May 2017

Amb. Ted Osius
Amb. Ted Osius
President & CEO
US-ASEAN Business Council

Greetings from Washington, DC!   It has been a busy 5 days in the Nation’s Capital.

Yesterday President Trump hosted Vietnam’s Prime Minister Nguyen Xuan Phuc - the first visit by an ASEAN leader to Washington this year.  The Council was honored to co-host a dinner for Prime Minister Phuc on Tuesday, the evening before the Prime Minister’s meeting in the Oval Office.   The U.S. Government was represented by newly installed U.S. Trade Representative, Robert Lighthizer at the dinner.   This was Ambassador Lighthizer’s first major speech in Washington since taking office.

At our dinner and a roundtable with American business leaders that preceded dinner, the Prime Minister emphasized his focus on continuing to improve the business environment for American Companies as well as opening additional opportunities for exports from the United States.  U.S. goods exports have grown by 77% to $9.45 billion in just the last two years, making Vietnam the fast growing export market of America’s top 50 trading partners.  Vietnam also announced billions of dollars on new deals yesterday with Council members GE and Caterpillar among those signing new deals.  

Last week, the Council hosted our annual gala dinner celebrating ASEAN’s 50th Anniversary and the 40th Anniversary of US-ASEAN Relations.  We were joined by U.S. Commerce Secretary Wilbur Ross as well as the four U.S. Ambassadors on our 25th annual U.S. Ambassadors Tour including U.S. Ambassador to Thailand Glyn Davies, U.S. Ambassador to Indonesia Joe Donovan, U.S. Ambassador to Cambodia Bill Heidt and U.S. Ambassador to the Philippines Sung Kim.   Secretary Ross emphasized the importance of ASEAN to the U.S. and also acknowledged that there were some aspects of TPP which could be repurposed into bilateral free trade agreements in the region.

The Ambassadors’ Tour visited San Francisco, Chicago, and Washington, D.C., for a week of engagements with Council members, business leaders, local government and the academic community. Highlights included a private lunch with former Secretary of State George Shultz, a visit to the Port of Oakland, public events at Asia Society in San Francisco and the Chicago Council on Global Affairs.

Earlier in the month, we were honored to co-host the ASEAN foreign ministers for a panel discussion and reception in Washington, on the sidelines of their meetings with Secretary of State Rex Tillerson and National Security Advisor H.R. McMaster. 

We launched the latest edition of the ASEAN Matters for America publication on Capitol Hill, in cooperation with the East-West Center and ISEAS.  In this year’s publication, we added sections on the Digital Economy and the role of Agriculture as well as expanded the demographics and Investment sections.   If you have not had a chance to view this updated and expanded edition, it can be found http://www.aseanmatters.org.

Our Annual Business Mission to Singapore wrapped up successfully.  During this year’s mission, we were able to reiterate member companies’ commitment to promoting trade and investment liberalization after the USG withdrew from the TPP; engage a range of public and private sector stakeholders on reforms and initiatives associated with Singapore’s economic transformation plan; and discuss Singapore’s formulation of their regional economic integration priorities as the next Chairman of ASEAN. 

We held our annual mission to the ASEAN Customs Directors General Meeting, as well this month, in Bali, Indonesia, where the delegation held a formal consultation with the ASEAN Directors-General to discuss the ASEAN customs integration agenda and explore areas of collaboration in cross-border e-commerce, border security, and customs valuation

At the end of April, we also led a delegation of member companies to Indonesia for our inaugural Digital Economy Industry Mission, where we addressed issues including data flows, privacy, cybersecurity, and e-commerce.

Highlights

Looking Ahead

  • USTR will host an Indonesian delegation in Washington on June 12-13 for Trade and Investment Framework Agreement (TIFA) discussions.  Under the 1996 TIFA, Indonesia and the U.S. meet regularly to address bilateral issues and coordinate on regional and multilateral issues.  The delegation will be led by Iman Pambagyo and Made Marthini from the Ministry of Trade and Tom Lembong, Chairman of the Investment Coordinating Board (BKPM).  More information on how members can participate will be forthcoming. Contact Artha Sirait at asirait@usasean.org and Kim Yaeger at kyaeger@useasean.org with any questions regarding the visit.
  • The Council is supporting an e-commerce workshop with US-ACTI and the ASEAN Secretariat on June 14 in Singapore.  The goal of the workshop is to provide private sector input for the ASEAN Strategic Action Plan on e-Commerce before it is finalized. If you are interested in participating please contact Shay Wester at swester@usasean.org.
  • The Council is currently registering members for the annual Thailand Business Mission, taking place on June 21-23 in Bangkok. The deadline for registration is June 7. Click here to register. Please contact Matt Solomon at msolomon@usasean.org with any questions. A pre-mission planning call featuring U.S. Ambassador Glyn Davies will take place on June 12/13. Click here to register. 
  • The Council is currently in the process of selecting a date for the 2017 Brunei Business Mission.  The mission will be a one-day mission, seeking to meet with the Minister of Foreign Affairs and Trade II and the Minister of Energy and Industry, among others.  Please contact Artha Sirait at asirat@usasean.org for more information.

