July 2017

ASEAN continues to be near the top of the Trump Administration’s agenda in Asia.  President Trump had formal bilateral meetings with President Jokowi of Indonesia and Prime Minister Lee of Singapore on the sidelines of the G-20 Meeting in Germany.  It was the first time the leaders of Indonesia and Singapore had met the President.  Prime Minister Lee is expected to visit Washington, DC later this year in a follow-up to the G-20 meeting.  President Jokowi and President Trump hit it off by all reports with President Jokowi inviting the POTUS to Indonesia.  This visit will likely happen in 2018.  Prime Minister Phuc of Vietnam was also in attendance at the G-20 in Germany and had a chance to follow-up on his May visit to the Oval Office, though not a formal bilateral. 

Thailand Prime Minister Prayut postponed his White House meeting scheduled for this week until a future date, possibly as early as the 4th Quarter of this year.  The Council was scheduled to co-host a dinner in his honor with the business community on the evening preceding his meetings at the White House.  We have been given every indication that the dinner will happen when the visit is rescheduled.

Yesterday, on behalf of the Council and our members, I was honored to be able to pay our formal respects to the late King Bhumibol at the Grand Palace in Bangkok.  The Council was one of very few organizations offered the opportunity of a VIP, private time.  Most of these time slots have been given to visiting heads of government/state.  In fact, I was immediately followed by Carrie Lam, the new Chief Executive of Hong Kong.  My note in the official condolence book covered three main points:

The role the King played in the rise of the standard of living for the Thai people and his compassionate leadership style which focused on those Thais who were less fortunate.

The role that a stable and economically prosperous Thailand played in the stability of the region and the fact that ASEAN was founded in 1967 in Bangkok – which has resulted in 50 years of peace and prosperity for all of Southeast Asia.

The King’s vision and leadership in a strong relationship with the United States, the country of his birth, and how that relationship, bolstered by his engagements with U.S. Presidents from Eisenhower to Obama, helped propel strong business ties with American corporations.

Last month, we successfully concluded our annual Thailand Business Mission.  The three-day mission focused on identifying opportunities to bolster the U.S.-Thailand economic relationship and support the government of Thailand’s efforts to implement key reforms to help promote Thailand as a destination for high-value trade and investment.  Representatives from 33 of our member companies were received by Prime Minister Prayut Chan-o-cha and Deputy Prime Minister Somkid Jatusripitakon, as well as the Ministers of Energy, Industry, and Transportation, and met separately with the Ministers of Commerce, Digital Economy and Society, Finance, and Tourism and Sports, as well as officials from the Ministry of Agriculture and Cooperatives, Ministry of Foreign Affairs, Ministry of Public Health, Bank of Thailand, and the National Broadcasting and Telecommunications Commission.

Earlier this month, we partnered with the U.S. Chamber of Commerce to co-host a roundtable and reception to honor the visit of a delegation of provincial leaders and businesses from Vietnam. On the heels of Prime Minister Nguyen Xuan Phuc’s successful visit to the United States at the end of May, this event provided members with an avenue to follow up on their issues and opportunities with government officials and businesses local to many of their operations in Vietnam. The delegation included officials and stakeholders from six provinces in Vietnam: Hanoi, Ba Ria-Vung Tau, Dong Nai, Quang Tri, Thai Nguyen, and Long An. The reception featured remarks from Diane Farrell, Deputy Assistant Secretary for Asia at the U.S. Department of Commerce, H.E. Nguyen Duc Chung, Chairman of the Hanoi People’s Committee, and H.E. Pham Quang Vinh, Ambassador of Vietnam to the U.S.

We are gearing up next week for our annual Philippines Business Mission, which will take place in Manila from July 25-27. This year’s mission is significant for several reasons and presents the opportunity to engage the Government of the Philippines during its chairmanship of ASEAN and follow up on the Duterte Administration’s economic goals and development agenda since coming into office a little over a year ago.

This mission is followed by our ASEAN Secretariat Mission on July 31 in Jakarta, which is an opportunity to engage the Secretariat’s top officials.  On the occasion of ASEAN's 50th anniversary and the 40th anniversary of U.S.-ASEAN relations, it is a particularly timely opportunity to further strengthen the commercial ties between the U.S. and ASEAN and offer the Council’s support for ASEAN integration. 

Our Indonesia Business Mission will take place from August 1-3 in Jakarta. The mission will serve as an excellent opportunity for the U.S. private sector to reinforce continuing support and commitment to Indonesia, following a series of positive commitments by the Trump and Jokowi administrations to strengthen the economic ties between the two nations. The White House has shown just how important Indonesia is, starting with U.S. Vice President Mike Pence’s visit to Jakarta in April and more recently with President Trump’s meeting with President Jokowi in Germany.  

Looking ahead, we will participate in a number of ASEAN meetings as well as at least one industry mission, including the Health & Life Sciences Industry Mission to Myanmar (August 16-17), the Mission to the ASEAN Economic Ministers’ Meeting (AEM) (September 7-9 in Manila), the Mission to the ASEAN Ministers on Energy meeting (AMEM) (September 18-22 in Manila), and the Mission to the ASEAN Ministerial Meeting on Agriculture and Forestry (AMAF) (September 28-29 in Chiang Mai).  I am pleased to report that the ASEAN Transport Ministers have agreed to make the Council’s engagement an annual event.   A business luncheon with the ASEAN Transport Ministers will take place on October 12 in Singapore.

Highlights

Looking Ahead

• The Council is now registering senior executives for its annual ASEAN Secretariat Business Mission on July 31 in Jakarta.  Click here to register.  For more information, please contact Matt Solomon at msolomon@usasean.org or Mario Masaya at mmasaya@usasean.org.
• The Council is now registering executives for its Annual Business Mission to Indonesia. Click here to register.  For more information, please contact Artha Sirait at asirait@usasean.org.

Advocacy

• The Council drafted a position paper on the Government of the Philippines’ proposed two-tier excise tax on sugar-sweetened beverages.  The proposal was part of a larger tax reform proposal in the House of Representatives.  The Council’s paper raises concerns about the extremely high tax rates and potential inconsistencies with the Philippine’s World Trade Organization (WTO) commitments regarding national treatment.  The paper was transmitted to the Senate Ways & Means Committee as it begins to debate a range of tax policy reform proposals
• The Council is continuing its advocacy efforts in Thailand (pre-and post-Business Mission) on proposed regulations and tax policy reforms governing the digital economy.  The Council submitted a letter to the Deputy Prime Minister and the Chairman of the National Telecommunication and Broadcasting Commission, raising concerns about proposals to implement overly burdensome regulations, without sufficient input from business stakeholders, on OTT service providers, as though their activities were the same as traditional content broadcasters.  The Council also transmitted formal comments on the Government of Thailand’s draft Act Amending the Revenue Code regarding its proposed e-commerce related tax reform provisions.  Some of the provision could impact corporate legal residency requirements and de minimis levels.  The Council advocated that the GOT study and adopt newly developing international standards and best practices on treatment of cross-border e-commerce sales.  The comments noted that the OECD principles on tax neutrality, efficiency, certainty and simplicity, effectiveness and fairness, and flexibility should also be prioritized.
• The Council is continuing its advocacy efforts with the Government of Indonesia regarding the data localization requirements contained in the proposed implementing regulations associated with Government Regulation 82.  The Council, in partnership with the U.S. Chamber of Commerce, is developing a series of letters to various GOI agencies and ministries which highlight the negative impacts on investment and competitiveness of such requirements.

