Singapore Becomes ASEAN Chair, Charts Path for Future of Regional Integration and Cooperation

18 January 2018

Last week, Singaporean Prime Minister Lee Hsien Loong launched his country’s chairmanship of the Association of Southeast Asian Nations (ASEAN) for 2018. As the Philippines passes along the baton to their city-state neighbour, Lee commenced the agenda-setting process and outlined directions for the bloc’s future with a focus on regional economic integration.

The annually rotating ASEAN chairmanship grants each member the opportunity to facilitate official meetings, introduce new projects, and ensure the functionality of ASEAN as a forum for cooperation.

“ASEAN’s economic community has opened up many job and business opportunities. Singapore companies have benefitted. With the ASEAN Free Trade Area, Singapore companies can reach ASEAN’s market of 630 million people – 100 times Singapore’s own population and more,” said the Prime Minister, speaking on the occasion of the launch at the Experience ASEAN carnival in Bishan-Ang Mo Kio Park on Friday. The ten-member regional bloc celebrated 50 years since its establishment in 2017.

The ASEAN Economic Community (AEC) was created in 2015 to ensure the free flow of goods, services, labour, and capital across the combined 622 million ASEAN citizens and US$2.6 trillion market. The Community is guided by the AEC Blueprint 2025 aimed at promoting integration both among and between members and the global economy and creating an innovative, competitive, and connected community.

“Singaporeans also benefit from the freer flow of goods and services. In our supermarkets we can buy Thai rice, Vietnamese coffee, Filipino dried mangoes, Indonesian kerupok, and Malaysian Musang King durians, all at very affordable prices,” Lee said.

Looking to priorities ahead for the region, “resilience” and “innovation” have been selected as guiding themes for the Singaporean chairmanship with the underlying aim of transforming ASEAN into “a better home for our future generations.” Lee identified in his remarks a role for ASEAN in strengthening collective resilience in the face of shared threats, including terrorism, cybercrime, and climate change. He also promised the promotion of innovation through dedicated schemes to leverage technology to create a dynamic and well-connected community.

Singapore has singled out e-commerce as a priority, given that ASEAN's digital economy is projected to reach US$200 billion by 2025. This initiative is backed by the blueprint, which counts consumer data protection, secure payment systems, and coherence between legal frameworks for online disputes as key areas of interest towards trade facilitation and improved connectivity and prospects for small businesses.

The ASEAN Single Window aims to make strides in this respect by expediting the clearing of shipments. Plans for its implementation were signed in September 2015 by ASEAN finance ministers.

The AEC Blueprint also aims to foster an inclusive, people-oriented community. “ASEAN is not just for diplomats and officials. ASEAN has benefitted all of us who live in Southeast Asia including Singaporeans,” Lee underlined on Friday.

Eyes on RCEP

The ten ASEAN member states are also actively undergoing negotiations together with their six FTA partners for the Regional Comprehensive Economic Partnership (RCEP), a deal of which Singapore has been a vocal supporter. Negotiations have been underway for five years, with the 20th and most recent round of talks concluding in South Korea in November, after which officials reaffirmed that an earlier target of concluding talks in 2017 would not be feasible. (See Bridges Weekly, 2 November 2017)

Delegates will meet in Indonesia in February to kick off deliberations for 2018, which has four rounds of meetings scheduled so far including a possible leaders’ gathering.

The pact will aim to cover goods, services, investment, competition, e-commerce, and intellectual property rights, among other topics. As negotiators begin wrapping up chapters, members are seeking to find consensus on various outstanding issues. For example, India is reportedly resisting pressure to open up 90 percent of its traded goods to competition, and has also sought to secure greater market access in services, especially with regard to the temporary movement of skilled workers across borders. India has a well-developed services sector, particularly in the information technology field.

New Delhi has been particularly cautious with granting tariff concessions to China, preferring not to expose its domestic industries to intense competition. Over the 2016-2017 period, India’s trade deficit with China amounted to US$51 billion. China is India’s largest trading partner.

Leadership changes

At the start of this month, Dato Lim Jock Hoi took office as the 14th ASEAN Secretary-General. The new Secretary-General was formerly Permanent Secretary at the Ministry of Foreign Affairs and Trade of Brunei and the country’s chief negotiator for the Trans-Pacific Partnership (TPP), another regional trade bloc that is moving towards completion. He will succeed former Secretary-General Le Luong Minh for a five-year term.

Speaking at the handover ceremony in Jakarta, Indonesia, the new Secretary-General said that “the immediate tasks for ASEAN would be to prepare the people of ASEAN for the new technological age, and to ensure the region advances towards inclusive growth and sustainable development.”

The constantly evolving global and regional landscape means that the challenges and opportunities facing ASEAN today are different compared to its early days,” he continued, underlining the importance of a united ASEAN in the face of these changes in order to continue progress towards closer economic integration in the region.

“The world is looking at ASEAN, and will measure its success on ASEAN’s resilience; how it stays on course in its integration efforts; and how it responds to emerging issues and developments arising from an interconnected world,” he said.

ICTSD reporting; “Indian resistance could spell trouble for RCEP,” BANGKOK POST, 8 January 2018; “RCEP: India hardens stand ahead of summit with ASEAN,” THE HINDU, 23 December 2017; “Trade deficit with China a matter of concern: Nirmala Sitharaman,” THE ECONOMIC TIMES, 25 July 2017; “Singapore takes the hot seat: Steering Asean amid challenges,” THE STRAITS TIMES, 14 January 2018; “Singapore atop Asean with a wary eye on China,” ASIA TIMES, 12 January 2018; “Great opportunities for India-ASEAN collaboration: Singapore minister,” THE ECONOMIC TIMES, 6 January 2018; “Singapore to focus on themes of resilience, innovation as ASEAN chairman,” CHANNEL NEWS ASIA, 12 January 2018.

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