ASEAN Integration – Taking the Next Step

In 2015, the ASEAN Economic Community (AEC) was established as a milestone to mark the achievement of ASEAN as an open market with intra-regional tariffs virtually eliminated. However, the removal of tariffs introduced repercussions as countries seek to bring in other measures to protect domestic trade. These measures may come in the form of quotas, levies or embargoes and can result in trade obstructions and a rise in non-tariff barriers (NTBs). Such implications call for greater efforts to be channelled into addressing NTBs.

On the 25th of October 2018, Food Industry Asia (FIA) hosted a Lunch Series session to launch its latest white paper, ‘Removing Non-Tariff Barriers in ASEAN through Regulatory Convergence and Mutual Recognition in the Food Sector’. The white paper examined the progress of harmonisation efforts in ASEAN, highlighted key remaining challenges for the food sector and proposed recommendations for ongoing collaboration and partnership to support the realisation of an integrated market.

The lunch series also brought together some of the region’s premier thought leaders on the topic of ASEAN trade to discuss what is next for the region. The session was opened by Ms Teresa Lo, FIA’s Regulatory Affairs Assistant Manager, who shared snippets of the white paper. Following Ms Lo’s introduction was a presentation by Mr Cuong Ba Tran, Assistant Director, Trade Facilitation Division, Market Integration Directorate, ASEAN Secretariat. In his presentation, Mr Tran shared on the ASEAN instruments that are in place to facilitate economic integration. To foster effective engagement between stakeholders, Mr Tran raised the need for collaborative efforts to create greater awareness of the available ASEAN instruments, such as the ASEAN Solutions for Investments, Services and Trade (ASSIST), which was created to address the issues encountered by businesses during the trade of goods between borders. Mr Tran encouraged industry members to channel trade issues through the platform of ASSIST such that the gaps can be identified and raised to the ASEAN Sectoral Ministerial Bodies.

Cuong Ba Tran, Assistant Director, Trade Facilitation Division, Market Integration Directorate, ASEAN Secretariat, presenting on ASEAN framework that can be used to address non-tariff barriers

Afterwards, Mr Tran shifted the focus to ongoing harmonisation efforts, including the implementation of the Guidelines for the Implementation of ASEAN Commitments on Non-Tariff Measures on Goods which will commence next year. Under this commitment, member states have to notify draft measures and gather feedback before such measures are adopted and implemented. In line with the World Trade Organisation (WTO) agreements, this implementation seeks to ensure transparency of non-tariff measures (NTMs) and minimise trade-distortive effects of NTMs.

Mr Tran then joined a panel with fellow industry leaders Mr Adhi Lukman, Chairman of Indonesian Food & Beverages Association (GAPMMI) and Dr Pichet Itkor, Vice Chairman of Regulatory Affairs of Food Processing Industry Club at Federation of Thai Industries (FTI). The panel, moderated by Mr Ng Kim Keat, Chairman of FIA Science and Technical Committee, discussed the progress of ASEAN and the importance of collaborative efforts to address NTBs.

Adhi Lukman, Chairman, GAPMMI, sharing his observations on the rise of non-tariff barriers in the food sector

Mr Lukman and Dr Itkor started by sharing the challenges faced by industry members. Despite the introduction of ASEAN instruments that serve to harmonise regulatory frameworks of member states, the non-binding nature does not mandate the implementation at a national level. Thus, industry members continue to experience difficulty in assessing different markets due to fragmentation in regulations. Furthermore, the lack of regulatory impact assessment or economic impact assessment prior to the adoption and implementation of regulatory measures does not provide sufficient opportunities for stakeholder consultation.

Pichet Itkor, Vice Chairman, Regulatory Affairs of Food Processing Industry Club, Federation of Thai Industries, speaking about the need for engagement between industry members and regulators to ensure practical implementation of measures

Following that, Mr Ng opened up the discussion on the ways to work around the non-binding nature of ASEAN instruments. Mr Tran highlighted existing agreements that are legally binding, such as the ASEAN Trade in Goods Agreement (ATIGA) which stipulates the obligation of member states. He urged industry members to play a more active role in keeping member states in check on their obligations.

In addition, Mr Tran suggested industry members to raise trade issues through other platforms, such as the Coordinating Committee for the Implementation of the ATIGA (CCA), ASEAN Trade Facilitation Joint Consultative Committee (ATF-JCC), the ASEAN Consultative Committee for Standards and Quality (ACCSQ), other ASEAN sectoral bodies and technical working groups, ASSIST and World Trade Organisation (WTO).

L-R: Pichet Itkor, Federation of Thai Industries; Cuong Ba Tran, ASEAN Secretariat; Adhi Lukman, GAPMMI; Ng Kim Keat, FIA Science & Technical Committee (moderator); giving their perspectives on the progress of ASEAN and the importance of collaborative efforts to address non-tariff barriers

In closing, the panel agreed that the commitment from each ASEAN member state remains integral to materialise the goal of ASEAN as a single market. Besides, a proactive involvement of industry members to engage regulators and ASEAN Secretariat, could be the key in paving the way towards harmonisation.