Intelligence

The Council has issued an Analytical Update on the evolution of U.S. trade policy and ASEAN.  The update was developed in response to members’ requests for additional background information on the initial contour of the administration’s trade policy priorities and initiatives, including the launch of 19 “deficit study” reports, which include reviews of current U.S. bilateral trade relations with Indonesia, Malaysia, Thailand, and Vietnam.  The update can be found here.

Relationship Building

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

• Health & Life Sciences Industry Mission to Myanmar, August 16-17 in Nay Pyi Taw and Yangon
• Mission to the ASEAN Economic Ministers’ Meeting (AEM), September 7-9 in Manila, Philippines
• Mission to the ASEAN Ministers on Energy meeting (AMEM), September 18-22 in Manila, Philippines
• Mission to the ASEAN Ministerial Meeting on Agriculture and Forestry (AMAF), September 28-29 in Chiang Mai, Thailand
• Mission to the ASEAN Transport Ministers meeting October 12 in Singapore.

Promotion

• On July 19, the Council convened a roundtable of all ten ASEAN Agricultural Attachés based in Washington, D.C.  This annual roundtable provided members based in Washington with a chance to review and discuss key issues and challenges in ASEAN’s agriculture sector.  For more information, please contact Hai Pham at hpham@usasean.org.
• The Philippine Department of Energy (DOE) is hosting the 35th ASEAN Ministers of Energy Meeting (AMEM) and its Associated Meetings in Manila on September 27-29.  In parallel, with the DOE as Official Host, the ASEAN Centre for Energy (ACE) and Leverage International are organizing the ASEAN Energy Business Forum (AEBF) 2017 incorporated with the Powertrends 2017 international exhibition at the SMX Convention Center.  More information on the event, including registration information, can be found here.

Membership

We are pleased to welcome Adobe to the Council on July 1.  Based in San Jose, CA , Adobe is known for brands such as Acrobat, Photoshop, Flash and Dreamweaver.  Adobe serves customers such as content creators and Web application developers with its digital media products, and marketers, advertisers, publishers and others with its digital marketing business.  Adobe has joined the Council at the Chairman’s Council level.

Regional Highlights

APEC

Looking Ahead

On November 8-10, the APEC CEO Summit 2017 will be held in Da Nang, Vietnam. Under the theme of “Creating New Dynamism, Fostering a Shared Future,” the Summit will bring together APEC leaders from the world’s most dynamic economies, speakers from the world’s top companies, and more than 700 CEOs from across the Asia-Pacific region. The program will feature two days of interactive discussions, presentations and dialogue on a wide range of issues that will impact the future development of the region, including innovation, healthy workforces, sustainability, inclusive growth, and entrepreneurship.

• To express interest in receiving an invitation for an executive, please complete the form, which can be accessed here.
• For more information on the event, please visit the APEC 2017 CEO Summit website here.
• For further information on the CEO Summit or sponsorship of the Summit, please contact Alex Parle (aparle@ncapec.org) and Loraine Ashcraft (lashcraft@ncapec.org).

View the Council's latest APEC updates

ASEAN

Major Developments

• On June 2, more than 50 countries gathered in Singapore for the 16th Asia Security Summit, also known as the Shangri-La Dialogue, where U.S. Secretary of Defense James Mattis gave a speech meant to reassure allies of America’s continued commitment to Asia under the Trump administration. The Asia Security Summit followed the introduction of a $2 billion Asia Defense Bill in the U.S. House Armed Services committee to support these policies and encourage increased U.S. presence in the South China Sea.  Despite reassurances, and a successful visit by Vice President Pence to ASEAN earlier this year, lingering questions remain about the Trump Administration’s posture towards the region. The Government of Singapore announced that when it assumes the Chairmanship of ASEAN in 2018, one of its top priorities will be to help ASEAN strengthen security cooperation arrangements to further promote peace and security.
• The Central Bank Governors of Indonesia and the Philippines have signed a letter of intent to comply with the ASEAN Banking Integration Framework (ABIF), which will allow qualified ASEAN banks to operate freely across ASEAN member states. Progress has also been made between the Central Banks of the Philippines, Malaysia, and Thailand in implementing the standards for Qualified ASEAN Banks (QABs).  In its current form, the ABIF excludes foreign banks, which the Council has urged the region to reconsider as foreign firms would introduce best practices and varied services and products.  The Council has recommended that ASEAN revise the criteria for a QAB so that foreign banks with a substantial presence in ASEAN could be considered Qualified ASEAN Banks as well.  Ultimately, the hope is that the ABIF will make it easier for foreign and ASEAN banks to operate throughout ASEAN to promote greater regional financial integration. The letter of intent shows continued progress towards this essential part of the formation of the ASEAN Economic Community (AEC).
• Following American withdrawal from the Trans-Pacific Partnership and amid negotiations for the Regional Comprehensive Economic Partnership (RCEP), Hong Kong has announced that three years of negotiations will result in a free trade agreement with ASEAN by the end of the year. After mainland China, ASEAN is Hong Kong’s second-largest trading partner. Although much of the attention will be focused on the implications of newfound free trade between Hong Kong and Singapore – the regional trading hubs – the Council will follow the details of a Hong Kong-ASEAN agreement with great interest for its immediate effects on all of ASEAN and the implications for future free trade agreements with the region.
• The Council has issued an Analytical Update on the evolution of U.S. trade policy and ASEAN.  The update was developed in response to members’ requests for additional background information on the initial contour of the administration’s trade policy priorities and initiatives, including the launch of 19 “deficit study” reports, which include reviews of current U.S. bilateral trade relations with Indonesia, Malaysia, Thailand, and Vietnam.  The update can be found here.

Advocacy

The Council will be participating in the ASEAN Economics Ministers (AEM) Meeting September 7-9 in Manila.  One of the highlights of this annual engagement is a sectoral white paper to the AEM of key action items in support of ASEAN integration.  A draft of the Council's annual AEM Whitepaper, which has been circulated to the Senior Economic Officials, is available here.  The paper will be continually updated in advance of the AEM.  Please send any additional input to Matt Solomon at msolomon@usasean.org.

Looking Ahead

• The annual ASEAN Secretariat Business Mission will take place on July 31 in Jakarta.  The mission will feature meetings with Secretary General Le Luong Minh, Deputy Secretary-Generals Lim and Vongthep, and an array of other ASEAN and U.S. officials. The registration deadline has now passed.  Please contact Matt Solomon at msolomon@usasean.org with any questions.
• Please save the date for the Council’s Mission to the ASEAN Economic Ministers’ Meeting (AEM) September 7-9 in Manila. Contact Matt Solomon at msolomon@usasean.org with any questions.

View the Council's latest ASEAN updates

TPP

Major Developments

• During the week of July 10, the chief negotiators of the remaining 11 nations in the Trans Pacific Partnership met to develop recommendations for their trade ministers on how the TPP agreement could go into force without the United States.  One of the primary issues to resolve is how much or little of the TPP text needs to be altered to reach a new consensus for bringing the agreement into force.  Most of the 11 nations favor modifying only the ‘bringing-into-force’ provisions of the agreement.  However, a few nations have indicated that they would like to alter additional provisions in the agreement which were direct requests of the United States.  The 11 nations have stated that they hope to agree on a pathway forward by November.
• A new study estimating the potential impacts on trade-related income gains if the TPP-11 nations could bring the agreement into force was released by a Canadian think tank last month.  The report notes that benefits for Canada and Mexico would be positive and the U.S. would be negatively impacted due to trade diversion.  The report can be found here.