Advocacy

  • As a follow-up to the Digital Economy Mission to Indonesia in April, the Council has continued its advocacy for a revision of the Government of Indonesia (GOI)’s local content regulations on imports of ICT products, recommending the exclusion of small quantities of such imports. The Council met with officials from the Ministry of Industry (MOI) to confirm that the regulatory change would be implemented.  The MOI confirmed that a joint meeting of officials from both MOI and the Ministry of Information and Communications (KOMINFO) was held and a decision was made that KOMINFO would revise its local content regulations to exclude import of small quantities of ICT products.  
  • At a recent ASEAN Senior Economic Officials meeting, an ASEAN E-Commerce work plan was endorsed. The work plan contains a number of trade facilitation-related recommendations submitted by the Council.  It also contains provisions related to payments, logistics and competition, which will be discussed at the ministerial level at the 2017 ASEAN Economic Ministers meeting in the Philippines in September.
  • The Council will be joining several other business associations in filing an amicus brief to the World Trade Organization (WTO) in support of the Philippines’ case against the Government of Thailand’s systemic customs administration.  Thailand has not complied with a 2011 WTO panel ruling to change its customs practices.
  • Prior to U.S. Vice President Pence’s visit to Indonesia, the Council engaged both the GOI and USG on advocacy issues involving contract sanctity and tax policies that are of interest to our members.  Following Vice President Pence’s visit, the GOI announced changes which benefitted three member companies.
  • S.504, a bill to permanently extend the authorization of the USG to issue APEC Business Travel Cards (ABTC), was voted on in the Senate Homeland Security and Governmental Affairs Committee on May 17th.  The Council transmitted a letter in support of the bill to its author Senator Hirono.  The Bill currently has two Republican and two Democrat co-sponsors. 

Intelligence

The Thailand Committee recently released a Legislative Update highlighting developments on customs, excise tax, personal data protection, labor protection, and more.

Relationship Building

Please save the date for the following Council events and business missions:

  • 2017 Thailand Business Mission, June 21-23 in Bangkok, Thailand
  • 2017 Philippines Business Mission, July 25-27 in Manila, Philippines
  • 2017 Business Mission to the ASEAN Secretariat, July 31
  • 2017 Indonesia Business Mission, August 1-3 in Jakarta, Indonesia
  • 2017 Laos Business Mission, August 31-September 1 in Vientiane, Laos
  • 2017 Business Mission to the ASEAN Economic Ministers’ Meeting (AEM), September 4-8 in Manila, Philippines

Promotion

Council launched the latest edition of our popular ASEAN Matters for America study with the East West Center and ISEAS on May 16th on Capitol Hill in conjunction with the launch of the ASEAN Congressional Caucus. A Singapore launch is planned later in the year. This year’s version adds sections on the importance of Agriculture and Technology to the relationship and expands the discussion of demographics to include a growing middle class as well as highlights the youth demographic of the region.  To access the ASEAN Matters study, please click here.

Membership

We are pleased to welcome to the Council two new members:  Salesforce.com, effective June, 1 and Expedia, effective July 1. 

Despite some recent churn our current membership total stands at 155.

Regional Highlights

APEC

Looking Ahead

As part of the US-APEC Business Coalition, the US-ASEAN Business Council, the National Center for APEC, and the U.S. Chamber of Commerce held several bilateral meetings with ASEAN trade ministers and senior officials during the sidelines of the APEC Ministers Responsible for Trade (MRT) meetings in Hanoi, Vietnam on May 19-21.  Confirmed meetings include Singapore Trade Minister Lim Hng Kiang, Indonesia Trade Minister Enggartiasto Lukita, Vietnam Deputy Minister of Industry and Trade Do Thang Hai, Thailand Vice Minister of Commerce Winichai Chaemchaeng, and Philippines Secretary of Trade and Industry Ramon M. Lopez.

View the Council's latest APEC updates

ASEAN

Major Developments

On May 2, the Council and the Center for Strategic and International Studies (CSIS) co-hosted a forum and reception for visiting ASEAN Foreign Ministers and senior officials, who were in Washington to meet with Secretary of State Rex Tillerson.  During the off-the-record panel, the Ministers addressed the current and future U.S.-ASEAN economic, political, and security relationship.  The reception featured remarks from Council President and CEO Alex Feldman, and Congressman Joaquin Castro, Co-Chair of the Congressional Caucus on ASEAN.  Photos from the event are available here.

Advocacy

  • On May 16, the Council, along with the East-West Center, celebrated the launch of the updated ASEAN Matters for America / America Matters for ASEAN, a publication and web resource for credible and nonpartisan information, graphics, analysis, and news at the national, state, and local level on U.S.-Southeast Asia interactions.  The launch event on Capitol Hill featured Congressman Joaquin Castro, Co-Chair of the Congressional Caucus on ASEAN; Congressman Denny Heck, Co-Chair of the Congressional Singapore Caucus; Congressman Bradley Byrne, Co-Chair of the Congressional Singapore Caucus;  Congresswoman Colleen Hanabusa, member of the Congressional Singapore Caucus; Ms. Patricia Mahoney, Acting Deputy Assistant Secretary for Southeast Asia at the U.S. Department of State; Lieutenant Gen. Wallace "Chip" Gregson, Jr. (Ret.), Former Assistant Secretary of Defense for Asian and Pacific Security Affairs at the U.S. Department of Defense; H.E. Budi Bowoleksono, Indonesian Ambassador to the United States; H.E. Ashok Mirpuri, Singaporean Ambassador to the United States; and Mr. Patrick Chuasoto, Chargé d’ Affaires of the Embassy of the Republic of the Philippines to the United States.  The report is available here.
  • On April 26-27, the Council’s inaugural Digital Economy Industry Mission took place in Jakarta, Indonesia.   The Council delegation met with officials from the ASEAN Secretariat to discuss a range of regional ICT and financial services initiatives.  The officials, Tran Dong Phuong, Director for Sectoral Development Directorate; and Dr. Budi Yuwono, Senior Officer for ICT, addressed issues including data flows, privacy, cybersecurity, and e-commerce.

