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48 - An Assessment of Services Sector Liberalization in ASEAN
- from ASEAN Economic Community
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- By Deunden Nikomborirak, Development Research Institute, Supunnavadee Jitdumrong, Colby College
- Edited in consultation with Kee Beng Ooi, Sanchita Basu Das, Terence Chong, Malcolm Cook, Cassey Lee, Michael Chai Ming Yeo
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- Book:
- The 3rd ASEAN Reader
- Published by:
- ISEAS–Yusof Ishak Institute
- Published online:
- 22 June 2017
- Print publication:
- 17 August 2015, pp 251-255
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Summary
INTRODUCTION
ASEAN has made a remarkable achievement in liberalizing trade in goods. The progress made in liberalizing trade in services, however, has not been as impressive. Liberalization efforts in services in the past have been focused on two areas: the promotion of trade services by using the GATS approach of request and offer of liberalization by services sector and the promotion of flows of skilled labour through the establishment of Mutual Recognition Arrangements (MRAs) of professional services.
ASEAN FRAMEWORK AGREEMENT IN SERVICES
ASEAN has completed seven packages of commitments to liberalize services trade thus far. But negotiations for the past fifteen years have resulted only in marginal liberalization of trade in services in ASEAN.
Lim (2008) quantified commitments made in AFAS compared to those made in the GATS. Table 1 illustrates the Sectoral Coverage Ratio (SCR) of AFAS commitments. SCR is defined as the ratio of GATS + AFAS sectoral coverage in the numerator and the GATS sectoral coverage in the denominator. That is, the larger the ratio, the more advanced are commitments made in the AFAS as compared with those made in the GATS. The minimum ratio, which is one, indicates that concessions made in the regional forum under the AFAS are not any more advanced than those made in the multilateral forum under the GATS.
As can be seen, except for Brunei, Myanmar and the Philippines, the SCR figures for member countries are marginally greater than one. The low SCR scores for Cambodia and Vietnam, however, can be explained by their already advanced liberalization commitments made in WTO (due to their relatively late accession) rather than their unwillingness to open up their services sector at the regional level. Table 1 shows quantitative indicators of individual ASEAN country's GATS commitments index. As mentioned earlier, Cambodia and Vietnam obtain the highest scores of 49.08 and 30.15, respectively. Brunei and Myanmar made very little concession in the GATS, while larger ASEAN economies such as Indonesia, the Philippines, Thailand, Malaysia, and Singapore, receive scores that range from the lowest at 9.52 for Indonesia to highest at 25.4 for Malaysia. For these countries, barring the Philippines, AFAS commitments are only marginal to those made in the WTO as the SCR figures are between 1.09 for Singapore and 1.56 for Indonesia. ASEAN's average SCR score is only 1.58.
3 - ASEAN Trade in Services
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- By Deunden Nikomborirak, Thailand Development Research Institute, Bangkok., Supunnavadee Jitdumrong, Thailand Development Research Institute (TDRI)
- Edited by Sanchita Basu Das, Jayant Menon, Rodolfo C. Severino, Omkar Lal Shrestha
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- Book:
- The ASEAN Economic Community
- Published by:
- ISEAS–Yusof Ishak Institute
- Published online:
- 21 October 2015
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- 28 November 2013, pp 95-140
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Summary
Introduction
ASEAN has made a remarkable achievement in liberalizing trade in goods through the ASEAN Free Trade Agreement (AFTA) where tariffs on virtually all imports within ASEAN have been reduced to zero, bar a few sensitive items since 2010 for the six earlier members. The progress made in liberalizing trade in services, however, has not been as impressive. Liberalization efforts in services in the past have been focused on two areas: the promotion of trade services by using the GATS approach of request and offer of liberalization by service sector and the promotion of flows of skilled labor through the establishment of Mutual Recognition Arrangements (MRAs) of professional services. After several rounds of negotiations and eight commitment packages since the ASEAN Framework Agreement on Trade in Services (AFAS) was established in 1995, the region has failed to liberalize services trade between member countries. Commitments made thus far are marginal to those already made in the WTO. As for MRAs, although several have been signed since 2005, their actual impact on promoting greater flows of professional services within the region is at best negligible.
At the 9th Summit in October 2003, ASEAN announced its intention to create an ASEAN Community based upon three pillars: the ASEAN Security Community, the ASEAN Economic Community and the ASEAN Socio-Cultural Community. The ASEAN Economic Community (AEC) envisions regional economic integration by 2015. In 2007, the 13th ASEAN Summit adopted the ASEAN Economic Community Blueprint (AEC Blueprint), a coherent master plan guiding the establishment of the ASEAN Economic Community 2015. The AEC Blueprint would establish ASEAN not only as a single market, but also as a single production base which requires the free flow of the factors of production, including capital and skilled labor.
