March 2018

President’s Newsletter – March 2018

Dear Members,

It has been an eventful few weeks within the Council and outside.  President Trump has announced changes in his foreign policy team and a new Deputy USTR has been confirmed.  Secretary of State Tillerson is out and CIA Director Mike Pompeo has been nominated to replace him.  National Security Advisor H.R. McMaster is out and John Bolton has been named as his replacement.  Closer to home, the Senate confirmed Deputy U.S. Trade Representative Jeffrey D. Gerrish and he was sworn in early last week.  Ambassador Gerrish will be responsible for Asia, Europe, the Middle East and Industrial Competitiveness globally.  As a leading attorney focused on trade, he has known USTR Lighthizer for decades, and they are reportedly very close.

President Trump also launched 301 tariffs targeting China last week.  Their effect on ASEAN is still to be determined.  A significant part of trade within Asia and from Asia to the United States happens within multinational supply chains.  ASEAN could be hurt by the disruption of these supply chains, but may also be a beneficiary as companies rebalance away from China. 

ASEAN might also benefit from renewed Trump Administration focus when it comes to bilateral free trade agreements.  Ambassador Lighthizer specifically mentioned possible FTAs with the Philippines, Vietnam and Malaysia (with the Philippines being the most likely short-term focus) during his Congressional testimony last week. To read the full testimony, please click here.

In Myanmar, President U Htin Kyaw resigned after nearly two years in office, citing health reasons.  The ruling National League for Democracy (NLD) Party has nominated Speaker of the Lower House U Win Myint, who resigned from his parliamentary post last week, to be the next President.  He is expected to be confirmed after a full parliamentary vote next week.  Despite the high-level shakeup, it is expected that the status quo will stay intact, with Daw Aung San Suu Kyi as de-facto leader of the country, and the Office of the President will remain largely ceremonial.

From the Council’s point of view, it has been a very busy month.  We have executed major business missions in the Philippines and Indonesia, and our Vietnam Business Mission will take place next week.  During the mission to Indonesia, the Council was on the receiving end of a rare honor to meet with both President Jokowi and Vice President Kalla on the same visit.  Most delegations are limited to one or the other.  Ambassador Bowoleksono, the Indonesian Ambassador to the U.S., also reminded me that in addition to meeting both the President and Vice President, we are one of the only organizations outside of Jakarta who has had a chance to meet with President Jokowi five times during his first three and half years in office.

Indonesia Business Mission:

On March 13-15, the Council led a delegation of 41 leading U.S. companies for its annual business mission to Indonesia.  We moved our mission earlier in the year this year due to the upcoming regional elections and the start of campaigning for the 2019 Presidential elections.  We were rewarded for this decision.  Over the course of the mission, the delegation held more than thirty meetings including with President Joko Widodo, Vice President Jusuf Kalla, Coordinating Minister Luhut, Coordinating Minister Wiranto, key members of the cabinet and other senior government officials, as well as representatives of the Indonesian business community.  In our hour-long meeting with President Jokowi, we discussed the state of the Indonesian economy and he announced a “major surprise” in economic reform which will be unveiled in “two months” time.  He also recognized that challenges still remained and named several of our top issues specifically including data localization, the Halal Law implementing regulations and digital payment systems.  During the mission, we also signed an MOU with Indonesia’s Investment Coordinating Board (BKPM) on promoting business opportunities in Indonesia through direct investment as well as Public-Private Partnerships.  The signing of this new MoU is yet another milestone for us, as it highlights the growing importance of bilateral ties between Indonesia and the U.S., and how American businesses can help strengthen this relationship.

Mission to the ASEAN Secretariat:

On March 12, the Council brought a delegation of 12 leading U.S. companies to engage top officials from the ASEAN Secretariat in Jakarta to build relationships with the newly-installed leadership, including recently-appointed ASEAN Secretary-General Lim Jock Hoi, and to further develop longstanding commercial ties with the region.  Secretary General Lim stressed the importance of the ASEAN Economic Community and his focus over his five-year term to further advance the 2025 goals of the Community.  In addition to meeting the new leadership, discussions between the delegation and Secretariat focused on understanding how the U.S. business community can best contribute to forging a Resilient and Innovative ASEAN under Singapore’s 2018 ASEAN Chairmanship.  The delegation expressed its support for progress under the ASEAN Free Trade Area, ASEAN Single Window, and the use of Mutual Recognition Agreements (MRAs) to regionally harmonize rules and standards across a wide range of industries and sectors.  The delegation also encouraged the continued development of the ASEAN Trade in Services Agreement, ASEAN e-Commerce Agreement, and ASEAN Framework on Digital Data Governance as efforts to boost regional harmonization.

Philippines Business Mission:

On March 6-7, the Council led a delegation of 23 U.S. companies on its annual business mission to the Philippines.  During the mission, the delegation engaged key Philippine Government officials, including Finance Secretary Carlos Dominguez and Trade and Industry Secretary Ramon Lopez on priority economic reforms and initiatives of the administration of President Rodrigo Duterte.  Major themes of the mission include Government efforts to liberalize sectors of the economy to attract more foreign direct investment (FDI), including through the release of a new, shortened Foreign Investment Negative List and proposed amendments to the Public Service Act.

