Ladies and Gentlemen,
This Second Forum is organised based on the success of the First Forum which was held two years back in July 2005 in Ha Noi, Viet Nam. We received useful assessments and recommendations from the stakeholders at the First Forum to move forward integration of trade in services in ASEAN. We hope this Second Forum will provide the opportunity for us to share with you the developments and progress in services integration in ASEAN and to receive your valuable feedback.
The time is momentous for ASEAN as the year 2007 marks the 40th year anniversary of ASEAN.
Today, ASEAN is in the process of building a community based on three pillars: the ASEAN Security Community, the ASEAN Economic Community and the ASEAN Socio-Cultural Community. At the 12th ASEAN Summit held recently early this year, ASEAN Leaders affirmed to have the ASEAN Community in place by 2015, before ASEAN turns 50.
ASEAN is increasingly recognised in Asia and the world. ASEAN has been instrumental in the recent efforts to foster economic integration in East Asia. This is in addition to the other dialogue mechanisms that had already been expanding and strengthening over the past decades.
Such progress is noteworthy considering that the integration efforts have started to intensify just a little more than a decade ago with the ASEAN Free Trade Area (AFTA) initiative. Now, we have to make every effort to provide investors with a competitive and attractive environment for investment and business operations in ASEAN.
Free flow of services is one of the important goals of building the ASEAN Economic Community, or in short AEC. Services sector is an indispensable part of our economies. Our growth and competitiveness in agriculture, manufacturing, and natural resources production is dependent on the availability and quality of the required services. If we do not deal with the services sector systematically, our economies will not grow as optimal as it could be and will not be as attractive to the foreign investors.
In fact, the importance of integrating ASEAN’s services as one of the critical elements in raising the competitiveness of ASEAN services industries had been taken seriously since its earliest time. Just about a year after the establishment of World Trade Organisation (WTO) and General Agreement on Trade in Services (GATS), the first-ever multilateral agreement on services trade, ASEAN signed its ASEAN Framework Agreement on Services (AFAS) in 1995. And to-date, ASEAN has worked through four rounds of negotiations to improve market access and national treatment for services suppliers conducting cross-border trade, resulting in five packages of commitments under this AFAS, the latest of which was signed just few months ago.
In addition, ASEAN is also working on Mutual Recognition Arrangements (MRAs) for qualifications in various professional services. An MRA enables professional service providers who are registered or certified in signatory Member Countries to be equally recognised in other signatory Member Countries, hence facilitating the flow of professional services providers in the region. We have concluded MRA for Engineering Services in 2005 and for Nursing Services in 2006. A number of other MRAs in various services are also in the final stages of negotiations.
An important trend which must be taken into consideration is the large chunk of FDI in services sector. Our records show that more than 50% of FDI coming into ASEAN are for services. We need to match policy development with the reality in the FDI scene. More incentives and rules to facilitate greater flow of FDI are required.
With the mandate set by ASEAN Leaders to achieve a free flow of services by 2015, with flexibility, the tasks ahead will not come easy. These tasks need to be charted and undertaken with strong collaboration among all stakeholders, including governments and private sector, industry players, etc.
Ladies and Gentlemen,
ASEAN’s drive towards the AEC cannot be substantiated without a well-thought out policy of dealing with trade in services. Moreover, ASEAN cannot gain adequate leverage in its current Free Trade Agreement (FTA) negotiations with its Dialogue Partners if we do not liberalise and accelerate ASEAN’s integration in services. To consolidate what ASEAN has accomplished so far with AFTA and its market integration efforts beyond Southeast Asia, ASEAN has to take the proactive approach and be on the services bandwagon. Some ASEAN economies may not be ready to contend with the more developed countries in managing the trade in services. However, ASEAN has never wavered in joining the wealthy and advanced parties at the main negotiating table.
This Forum is an excellent opportunity for all of us to exchange views and learn from each other’s experiences and share ideas concerning services integration and competitiveness. I therefore encourage all of you to actively participate and help ASEAN to advance this important arena of economic integration.
Thank you!