Deepening services and investment integration in the region

SERVICES are a key engine of growth in ASEAN, accounting for slightly more than half of the re­gion's economy over the last dec­ade. Travel, transport and other business services dominate ASEAN ser­vices trade.

Services sectors attract substantial for­eign direct investment (FDI) flows into the region, reaching almost 50 per cent of total FDI flow in the 10 years till 2016, accord­ing to data from ASEANStats.

Intra-ASEAN trade in services is also showing robust growth. Since 2012, the volume of intra-ASEAN trade in services has exceeded US$50 billion, with the ser­vices sector set to become an increasingly important pillar of regional growth.

As part of its 2018 ASEAN chairman­ship, Singapore is working to increase in-tra-ASEAN services trade and reduce im­pediments to investment, so as to boost ASEAN's attractiveness as a business and investment destination.

These are some of the related initiat­ives.

The ASEAN Framework Agreement on Services (AFAS)

Singapore is working closely with ASEAN Member States to complete the 10th Pack­age of Commitments under the ASEAN Framework Agreement on Services (AFAS), which was signed in 1995.

The AFAS is a longstanding commit­ment under the AEC Blueprint to substan­tially improvemarket accessfor ASEAN ser­vice providers and progressively reduce barriers to trade for service suppliers. The 10th Package is the final one and marks a significant milestone after 23 years of pro­gressive liberalisation of services trade among AMS.

The ASEAN Trade in Services Agreement (ATISA)

The next step under ASEAN's services in­tegration journey involves negotiating and implementing the ASEAN Trade in Services Agreement(ATISA), tofurther integrate ser­vices sectors in the region, increase in-tra-ASEAN services trade, and improve the competitiveness of ASEAN's services ex­ports.

It will complement ongoingeffortstoat­tract foreign direct investment and ex­change best practices across the region.

The ASEAN Comprehensive Investment Agreement (ACIA)

The ASEAN Comprehensive Investment Agreement was signed in 2009 and entered into force on March 29, 2012, with the aim of creating a free and open invest­ment environment in the region.

The ACIA covers almost all forms of in­vestment, with liberalisation provisions for key sectors: manufacturing, agricul­ture, fishery, mining and quarrying, as well as services related to these sectors.

The agreement protects investors by levelling the playing field and compensat­ing those who become negatively affected if a country modifies their commitments.

The ACIA covers not just ASEAN in­vestors but also investors based in ASEAN countries, to make the region more attract­ive to foreign investments.

Singapore will work to enhance the agreement as part of its 2018 chairman­shipbymaking improvementsin liberalisa­tion and transparency.

ASEAN Declaration on Cruise Tourism

ASEAN has the potential to generate growth of up to 4.5 million passengers cruising in South-east Asia by 2035 - a ten-fold increase from 2016.

This growing demand for cruise tour­ism is expected to spur advancements in regional port infrastructure, catalyse ship deployments and create spin-off benefits for local tourism industries and stakehold­ers across the region.

As part of ASEAN's ongoing efforts to transform South-east Asia into a vibrant cruising destination, the joint ASEAN Declaration on Cruise Tourism was officially endorsed in January 2018.

The Declaration outlines ASEAN's com­mitment to further develop cruise tourism byimprovingtheclarityof policies and reg­ulations, efficiency in administration pro­cesses, as well as refining business prac­tices to be fairer and more responsible.

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