On March 7, the Council kicked off its 2018 SME programming, with more than 200 East Java entrepreneurs participating in a one-day workshop entitled “Surabaya SMEs Go Digital and International,” co-organized by the Council, the Indonesia Ministry of Cooperatives and SMEs, and the U.S. Consulate General in Surabaya.  Council Members such as Cisco, PT HM Sampoerna Tbk., Facebook, FedEx, and Google shared their expertise on SMEs’ usage of digital tools for increased competitiveness and global market participation.  Mayor of Surabaya Ms. Tri Rismaharini; Deputy of Production and Marketing sector of the Indonesia Ministry of Cooperatives and SMEs Mr. I Wayan Dipta; and U.S. Consul General in Surabaya Ms. Heather Variava were among the distinguished guests that attended the workshop.  View the press release here.  Contact Vinsensius Kangen at vkangen@usasean.org for more information related to this workshop and other Council’s SME activities.

To our friends celebrating the New Year in Thailand, Myanmar and Laos – Happy Songkran!  Happy Thingyan!  Happy Pii Mai! On behalf of all of us at the Council, I wish you a year of happiness, good health, and prosperity.

Highlights

Looking Ahead

• On March 27-29, the Council is organizing its annual Vietnam Business Mission.  During this year’s mission, the Council will meet with a wide variety of Ministries from all sectors, State-Owned Enterprises, and Prime Minister Nguyen Xuan Phuc.  The mission will begin with a briefing by U.S. Ambassador to Vietnam Daniel Kritenbrink, followed by an evening reception, hosted by the Council, with participation from senior members of the Vietnamese Government and key stakeholders in Vietnam. For more information, please contact Hai Pham at hpham@usasean.org and Vu Tu Thanh at tvu@usasean.org.
• On March 29-30, the Council is organizing its annual Health & Life Sciences Industry Mission to Vietnam.  During the mission, the Council will meet with the Ministry of Health, the Vietnam Social Security agency, Vinmec International Hospital, and the National Assembly’s Committee on Social Issues.  The mission will also feature a panel discussion on the healthcare industry development in Vietnam and a joint working group meeting with MOH as part of the Council’s MOU with MOH.  For more information, please contact Hai Pham at hpham@usasean.org and Ying Hui Tng at yhtng@usasean.org.
• On April 5-6, the Council will hold its annual Mission to the ASEAN Finance Ministers and Central Bank Governors Meeting (AFMGM) in Singapore.  The Council plans to hold its regular consultation with the assembled Finance Ministers and Central Bank Governors on ASEAN integration issues, including digital financial innovation, capital markets development, and insurance and addressing emerging risks.  The delegation will also hold bilateral meetings with Ministers and Governors and join the official AFMGM programming. For More Information, please contact Shay Wester at swester@usasean.org or Ian Saccomanno at isaccomanno@usasean.org for more information.

Advocacy

• The Council utilized our 2018 Senior Executives Business Mission to the Philippines, which included meetings with numerous Cabinet Secretaries and the Central Bank governor, to successfully advocate for a number of recommendations to the Government of the Philippines including: the value of Life Cycle Cost in infrastructure project development; including a grace period for existing investors in the expected reduction of investment incentives in future tax reform packages; and liberalizing additional domestic industries open to foreign direct investment
• The Council is continuing its advocacy efforts with the Government of Malaysia’s Central Bank regarding proposed regulations on outsourcing and electronic payments.  The Council’s has already noted several concerns about potential measures (data localization and the creation of a domestic electronic payment monopoly company) that may be part of the proposed new regulatory frameworks, which if true would seemingly contradict existing regulations and the principles noted in the Prime Minister’s “Cloud First Strategy”.  Following a meeting last month at Bank Negara between the Council’s VP of Policy Marc Mealy and Deputy Governor Jessica Lian, the Council requested a follow up meeting focused on providing industry with greater transparency of the technical details in the proposed regulations.  
• The Council joined several other industry groups in transmitting a letter to the Government of Thailand advocating that careful consideration be given regarding proposed new restrictions on the use of crop protection technologies in Thailand. The letter also stressed the importance of using science based approaches to evaluating the efficacy and safety of agricultural input and the value of including stakeholder consultations in any proposed policy or regulatory change process.   

Intelligence

On March 2, the Council published an Analytical Report on Singapore’s Budget 2018, which focuses on strengthening Singapore’s economic future and preparing the country for anticipated challenges in the years to come.  The report includes an examination of how Budget 2018 deals with projected infrastructure investment and rising healthcare costs, including an increase in the Goods and Services Tax (GST) to help address the latter.  The full Analytical Report can be found here.

Relationship Building

In addition to all of the Business Missions in March, we will be holding a series of meetings around the World Bank IMF Spring Meetings for more details to follow.  The Council will also hold our annual gala dinner on April 26 in Washington, DC.   U.S. Ambassadors Bitter (Laos) Davies (Thailand), Donovan (Indonesia) and Kritenbrink (Vietnam) will be joining us for the dinner as well as our annual Ambassadors Tour which will visit Seattle and Los Angeles in addition to Washington, DC

Promotion

On behalf of the U.S. APEC Business Coalition, the Council would like to extend an invitation to members for a briefing on the APEC Papua New Guinea SOM I and ABAC I meetings.  Please join senior U.S. government officials and members of the U.S. business community for a briefing on outcomes of the first APEC Senior Officials Meeting, held in Port Moresby, Papua New Guinea, and the first ABAC meeting, held in Auckland, New Zealand.  The briefing will feature remarks from Ambassador Matthew J. Matthews, U.S. Senior Official for APEC and Deputy Assistant Secretary for Australia, New Zealand, and the Pacific Island; Michael L. Beeman, Assistant U.S. Trade Representative for Japan, Korea, and APEC; and Monica H. Whaley, President, National Center for APEC, Alternate U.S. ABAC Member.  Interested members should register here.