View the Council's latest TPP updates

Industry Highlights

Customs

Major Developments

• ASEAN Member States continue to make progress developing their National Single Window (NSW) systems in preparation for regional integration into the ASEAN Single Window (ASW).  While ASEAN’s more developed members have already completed their NSWs and begun connecting to the ASW, the less developed members are taking longer.  Indonesia, Malaysia, Singapore and Thailand have been exchanging electronic certificates of origin (e-ATIGA Form D) over the pilot ASW since March 2016 and are now exploring the exchange of e-phytosanitary certificates and the ASEAN Customs Declaration Document by the end of 2017.
• Singapore’s Ministry of Finance (MOF) and Singapore Customs recently concluded a public consultation on the proposed amendments to the Customs Act. A summary of the amendments may be found here.  The amendments cover areas such as duties imposed on goods consumed in Free Trade Zones, approved landing places, and transit warehouses; the need for permits in removing fuel carried in fuel supply tanks of vessels; and the time limit to submit claims for refunds and to recover duties, taxes, fees, and other charges.  Notably, a major area of contention is the amendment of Section 39 on the submission of manifest data which would allow transshipments to be exempted from submission of manifest data. MOF and Singapore Customs will follow up with a summary of the comments received and their responses.

Advocacy

• On June 14, the Council submitted brief comments on the Proposed Amendments to the Singapore Customs Act 2017.  The submission may be found here.  The comments pertain to providing more clarity on certain sections and supporting Singapore’s e-commerce agenda and effectiveness as a global port.
• On July 11, the Council submitted comments on the Thai Revenue Department’s broad proposals to apply value added tax (VAT) and income tax to goods imported via e-commerce and electronic services.  The hearing document outlining these proposals may be found  here.  An unofficial translation may be found here and the Council’s letter may be found here.
• The 8th ASEAN Trade Facilitation–Joint Consultative Committee meeting was held in Singapore June 20-21 to develop a new strategic action plan for trade facilitation. The APEC Policy Support Unit, the United Nations Economic and Social Commission for Asia and the Pacific, the Economic Research Institute for ASEAN and East Asia (ERIA), and the World Bank gave presentations on trade facilitation indicators, and the Council presented on the importance of considering digital economy issues in trade facilitation.  On the second day, the Council and the Joint Business Councils gave a presentation on short- and medium-term trade facilitation recommendations. The Council’s presentation may be found here and the current draft of the SAP may be found here. The ATF-JCC now plans to make the SAP more specific in its strategies to reduce transaction costs.  A follow-up letter was sent to the ATF-JCC on July 4 further elaborating on ways to facilitate cross-border e-Commerce trade. This includes having <SDR 1000 as a simple common threshold to build a low-value shipment program. The program entails simplification of procedures and documentation, facilitation of clearance, simplified tax and payments, and simplification of returns.

View the Council's latest Customs updates

Defense & Security

Major Developments

Malaysia has halted its US$2 billion effort to replace its aging combat aircraft, instead opting to push forward plans to upgrade aerial surveillance capabilities in response to a growing threat of Islamic State (IS)-related militancy in the region.  Most significantly, the battle in Marawi between IS militants and Filipino security forces has led toward a greater priority being placed on obtaining more capable maritime patrol and surveillance aircraft by 2020.  A source in Malaysia’s Ministry of Defense noted that Kuala Lumpur was strongly considering the acquisition of commercial-based surveillance platforms, in lieu of military options, due to advantages in affordability, likely in response to a defense budget hampered by slow economic growth due to decreasing oil revenues.  The defense ministry source specified that the new platforms would need to be larger than existing assets, with a longer range, making specific mention of aircraft built by Lockheed Martin.  Indonesia and Malaysia are currently providing support to the Philippines with patrols along their shared borders in the Sulu Sea, and the fall of the IS stronghold in Mosul is met with fears of a renewed base for the organization to turn to Southeast Asia, as militants return to their home countries from fighting abroad.

View the Council's latest Defense & Security updates

Energy

Major Developments

• Starting in early 2018 the Government of the Philippines aims to implement a mandatory fuel-marking program to curb fuel smuggling and increase revenues.  The proposed fuel-marking program is one of a number of new revenue-generating provisions included in House Bill 5636, also called the Tax Reform for Acceleration and Inclusion (TRAIN) Act, which comprises the first package of the Department of Finance’s Comprehensive Tax Reform Plan (CTRP).  In the Philippines in 2016, smuggling and misdeclaration of oil cost the government at least P26.87 billion (US$533 million).  More information on the fuel-marking program can be found here.
• Indonesia’s Ministry of Energy and Mineral Resources (ESDM) continues its efforts to simplify licensing procedures in sectors under its authority with the aim of increasing investment flows into the energy and mining sectors.  In the oil and gas sector, ESDM has reduced the number of permits from 42 to at least six by implementing minister’s regulation No. 29/2017 (in Bahasa).  In addition, Minister for Energy and Mineral Resources Ignasius Jonan recently issued minister’s regulation No. 34/2017 (in Bahasa), which aims to streamline regulations covering mineral and coal sector mining licenses.  Minister’s regulation No. 34/2017 also reduces the number of permits for the coal and mineral mining sector from 117 to at least six.  While the efforts are a move in the right direction, a more comprehensive reform initiative aimed at better ensuring sanctity of contracts in the energy and mining sectors would send an even stronger message to foreign investors in Indonesia.  More information on minister’s regulation No. 29/2017 and minister’s regulation No. 34/2017 can be found here.
• Brunei's Energy and Industry Department at the Prime Minister’s Office (EIDPMO) announced earlier this month that it would be implementing a new electricity order – Electricity Order 2017 – on July 1, 2018, to increase the reliability and quality of the country's electricity supply.  Under the order, the newly established Autoriti Elektrik Brunei Darussalam, which would be part of the EIDPMO, would be in charge of enforcing provisions related to the generation, transmission, and distribution of electricity.  The new electricity order is the latest example of a government initiative aimed at improving Brunei’s business environment, particularly those factors associated with the ease of doing business.  More information on Electricity Order 2017 can be found here.

Advocacy

The Council notified member companies that the Energy Regulatory Commission (ERC) of the Philippines had issued the first draft of the “Licensing Rules for Distributed Energy Resources (DER) and Microgrid Systems.”  The public consultation period for the draft licensing rules, a copy of which can be found here, closed on July 4.

Looking Ahead

Please save the date for the Council’s Business Mission to the ASEAN Ministers on Energy Meeting (AMEM) September 19-21 in Manila.  Contact Riley Smith at rsmith@usasean.org with any questions.