This chapter seeks to assess the progress ASEAN has made thus far in liberalizing services trade within the region according to the milestones and targets stipulated in the AEC Blueprint. The first section provides an overview of the relative importance of the service sector to ASEAN economies. The second section describes the service trade negotiation modality and liberalization commitments made thus far under the AFAS as well as those prescribed in the AEC Blueprint. Section three examines the extent to which ASEAN member countries have met the liberalization milestones prescribed in the AEC Blueprint.
4 - An Assessment of Services Sector Liberalization in ASEAN
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- By Deunden Nikomborirak, Thailand Development Research Institute, Supunnavadee Jitdumrong, London School of Economics
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- Book:
- ASEAN Economic Community Scorecard
- Published by:
- ISEAS–Yusof Ishak Institute
- Published online:
- 21 October 2015
- Print publication:
- 06 May 2013, pp 47-78
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Summary
I. Introduction
ASEAN has made a remarkable achievement in liberalizing trade in goods through the ASEAN Free Trade Agreement (AFTA), where tariffs on virtually all imports have been reduced to zero within ASEAN 6 since 2010, bar a few sensitive items for six original members. The progress made in liberalizing trade in services, however, has not been as impressive. Liberalization efforts in services in the past have been focused on two areas: the promotion of trade services by using the GATS approach of request and offer of liberalization by services sector and the promotion of flows of skilled labour through the establishment of Mutual Recognition Arrangements (MRAs) of professional services. After several rounds of negotiations and eight commitment packages since the ASEAN Framework Agreement on Trade in Services (AFAS) was established in 1995, the region has failed to liberalize services trade between member economies. Commitments made thus far are marginal to those already made in the WTO. As for MRAs, although several have been signed since 2005, their actual impact on promoting greater flows of professional services within the region is at best negligible.
At its 9th Summit in October 2003, ASEAN announced its intention to create an ASEAN Community based upon three pillars: ASEAN Political-Security Community, ASEAN Economic Community, and an ASEAN Socio-Cultural Community. The ASEAN Economic Community (AEC) envisions regional economic integration by 2015. In 2007, at the 13th ASEAN Summit, the ASEAN Economic Community Blueprint (AEC Blueprint), a coherent master plan guiding the establishment of the ASEAN Economic Community 2015, was adopted. The AEC Blueprint will establish ASEAN not only as a single market, but also a single production base which requires free flow factors of production, namely capital and skilled labour.
This chapter seeks to assess the progress ASEAN has made thus far in liberalizing services trade within the region according to the milestones and targets stipulated in the AEC Blueprint. The first section provides an overview of the relative importance of the service sector to ASEAN economies. The second section describes service trade negotiation modality and liberalization commitments made thus far under the AFAS as well as those prescribed in the AEC Blueprint.
4 - Rules of origin in services: A case study of five ASEAN countries
- from PART 2 - Unexplored economic, political and judicial dimensions of GATS
- Edited by Marion Panizzon, Universität Bern, Switzerland, Nicole Pohl, Universität Bern, Switzerland, Pierre Sauvé
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- Book:
- GATS and the Regulation of International Trade in Services
- Published online:
- 03 September 2009
- Print publication:
- 10 July 2008, pp 111-138
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3 - Corporate Governance among State-Owned Enterprises in Thailand
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- By Deunden Nikomborirak, Thailand Development Research Institute (TDRI) in Bangkok, Saowaluk Cheevasittiyanon, Thailand Development Research Institute (TDRI) in Bangkok
- Edited by Sakulrat Montreevat
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- Book:
- Corporate Governance in Thailand
- Published by:
- ISEAS–Yusof Ishak Institute
- Published online:
- 21 October 2015
- Print publication:
- 23 December 2005, pp 54-84
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Summary
Much has been written about the governance of private enterprises, but very little on the governance of state-owned enterprises (SOEs). This is surprising considering that state enterprises continue to contribute a significant share of the national gross domestic product (GDP) in many countries, in particular, developing countries where the markets are not truly open to private competition. In case of Thailand, state enterprises contribute to a quarter of the country'sGDP. A probe into the governance of government enterprises is therefore long overdue.
The privatization trend has swept across the globe. Almost every country, large or small, most developed or least developed, has privatization on the list of its policy agenda. This is a result of increasing intolerance with inefficiencies that are inherent in most SOEs. The transfer of state ownership to private hands is expected to improve efficiency through the elimination of bureaucracy, mobilization of fresh capital, and superior supervision, and business acumen from private owners. Unfortunately, from experience, these improvements may not be forthcoming if competition or effective regulatory oversight is not in place. Privatization may lead to a deterioration in the quality of goods and services as private owners seek to cut costs, or to raise prices as they seek to maximize profits. Therefore, privatization is indeed not a panacea for the ills of SOEs.