Looking Ahead

  • The Council is supporting an e-commerce workshop with US-ACTI and the ASEAN Secretariat on June 14 in Singapore.  The goal of the workshop is to provide private sector input for the ASEAN Strategic Action Plan on e-Commerce before it is finalized. If you are interested in participating please contact Shay Wester at swester@usasean.org.
  • Please save the date for the annual ASEAN Secretariat Business Mission, taking place on July 31 in Jakarta. Details are forthcoming.  Please contact Matt Solomon at msolomon@usasean.org with any questions.
  • Please save the date for the 2017 ASEAN Economic Ministers’ Meeting (AEM), scheduled for September 4-8 in Manila.

View the Council's latest ASEAN updates

TPP

The TPP 11 Chief Trade Negotiators held a two-day meeting in Canada in early May.   The meeting represented an opportunity for the remaining 11 nations in the TPP to exchange views on potential pathways forward for bringing the TPP into force.  A study on the potential benefits of enacting the TPP without the United States was also presented at the meeting.  At this time, only half of the eleven nations have indicated publicly their interest in trying to bring the TPP into force without the United States.  That number is likely to grow after the U.S., Canada, and Mexico conclude talks on renegotiating NAFTA and greater clarity on the USG’s priority countries for pursuing bilateral agreements emerges.  The trade ministers from the TPP 11 held a ministerial meeting in Vietnam on May 20-21.

View the Council's latest TPP updates

Industry Highlights

Customs

Major Developments

  • The Regional Comprehensive Economic Partnership’s (RCEP) negotiators held their 18th round of talks from May 8-12 in Manila.  Leaders have called for the agreement to be substantially concluded this year, which the Philippines, as ASEAN’s 2018 chair, is continuing to target.  Iman Pambagyo, the Indonesian Ministry of Trade official who is leading the negotiations, is also hoping for an end-of-year conclusion as he may be leaving his post later this year.  However, wide gaps remain in positions on key issues ranging from tariff cuts to services liberalization.  Significant differences also continue to exist between India and China, which appears to be slowing overall negotiations.  The more developed members of the negotiations are also hoping to turn RCEP into a higher quality deal that would include more extensive services and investment chapters.  Their proposals, some of which are more like the contents of the TPP than the earlier drafts of RCEP, appear to be gaining little traction with the less developed members like China.
  • Thailand completed its new Customs Act in March, which is expected to simplify customs procedures and facilitate trade.  The Act includes a trusted traders program and significantly scales back a system that gives Thai customs officers financial rewards for finding violations.  The new Act also reduces the time for customs audits and reduces penalties.  The Act now awaits royal signature, after which it will enter force within 180 days, replacing the Customs Act of 1926, and be posted to the Royal Gazette.
  • The Philippines is continuing to issue implementing regulations for the Customs Modernization and Tariff Act.  Currently, new draft regulations on different parts of the law are scheduled to be issued every week for public consultation from now until mid-July.  The draft regulations, schedule, and completed regulations may be found on the Department of Finance website.

Advocacy

The Council held its annual Mission to the ASEAN Customs Directors-General Meeting on May 15-17 in Bali, Indonesia.  The delegation held a formal consultation with the assembled Directors-General to discuss the ASEAN customs integration agenda and explore areas of collaboration related to cross-border e-commerce, border security, and customs valuation.  The delegation also held bilateral meetings with individual Directors-General, the World Customs Organization, and the ASEAN Secretariat.  More information about the Mission will be distributed soon.

View the Council's latest Customs updates

Defense & Security

Major Developments

On May 23, President Rodrigo Duterte declared martial law across the southern island of Mindanao after militants from the Abu Sayyaf and Maute insurgent groups attacked and occupied the city of Marawi, which is located in northern Mindanao.  Duterte said the initial declaration would last only 60 days, but he also said he was prepared to extend it if the security situation in northern Mindanao did not improve.  Duterte also said that he would consider extending the declaration to the entirety of the Philippines if the terrorist threat extended to the northern island of Luzon.  It is unclear at this time what effect the implementation of martial law will have on business operations in Mindanao.  The Council will continue to monitor developments on this.

Advocacy

On May 26, the Council hosted a defense and security roundtable with the U.S. Ambassadors to Thailand, Indonesia, Cambodia, and the Philippines.  This served as a great opportunity for members to discuss US-ASEAN security relationships, individual ASEAN countries' defense procurement trends and to share members’ commercial interests (defense, security, disaster preparedness, etc.) with the Ambassadors.  Please contact Jack Myint at jmyint@usasean.org to learn more.