View the Council's latest Energy updates

Financial Services

Major Developments

• The new leadership of Bank Negara Malaysia (BNM), under Governor Muhammad bin Ibrahim, has moved to tighten enforcement of its 70 percent foreign equity cap on insurance companies.  BNM recently sent letters to foreign insurance companies that exceeded this level, asking them to increase their local shareholding to at least 30 percent by June 2018.  Though the ownership cap has existed since 2009, BNM had previously granted exemptions for foreign investors who they saw as contributing to the development of the industry.  BNM’s new leadership, however, has chosen to focus on promoting local involvement in the industry.  There are 11 Malaysia-incorporated insurers that are wholly owned by foreign insurance companies.  Relatively small local equity markets may make it difficult for these companies to both raise local ownership at a competitive price and additional financing for future expansion. With national elections expected in October or November, the attention of senior political leadership will be diverted.  Following the elections, however, the new cabinet will have more time and political capital to deal with challenges such as this before the June 2018 deadline.  BNM's leadership changed in May 2016 when the current governor, Muhammad bin Ibrahim, replaced Dr. Zeti Akhtar Aziz, who had run BNM since 2000.
• Myanmar’s Lower House of Parliament (Pyithu Hluttaw) accepted initial proposals to develop laws on national crop insurance and national health insurance on June 21 and June 22 respectively.  The proposal for health insurance passed with support from 15 Members of Parliament and Minister for Health and Sport Dr. Myint Htwe with the goal of creating a more effective and affordable national healthcare system.  Both proposals are now going through State and Regional municipalities for public consultation.  After that, both proposals will go to their relevant Ministries to draft the bills.  Before becoming a law, each bill will have to be debated and passed by the Lower House and the Bills Committee, then the Upper House, and finally to the President.  The Council plans to submit feedback on the national health insurance proposal as the bill begins to be drafted.  A Health and Life Sciences Industry Mission to Myanmar is tscheduled August 16-17, around the same time that drafting will begin, providing an excellent opportunity to discuss the bill.
• At the Myanmar Investment Forum held in Nay Pyi Taw June 6-7, the government announced plans for a more competitive insurance market.  Managing Director of Myanma Insurance and former Chief Regulator at the Ministry of Finance and Planning, Daw Sandar Oo, explained that the government’s plan has already been approved by the cabinet and will be rolled out within three months.  Her presentation confirmed that this plan will allow for foreign insurance underwriters, brokers, and agents to obtain licenses to sell products.  Since 2012, when the government broke state-owned Myanma Insurance’s monopoly on the insurance sector, Myanmar has begun opening to private firms.  Back in December, U Thant Zin, an official in the Financial Regulation Department, emphasized that Myanmar planned to allow foreign firms to operate while easing the restrictions on local firms.

View the Council's latest Financial Services updates

Food & Agriculture

Major Developments

On June 15, United States Trade Representative Ambassador Robert Lighthizer spoke on plans to bring cases to the World Trade Organization (WTO) to abolish trade barriers that are not strictly grounded in science.  In his speech at the inaugural meeting of the Interagency Task Force on Agriculture and Rural Prosperity, Ambassador Lighthizer highlighted the significant barriers in agricultural trade faced by U.S. producers, focusing on biotechnology, which he contended faced trade barriers that are “not based on science”, echoing a media briefing by President Trump’s special assistant for agriculture, trade and food, Ray Starling, on April 24.  He added that the “USTR is dedicated to negotiating and enforcing trade deals with standards based on science to ensure the United States remains the world leader in innovation and a global powerhouse in agricultural trade.”  The inter-agency task force is chaired by Agriculture Secretary Sonny Perdue, and includes representatives from more than 20 cabinet agencies and executive branch offices, including the Commerce Department and the National Economic Council.  It aims to establish a “multi-agency platform,” working with parties involved in the agriculture trade to identify barriers to economic growth and forge access to new markets.  According to a report published by the USTR in 2014, the United States has been facing increasing non-tariff barriers in the agricultural sector, despite a corresponding decrease and removal of tariffs barriers.  These include issues connected to export certification requirements, agricultural biotechnology, Bovine Spongiform Encephalopathy (BSE), Avian Influenza (AI), and Maximum Residue Limits (MRLs) for pesticides and veterinary drugs.  In ASEAN, the Council’s Food & Agriculture Committee has continually advocated for the adoption and adherence to international science-based standards such as Codex, World Organization for Animal Health (OIE), International Plant Protection Convention (IPPC) and SPS measures.  ASEAN’s ability to compete regionally and internationally will be enhanced if there is harmonization of regulatory regimes that regulate the introduction of new technologies, the cross-border movement of biological materials, mutual recognition of standards, and the adoption of sensible, science-based policies to key issues.

Advocacy

The Council has submitted a position paper to the Philippines Senate Ways and Means Committee for a hearing on the proposed excise tax on sugar-sweetened beverages (SSBs).  While the date for the hearing has not been set, it is expected to take place after President Duterte’s State of the Nation Address on July 24.  The paper addresses the Government of the Philippines’ plan to impose a two-tier excise tax structure of 10 Pesos on SSBs containing purely locally produced sugar and 20 Pesos on SSBs containing “others’” sugar.  One of the proposed amendments as outlined in the paper is to eliminate this two-tier structure discriminating between domestic and foreign products and replace it with the same system for SSBs containing domestic and foreign-produced caloric sweeteners.  The Council reiterated that the purpose of the national treatment rule is to eliminate “hidden” domestic barriers to trade by WTO members through according imported products treatment no less favorable than that accorded to products of national origin.  Philippines’ adherence to this principle is important to maintain the balance of rights and obligations, and is essential for the maintenance of the multilateral trading system.  In addition, discriminatory application of such domestic taxes to protect national sugar production distorts the conditions of competition between domestic and imported goods, and leads to a reduction in economic welfare.

Looking Ahead

The Council will lead a business delegation to the 39^th ASEAN Ministerial Meeting on Agriculture and Forestry (AMAF) in Chiang Mai, Thailand September 28-29, 2017.  This annual mission provides a platform for members to engage with the ten ministers of agriculture, senior agricultural officials, and the ASEAN Secretariat.  Some key focus areas include Mutual Recognition Agreements (MRAs), and technology development in the agricultural sector.  For more information, please contact Sunita Kapoor at skapoor@usasean.org

View the Council's latest Food & Agriculture updates

Health & Life Sciences

Major Developments

Myanmar’s Lower House (Pyithu Hluttaw) accepted initial proposals to develop a national health insurance on June 22.  The proposal for health insurance passed with support from 15 MPs and Minister for Health and Sport Dr. Myint Htwe with the goal of creating a more effective and affordable national healthcare system.  Dr. Myint Htwe also commented that Myanmar will have to improve healthcare services before the proposed insurance system can be implemented.  Both proposals are now going through State and Regional municipalities for public consultation.  After that, both proposals will go to their relevant Ministries to draft the bills.  Before becoming a law, each bill will have to be debated and passed by the Lower House and the Bills Committee, then the Upper House, and finally to the President.  The Council plans to submit feedback on the national health insurance proposal as the bill begins the drafting process. Please contact Jack Myint at jmyint@usasean.org and Ying Hui Tng at yhtng@usasean.org to discuss the proposal further.  The bill’s drafting process will coincide with the Council’s Health and Life Sciences Committee’s Mission to Myanmar August 16-17, providing an excellent opportunity to discuss the bill.