In countries where rules and regulations have not been fully developed or the capacity to regulate is limited, state ownership of uncontestable markets may be superior to private ownership. It is easier to regulate government-owned enterprises as corporate information is much more easily accessible compared with private enterprises.
It is also easier to carry out social policies through a state enterprise than through a profit-maximizing private enterprise when universal service rules are not yet clearly established. That being said, state enterprises are, however, subject to two major downside risks — political intervention and state bureaucracy — which contribute to corruption and inefficiency. But there is much that can be done to reduce such risks, such as working towards greater transparency in key decision processes, holding executives accountable for their actions or allowing greater participation among stakeholders, and so forth.
3 - The Impact of External Changes and Japan's Role in Industrializing Thailand
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- By Somkiat Tangkitvanichdeunden Nikomborirak, Development Research Institute, Thailand, Deunden Nikomborirak, Development Research Institute, Thailand
- Edited by Ryokichi Hirono
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- Book:
- Asian Development Experience
- Published by:
- ISEAS–Yusof Ishak Institute
- Published online:
- 21 October 2015
- Print publication:
- 21 January 2004, pp 50-72
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Summary
Introduction
The fact that Japan has significantly contributed to the industrialization of Thailand can never be overstated. To begin with, Japan is one of the most important trading partners of Thailand. The value of export from Thailand to Japan in 2002 amounted to $10 billion, or about 14.5% of Thailand's total export. The value of import from Japan to Thailand in the same year amounted to $14.8 billion, or about 23% of Thailand's total import. In terms of investment, foreign direct investment (FDI) inflow from Japan to Thailand amounted to $620 million in 2002, second only to the flow from ASEAN.
In addition to the role of the private sector, the Japanese government also plays an important role in promoting industrialization in Thailand through financial support in the forms of loans and grants as well as technical support. The assistance has contributed to both the hardware and the software sides of the Thai industries. The former includes infrastructure development while the latter includes technology transfer, laws and regulation development and institutional building. During the economic crisis, the Japanese government and private sectors also contributed in alleviating the impact of the crisis. In particular, the Japanese government had initiated a number of projects that aimed at facilitating the recovery of Thailand and other ASEAN countries, most notably the New Miyazawa Initiative. Japanese multinational companies (MNCs) injected capital into their Thai affiliates in the form of loans or equity to retain the level of employment in these firms. Organizations in the third sectors, e.g., the Ja panese Overseas Development Corporation (JODC) and Association of Overseas Technical Scholarship (AOTS), also played important roles in developing human resources in Thailand after the crisis. The assistance and co-operation were highly recognized by the Thai government and private sectors. Indeed, the economic crisis has further strengthened the Japanese–Thai relations.
In future, Thailand and Japan need to deepen their co-operation in areas of mutual benefit. Examples of such areas include human resource development and SME support. The goal of this chapter is to assess the role of Japan in the process of industrializing Thailand in the past decades and discuss some areas for future co-operation
6 - Liberalization of air transport services
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- By Christopher Findlay, Professor of Economics in the Asia Pacific School of Economics and Management Australian National University, Deunden Nikomborirak, Research Director, Economic Governance Thailand Development Research Institute (TDRI), Bangkok
- Edited by Will Martin, The World Bank, Mari Pangestu, The World Bank
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- Book:
- Options for Global Trade Reform
- Published online:
- 22 September 2009
- Print publication:
- 27 March 2003, pp 117-144
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Summary
Introduction
Air transport, at least, the direct provision of the service, is currently excluded from the provisions of the General Agreement on Trade in Services (GATS) by a special annex. However the GATS also contains a provision that the
Council for Trade in Services shall review periodically, and at least every five years, developments in the air transport sector and the operation of this Annex with a view to considering the possible further application of the Agreement in this sector.
A review of the current treatment of air transport began in 2000 and participants were unable to reach agreement in December 2000 on how to proceed. A fundamental desire by many members to retain the current bilateral system of air traffic rights was an important consideration, although important technical issues revolved around the coverage of the exclusion. Although there does not appear to be much support for abolishing the annex, many members are interested in ways to improve the operation of this important sector (WTO 2001). While many of the recent changes in the sector, such as the formation of airline alliances, clearly have some important advantages, there are also significant concerns about issues such as market power at hub airports, and the asymmetries associated with some “open skies” agreements.
This chapter outlines the features of the current arrangements for the regulation of trade and investment in the sector. It reviews some routes to reform, including the multilateral track and options for dealing with air transport in the GATS.