Leveraging on Free Trade Agreements iadvisory Seminar Series: Doing Business in Indonesia April 29, 2015

Transcription

1 Leveraging on Free Trade Agreements iadvisory Seminar Series: Doing Business in Indonesia April 29, 2015 presented by: WONG CHIAN VOEN Mayer Brown Consulting Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the Mayer Brown Practices ). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe-Brussels LLP, both limited liability partnerships established in Illinois USA; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC ); Mayer Brown, a SELAS established in France; Mayer Brown JSM, a Hong Kong partnership and its associated legal practices in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. Mayer Brown Consulting (Singapore) Pte. Ltd and its subsidiary, which are affiliated with Mayer Brown, provide customs and trade advisory and consultancy services, not legal services. Mayer Brown and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.

2 FTA Benefits Trade in Goods Gradual removal of market barriers Tariff reduction and elimination Removal of non-tariff measures Improved access to markets Expanded marketplace Greater pool of supply Creation of integrated operational space Rationalization Specialization Cost-saving opportunities 2

3 Indonesia s Merchandise Trade Flows 2013 China Singapore US$ 18.2 billion (42.31% of ASEAN trade) Korea Japan India Australia US$ 5.7 billion (42%) US$ 13.1 billion (54%) US$ 31.3 billion (36.77%) US$ 28.6 billion (45.32%) ASEAN US$ 15 billion (44.44%) US$ 43.1 billion (47.53%) New Zealand US$ 1.3 billion (52.06%) Indonesia ASEAN+6 US$ billion (44.72%) EU28 US$ 22.4 billion (43.14%) United States US$ 19.2 billion (23.8%) Total Export: US$ billion Export to ASEAN+6 as % Total: 66% Export to ASEAN as % of Total: 21% Source: RIETI-TID

4 Road to ASEAN Economic Community (AEC 2015) ASEAN Community 2015 Bali Concord III (RCEP/EED) 2011 Cha-am Hua Hin Declaration on the Roadmap for the ASEAN Community ( ) ASEAN Economic Community Blueprint ( ) Entry into Force of ASEAN Charter 1998 Bali Concord II 2003 Vientiane Action Program ASEAN Vision ASEAN Investment Agreement (AIA); Hanoi Plan of Action (HPA) ASEAN Framework Agreement on Services (AFAS) ASEAN Free Trade Area (AFTA) 1967 ASEAN Preferential Trading Arrangement Birth of ASEAN 4

5 Single market and production base Competitive economic region Equitable Economic Development Integration into the global economy AEC Pillars The AEC will establish ASEAN as a single market and production base making ASEAN more dynamic and competitive with new mechanisms and measures to strengthen the implementation of its existing economic initiatives; accelerating regional integration in the priority sectors; facilitating movement of business persons, skilled labor and talents; and strengthening the institutional mechanisms of ASEAN. Source: ASEAN Economic Community Blueprint goods Competition Policy services investment Freer flow of capital skilled labor Food, Agriculture & Forestry Consumer Protection Intellectual Property Rights Infrastructure Development Taxation e-commerce SME Development Initiative for ASEAN Integration (IAI) Coherent Approach towards External Economic Relations Enhanced participation in global supply networks 5

6 Single market and production base Competitive economic region Equitable Economic Development Integration into the global economy AEC Pillars The AEC will establish ASEAN as a single market and production base making ASEAN more dynamic and competitive with new mechanisms and measures to strengthen the implementation of its existing economic initiatives; accelerating regional integration in the priority sectors; facilitating movement of business persons, skilled labor and talents; and strengthening the institutional mechanisms of ASEAN. Source: ASEAN Economic Community Blueprint goods Competition Policy services investment Freer flow of capital skilled labor Food, Agriculture & Forestry Consumer Protection Intellectual Property Rights Infrastructure Development Taxation e-commerce SME Development Initiative for ASEAN Integration (IAI) Coherent Approach towards External Economic Relations Enhanced participation in global supply networks 6