Advocacy

The Council engaged the Government of Thailand in June during our Thailand Business Mission and most recently during a meeting between the Council and Deputy Secretary General Surachoke of the Thailand Food and Drug Administration, to discuss the current median reference pricing issue faced by pharmaceutical companies operating in Thailand.  The Public Procurement Act B.E. 2560, passed in 2016 and slated to take effect in August 2017, would establish a pricing committee on pharmaceutical products.  The Council has sent a letter to the Prime Minister expressing its support of the new public procurement system, and is following up with the Ministry of Public Health to request a pause to the current reference price system and instead use the vehicle of the Public Procurement Act to establish a more transparent, sustainable and predictable system.

Looking Ahead

The Council’s Health & Life Sciences Industry Mission to Myanmar will take place in Yangon and Nay Pyi Taw from August 16-17.  For more information, please contact Ying Hui Tng at yhtng@usasean.org.

View the Council's latest Health & Life Sciences updates

ICT

Major Developments

The government of Vietnam’s Ministry of Information and Communication (MIC) recently proposed a draft decree seeking to remove offensive, inaccurate or sensitive material from the internet.  Through this draft decree, MIC hopes to protect the reputation of organizations and individuals, and users who violate this decree may face fines up to VND50 million (US$2,200).  MIC also proposed a new regulation to go into effect on April 24, 2018, aimed at reducing spam and false content sent from prepaid mobile phones.  Through this regulation, mobile phone carriers will terminate accounts of mobile phone subscribers who fail to submit accurate information and/or upload a photo ID, in efforts to protect new internet and social media users.  Service providers who fail to comply with this regulation will face potential fines.  If Council members are interested in engaging on either regulation, please contact Matt Solomon at msolomon@usasean.org.

Advocacy

• The Council is preparing a submission in response to Vietnam’s new draft Law on Cybersecurity (English | Vietnamese), issued by the Ministry of Public Security.  Among its wide-ranging provisions, the Law requires foreign enterprises providing "telecommunication and/or internet services" to obtain business licenses, establish representative offices, and locate all servers "in which Vietnamese users data are administered" within Vietnam's borders; establishes a business licensing regime for entities offering “cybersecurity assurance services;” obliges telecommunications and internet service providers to deny service to any user failing to provide “authentic personal information;” and sets a broad definition of cybersecurity, including not only national security issues but also public order and social interest, allowing for the suspension or withdrawal of the operating license for any website hosting content “contrary to the morality or the fine customs and practices.”   The Council’s draft letter will be circulated to members shortly. 
• To address growing concerns around the data localization requirement in Indonesia’s Government Regulation (GR) 82/2012 (to be implemented in October 2017), the Council, along with the U.S. Chamber of Commerce, drafted letters to the Government of Indonesia.  The first letter followed the U.S.-Indonesia Trade and Investment Framework Agreement (TIFA) discussions in Washington in June, to the head of the Indonesia TIFA delegation, BKPM Chairman Tom Lembong and Ministry of Trade’s Director General Iman Pambagyo.  The second letter was addressed to the Minister of Communications and Information Technology, OJK and Bank Indonesia.  The letters request the Government of Indonesia to remove data localization requirements from GR82.  Contact Kim Yaeger at kyaeger@usasean.org for more information.
• The Council submitted a letter to the Thai Revenue Department in response to the Draft Act Amending the Revenue Code to Support Collection of Taxes from e-Business Operators.  Among its recommendations, the letter urges that the Draft Act follow the Organization of Economic Cooperation and Development (OECD)’s 2015 International Value Added Tax (VAT)/ Goods and Services Tax (GST) Guidelines, the European Union’s 2016 VAT Digital Single Market Package, and the OECD Base Erosion and Profit Shifting (BEPS) project, in order to create de minimis levels for tariffs, VAT, and income taxes that are high enough that small businesses are not overburdened. 
• Following the submission of a letter to Thai Deputy Prime Minister Somkid and National Broadcasting and Telecommunications Commission (NBTC) Chairman Thares, as well as in-person engagements during and since the Thailand Business Mission, the Thai government has delayed implementation of its proposed regulation governing Over-the-Top (OTT) services.  More information is available here. The Council will continue to follow developments as NBTC reworks the regulation and offers an opportunity for consultation.

View the Council's latest ICT updates

Infrastructure

Major Developments

• Vietnam plans to approve three new special economic zones (SEZ) by the end of 2017 in Quang Ninh, Khanh Hoa and Phu Quoc provinces in the north, central, and southern parts of the country, respectively.  Planning and Investment Minister Nguyen Chi Dung said that the new SEZs would be completely free of local regulation as per a new law being developed by the Vietnamese government that will attract international investment.  Although the precise contents of the law are unknown, officials have touted the unprecedented nature of these regulation-free zones, and said that they will go further than ever before to remove regulatory restrictions and taxes. Vietnam has 18 economic zones with varying degrees of incentives for investors which are currently at about 70 percent of their maximum capacity. Although Vietnam’s GDP growth has slipped to 5.1 percent last year, the government maintains its 2017 target of 6.7 percent and hopes that the attractive areas of foreign investment will be a driving force for this growth.
• As China invests in creating trade routes that recall the interconnectivity of the ancient Silk Road, ASEAN nations are expected to benefit from infrastructure funding, investments, and the inter-commercial flow.  Since Chinese President Xi Jinping announced his vision for the program in 2013, funding has been steadily growing at a pace that is unmatched by other infrastructure investment funds.  In May, Xi further pledged US$124 billion to the Belt and Road Initiative (BRI), adding to an initiative whose investment estimates range from $1 trillion to $4 trillion.  According to the ASEAN Investment Report 2015 on Infrastructure Investment and Connectivity, the infrastructure investment needs for the region through 2025 – covering power, transport, ICT, and water and sanitation – are huge.  Some $110 billion a year will be needed for infrastructure investment in these sectors.  Given the current spending by ASEAN Member States, the infrastructure investment gap will be equally huge but resources need to be found if the gap is to be filled and future demand is to be met.  ASEAN countries are increasingly looking at China to play a greater role to help bridge the gap.  Although large amounts of Chinese cash are flowing to projects throughout the ASEAN region, the financial structure and amount of these investments is mostly unknown due to a lack of transparency.  As China continues to invest and build throughout the region, the host governments will be challenged to organize their needs and priorities in formulating mutually beneficial agreements.  The BRI will undoubtedly cause China to become more involved in other countries than under the previous policy of respect for sovereignty, signaling an interesting shift in China’s global role. As more details of the BRI vision emerge, it will also be important to see if formal free-trade agreements are formulated between the countries within Xi’s vision and how the initiative will accompany a changing economic role for China and a new role for ASEAN.

Advocacy

The Council recently submitted a letter to the U.S. Trade and Development Agency (USTDA) providing support for its Lifecycle Cost Procurement Trainings that are conducted in Vietnam and the Philippines and soon to be in Indonesia.  To access the letter, please click here. As part of the USTDA’s Global Procurement Initiative (GPI), the in-depth training curriculum trains public procurement officials on how to conduct life cycle cost analyses (LCCA) for use in their daily job functions.  Many countries throughout ASEAN and the Asia Pacific still rely on least-cost procurement practices that severely disadvantage U.S. companies and keep many of these emerging economies from receiving high-quality goods and services they wish to procure.  Helping build the capacity of these procurement officials so that they can accurately apply more modern models and formulas for evaluating quality in public procurements would greatly help level the playing field for U.S. companies in the ASEAN region.