View the Council's latest Defense & Security updates

Energy

Major Developments

As ASEAN celebrates its 50th anniversary and continues to develop the ASEAN Economic Community, one of the region’s most compelling debates centers around the growing importance of domestic demand-led economic growth and the evolution of domestic energy subsidy policies.  A recent study entitled "Energy Subsidies Removal in the East Asia Summit Region" by one of the leading think tanks in the region (Economic Research Institute for ASEAN and East Asia (ERIA) noted the critical importance of adopting holistic approaches, including efforts to mitigate adverse impacts on the poor, to developing subsidy evolution/elimination reform strategies and the economic benefits, in the form of fiscal savings, which could be obtained.
ERIA notes that in 2012, ASEAN spent an estimated $51 billion in fuel subsidies.  To access the study, please click here.

View the Council's latest Energy updates

Financial Services

Major Developments:

  • Earlier this month, ASEAN’s ten Ministers of Finance and Central Bank Governors attended the 20th annual ASEAN+3 (China, Korea and Japan) finance meetings in Yokohama, Japan.  The meetings coincided with the 50th annual meetings of the Asia Development Bank (ADB).  The highlight of the meeting was the ASEAN +3 joint statement adopting “Yokohama Vision”, a set of guiding principles for a more resilient and integrated ASEAN+3 region.  It also proposed to deepen cooperation along two pillars: The enhancement of regional resilience against economic and non-economic shocks; and the promotion of local currency use to support ASEAN financial integration.  The statement can be reviewed here.   
  • At the 2017 World Economic Forum (WEF) on ASEAN, the Sustainable Development Investment Partnership (SDIP) announced that it was creating a new ASEAN Hub, a regional platform to support local infrastructure development project finance using “blended financial models”.  The initiative will mobilize public, private, and charitable money for investing in development projects that commercial or institutional investors are reluctant in pursuing due to project risks.  The SDIP is an initiative of the Organization for Economic Cooperation and Development (OECD) and the WEF, and is made up of 35 global governments, banks, pension funds and charitable organizations.  More details on the ASEAN Hub can be found here.

View the Council's latest Financial Services updates

Food & Agriculture

Major Developments

Earlier this month in the Philippines, a copy of the revised bill that consolidated House Bill No. 4774 showed that sugar-sweetened beverages will be levied a P10 per liter excise tax in the first year of its implementation and increase 4 percent each year after.  The sugar-sweetened beverages targeted include soft drinks, soda pop, energy drinks, and sweetened tea and coffee.  The substitute bill approved by the House Ways and Means Committee is part of the Duterte administration's comprehensive tax reform program and is aimed at lowering the personal income tax rates while at the same time, has its corresponding revenue generation measures

Looking Ahead

On July 19, the Council is organizing its annual ASEAN Agricultural Attachés roundtable in Washington, D.C.  For more information, please contact Hai Pham at hpham@usasean.org 

View the Council's latest Food & Agriculture updates

Health & Life Sciences

Major Developments

  • In late April, the Vietnam Ministry of Health and Gilead Sciences signed a Memorandum of Understanding (MOU) that would allow the company to deliver drugs to help Vietnam fight the Hepatitis C Virus at a low cost.  Gilead Sciences will also assist domestic pharmaceutical enterprises in producing generic Hepatitis C drugs in the future.  The MOU signing was witnessed by H.E. Truong Quoc Cuong, Deputy Minister of Health and Head of the Drug Administration Agency of Vietnam.
  • In early May, the Government of Singapore announced the creation of a new government industry partnership scheme to help craft a holistic approach to combating diabetes in Singapore.  The scheme will include government support for companies undertaking healthier product innovation; a supportive regulatory environment to encourage innovation and experimentation; and help for companies using Singapore as a region HQ and launch pad to access other Asian markets.  The launch of this effort follows a declaration in Singapore’s Parliament to wage war on diabetes.

Advocacy

The Council’s Health & Life Sciences Committee has been engaging with the Indonesian National Procurement Agency (LKPP) and Ministry of Health (MOH) on an advocacy issue regarding medical devices, pharmaceutical product registrations, and the e-catalogue.  For more information, please contact Ying Hui Tng at yhtng@usasean.org

View the Council's latest Health & Life Sciences updates

ICT

Advocacy

  • On April 26-27, the Council’s inaugural Digital Economy Industry Mission to Indonesia brought a delegation of 15 ICT and financial services companies to Jakarta for meetings with key government and private sector stakeholders.  The Council made progress on data localization, local content requirements, and other critical issues.
  • Vietnam's Ministry of Information and Communication (MIC) is in the process of revising its 2006 Law on Information Technology, and is seeking private sector input.  The Council is planning to submit a detailed letter, outlining specific ways in which the updated Law can better support ICT sector development and foreign investment. Please review the 2006 Law and submit specific feedback/recommendations to Matt Solomon at msolomon@usasean.org as soon as possible.

Looking Ahead

  • Vietnam's Ministry of Information and Communication (MIC) will convene an “ICT legal framework development conference,” on June 2 in Hanoi.  MIC is seeking private sector presenters to: (1) offer an assessment of what works and what doesn’t in Vietnam’s current ICT legal framework, including the ICT Law and related regulations, from an FDI perspective; and (2) share a vision for Vietnam’s ICT industry in the next 10–15 years and make recommendations to improve the legal framework to facilitate such vision.  If you are interested in joining the conference, please contact Matt Solomon at msolomon@usasean.org.
  • The Council is supporting an e-commerce workshop with US-ACTI and the ASEAN Secretariat tentatively scheduled for July 3 in Singapore.  The goal of the workshop would be to provide private sector input for the ASEAN Strategic Action Plan on e-Commerce before it is finalized.  If you are interested in participating please contact Shay Wester at swester@usasean.org.