Council in the News

• Council Senior Vice President and Regional Managing Director Amb. Michael Michalak was on Bloomberg TV, discussing U.S.-China trade tariffs: US-ASEAN Business Council Weighs in on U.S., China Trae Wars | Bloomberg, March 22
• The Jakarta Post did a feature piece on the Council’s annual business mission to Indonesia: RI entices US to invest more | Jakarta Post, March 14
• Business Inquirer did a feature piece on the Council’s annual business mission to the Philippines: US firms woo PH partners amid China push | Business Inquirer, March 10

Membership

As of March 1, we are pleased to welcome two new members to the Council, both at the Corporate level: Lennar International and Verizon.  This brings our total membership to 155, with 74 Corporate members and 81 Chairman’s Council members.

Lennar is one of the largest homebuilding, land-owning, loan-making leviathans in the U.S., along with D.R. Horton and Pulte Homes.  The company builds single- and multi-family attached and detached homes in 18 states under brand names including Lennar, Camelot, NuHome, and Greystone.  Lennar targets first-time, move-up, and active adult buyers and markets its homes as "everything included."  The company also provides financial services including mortgage financing, title, and closing services.  Lennar's homes are delivered at an average price of $360,000.  In 2017, Lennar purchased Florida homebuilder WCI Communities and acquired rival CalAtlantic for $6 billion in 2018.

Verizon Communications is the largest wireless phone service in the US and the second largest US telecom services provider overall. The company's core mobile business, Verizon Wireless, serves more than 146 million connections. Verizon's wireline unit, with more than 18 million voice connections, provides local telephone, long-distance, internet access, and digital TV services to residential and wholesale customers. In addition, Verizon offers a wide range of telecom, managed network, and IT services to commercial and government clients in more than 150 countries. Verizon has expanded its video and advertising capabilities with the acquisitions of AOL and Yahoo assets.

Regional Highlights

APEC

Looking Ahead

On behalf of the U.S. APEC Business Coalition, the Council would like to extend an invitation to members for a briefing on the APEC Papua New Guinea SOM I and ABAC I meetings.  Please join senior U.S. government officials and members of the U.S. business community for a briefing on outcomes of the first APEC Senior Officials Meeting, held in Port Moresby, Papua New Guinea, and the first ABAC meeting, held in Auckland, New Zealand.  The briefing will feature remarks from Ambassador Matthew J. Matthews, U.S. Senior Official for APEC and Deputy Assistant Secretary for Australia, New Zealand, and the Pacific Island, Michael L. Beeman, Assistant U.S. Trade Representative for Japan, Korea, and APEC, and Monica H. Whaley, President, National Center for APEC, Alternate U.S. ABAC Member.  Interested members should register here. 

View the Council's latest APEC updates

ASEAN

Major Developments

• On March 7, the Council kicked off its 2018 SME programming, with more than 200 East Java entrepreneurs participating in a one-day workshop entitled “Surabaya SMEs Go Digital and International,” co-organized by the Council, the Indonesia Ministry of Cooperatives and SMEs, and the U.S. Consulate General in Surabaya.  Council Members such as Cisco, PT HM Sampoerna Tbk., Facebook, FedEx, and Google shared their expertise on SMEs’ usage of digital tools for increased competitiveness and global market participation.  Mayor of Surabaya Ms. Tri Rismaharini; Deputy of Production and Marketing sector of the Indonesia Ministry of Cooperatives and SMEs Mr. I Wayan Dipta; U.S. Consul General in Surabaya Ms. Heather Variava; and the Council’s Indonesia Chief Representative Ms. Desi Indrimayutri were among the distinguished guests that attended the workshop.  View the press release here.  Contact Vinsensius Kangen at vkangen@usasean.org for more information related to this workshop and other Council’s SME activities.
• On March 12, the Council held its fifth annual ASEAN Secretariat Business Mission in Jakarta.  The delegation of 12 leading U.S. companies was received by the recently-appointed ASEAN Secretary-General H.E. Lim Jock Hoi and other top Secretariat officials. The Mission also featured a briefing from Jane Bocklage, Chargé d’affaires ad interim at the U.S. Mission to ASEAN, and a luncheon discussion with the ASEAN Centre for Energy, the ASEAN Foundation, the ASEAN Coordinating Centre for Humanitarian Assistance (AHA Centre), and the Economic Research Institute for ASEAN and East Asia (ERIA).  View the press release here.

Looking Ahead

On April 5-6, the Council will hold its annual Mission to the ASEAN Finance Ministers and Central Bank Governors Meeting (AFMGM) in Singapore.  The Council plans to hold its regular consultation with the assembled Finance Ministers and Central Bank Governors on ASEAN integration issues, including digital financial innovation, capital markets development, and insurance and addressing emerging risks.  The delegation will also hold bilateral meetings with Ministers and Governors and join the official AFMGM programming.  For more information, please contact Shay Wester at swester@usasean.org or Ian Saccomanno at isaccomanno@usasean.org for more information.

View the Council's latest ASEAN updates

TPP

Major Developments

On March 8 in Chile, the 11-member nations of the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) signed a final agreement, which can be accessed here.  The trade pact involves a group of 11 nations, which collectively have 500 million citizens, make up approximately 14 percent of global GDP and combined economies totaling nearly US$14 trillion.

Advocacy

The Council continued to encourage the four ASEAN members of the CPTPP to sign the agreement and ratify it as soon as possible.

Looking Ahead

Once six of the eleven-member nations ratify the agreement, it will go into force immediately. Most analysts believe that by the end of 2018 or early 2019, the agreement will be enacted.