Looking Ahead

The Council will lead a business delegation to the 23^rd ASEAN Transport Ministers Meeting in Singapore later this year.  During the Council’s inaugural participation in 2016, the delegation hosted the 10 ASEAN Ministers, Senior Transport Officials and ASEAN Deputy Secretary General H.E. Lim Hong Hin for a working luncheon exchanging ideas on how the U.S. private sector can support plans to accelerate transport infrastructure development and address regional disparities in infrastructure.  Delegates also received updates from all ten ministers on the top land, aviation and maritime infrastructure projects as prioritized by each country.  For more information, please contact Sunita Kapoor at skapoor@usasean.org.   

View the Council's latest Infrastructure updates

Country Highlights

Brunei

Major Developments

The Government of Brunei and leaders of the oil and gas industry announced Electricity Order 2017 and the Energy Industry Business Integrity Pact respectively to show their commitment to improving and upholding integrity in Brunei’s energy sector.  Electricity Order 2017 will replace the country’s existing Electricity Act to improve the generation, transmission and distribution of electricity in Brunei as of July 1, 2018.  The order, which will be enforced by Autoriti Elektrik Brunei Darussalam established under the Energy and Industry Department at the Prime Minister’s Office (EIDPMO) is also in accordance with the nation’s efforts to improve its business environment by improving the reliability and quality of the electricity supply.  The changes and additions made to the existing Act include:

• Introduction of a licensing scheme for the generation, transmission and distribution of electricity;
• Certification requirement for electrical workers; and
• Regulation on installation and modification of electrical works.

Looking Ahead

The Council is currently reviewing possible dates for the 2017 Brunei Business Mission,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 asirait@usasean.org with any questions.

View the Council's latest Brunei updates

Cambodia

Major Developments

On June 27, Cambodia’s National Election Committee (NEC) announced the official results of the June 4 commune elections. The ruling Cambodian People’s Party (CPP) took 1,156 local commune chiefs’ seats compared to the main opposition Cambodia National Rescue Party’s (CNRP) 489 seats. For commune council seats, the CPP received 50.76% to the CNRP’s 43.83%, which puts the numbers at 6,503 for the CPP and 5,007 for the CNRP. The election saw 7.8 million of 9.6 million eligible voters participating, which represents a record turnout of 90.37% and a dramatic increase from the 2012 communal elections of 65.13%.

While both parties have criticized the integrity of the election, Prime Minister Hun Sen and opposition leader Kem Sokha also acknowledged the results announced by the NEC.  In the weeks leading up to the election, Prime Minister Hun Sen had claimed that civil war would erupt were the CPP to lose, but the electoral process proceeded without any major hiccups.  A coalition of 38 independent election monitors, including the Committee for Free and Fair Elections in Cambodia (COMFREL), sampled 481 polling stations and found that their counting results matched the NECs with 95 percent accuracy.  The seemingly improved integrity of Cambodia’s electoral process is a promising sign looking ahead to next year’s general elections.  Moreover, a significant increase in voter participation, particularly among the youth population, signals a growing public trust towards the electoral system.

View the Council's latest Cambodia updates

Indonesia

Major Developments

• The Indonesian government has expressed its intent to revise the country’s Negative Investment List during a technical meeting organized by the Coordinating Ministry for Economic Affairs.  The current Negative Investment List was last amended in February 2016 through Presidential Decree No. 44/2016.  While no formal revisions have been made, Coordinating Minister for Economic Affairs, Darmin Nasution hinted that potential revisions might be in the transportation (foreign ownership currently capped at 49 percent) and pharmaceutical (foreign ownership currently capped at 85 percent) sectors.
• On June 15, the Government of Indonesia released the ‘15th Economic Policy Package’, which is centered on strengthening the national logistics system through improving the business development and competitiveness of national logistics providers.  The policy package focuses on four main areas: (i) creating bigger opportunities for national transport and insurance in the transportation of goods, as well as increasing shipyard business or ship maintenance in Indonesia; (ii) reducing costs for logistic service providers, eliminating the requirements for licensing of freight transport, mitigating the investment costs of port business, standardizing domestic goods flow documents, developing regional distribution centers, simplifying certain vessel procurement facilities, and cost containment refund mechanism; (iii) strengthening the Indonesia National Single Window (INSW) authority; and (iv) establishing the Export Import Trade Team to simplify the trading system to support a better flow of goods.

Advocacy

On June 13, the Council partnered with the U.S. Chamber of Commerce to host a private sector consultation during the U.S.–Indonesia Trade and Investment Framework Agreement (TIFA) talks, which provided an opportunity to reinforce the importance of the two countries’ commercial relationship and the need to resolve key challenges in trade and investment.  The meeting was joined by Chairman Tom Lembong of the Investment Coordinating Board; Iman Pambagyo, the Ministry of Trade’s Director General for International Trade Negotiation; Ni Made A. Marthini, Ministry of Trade's Director for Bilateral Trade Negotiations; representatives of the Coordinating Ministry for Economic Affairs, Ministry of Law and Human Rights, Bank of Indonesia, and the Embassy of Indonesia.  This was the largest and most diverse delegation the Government of Indonesia has ever sent to the United States for TIFA talks and marks the first time since 2009 that a cabinet-level official has joined, demonstrating the willingness of Indonesia to constructively engage the new U.S. Administration. 

To address growing concerns regarding the data localization requirement in Government Regulation 82/2012, the Council and the U.S. Chamber of Commerce have drafted letters to the Ministry of Trade, Investment Coordinating Board (BKPM), Ministry of Communications and Information Technology, Bank Indonesia, and Financial Services Authority (OJK). For more information, contact Kim Yaeger at kyaeger@usasean.org.

Looking Ahead

The Council is now registering executives for its Annual Business Mission to Indonesia. Click here to register.  Contact Artha Sirait at asirait@usasean.org with any questions.

View the Council's latest Indonesia updates

Laos

Major Developments

• Laos will sign a tripartite electricity trade agreement with Thailand and Malaysia at the next ASEAN Energy Ministers Meeting September 18-22.  Laos will sell electricity to Malaysia using Thailand’s transmission system.  This informal commitment to sign an agreement is a step towards an ASEAN power grid that would eventually incorporate all of mainland ASEAN.  After the agreement is signed in September, there will be more opportunities for firms to improve electricity transport between Laos and Malaysia by improving the Thai facilitation system.
• The Lao-Thai Railway is expected to begin construction at the end of 2017 or early 2018.  Authorities are seeking a consulting firm to begin the construction process which will involve linking Laos and Thailand over the Friendship bridge.  Most of the funding has been provided by Thailand through grants and low interest loans.  The project is expected to be completed two years after construction and eventually the goal is to link this railway with the Lao-Chinese railway. Integrating these two railways will link China, Laos, and Thailand further as the “One Belt, One Road” initiative takes shape.