View the Council's latest ICT updates

Infrastructure

Major Developments

  • Indonesia’s Ministry of National Development Planning (BAPPENAS) released an industry guide to Public-Private Partnerships (PPP) in the infrastructure sector, with the aim of promoting understanding of PPP development and encouraging the acceleration and improvement of the preparation process.  Highlights include counsel regarding regulatory framework, and a detailed list of projects currently under preparation.  In his introduction, the Minister of National Development Planning, Prof. Dr. Armida S. Alisjahbana, highlighted the country’s need for public-private partnerships to fill the gap in total infrastructure funding and accelerate infrastructure development.  He also added that the Government of Indonesia has affirmed its commitment strengthening and streamlining policies that govern the PPP preparation process.  The complete industry guide can be found here.
  • The Asian Development Bank (ADB) has announced a new, infrastructure-focused country partnership strategy with Myanmar, to support the government’s goals of promoting economic growth and job-creation by facilitating access to rural and urban markets, training a skilled workforce, and modernizing the economy through reform. James Nugent, Director General of ADB’s Southeast Asia Department, stated that “ADB’s operations will focus on areas that are of fundamental importance to the country’s development”.  The strategy, set to run from 2017 to 2021, will focus primarily on energy, transport, and urban development.  This follows news from earlier this year regarding the ADB’s plans to help Myanmar modernize its transportation infrastructure, provide assistance with planning, contracting, funding procurement, legislation, and use Public-Private Partnerships (PPP) as a key to promote projects in road and port sectors.

View the Council's latest Infrastructure updates

Country Highlights

Brunei

Major Developments

On April 26, at the invitation of President Rodrigo Duterte of the Philippines, His Majesty Sultan Haji Hassanal Bolkiah, Sultan and Yang Di-Pertuan of Brunei Darussalam, conducted a State Visit to the Philippines, where he participated in the ASEAN Summit.  His visit came six months after President Duterte’s state visit to Brunei.  Following the ASEAN Summit, the two leaders issued a joint statement affirming the steady growth of friendship between Brunei and the Philippines and welcomed increased interactions at all levels to strengthen its bilateral relations, with emphasis on bilateral trade and economic relations.  The visit witnessed the signing of a Memorandum of Understanding (MOU) between Brunei’s Energy and Industry Department and the Philippines’ Halal Industry and Halal Export Development and Promotion Board of the Department of Trade and Industry, as a means to explore opportunities in the emerging global market for halal products and services.

Advocacy

On May 11, the Council hosted U.S. Ambassador to Brunei Darussalam Craig Allen for a small roundtable discussion in Washington, D.C.  The roundtable was an opportunity for members to hear a briefing by Ambassador Allen on the latest efforts undertaken by the Bruneian government to attract investment and improve ease of doing business.

Looking Ahead

The Council is currently in the process of selecting a date for the 2017 Brunei Business Mission.  The mission will be a one-day mission, seeking to meet with the Minister of Foreign Affairs and Trade II and the Minister of Energy and Industry, among others.  Please contact Artha Sirait at asirat@usasean.org for more information.

View the Council's latest Brunei updates

Cambodia

Major Developments

  • On May 10-12, Cambodia hosted the World Economic Forum (WEF) on ASEAN in Phnom Penh, bringing together over 700 delegates from the business sector, government, academia, and civil society.  Prime Minister Hun Sen opened the forum and was joined by President Rodrigo Duterte of the Philippines, Prime Minister Nguyen Xuan Puc of Vietnam, and Prime Minister Thongloun Sisolith of Laos as keynote speakers.  The themes of this year’s WEF were centered around youth, technology, and sustainable growth.  Additionally, discussions on the future of ASEAN and China’s “One Belt, One Road” initiative loomed large on the program agenda.  The Council was represented by President & CEO Alexander Feldman at the WEF.
  • At the World Economic Forum on ASEAN hosted in Phnom Penh, Prime Minister Hun Sen emphasized ASEAN’s need for quality infrastructure, stating that developing infrastructure will attract foreign direct investment, improve connectivity and long-term growth in the region, and cement ASEAN’s role as a major global trading partner.  To this end, World Economic Forum’s Head of Asia Pacific, Justin Wood, announced the creation of The ASEAN Infrastructure Hub, to be launched during the three-day WEF conference.  The hub will be the first of its kind initiative, which aims to raise funds from investors and fund infrastructure projects in developing countries, and offset the risks of long-term infrastructure investment. Cambodia has signed on to this initiative. Earlier this year, Cambodia was also the first Asian country to sign on to the Sustainable Development Investment Partnership (SDIP), a global initiative backed by the World Economic Forum (WEF) and the Organization for Economic Cooperation and Development (OECD), which aims to fund infrastructure projects through public-private partnerships.