7 Free Flow of Goods Tariff Liberalization Average intra-asean tariffs declined (as of Feb 2015) ASEAN: 0.23% ASEAN-6: 0.03% CLMV: 0.55% Intra-ASEAN tariffs on most goods are at 0% ASEAN: 87% ASEAN-6: 99% CLMV: 72% 7

8 Free Flow of Goods Trade Facilitation Rules of Origin Wholly obtained or produced Not wholly obtained or produced Co-equal general rules 40% Regional value content Change in tariff classification (CTH) Product-specific rules Operational Certification Procedures Back-to-back CO Third-party invoicing Self-certification 1 st Pilot Project: Manufacturers & traders (Brunei, Cambodia, Malaysia, Myanmar, Singapore, Thailand) 2 nd Pilot Project: Manufacturers only (Indonesia, Lap PDR, the Philippines, Thailand, Vietnam) ASEAN/National Single Window e-co Form D ASEAN/National Trade Repository Harmonized Regulatory Regime, Mutual Recognition Arrangements (MRAs) on Conformity Assessment and Good Manufacturing Practices Electrical and electronic equipment Cosmetics Medical devices Medicinal products Non-tariff Measures (NTMs) NTM database Notify new measures to Secretariat Identification of non-tariff barriers (NTBs) Matrix of actual NTB cases 8

9 Existing Regional Economic Architecture ASEAN+1 FTAs China (2005) Korea (2007) Japan (2008) Australia-New Zealand (2010) India (2010) Bilateral FTAs Missing Links China-Japan Japan-Korea China-India Japan-New Zealand 9

10 Regional Comprehensive Economic Partnership (RCEP) Population, 2013: 3.4 billion people (48% of world) Share of World GDP (PPP), 2013: 34.2% Intra-regional trade: 45% of total 10

11 Opportunities for Imports into Indonesia Indonesia MFN Applied Duties Product Group Duty-free AVG in % Max Animal products Dairy products Fruit, vegetables, plants Coffee, tea Cereals & preparations Oilseeds, fats & oils Sugars and confectionery Beverages & tobacco Cotton Other agricultural products Fish & fish products Minerals & metals Petroleum Chemicals Wood, paper, etc Textiles Clothing Leather, footwear, etc Non-electrical machinery Electrical machinery Transport equipment Manufactures, n.e.s Source: WTO Indonesia s Liberalization Level under ASEAN FTAs AFTA 99.65% AANZFTA 95.1% ACFTA 93.0% AIFTA 80.9% AJCEP 97.4% AKFTA 99.0% 11

12 Opportunities for Indonesian Exports Major markets Agricultural products MFN AVG of traded TL Pref. margin Simple Wtd Wtd 1. India China European Union Malaysia Singapore Non-agricultural products 1. Japan China Singapore United States Korea, Republic of Source: WTO LIBERALIZATION UNDER ASEAN+1 FTAs AFTA AANZFTA ACFTA AIFTA AJCEP AKFTA BRN 99.65% 99.2% 98.3% 85.3% 97.7% 99.2% CAM 98.86% 89.1% 89.9% 88.4% 85.7% 97.1% IDN 99.65% 93.7% 92.3% 48.7% 91.2% 91.2% LAO 98.86% 91.9% 97.6% 80.1% 86.9% 90.0% MLS 99.65% 97.4% 93.4% 79.8% 94.1% 95.5% MYA 98.86% 88.1% 94.5% 76.6% 85.2% 92.2% PHI 99.65% 95.1% 93.0% 80.9% 97.4% 99.0% SGP 100% 100.0% 100.0% 100.0% 100.0% 100.0% THA 99.65% 98.9% 93.5% 78.1% 96.8% 95.6% VTN 98.86% 94.8% n.a. 79.5% 94.4% 89.4% AUS 100% CHN 94.1% IND 78.8% JPN 91.9% KOR 90.5% NZ 100% 12

13 Thank You Mayer Brown Consulting (Singapore) Pte Ltd Wong Chian Voen 13

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