Looking ahead

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

View the Council's latest Laos updates

Malaysia

Major Developments

• Malaysia has been removed from the State Department’s Tier 2 watchlist in its annual Trafficking in Persons (TIP) report, released on June 27.  The Malaysian government’s increased efforts, compared to previous reporting periods, is cited as the main reason for the upgrade.  Among improvements made, a new inter-agency law enforcement taskforce to coordinate anti-trafficking operations was established and enforcement of the law prohibiting passport retention was strengthened.  The Government had also approved an updated national action plan spanning 2016-2020 and allocated sufficient resources towards its implementation.  However, despite being removed from the watchlist, Malaysia remains listed as a Tier 2 country in the TIP report, a ranking assigned to countries that do not fully meet the Trafficking Victims Protection Act’s (TVPA) minimum standards, but are making significant efforts towards meeting them. The report can be found here.
• The new leadership of Bank Negara Malaysia (BNM) has moved to tighten enforcement of its 70 percent foreign equity cap on insurance companies as it seeks to boost local participation in the industry.  BNM recently sent letters to foreign insurance companies that exceeded this level, asking them to increase their local shareholding to at least 30 percent by June 2018.  Although the ownership cap has existed since 2009, BNM had previously granted exemptions for foreign investors that they saw as contributing to the development of the industry.  BNM’s new leadership, however, has chosen to focus on promoting local involvement in the industry instead.  The small size of the local equity markets may make it difficult for foreign insurance companies to raise local ownership at a competitive price while also raising additional financing for future expansion.

Advocacy

On July 14, the Council held a roundtable in Kuala Lumpur with Karl Ehlers, Deputy Assistant USTR, Southeast Asia. The roundtable was an opportunity to brief USTR on issues member companies are facing in advance of the U.S.-Malaysia TIFA discussion on July 17 with the Ministry of International Trade and Industry (MITI) and USTR officials Barbara Weisel and Karl Ehlers.

View the Council's latest Malaysia updates

Myanmar

Major Developments

• Three major telecommunication operators in Myanmar continue to push towards increased 4G LTE service. Considering most internet access in Myanmar is through cellular data, this should drastically improve efficiency across the country. On June 19, Myanmar’s state-owned Myanma Posts and Telecommunications (MPT) launched LTE+ in Yangon, Mandalay, and Nay Pyi Taw with the promise that it would be the fastest data service in the country.  MPT collaborated with Japan’s KDDI Corp and Sumitomo Corp in a joint venture to make this investment possible.  This came after Telenor launched its own LTE service on June 15 in 29 townships around Yangon with more expansion to follow in the coming months.  Ooredoo Myanmar also plans to increase its 4G network with its recent investment of US$80 million in 4G technology.  It is estimated that this upgrade in mobile data will be 10 times faster than the current 3G coverage.  It will improve cell phone service for almost 50 million people, with MPT claiming 23 million customers, Telenor 18 million, and Ooredoo 9 million.  All companies appear to be using the 1,800 MHz frequency band for their LTE service. Over the past few years, these companies have succeeded in expanding 4G reach to all states and regions across Myanmar, with the exception of the mountainous Chin and Kayah states.  Since 2014 the number of mobile users in Myanmar has risen from 10 to 80 percent, showing major growth in connectivity.
• At the Myanmar Investment Forum held in Nay Pyi Taw June 6-7, the government announced plans for a more competitive insurance market.  Managing Director of Myanma Insurance and former Chief Regulator at the Ministry of Finance and Planning, Daw Sandar Oo, explained that the government’s plan has already been approved by the cabinet and will be rolled out within three months.  Her presentation confirmed that this plan will allow for foreign insurance underwriters, brokers, and agents to obtain licenses to sell products.  Since 2012, when the government broke state-owned Myanma Insurance’s monopoly on the insurance sector, Myanmar has begun opening to private firms.  Back in December, U Thant Zin, an official in the Financial Regulation Department, emphasized that Myanmar planned to allow foreign firms to operate while easing the restrictions on local firms.

View the Council's latest Myanmar updates

Philippines

Major Developments

• In its current form, the first package of the Philippines Comprehensive Tax Reform Program (CTRP), which was approved by the House of Representatives on May 31 but has yet to pass in the Senate, would remove the value-added tax (VAT) exemptions that are currently applied to the business process outsourcing (BPO) industry in the Philippines.  The measure has raised concerns among businesses and industry groups that the removal of the exemptions could weaken the Philippines’ global competitiveness as a BPO destination, an outcome that would likely see growth in the industry stall and have repercussions throughout the broader economy.  Over the last decade the BPO industry has come to play a major role in the Philippine economy.  In 2015 alone, the industry generated 1.2 million direct jobs and brought in US$22 billion in revenue.     
• On June 23, the Department of Information and Communication Technology (DICT) released the National Broadband Plan (NBP), which will serve as a blueprint for putting in place the broadband infrastructure necessary to increase internet speeds and expand internet access into remote areas of the Philippines.  Expensive but poor internet connectivity and chronically slow speeds are increasingly becoming a serious hindrance in the Philippines as businesses rely more on ICT and the internet.  Through the NBP the DICT aims to achieve four main goals over the next 10 years (2017-2027): accelerated investment, mobilized and engaged public and private sectors, increased internet access across the country, and increased take-up rate.  A copy of the NBP can be found here.
• House Bill 3719 was recently filed in the House of Representatives.  The Bill seeks to impose a new excise tax on the salt content of manufactured and processed food.  Supporters of the proposed tax believe that it will reduce the consumption of salt.  Studies have shown that diets high in salt are associated with high blood pressure and increased risks of heart attacks and strokes.  However, opponents argue that the tax is anti-poor and undermines the 1995 ASIN Law, or Republic Act 8172, which required that salt be iodized for nutritional purpose.  A copy of House Bill 3719 can be found here.

Advocacy

• The Council has submitted a position paper to the Philippines Senate Ways and Means Committee for a hearing on the proposed excise tax on sugar-sweetened beverages (SSBs).  While the date for the hearing has not been set, it is expected to take place after President Duterte’s State of the Nation Address on July 24.  The paper addresses the Government of the Philippines’ plan to impose a two-tier excise tax structure of 10 Pesos on SSBs containing purely locally produced sugar and 20 Pesos on SSBs containing “others’” sugar.  One of the proposed amendments as outlined in the paper is to eliminate this two-tier structure discriminating between domestic and foreign products and replace it with the same system for SSBs containing domestic and foreign-produced caloric sweeteners.  The Council reiterates that the purpose of the national treatment rule is to eliminate “hidden” domestic barriers to trade by WTO members through according imported products treatment no less favorable than that accorded to products of national origin.  Philippines’ adherence to this principle is important to maintain the balance of rights and obligations, and is essential for the maintenance of the multilateral trading system.  In addition, discriminatory application of such domestic taxes to protect national sugar production distorts the conditions of competition between domestic and imported goods, and leads to a reduction in economic welfare.  An overview of the Council’s analysis and recommendations is detailed here.
• On July 18, the Council and AmCham Philippines co-hosted a roundtable discussion with Dr. Madeleine K. Albright, former U.S. Secretary of State and current Chair of the Albright Stonebridge Group.  Dr. Albright sought the views of the current business environment in the Philippines from the companies in attendance.  She also discussed her views on global trends and changing international politics from Washington D.C.

Looking Ahead

The Council's 2017 Philippines Business Mission will take place July 25-27 in Manila.  The mission will feature meetings with high-ranking officials from the Duterte administration, leaders of Congress, and members of the private sector.  The registration deadline has now passed.  Please contact Riley Smith at rsmith@usasean.org with any questions.