View the Council's latest Cambodia updates

Indonesia

Major Developments

  • On April 19, U.S. Vice President Mike Pence visited Jakarta as part of his trip to the Asia-Pacific region.  Vice President Pence stated that President Donald Trump had asked him to visit Indonesia as a sign of the high value that the United States places on its strategic partnership with Indonesia.  In his meeting with Indonesian President Joko Widodo, Vice President Pence conveyed the Trump administration’s message for the two countries to work more closely together for their mutual benefit and for the benefit of Southeast Asia.  In a separate meeting with representatives from both the U.S and Indonesian private sector, in which the Council was represented by our Indonesia Country Committee Chair, Vice President Pence reaffirmed the United States’ commitment on bilateral trade and investment through the signing of deals in the energy sector worth approximately US$8 billion.  A meeting with the leaders of the ASEAN Secretariat concluded the U.S. Vice President’s tour in Indonesia, in which he announced that President Trump will attend the U.S.-ASEAN Summit and the East Asia Summit in the Philippines in November, as well as the APEC Summit in Vietnam.  
  • On March 31, Indonesia’s Constitutional Court ruled that the central government (through its Ministry of Home Affairs) no longer has the authority to revoke regional laws.  The court partially upheld a challenge by the Indonesian Regency Administration Association against Article 251 of Law No. 23 of 2014 on Regional Administration, which states that the Minister of Home Affairs has the right to review regional laws that contradict national laws and regulations.  The law was enacted to give more power to the central government to be able to review and revoke local laws and regulations that do not coincide with national interests, which include ease of doing business.  With this decision, the revocation of all regional laws must now go through the judicial review process by the Supreme Court instead.  Prior to this latest development, the Minister of Home Affairs had scrapped some 3,143 laws throughout 2015 and 2016.
  • On April 28, USTR released its 2017 Special 301 Report on Intellectual Property (IP) protection. Indonesia was again included in the Priority Watch list due to a lack of adequate and effective IP protection policies and enforcements.  The 301 report reflects a congressionally mandated annual review of the global state of intellectual property rights, and helps inform policy making.  USTR is also concerned about various market access barriers in Indonesia, including requirements for domestic manufacturing and technology transfers for pharmaceuticals, among other sectors.  Furthermore, the revision of Indonesia’s patent law has also raised some serious concerns, including those with respect to patentability criteria for incremental innovations and computer implemented inventions and local manufacturing and use requirements.

Advocacy

Prior to Vice President Pence’s visit to Jakarta, the Council prepared a Sense of American Business in Indonesia Paper, which was used as a basis for discussion with the White House National Security Council.   The Paper highlights opportunities as well as challenges facing the U.S. private sector in Indonesia.  The Council would like to thank members for their feedback and advice provided during the preparation of the paper.  Please contact Artha Sirait at asirait@usasean.org if you wish to provide additional concerns regarding your business activities in Indonesia.

Looking Ahead

  • USTR will host an Indonesian delegation in Washington on June 12-13 for Trade and Investment Framework Agreement (TIFA) discussions.  Under the 1996 TIFA, Indonesia and the U.S. meet regularly to address bilateral issues and coordinate on regional and multilateral issues.  The delegation will be led by Iman Pambagyo and Made Marthini from the Ministry of Trade and Tom Lembong, Chairman of the Investment Coordinating Board (BKPM).  More information on how members can participate will be forthcoming. Contact Artha Sirait at asirait@usasean.org and Kim Yaeger at kyaeger@useasean.org with any questions regarding the visit.
  • Please save the date for the annual Indonesia Business Mission, taking place August 1-3.  Details are forthcoming.  Please contact Artha Sirait at asirait@usasean.org or Desi Indrimayutri at desi@usasean.org with any questions.

View the Council's latest Indonesia updates

Laos

Major Developments

Vietnamese telecommunication company Viettel is partnering with Laos Asia Telecom to implement the largest “smart society” project in the country to date, an information system to electronically register citizens’ birth, death, marriage, and related information.  The project indicates future growth in the e-government sector, and opportunities for foreign ICT companies to partner with the Lao government on such initiatives.

Looking Ahead

Please save the date for the annual Laos Business Mission, taking place from August 31 to September 1 in Vientiane. Registration information is forthcoming. Please contact Matt Solomon at msolomon@usasean.org with any questions.

View the Council's latest Laos updates

Malaysia

Major Developments

On May 9, Prime Minister Najib Razak announced a Malaysia Productivity Blueprint to address productivity challenges holistically in order to boost economic growth.  Malaysia must record a labor productivity growth of 3.7% per year to remain on track with the Vision 2020 growth targets.  Malaysia’s current productivity growth is 1.8% (reported from 2011-2015).  The blueprint outlines five strategies: (1) talent—including more cohesive efforts to build a workforce focused on high-value jobs for the future; (2) technology—accelerating investments in technology and digitalization, including stronger collaboration between industry and academia; (3) incentive structure—improving competitiveness of private enterprises by reducing reliance on non-critical subsidies and ensuring liberalization efforts are linked to productive outcomes; (4) business environment—reducing regulatory hurdles and increasing transparency to improve ease and reduce cost of doing business; and (5) productivity mindset—promoting benefits of productivity and assisting enterprises with measuring and tracking productivity. The full blueprint can be found here.

Advocacy

As a follow-up to the Malaysia Business Mission (March 27-29) and our engagement during the ASEAN Finance Ministers and Central Bank Governors Meeting (April 6-7), the Council hosted a small luncheon for Finance Minister II Y.B. Datuk Seri Johari bin Abdul Ghani.  During the lunch, Minister Johari reiterated what he told delegates during both missions by stating that recent foreign exchange measures taken by Bank Negara were not intended to impact foreign investment to Malaysia and that he welcomed individual discussions if the measures were negatively affecting members’ business.  Since our engagement, multiple members have been able to engage the Finance Ministry to advocate for more flexibility and to minimize adverse effects of the foreign exchange measures.