View the Council's latest TPP updates

Industry Highlights

Customs

Major Developments

In January, the Indonesian Ministry of Trade issued several regulations to improve export permits and process for a range of raw materials and industrial inputs. Eighteen of the twenty-one regulations have been issued so far, which can be found here in Bahasa Indonesia.  Most of the new regulations alter provisions related to monitoring and inspection processes for import-export.  Each regulation is different, in order to reflect the variation in existing regulations for various goods.  One of the most notable changes throughout the regulations is the introduction of a post-border inspection scheme, which allows for inspection of imported goods to be conducted outside official customs-and-excise areas.  Importers are now required to submit self-declarations for these goods online.  Some regulations include new types of sanctions for importers who are not in accordance with the new regulations, including recall and destruction of products in some cases. The post-border approach is expected to reduce administrative barriers which previously impeded imports.  The regulations are part of a series of follow-ups to the 16th Economy Policy Package, which was announced in August 2017, that the government would streamline business license processes.  President Joko Widodo has been pressuring the government to simplify business regulations and move the country up on the World Bank’s Ease of Doing Business Index.

Advocacy

On February 26, the Customs and Trade Facilitation Committee held its first quarterly call of 2018. The call reviewed committee priorities and upcoming activities with a heavy focus on potential themes for the consultation with the ASEAN Directors-General of Customs in May.  An updated draft of the work plan can be found here.  Please contact us if you have any suggestions.

View the Council's latest Customs updates

Defense & Security

Major Developments

In February, the ASEAN Defense Ministers’ Meeting (ADMM) Retreat took place in Singapore.  During the meeting, the ministers agreed to ramp up cooperation in the fight against terrorism, which they identified as the region's most serious security threat.  To read the ADMM joint statement on countering terrorism in ASEAN, please click here. Additionally, the ministers also agreed to conduct the first ASEAN-China maritime exercise as a means to strengthen regional security, and had an informal dialogue with Chinese Minister of National Defense General Chang Wanquan, who was in Singapore on a five-day goodwill tour.  Since early 2015, China has been proposing joint maritime drills with ASEAN member states in the South China Sea, making the case that drills would jointly solve disputes and control risks, reduce risk of actual conflict, and serve as good practice of the Code of Unexpected Encounters in the Sea (CUES).  This only seems to have taken traction now, given the relative “cooling down” of tensions in the South China Sea, and the rise of larger shared regional concerns such as terrorism and North Korea.  Founded in 2006, the ADMM has been the key platform for regional defense and security matters.  The official ADMM and the ADMM-Plus (which in addition to the 10 ASEAN member countries includes: Australia, China, India, Japan, New Zealand, Republic of Korea, Russia, and the United States) are set to take place in October.

View the Council's latest Defense & Security updates

Energy

Major Developments

• On February 12, the Indonesian Ministry of Energy and Mineral Resources (ESDM) announced the further revision and simplification of 22 regulations to encourage investment in the energy and mineral resources sector.  Earlier, on February 5, the Ministry had revoked 32 regulations in the form of ministerial regulations or ministerial decrees to streamline bureaucracy.  The changes to 54 regulations so far is an attempt to boost total investment in the energy and mineral resources sector to US$50 billion, or double the amount in 2017.  Total investment in the sector reached US$26 billion in 2017.  However, despite the revocation and streamlining of these regulations, many challenges remain for businesses operating in the energy and mineral resources sector, especially amid the continuing trend towards increasing resource nationalism.  More information on the regulations that were revoked or streamlined can be found here.
• On January 30, the Myanmar Minister for Electricity and Energy, U Win Khaing oversaw the issuing of a “notice to proceed” to investors in four Liquefied Natural Gas (LNG) and natural gas projects.  The government hopes to have some of the plants operational by mid-2020.  Investors predict that the four projects would collectively add more than 3,000 megawatts (MW) of capacity to the national network.  According to data from 2017, Myanmar has an installed capacity of electricity generation of 3,495 MW generated from 30 plants, 19 of which are hydropower plants.  Three out of the four projects make use of imported LNG, while one makes use of natural gas.  The approval has prompted industry players to speculate that the government may rely on imported LNG as one of its main sources of power going forward, given the delays in hydropower projects due to environmental concerns and the decline in domestic gas production.  More information on these LNG and natural gas projects in Myanmar can be found here.

Looking Ahead

From March 27-29, the Council will conduct its annual business mission to Vietnam.  Meetings with the Ministry of Industry and Trade, PetroVietnam, and Electricity of Vietnam are among those that have been proposed.  A meeting with Prime Minister Nguyen Xuan Phuc has already been confirmed.  More information on the Vietnam Business Mission can be found here.

View the Council's latest Energy updates

Financial Services

Major Developments

On February 23, the Monetary Authority of Singapore (MAS), Securities Commission Malaysia (SC), and the Securities and Exchange Commission of Thailand (SEC) signed an updated set of qualifying standards for funds to use the ASEAN Collective Investment Schemes Framework (CIS), which entered effect immediately.  The CIS has faced a range of challenges since its launch in 2014, including regulatory harmonization issues, requirements that passporting be authorized by both the home and host regulators, requirements for local agents, foreign exchange holding requirements, and overlapping withholding taxes.  Having observed the limited use of the CIS, the ACMF has been studying solutions for the last few years and met with the Council several times to discuss them.  Some of the challenges discussed in these meetings and studies seem to be addressed in the update, which should support somewhat expanded use of the program.  The updated Standards of Qualifying CIS can be found here,

Looking Ahead

On April 5-6, the Council will hold its annual Mission to the ASEAN Finance Ministers and Central Bank Governors Meeting (AFMGM) in Singapore.  The Council plans to hold its regular consultation with the assembled Finance Ministers and Central Bank Governors on ASEAN integration issues, including digital financial innovation, capital markets development, and insurance and addressing emerging risks.  The delegation will also hold bilateral meetings with Ministers and Governors and join the official AFMGM programming.  For more information,  please contact Shay Wester at swester@usasean.org or Ian Saccomanno at isaccomanno@usasean.org for more information..

