EU-ABC and ASEAN Business Advisory Council Launch Report on Non-Tariff Barriers in ASEAN

The EU-ASEAN Business Council and ASEAN Business Advisory Council Launch Report On Non-Tariff Barriers In ASEAN: Both bodies call for faster action on removal of NTBs

  • The EU-ASEAN Business Council & ASEAN Business Advisory Council today launched a report on Non-Tariff Barriers in ASEAN that they jointly commissioned.
  • The report identifies the existence of a large number of Non-Tariff Barriers (NTBs) in the region in the Automotive, Agri-Food and Healthcare sectors.
  • It also sets out a number of recommendations for ASEAN to follow if the region is to accelerate the process of NTB removal as set out in the AEC Blueprints.
  • Both Organisations encourage faster movement on achieving ASEAN’s objectives linked to the ASEAN Economic Community, particularly on the removal of trade distorting Non-Tariff Barriers.
  • The business groups continue to have concerns over the slow progress in achieving the objectives of the AEC, particularly on NTB removal, and the continued impact this has on holding back intra-ASEAN trade and achieving the full benefits of economic integration.

22 June 2019 – In line with ASEAN’s 2019 theme of “Advancing Partnership for Sustainability”, the EU-ASEAN Business Council (EU-ABC) and ASEAN Business Advisory Council (ASEAN BAC) today launched a joint report Non-Tariff Barriers (NTBs) in ASEAN and their elimination from a business perspective which examines the prevalence of NTBs to trade in three key industrial sectors in ASEAN – Automotive, Agri-Food, and Healthcare.

Above: Press conference to launch NTB report on 22 June in Bangkok, Thailand

From left: Trai-ukos Segsarn, Secretary General, South & Southeast Asia & Oceania, Michelin; Chris Humphrey, Executive Director, EU-ABC; Arin Jira, Chairman of ASEAN Business Advisory Council; Kejiporoon Kohsuwan, Deputy Director General, Dept of Trade Negotiations, Ministry of Commerce of Thailand & Chair of ASEAN Trade Facilitation Joint Consultative Committee; Tan Sri Dato Dr. Mohd Munir Abdul Majid, Chairman of ASEAN BAC Malaysia, & Chairman of CIMB ASEAN Research Institute; Dr Deborah Elms, Executive Director, Asian Trade Centre

The aim of the report is to highlight the need for faster action in removing NTBs in the region to help ASEAN achieve its objectives as set out in the two ASEAN Economic Community (AEC) Blueprints, and the subsequent targets of reducing the cost of trade transaction by 10% by 2020 and doubling intra-ASEAN trade by 2025 as agreed by the ASEAN Leaders in 2017. The report sets out a number of recommendations to ASEAN, aimed at helping the region accelerate the removal of NTBs.

Above: Dr Deborah Elms presenting on the report prepared by the Asian Trade Centre; Isabelle de Stobbelier, Trade Counsellor at the EU Delegation to Thailand.

The Counsellor of the EU Delegation in Thailand, Mrs Isabelle De Stobbeleir, opened the event by stating that: “The European Union is a strong supporter of the ASEAN economic integration and the facilitation of regional trade. Through the Enhanced Regional EU-ASEAN Dialogue Instrument (E-READI), the EU strives to facilitate EU-ASEAN policy dialogues across all three ASEAN pillars. Thanks to the active engagement of the ASEAN Business Advisory Council and the EU-ASEAN Business Council, business communities from the EU and ASEAN are involved in a constructive exchange. Together, we join forces to promote the economic integration of ASEAN, strengthen business cooperation and bring forth the perspectives of the private sector.”

Commenting on the report, Mr Donald Kanak, Chairman of the EU-ABC, said: “ASEAN has made excellent progress on removing tariffs for intra-ASEAN trade, but Non-Tariff Measures (NTMs) have increased markedly despite the commitments made under the ASEAN Economic Community to reduce them. This report by the Asian Trade Centre highlights the extent of the problem in three sectors within ASEAN. Reducing NTMs and removing NTBs will foster intra-ASEAN trade, increase innovation, and lead to lower costs for businesses and for consumers. It should also create intra-ASEAN trading opportunities for MSMEs.”

Speaking at the launch event in Bangkok, Chairman of ASEAN BAC, Mr Arin Jira, said: “As we cross over the 10th year anniversary of the ASEAN Trade in Goods Agreement (ATIGA), we are very pleased to launch this joint research undertaking by ASEAN BAC and EU-ABC which only affirms the private business sector’s commitment to help address NTBs. While it’s only the start of a long tedious process, we’re hopeful that with ASEAN’s support and cooperation, we now have a clear starting point in prioritising which NTBs to address based on the results of the research as initiated on three sectors: Agri-food, Healthcare and Automotive. We are now moving from talk mode to action mode.”

Executive Director of the EU-ASEAN Business Council, Chris Humphrey, added: “ASEAN is at risk of failing to fulfil its potential, unless faster and more proactive action is taken on its own economic integration programme. 2019 marks ten years since ATIGA was signed but yet some elements of that Agreement have still not been implemented. ASEAN is still a long way from being the single market and production base that the AEC envisaged. Unfortunately, this means that intra-ASEAN trade remains low, and extremely unlikely to hit the goal of doubling intra-ASEAN trade by 2025 set when the Philippines was in the Chair of ASEAN in 2017. Taking faster and clearer action on the removal of NTBs is vital to both hitting those targets, and to enhancing business confidence in the AEC process.”

The Business Times article: 22 June 2019

The report concludes that “absent a much clearer, more sustained and tighter focus on reducing the number and scope of existing NTMs and eliminating NTBs, ASEAN will not accomplish the objectives of the AEC and it will fail to meet the targets contained in the AEC Blueprint 2025. Growth will not be as high as ASEAN Member States could have achieved and much of the promise embedded in the ASEAN exercise will have been lost.”

The report was prepared by the Asian Trade Centre, commissioned by the EU-ASEAN Business Council and by the ASEAN Business Advisory Council, and funded by the EU’s Enhanced Regional EU-ASEAN Dialogue Instrument (E-READI).

Read the full press release here.