View the Council's latest Malaysia updates

Myanmar

Major Developments

The Asian Development Bank (ADB) has announced a new, infrastructure-focused country partnership strategy with Myanmar, to support the government’s goals of promoting economic growth and job-creation by facilitating access to rural and urban markets, training a skilled workforce, and modernizing the economy through reform. James Nugent, Director General of ADB’s Southeast Asia Department, stated that “ADB’s operations will focus on areas that are of fundamental importance to the country’s development”.  The strategy, set to run from 2017 to 2021, will focus primarily on energy, transport, and urban development.  This follows news from earlier this year regarding the ADB’s plans to help Myanmar modernize its transportation infrastructure, provide assistance with planning, contracting, funding procurement, legislation, and use Public-Private Partnerships (PPP) as a key to promote projects in road and port sectors.

Advocacy

  • On May 3, the Council hosted a working lunch with the Myanmar Deputy Minister of Home Affairs, Major General Aung Soe.  This marks our first engagement with the Myanmar Ministry of Home Affairs, which is arguably the most powerful of the three key Union Ministries controlled by the Tatmadaw (Myanmar's military).  The Ministry of Home Affairs controls the General Administration Department (GAD), which selects, trains, and appoints almost the entire Myanmar bureaucracy and runs all township and ward administrations.  The Ministry is also taking the lead in shaping Myanmar's cybersecurity landscape.  Topics of discussion included: future of US-Myanmar military-to-military relations, relations between the Myanmar military and the civilian government under the NLD-led administration, future of the GAD, next steps on cybersecurity policy development, and management of state-owned enterprises currently under military control.  Please contact Jack Myint at jmyint@usasean.org with any questions.
  • On May 2, the Council and the Center for Strategic and International Studies (CSIS) co-hosted a forum and reception for visiting ASEAN Foreign Ministers and senior officials, who were in Washington to meet with Secretary of State Rex Tillerson.  As part of the panel and reception, the Council engaged with Myanmar’s new National Security Advisor U Thaung Tun for the first time.  During the off-the-record panel, the Ministers addressed the current and future U.S.-ASEAN economic, political, and security relationship.  Photos from the event are available here.

View the Council's latest Myanmar updates

Philippines

Major Developments

  • On May 23, President Rodrigo Duterte declared martial law across the southern island of Mindanao after militants from the Abu Sayyaf and Maute insurgent groups attacked and occupied the city of Marawi, which is located in northern Mindanao.  Duterte said the initial declaration would last only 60 days, but he also said he was prepared to extend it if the security situation in northern Mindanao did not improve.  Duterte also said that he would consider extending the declaration to the entirety of the Philippines if the terrorist threat extended to the northern island of Luzon.  It is unclear at this time what effect the implementation of martial law will have on business operations in Mindanao.
  • On May 10, President Duterte appointed close ally Senator Alan Peter Cayetano as Secretary of Foreign Affairs replacing acting Secretary Enrique Manalo.  Prior to Cayetano's appointment, Manalo replaced Perfecto Yasay, whose ad interim appointment was rejected by the Commission on Appointments due to issues surrounding his citizenship.  Cayetano is a lawyer and former member of the House of Representatives who was first elected to the Senate 10 years ago.  He lost the race for Vice President last year when he ran as Duterte’s running mate.
  • On May 8 after several months of delay, President Duterte appointed Nestor Espenilla as Governor of the Bangko Sentral ng Pilipinas, succeeding Amando Tetangco, Jr.  Nestor Espenilla is a long-serving technocrat whose previous role was as the Deputy Governor in charge of banking supervision.  Espenilla’s promotion will likely usher in a smooth handover from the widely respected Tetangco, who served as Governor for twelve years, and signals Duterte’s support of continuation of policy.  Espenilla is expected to uphold the three pillars of central banking: price stability, financial stability, and a reliable and efficient system for payments and settlements.
  • On May 3, Congress rejected the controversial appointment of Gina Lopez as Secretary of Environment and Natural Resources.  Lopez was previously bypassed by the Commission on Appointments (CA) on March 12 and was eventually rejected by Congress a day after session resumed.  Gina Lopez, a known environmentalist, ordered the closure of 23 mining firms and cancellation of permit of about 75 mining companies and this move has caused a strong opposition and eventual rejection of her appointment.  At this time, President Duterte has designated a former Armed Forces chief, Roy Cimatu, as the new Secretary of the Department of Environment and Natural Resources.
  • On April 26-29, the 30th ASEAN Summit took place in Manila, Philippines.  The Summit, under the theme “Partnering for change, Engaging the world,” was the first international event under the administration of President Duterte.  The last time the Philippines hosted an ASEAN Summit was in 2007 during the term of former President Arroyo.  Implementation of ASEAN Vision 2025 was discussed, along with other regional and international issues of common interests to all participants.  ASEAN leaders who attended include Brunei Sultan Hassanal Bolkiah, Cambodian Prime Minister Hun Sen, Indonesian President Joko Widodo, Laos President Bounnhang Vorachith, Malaysian Prime Minister Najib Razak, Myanmar State Counsellor Aung San Suu Kyi, Singaporean Prime Minister Lee Hsien Loong, and Thailand Prime Minister Prayut Chan-o-cha.