View the Council's latest Financial Services updates

Food & Agriculture

Major Developments

The Agri-Food and Veterinary Authority (AVA) of Singapore is seeking feedback from the food industry and interested experts in academia, on the proposed definition and scope of novel foods.  This consultation is the first in a series of public consultations that will be held in relation to the regulatory framework for novel foods and novel food ingredients in Singapore.  Subsequent consultations will cover specific safety assessment criteria and processes involved in applications for novel food.  Industry members have provided feedback that there is a lack of regulatory clarity in the current regulatory approach, which could impede innovation and trade in the food sector.  In addition, the current situation does not facilitate the wider adoption of the novel foods and food ingredients by the food industry, as outcomes of safety assessments may be known to only a specific company.  This results in potential delays faced by industry in bringing possible benefits to consumers.  The proposed regulatory framework covers the definition and scope of novel foods, safety assessment criteria of novel foods and processes involved for applications for the use of novel food.  This approach is consistent with current practice in Australia and New Zealand, Canada, and the European Union, where new foods or new ingredients used in food are regulated as novel foods, and require safety assessment and approval by the respective food safety authorities before they can be marketed.  If you are interested in joining a joint submission on this topic, please contact Sunita Kapoor (skapoor@usasean.org) and Hai Pham (hpham@usasean.org).  

Advocacy

On March 13, the Council sent an advocacy letter to Thai Deputy Prime Minister Somkid Jatusripitak as part of a joint-submission with the EU-ASEAN Business Council to follow up on the Council’s previously raised concerns relating to the 2017 restrictions on world class crop protection technology in Thailand.  Because a decision will be made by the end of this month on the review process of three key crop protection chemicals, this joint-letter serves to continue our dialogue with the Royal Thai Government, specifically in reference to the role plant science can play in not only maintaining but further boosting Thailand’s position as a regional agricultural leader and prolific exporter.  For more information on this advocacy effort, please contact Sunita Kapoor at skapoor@usasean.org.   

Looking Ahead

The Council is planning to organize a Food & Agriculture Industry Mission to Jakarta, Indonesia during the last week of April.  The Council previously organized a similar agriculture-focused industry mission to Indonesia in March 2016 and engaged with Secretary General of Ministry of Agriculture Hari Priyono.  More information for the mission this April is forthcoming – if you are interested, please contact Sunita Kapoor at skapoor@usasean.org and Hai Pham at hpham@usasean.org.   

View the Council's latest Food & Agriculture updates

Health & Life Sciences

Major Developments

Vietnam’s Decree 54, which was implemented on July 1, 2017, mandates that foreign pharmaceutical companies with approved licenses from the Ministry of Health (MOH) may directly import products to local companies and partners.  The Decree also amends previous licensing procedures, requiring foreign pharmaceutical companies to sell products through a local distributor, provided these investors prove a specific level of trade experience, including a minimum revenue amount in past business transactions.  While Decree 54 attempts to connect local enterprises with foreign companies, certain policies complicate the import process for foreign pharmaceutical companies.

Decree 54 currently restricts foreign companies from providing transportation and preservation services on their own.  This requirement is damaging because pharmaceutical companies have the knowledge and technical expertise to set appropriate storage and transportation conditions for their products, and these conditions are often specific to the type of product. Pharmaceutical companies need autonomy to set these conditions themselves to preserve the safety and quality of their products, especially drugs.  Requiring foreign companies to operate through a local distributor furthermore complicates the import process through the addition of intermediary steps, specifically partnering with local enterprises.  If a foreign company already has an established market in Vietnam and can better operate without the use of a local distributor, then this policy unnecessarily creates more steps in the business process.

According to legal experts, the policies under Decree 54 furthermore violate international trade agreements and other domestic legislation Vietnam has implemented in the past, including the World Trade Organization (WTO) Accession Commitment and Vietnam's Law on Promulgation of Legal Documents as well as Investment Law.  When Vietnam joined the WTO in 2007, it committed to only implement state protections on sectors and transactions that would affect sensitive interests, such as national defense and security.  Foreign pharmaceuticals and experts alike have argued that their services and products do not constitute a risk to these sensitive interests, and so do not require the level of regulation stipulated under Decree 54.

Looking Ahead

On March 29-30, the Council is organizing its annual Health & Life Sciences Industry Mission to Vietnam.  During the mission, the Council will meet with the Ministry of Health, the Vietnam Social Security agency, Vinmec International Hospital, and the National Assembly’s Committee on Social Issues.  The mission will also feature a panel discussion on the healthcare industry development in Vietnam and a joint working group meeting with MOH as part of the Council’s MOU with MOH.  For more information, please contact Hai Pham at hpham@usasean.org and Ying Hui Tng at yhtng@usasean.org.   

