ADBI, the ASEAN Secretariat, and the World Bank, co-organized the “Conference on Regional Integration of Services in ASEAN Countries: Progress and Challenges,” in Jakarta on the 18-19 June 2015 in order to help facilitate a dialogue on promoting services integration in ASEAN. While the benefits of services trade integration are well known, many challenges and issues remain, including enhancing the efficiency of services in the supply chain and addressing policy barriers to the services sector. During the forum, around 80 government officials, academic experts, and private sector practitioners joined the discussions on how to strengthen ASEAN’s services negotiation framework and accelerate the implementation of services integration under the ASEAN Economic Community and global production networks. Among the key policy issues discussed were measures to enhance the participation of ASEAN in services supply chains, assessment of policy barriers to the services sector, and the role of regulatory cooperation in achieving greater services trade and integration in ASEAN.
The aim of the Policy Dialogue will be to organize a substantive discussion on services trade and integration issues among policy makers, researchers, private sector and civil society stakeholders in the region so that there can be a shared understanding of the challenges ahead. More concretely, the discussion is supposed to benefit on-going discussions to strengthen ASEAN’s services negotiations framework and accelerate the implementation of services integration.
The ASEAN Economic Community (AEC) 2015 has set ambitious targets for creating a free flow of services in the region. According to the AEC Blueprint, ASEAN aims for the “free flow of trade in services, where there will be substantially no restrictions to ASEAN services suppliers in providing services and in establishing companies across national borders within the region, subject to domestic regulations.” The ASEAN Framework Agreement on Services (AFAS), signed in 1995, has also been the basis for eight successive negotiation rounds of liberalization commitments by ASEAN member countries as well as for negotiation of sector-specific commitments and Mutual Recognition Arrangements for professional qualifications.
There are strong reasons for ASEAN to emphasize services integration. On average, services contributed more than 40% of the total value added and total employment in 2013. Trade in service has also risen sharply, although there are notable differences across countries due to the differences in the levels of development, resource endowments, and trade intensities.
Overall, however, ASEAN countries lag behind in service sector development and services trade compared to other economies given their level of development. As ASEAN economies grow to become upper middle income economies, the services sector will become a key source of growth and employment. This will be true in two senses. First, in the accounting sense the increasing share of services in GDP and employment means strong growth in services and service productivity will be required for overall growth. Second, it will be important for spillover effects: productivity growth in services will raise productivity in other sectors also.
The services growth agenda is also closely related to another big challenge the ASEAN middle-income countries face: how to overcome the ‘the Middle Income Trap’. Worldwide, only 14 countries have managed to grow from middle income to high income countries since 1960. This failure to make the transition is because most middle income countries are unable to boost their productivity adequately to remain competitive as their wages increase and they are unable to innovate and diversify their economies to high manufacturing and services. As a result, on one side, middle income countries are lose out in traditional sectors to other developing countries where wages are low. On the other side, the middle income countries cannot compete with high-income economies where productivity and technological sophistication are much higher.
This activity is organized as a substantive discussion or forum on services trade and integration issues in ASEAN, and it involves the analysis of emerging policy issues from regional as well as medium- to long-term perspectives.
Economic, trade, finance and foreign affairs officials from ASEAN countries, ASEC staff, and trade experts, the business community, and civil society organizations in member countries.
Actively participate in discussions and share views and experiences with others.
- Improved capacity of government officials in understanding service policies and issues in emerging markets as well as in designing effective policies and recommendations.
- Enhanced dialogue and networking among government officials and experts from international organizations, academic institutions and the private sector to promote ASEAN services networks.
- Promotion of good governance policies and practices on services.
- Highlight the importance of services sector development and trade in ASEAN countries and the current state of development; progress in implementing services trade liberalization and integration based on policy data collected in all ASEAN countries.
How to register
Participation is by invitation only.
Partners and or sponsors
ASEAN Secretariat (AEC Department) and World Bank (East Asia and Pacific Department)