Looking Ahead

Please save the date for the annual Philippines Business Mission, taking place July 25-27.  Details are forthcoming.  Please contact Riley Smith at rsmith@usasean.org or Elizabeth “Maxie” Magsaysay-Crebass at em.crebassa@usasean.org with any questions.

View the Council's latest Philippines updates

Singapore

Major Developments

  • From May 12-July 13, SPRING Singapore is inviting public comments on standards for Cloud Outage Incident Response (COIR) guidelines.  First released in February 2016, the COIR guidelines are intended to assist business continuity management and provide greater clarity in how cloud service providers (CSPs) should react in the case of cloud outages.  The SPRING Singapore announcement regarding the public comment period, which includes instructions on how to view the draft COIR guidelines, can be found here.
  • In response to concerns over the increasing price for formula milk, Senior Minister of State for Trade and Industry Koh Poh Koon announced on May 22 that a recently formed taskforce would focus on implementing measures by the end of the year intended to reverse the increase in formula milk prices.  According to Senior Minister of State Koh’s announcement, the taskforce’s priority will be “to tighten regulations on labelling and advertising, facilitate imports of more formula milk options, raise public awareness, and encourage good practices in our hospitals."  According to the Singapore Department of Statistics, the average price of formula milk has increased by over 100 percent over the last decade.
  • On April 27, the Prime Minister’s Office of Singapore announced a series of promotions and political appointments with the aim of further refining the core of Singapore’s fourth generation of political leaders.  Ever since announcing his new Cabinet following the September 2015 general election, Prime Minister Lee Hsien Loong has made planning for leadership succession a key priority.  The promotion of Mrs. Josephine Teo and Mr. Desmond Lee to full Ministers in the Prime Minister’s Office are among the defining characteristics of this latest shuffle.  The promotions and appointments took effect on May 1, with the exception of those of the five mayors who were also appointed, which took effect when the terms of the current Mayors ended on May 27.  The complete list of promotions and appointments can be found here.

Advocacy

Earlier this month, the Council conducted its Business Mission to Singapore.  This year’s mission was timely for several reasons.  It allowed the U.S. business community to reiterate its commitment to promoting trade and investment liberalization after the USG withdrew from the TPP; engage a range of public and private sector stakeholders on reforms and initiatives associated with Singapore’s economic transformation plan issued by the Committee for the Future Economy; and discuss Singapore’s formulation of their regional economic integration priorities as the next Chairman of ASEAN.  The delegation was received by senior government officials, including: Minister for Trade and Industry (Industry), H.E. S Iswaran; Minister for Education (Higher Education and Skills) and Second Minister for Defence, H.E. Ong Ye Kung; Minister for National Development and Second Minister for Finance, H.E. Lawrence Wong and Minister in the Prime Minister’s Office and Second Minister for Manpower & Foreign Affairs, H.E. Josephine Teo.

View the Council's latest Singapore updates

Thailand

Major Developments

On April 28, the Office of the United States Trade Representative (USTR) released its 2017 Special 301 Report on Intellectual Property Rights, detailing international developments regarding trade and intellectual property.  Thailand was placed on the Priority Watch List (PWL) for another year, indicating that the country remains a source of concern for insufficient IP protection measures.  Consequentially, Thailand “will be the subject of intense bilateral engagement during the coming year,” according to the report, which leaves the nation open to punitive trade measures, including special duties and sanctions.

Advocacy

On May 3, the Council and the U.S. Chamber of Commerce convened a private sector roundtable to highlight key challenges facing U.S. companies in Thailand, in advance of U.S. Department of Commerce Deputy Assistant Secretary for Asia Diane Farrell’s trip to Bangkok this month.  DAS Farrell will be the highest-ranking Commerce Department official to visit Bangkok since the 2014 coup.

Looking Ahead

The Council is now registering executives for its 2017 Thailand Business Mission. The Mission will begin the evening of June 21 and finish the evening of Friday, June 23. The deadline for registration and submission of materials is Wednesday, June 7.  Click here to register.  A pre-mission planning call featuring U.S. Ambassador Glyn Davies will take place on June 12/13. Click here to register.  Contact Matt Solomon at msolomon@usasean.org with any questions.

View the Council's latest Thailand updates

Vietnam

Major Developments

In late April, U.S. Vice President Mike Pence announced during his visit to Indonesia that U.S. President Donald Trump will attend the APEC Economic Leaders’ Meeting in Vietnam in November, and the East Asia Summit in the Philippines.  Following this, U.S. National Security Adviser H.R. McMaster delivered a letter from President Trump to Vietnam Deputy Prime Minister Pham Binh Minh during his trip to the U.S. to invite Vietnam Prime Minister Nguyen Xuan Phuc to visit the United States at the end of May, which the Prime Minister accepted.  Yesterday, along the sidelines of Prime Minister Phuc’s visit, the Council co-hosted a dinner in his honor in Washington, D.C.  The dinner also featured remarks from new USTR Ambassador Robert Lighthizer, who spoke about U.S.-Vietnam relations and the work that still needs to be done between the two administrations.

View the Council's latest Vietnam updates