View the Council's latest Health & Life Sciences updates

ICT

Major Developments

• On March 2, Singapore’s Senior Minister of State for Trade and Industry Koh Poh Koon announced that the Agency for Science, Technology and Research (A*STAR) is extending the reach of its Operation and Technology Roadmapping (OTR) service to strengthen the trade ecosystem and support start-ups.  For a detailed summary, see our recent ICT Update here.
• On March 2, the Ministry of Commerce and Industry of Laos and the Asian Development Bank hosted an educational event on their newly inaugurated e-commerce platform, plaosme.com.  The platform is aimed at enhancing market access, particularly within ASEAN, for Laotian SMEs.  For more information, see our recent ICT Update here.
• On March 6, Thailand’s Director General of the Revenue Department Prasong Poonthanet announced that an e-commerce tax bill will be submitted for endorsement this month by the Finance Ministry and the Cabinet.  If approved, the new regulation will impose a 7 percent value-added tax (VAT) on foreign businesses providing online services to Thai customers. For more information, see our recent ICT Update here.  The Council submitted comments to the Thai Revenue Department on this Draft Act on February 9, which can be found here.  If you have any question, please contact Ella Duangkaew at eduangkaew@usasean.org

Advocacy

• The Inland Revenue Authority of Singapore is now accepting comments on two Draft Goods and Services Taxes (GST) Guides which impose GST on imported digital services in the context of both business-to-business (B2B), found here, and business-to-customer (B2C) transactions, found here.  The Council is preparing two submissions, one for each Draft Guide: please find the final draft submissions for the B2B guide here and the B2C guide here.  Please provide any final comments or revisions by EOD March 19.  The Council will submit both documents to IRAS by the March 20 deadline.  For any questions, or if you would like to submit any additional comments, please contact Ella Duangkaew at eduangkaew@usasean.org.

• On February 26, the Council, along with partner associations ACT, AmCham Hanoi, BSA, CompTIA, DIGITALEUROPE, ITI, JEITA, SIA, and the U.S. Chamber of Commerce, submitted comments on Draft 15 of Vietnam’s Draft Law on Cybersecurity. View the final submission here: English | Vietnamese.  Among other concerns, the submission highlights the negative security and business implications of proposed data localization requirements.  The Council previously submitted detailed comments on the initial Draft Law in August 2017, and then a supplemental letter in response to Draft 14 in October 2017.

View the Council's latest ICT updates

Infrastructure

Major Developments

Singapore is looking to advance and develop both its infrastructure and transport landscapes extensively.  Both the Ministry of Finance and Ministry of Transport have laid out specific projects that will be undertaken in the coming years. Infrastructure developments and funding were amongst the key themes in the 2018 Singapore budget.  Two major sources of expenditure will be channeled towards building not only critical physical infrastructures, but also healthcare infrastructures to cope with the ageing population. Initiatives that can be expected will include, grid architectures under Energy Grid 2.0, community hospitals, upgrading housing flats and lifts, as well as redeveloping Jurong Lake District, Punggol Digital District and Woodlands North Coast. The Singapore government has concurrently raised concerns regarding the financing of these major developments.  To manage financial costs, the Budget has stated intentions to raise Goods and Services Tax (GST) by 2% sometime between 2021-2025, as well as tax imported services, effective January 1, 2020.  Parliament has announced intentions to raise airport levies to fund the construction of Changi Airport Terminal 5, with an increase of landing, parking and aerobridge fees for airlines by 1%. Public transportation fees are also expected to increase so as to subsidize the renewal of rail operating assets.  Overall, the transport sector is seeing the highest increase in allocated expenditure for FY2018; an increase by 52.6% vis a vis FY2017.  The Singapore government is certainly looking at all financing options available, spreading the forecasted expenditure across sources, therefore representing a good balance.  Singapore has plans to engage in a wide range of infrastructure projects extensively.  A Rail Infrastructure Fund will be set up in light of major developments of rail lines.  This will set aside S$5 billion in FY2018, and will increase in future years if the country’s fiscal position allows.  The Ministry of Transport is set to take on several projects that include the Kuala Lumpur-Singapore High Speed Rail, the Johor Bahru-Singapore Rapid Transit System Link, funding the renewal of domestic rail operators and public bus services contracts.

Advocacy

The Council is currently putting together three infrastructure committee position papers (Road and Rail Safety; Smart Cities and Sustainability; Access to Infrastructure Projects: Role of Private Sector) that will be discussed during country business missions, industry missions, and the ASEAN Transport Ministers Meeting.  There will also be an additional section on case studies that highlight key projects of member companies, and their relative success.  Kindly submit your feedback and inputs to Sunita Kapoor at skapoor@usasean.org.

View the Council's latest Infrastructure updates

Country Highlights

Brunei

Major Developments

Brunei’s Ministry of Finance has allocated B$5 million out of its B$747.32 million 2018/2019 Financial Year budget for development expenditure purposes to finance the establishment of the Brunei Darussalam Stock Exchange, although it remains unclear when such plan would materialize.  In December 2016, the Monetary Authority of Brunei (Autoriti Monetari Brunei Darussalam) prepared an initial draft of rules for the launching of the Brunei Darussalam Stock Exchange.  The plan is part of the government’s effort to diversify Brunei’s economy beyond oil and to catch up to some of the more mature capital markets in neighboring ASEAN countries.  The launch of a stock exchange is expected to boost Brunei’s presence in ongoing ASEAN regional capital markets development and financial sector integration initiatives. Brunei’s government-linked companies (GLC’s) will need to become more competitive in order to compete in an integrated ASEAN.  The Brunei Darussalam Stock Exchange is expected to have a core objective of serving the needs of Brunei’s Muslim investors, focusing on sharia-compliant securities, equities and Islamic bonds (sukuk).