View the Council's latest Philippines updates

Singapore

Major Developments

• At Singapore’s 9th National IT Summit on May 30, Minister for Health Gan Kim Yong unveiled seven transformation programs intended to help the Ministry of Health (MOH) achieve the goals of the Health IT Master Plan (HITMAP).  First developed in mid-2013, HITMAP had become the strategic IT master plan for utilizing the latest advancement in IT to make the provision of healthcare in Singapore cheaper, better and faster.  The Minister of Health hopes to achieve this goal by effecting three key shifts in the healthcare system, namely moving beyond quality to value, moving beyond hospital to community, and moving beyond healthcare to health.  More information on the seven transformation programs announced by MOH and HITMAP can be found here.
• The Monetary Authority of Singapore (MAS) completed its two-year investigation of banks involved with 1Malaysia Development Berhad (1MDB) on May 30.  The investigation showed breaches of anti-money laundering requirements and control lapses relating to poor screening of these transactions.  In addition to financial penalties levied against Credit Suisse and United Overseas Bank (UOB), at least four bank employees were banned from the industry.  In addition to those who received bans, several bankers found guilty of charges related to the 1MDB scandal received jail sentences ranging from 4 weeks to 2.5 years.  More information on the MAS investigation into 1MDB can be found here.
• On June 15, U.S. President Donald Trump formally nominated Kathleen Troia (K.T.) McFarland to be the next U.S. Ambassador to the Republic of Singapore, according to a White House press release.  McFarland served as Deputy National Security Adviser in the Trump Administration until she stepped down in April amid a reorganization.  More information on K.T. McFarland’s nomination can be found here.

Advocacy

• The Council and BSA | The Software Alliance (BSA) submitted a draft joint position paper on July 13 to the Info-communications Media Development Authority (IMDA) and the Ministry of Trade and Industry.  The draft position paper drew from member companies’ input and expressed the Council’s and BSA’s concerns over the Government of Singapore’s proposal to convert Cloud Outage Incident Response (COIR) Guidelines into a Singapore Standard.  Representatives from the Council, BSA, and member companies also met with officials from IMDA and SPRING to express their concerns over the newly proposed standard.  Both the Council and BSA do not believe that these standards align with fundamental concepts of cloud computing architecture, business models and usage models, and that it is likely to confuse consumers and undermine efforts to drive greater cloud adoption and innovation.  Taking the meeting with IMDA and SPRING into account, the Council and BSA are finalizing the joint position paper and plan to formally request an extension of the public consultation period beyond the original deadline of July 13.  A copy of the draft joint position paper can be found here.
• The Council notified members that the Ministry of Communications and Information (MCI) and the Cyber Security Agency (CSA) had opened the Draft Cybersecurity Bill for public consultation.  The consultation period is open from July 10-August 3, and the Draft Bill seeks to strengthen the defense for Critical Information Infrastructure in public and private sectors, as well as provide and maintain a framework for national cybersecurity.  The Council is not developing a submission at this time, but would be happy to, should sufficient interest and input from members be provided.  The public consultation document for the Draft Bill can be found here.
• The Inland Revenue Authority of Singapore (IRAS) issued a call for input on a proposal for a simplified vendor registration system for imports of low-value goods and digital services.  Under the proposed regime, overseas suppliers providing digital services and low-value goods to customers in Singapore would be required to register and account for Goods and Services Tax (GST) on these supplies.  The Council solicited input from member companies and submitted a consolidated version of the input on June 30.  A copy of the submission can be found here.

View the Council's latest Singapore updates

Thailand

Major Developments

• On June 23, the Council concluded its annual Thailand Business Mission.  The three-day mission focused on identifying opportunities to bolster the U.S.-Thailand economic relationship and supporting the government of Thailand’s efforts to implement key reforms to help promote Thailand as a destination for high-value trade and investment. Representatives from 33 companies were received by Prime Minister Prayut Chan-o-cha and Deputy Prime Minister Somkid Jatusripitakon, as well as the Ministers of Energy, Industry and Transportation, and met separately with the Ministers of Commerce, Digital Economy and Society, Finance, and Tourism and Sports, as well as officials from the Ministry of Agriculture and Cooperatives, Ministry of Foreign Affairs, Ministry of Public Health, Bank of Thailand, and the National Broadcasting and Telecommunications Commission. For more information on the mission, please click here.
• The Thai Ministry of Commerce has issued a regulation amending the Foreign Business Act, easing foreign majority ownership restrictions on 19 types of businesses.  The amendments allow foreigners to apply for work and share ownership permissions from the ministry or government agency that directly oversees one of the 19 sectors or professions, including finance, rail transportation, aviation, energy production, and petroleum exploration.
• The Department of Trade Negotiations under the Ministry of Commerce has issued a concept paper proposing flagship projects in a range of sectors under the U.S.-Thailand Strategic Partnership Initiative.  The Department has requested that Council members review the document to identify opportunities for collaboration.  Proposed projects include research and development in processed agricultural products, development of fulfillment centers for e-commerce business, and development of Smart SMEs.  To express interest in any of the projects, please email Matt Solomon at msolomon@usasean.org.

Advocacy

• The Council submitted a letter to the Thai Revenue Department in response to the Draft Act Amending the Revenue Code to Support Collection of Taxes from e-Business Operators.  Among its recommendations, the letter urges that the Draft Act follow the OECD’s 2015 International VAT/GST Guidelines, the European Union’s 2016 VAT Digital Single Market Package, and the OECD BEPS project, to create de minimis levels for tariffs, VAT, and income taxes that are high enough that small businesses are not overburdened. 
• Following the submission of a letter to Deputy Prime Minister Somkid and NBTC Chairman Thares, as well as in-person engagements during and since the Thailand Business Mission, the Thai government has delayed implementation of its proposed regulation governing Over-the-Top (OTT) services.  More information is available here. The Council will continue to follow developments as NBTC reworks the regulation and offers an opportunity for consultation.

View the Council's latest Thailand updates

Vietnam

Major Developments

The Government of Vietnam has set a goal of 6.7 percent GDP growth rate for fiscal year 2017.  Although this is an ambitious figure, the nation projects to raise $7 billion from the sales of share offerings from state-owned enterprises (SOEs), which will contribute to this growth.  To increase the likelihood of reaching this $7 billion target, Prime Minister Nguyen Xuan Phuc stated that Vietnam will lift restrictions on foreign investment in the following industries: services, telecommunication, finance, and banking.  In addition, limits on foreign ownership will also be raised across the board.  Foreign investors have paid closer attention to private firms, and invested fewer dollars into SOEs.  However, with the lifting of restrictions, the hope is to promote growth and investment in SOEs.

Advocacy

The Council is preparing a submission in response to Vietnam’s new draft Law on Cybersecurity (English | Vietnamese), issued by the Ministry of Public Security. Among its wide-ranging provisions, the Law requires foreign enterprises providing "telecommunication and/or internet services" to obtain business licenses, establish representative offices, and locate all servers "in which Vietnamese users data are administered" within Vietnam's borders; establishes a business licensing regime for entities offering “cybersecurity assurance services;” obliges telecommunications and internet service providers to deny service to any user failing to provide “authentic personal information;” and sets a broad definition of cybersecurity, including not only national security issues but also public order and social interest, allowing for the suspension or withdrawal of the operating license for any website hosting content “contrary to the morality or the fine customs and practices.”

View the Council's latest Vietnam updates