First Slide

The Four Pillars of AEC Vision 2020
(first slide)
Single Market & Production Base
● Free flow of products

● Free flow of services
● Free flow of investments
● Free flow of skilled labour
● Free flow of capital
● Priority integration in foods, agriculture and forestry sectors
(second slide)
Competitive Economic Region
● Competition policy
● Consumer protection
● Intellectual property rights
● Infrastructure development
● Taxation
● E-commerce
(third slide)
Equitable Economic Development
● SME development
● Narrow development gap between members & accelerate integration of
Cambodia, Laos, Myanmar, and Vietnam.
(fourth slide)
Integration to Global Economy
● Coherent approach regarding external economic relations

● Enhance participation in global supply networks
(5th slide)
To pursue the goal of establishing a single market and production base with free flow by
2015 for the ASEAN ECONOMIC COMMUNITY, the ASEAN Economic Ministers agreed in
August 2007 to enhance the CEPT-AFTA scheme into a more comprehensive legal
instrument.
6th slide
Its key features are:
1. It consolidates all ASEAN’s existing initiatives, obligations and commitment on intra-

ASEAN trade-in-goods, including both tariff and non-tariff elements, into one single
comprehensive document. The list of Agreement to be superseded by the ATIGA,
such as the CEPT Agreement and selected Protocols, is being finalised for
subsequent annexing to the ATIGA.
7th slide
2. Its Annex 2 provides full tariff reduction, schedule of each member state and the tariff
rates to be applied on each product for each year up to 2015. The ATIGA introduces
a new element compared to the CEPT scheme, an article on Temporary Modification
and Suspension of concessions, which provides guidelines, for compensation arising
from any increase in import duties to the existing commitment (Article23)
8th slide
3. It compromises elements to ensure the realisation of the free flow of goods within
ASEAN including tariff liberalisation (Chapter 2), rules of origin (Chapter 3), removal
of non-tariff barriers (Chapter 4), trade facilitation( Chapter 5), customs (Chapter 6),
standards, technical technical regulations and conformity assessment procedures
(Chapter 7), sanitary and phytosanitary measures (Chapter 8), and trade remedy
measures (Chapter 9). The ATIGA all-in-one formula enhances the transparency and
predictability of ASEAN legal framework on trade in goods. The treaty will further
facilitate and strengthen intra-ASEAN trade. It is of considerable significance for
accelerated economic integration towards realising the ASEAN Economic
Community by 2015.
9th slide
The main objectives of AFAS are:
a. To enhance cooperation to services amongst member states in order to improve their

efficiency and competitiveness, diversify production capacity and the supply and
distribution of the services of their service suppliers within and outside ASEAN.
b. To eliminate substantially restrictions to trade in services amongst members; and To

liberalisation beyond those undertaken by member states under the GATS with the
aim to realising a free trade area in services.
c. To liberalise trade in services by expanding the depth and scope of liberalisation

beyond those undertaken by member states under the GATS with the aim to realising
a free trade area in services.
10th slide
The AFAS provides broad guidelines for ASEAN member countries to progressively
improve MA and ensure NT for service among ASEAN countries in all four modes of
supply, including Mode 1 ( Cross-Border Supply), Mode 2 (Consumption Abroad).
Mode 3 (Commercial Presence), and Mode 4 (Movement of Natural Persons).
In addition, the AFAS also provides rules for related aspects such as mutual
recognition, dispute settlement, and institutional mechanism, as well as other areas
of cooperation in services. The AFAS is aimed at achieving commitments beyond
member countries’ commitments under the GATS. Under this Agreement, ASEAN
countries undertake to liberalise a substantial number of sectors within a reasonable
timeframe.
11th slide
Since 1996, ASEAN has concluded eighth of services commitments as follows:
● Protocol to Implement the Initial Package of Commitments under AFAS

signed on 15 December 1997
signed on 3 September 2004
signed on 19 November 2007
signed on 26 February 2009
● Protocol to Implement the Initial Package of Commitments under ASEAN
Framework Agreement on Services signed on 28 October 2010
12th slide
These commitments are cover by the liberalisation of a wide range of service sectors,
including business services, professional services, construction, distribution, education,
environmental services, healthcare, maritime transport, telecommunications, and tourism.
There have also been four packages of commitments on financial services signed by the
ASEAN Finance Ministers, and six packages on air transport signed by the ASEAN
Transport Ministers.
13th slide
The 1987 Agreement contains the generally defined standards of protection in line with
many other investment treaties, such as full protection, fair and equitable treatment, an
umbrella clause, the repatriation of capital and earnings, and dispute settlement. NT and
MFN treatments for ASEAN foreign investors to have better access to ASEAN countries
were not provided under the 1987 Agreement. Instead these standards were introduced 11
years afterwards in the framework Agreement on the ASEAN Investment Area 1998. The
conclusion of this Framework Agreement aims to establish a competitive ASEAN Investment
Area with a more liberal and transparent investment environment within ASEAN.
14th slide
Both agreements, however, need improving since their language is, in some places, very
general and vague, which might create too much room for interpretation. Therefore, ASEAN
concluded the ASEAN Comprehensive Investment Treaty (ACIA) in 2009. The new treaty
aims to create a free and open investment regime through the progressive liberalisation of
investment regimes of ASEAN member states and enhanced protection for intra-ASEAN
investors.
The ACIA has not yet been effective because not all 10 ASEAN countries have ratified it.
ASEAN members are finalising the ACIA Reservation List; the Agreement is expected to
enter into force soon upon ratification of Thailand, the only country out of 10 ASEAN
member states has not ratified the ACIA. It will replace the 1987 and 1998 agreements upon
its entry into force. However, investors of investments covered by all the three agreements,
may invoke one of them for the period of three years after the termination of 1987 and 1998
agreements.

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The Four Pillars of AEC Vision 2020

Single Market & Production Base

● Free flow of products

Competitive Economic Region

Equitable Economic Development

Integration to Global Economy

● Coherent approach regarding external economic relations

Its key features are:

1. It consolidates all ASEAN’s existing initiatives, obligations and commitment on intra-

The main objectives of AFAS are:

a. To enhance cooperation to services amongst member states in order to improve their

b. To eliminate substantially restrictions to trade in services amongst members; and To

c. To liberalise trade in services by expanding the depth and scope of liberalisation

Since 1996, ASEAN has concluded eighth of services commitments as follows:

● Protocol to Implement the Initial Package of Commitments under AFAS

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