Brunei has issued at least 130 sukuk in short-term offerings since 2006.  Historically, the financial industry has played a rather small role in the oil-dominated economy of Brunei.  With the goal of diversification, the government of Brunei intends for capital markets development to help strengthen the growth of industries such as tourism, halal products and manufacturing.

View the Council's latest Brunei updates

Cambodia

Major Developments

On February 27, the White House issued a statement announcing the suspension or curtailment of assistance programs to Cambodia.  This suspension will include certain U.S. Treasury, USAID, and military programs, but will not affect all ongoing projects in areas such as agriculture development, civil society promotion, and mine clearance.  Given the downturn in bilateral relations since the forced dissolution of the opposition Cambodian National Rescue Party (CNRP) and arrest of its leader Kem Sokha on treason charges, the move is not a surprise, and just one of several methods by which the U.S. government has expressed its disapproval of Cambodia’s democratic regression.  The shutdown of the CNRP left the ruling Cambodia People's Party (CPP) as the sole contender in the country's upcoming general elections, which is set to take place in July 2018.  The White House statement also pointed to the February 25 Senate elections “that failed to represent the genuine will of the Cambodian people.” The White House has openly condemned the undemocratic nature of the upcoming general elections, saying that it will "not be legitimate, free, or fair," unless the government reverses course.

On the U.S. legislative side, U.S. Senators Graham, Durbin, Cruz, Cardin and Leahy introduced the "The Cambodia Accountability and Return on Investment (CARI) Act" in the Senate Foreign Relations Committee on February 9, calling for further visa bans on high ranking Cambodian government officials, freezing U.S. assets of those listed on the ban, ending appropriation of any funds to assist the Cambodian government, and ending all negotiations for a war debt relief program for the US$500 million that Cambodia owes the United States dating to the Lon Nol regime.  Read the press statement here.  Amidst all this, Cambodia has hedged further towards China, which has showered the Cambodian government with aid in the form of investments in infrastructure projects, election support, defense and security cooperation, modern agriculture development, technology assistance, among others.  In 2017, 30 percent of all investment in Cambodia came from China and that number is expected to rise this year with an influx of infrastructure projects set to take place under the One-Belt One-Road Initiative.

View the Council's latest Cambodia updates

Indonesia

Major Developments

• On February 27, President Joko Widodo confirmed he had nominated current Bank Indonesia Deputy Governor Perry Warjiyo as the new Governor for 2018-2023.  The nomination has already been sent to the House of Representatives (DPR) for approval from Commission XI, which oversees the finance and banking sector.  If Perry gains the DPR’s approval, which observers expect he will, he will replace outgoing Governor Agus Martowardojo when Agus retires in May.  The House is required to conduct a fit-and-proper test before accepting his nomination at least a month before the incumbent’s term ends.  Once approved, Perry will serve a five-year term from 2018-2023.  The Deputy Governor being the sole nominee for the position likely indicates the government is intent on policy continuity at BI over the coming years.  Perry has previously served as Assistant Governor for the formulation of monetary, macroprudential, and international policies at Bank Indonesia and is now the Deputy Governor.  From 2007-2009, Perry served as an Executive Director at the International Monetary Fund, representing the 13-member South-East Asia Voting Group.
• The 2018 Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group have been confirmed to take place in Bali Nusa Dua, Indonesia, from October 12-14.  The Annual Meetings bring together high-ranking government officials, businesspeople, academics, and representatives from civil society organizations to discuss issues of global concern, including the world economic outlook, poverty eradication, development, and climate change.  This year, representatives from a total of 189-member countries of the IMF and the World Bank are slated to attend the event, with attendees estimated to number between 15,000 and 20,000.  The Indonesian government hopes that the Annual Meetings will generate additional tourism revenue for Bali and help Indonesia’s investment agency, BKPM, promote Indonesia as a foreign direct investment destination to the international community.  The Indonesian government has so far invested Rp 868 billion (approximately US$61 million) in infrastructure projects, delegate accommodation, and other needs for the event spearheaded by Coordinating Minister Luhut B. Pandjaitan, Minister of Finance Sri Mulyani Indrawati and Bank Indonesia Governor Agus Martowardojo.  The Indonesian government has asked the Council to hold a private-sector engagement alongside the Annual Meetings.  Please stay tuned for updates

Advocacy

On March 13-15, the Council held its annual Business Mission to Indonesia, bringing a delegation of 41 U.S. companies to engage with the Indonesian Government in one of our largest delegations to date.  Over the course of the mission, the delegation held more than thirty meetings with key government officials, including President Joko Widodo, Vice President Jusuf Kalla, Ministers, members of Parliament, as well as representatives of the Indonesian business community from the Indonesian Chamber of Commerce and Industry (KADIN), Indonesian Employers Association (APINDO), and the KADIN United States Committee (KIKAS).   More information about the Mission and follow-up activities will be distributed soon.

View the Council's latest Indonesia updates

Laos

Major Developments

• As of February 26, four construction companies from Laos and China have been selected by the Laotian government to conduct surveys, feasibility studies and detailed designs for a Vientiane-Pakxe Expressway Project.  The expressway is planned to be 585 kilometers long and will run from Vientiane to Champassak Province.  For more information, see our recent Laos Update here.
• From February 21 to 25, two U.S. Congressional Delegations visited Laos with the goal of strengthening bilateral cooperation between the United States and Laos.  The delegations met with Deputy Prime Minister Dr. Sonexay Siphandone, National Assembly President Mrs. Pany Yathotou, Deputy Prime Minister and Minister of Finance Mr. Somdy Duangdy, and Foreign Minister Mr. Saleumxay Kommasith.  The first delegation was led by Chairman of the House Appropriations Committee Congressman Rodney Frelinghuysen (R-NJ).  The second delegation was led by Chairman of the House Judiciary Committee Congressman Bob Goodlatte (D-VA).  For more information, see our recent Laos Update here.

Looking Ahead

• Please save the date for the 2018 Laos Business Mission, scheduled to take place on June 23-24 in Vientiane. Contact Ella Duangkaew at eduangkaew@usasean.org with any questions.

View the Council's latest Laos updates

Malaysia

Major Developments

• Bank Negara has reported that the Malaysian economy grew 5.9 percent in 2017, the fastest rate of GDP growth in three years and up from 4.2 percent in 2016.  The central bank credited private sector spending plus wage and employment gains for the robust growth last year.  In a statement, they predicted that growth should remain favorable for 2018 due to continued strong domestic demand, but will be more moderate, with a growth rate of between 5 and 5.5 percent.  Bank Negara expects faster expansion in global growth to continue to benefit Malaysian exports.  In addition to Bank Negara’s recent report, Moody’s also gave a positive outlook for the Malaysian economy, citing its key infrastructure projects to stimulate public and private investment for the year.  Additionally, Moody’s also issued Malaysia its A3 stable credit profile for 2018, citing its large and diversified economy, ample natural resources and robust medium-term growth prospects.  However, Moody’s raised concern about Malaysia’s debt level, particularly the growth of household debt, which could pose credit challenges later.

View the Council's latest Malaysia updates

Myanmar

Major Developments

• On March 20, Myanmar President U Htin Kyaw resigned, almost two years after taking office in March 2016. The announcement, made on the President's office Facebook page, cited "the need to rest due to health reasons" for his departure. Rumors of U Htin Kyaw's ill health have been ongoing for over a year, with government spokespersons officially denying them, until January 2018, when it was first acknowledged that he has been receiving serious medical treatment in Singapore. A long-time confidante and family friend of State Counsellor Daw Aung San Suu Kyi, U Htin Kyaw stepped into the Presidential role after the National League for Democracy (NLD)'s landslide win in the 2015 general elections. According to clause 59(f) of the Myanmar Constitution, Daw Aung San Suu Kyi cannot become President due to her two sons' foreign citizenship status. As such, U Htin Kyaw became Daw Aung San Suu Kyi's proxy, and one of his first orders of business upon taking office was to create the position of State Counsellor, a role made specifically for her "above the President," in alignment with the NLD's campaign promise. Since then, he has taken on a largely ceremonial role in his position, accepting foreign dignitaries and making the occasional foreign visit. This deviates from his predecessor, U Thein Sein, who made full use of the constitutionally-mandated powers of the Office of the President and was effectively in charge of the entire government.  Per the constitution, U Htin Kyaw's resignation makes Vice President (1), U Myint Swe, who was the military's nominee for the post, the interim President until a replacement candidate has been put forward and voted on in Parliament within seven working days. In Myanmar, it is not the populace who elects the President and the two Vice Presidents, but Parliament. The Lower House, the Upper House, and the Tatmadaw (Myanmar's military) each nominates a candidate and the entire Parliament votes. The candidate with the highest votes becomes President, second highest becomes VP-1 and then, VP-2.  Two hours before U Htin Kyaw's resignation, it was announced that Speaker of the Lower House of Parliament (Pyithu Hluttaw), U Win Myint, resigned from office. This led to widespread speculation that he will be the replacement candidate for the Presidency. The rumor was later confirmed by NLD Spokesperson and Secretary of the Information Committee, Monywa Aung Shin to Frontier Myanmar in a phone interview. However, his candidacy will not be confirmed until officially put forth in Parliament. U Win Myint is a longtime NLD member and a trusted member of Daw Aung San Suu Kyi's inner circle, having served years on the party's central executive committee. A lawyer by training, he became involved in the 1988 student protests and was briefly jailed by the military junta. He won a seat to the Lower House in the 2012 by-election and served alongside Daw Aung San Suu Kyi as the opposition in the then-USDP dominated Parliament. When the NLD won its landslide victory in 2015 and gained control of Parliament, he became Speaker of the Lower House.  U Win Myint is known to be highly disciplined in his role as Speaker, only allowing debates on issues that strictly aligned with the party's (thus, the Administration's) priorities. This deviated from his predecessor, Thura U Shwe Mann, who did not always toe the party line, and worked to carve out a separate role for the legislature, with little influence from the executive branch. As such, under U Win Myint's leadership, it is widely believed in Myanmar's political circles that Parliament is kept in line but its influence as an equal and separate body of government has deteriorated. It is perhaps his 'yes-man' persona that makes U Win Myint an appealing candidate for President, given that he will have to willingly forgo his constitutionally mandated powers so that the State Counsellor's can remain the highest office in the land. Parliament will vote for a replacement candidate for Speaker of the Lower House tomorrow, announced Deputy Speaker U T Khun Myint.  Despite the high-level shakeup, it is expected that the status quo will stay intact, with Daw Aung San Suu Kyi as de-facto leader of the country, and largely ceremonial Office of the President. U Win Myint may be a bit more involved in political affairs, given his background, but only to a degree that is allowed by the State Counsellor.
• On January 30, the Myanmar Minister for Electricity and Energy, U Win Khaing, oversaw the issuing of a “notice to proceed” to investors in four Liquefied Natural Gas (LNG) and natural gas projects.  The government hopes to have some of the plants operational by mid-2020.  Investors predict that the four projects would collectively add more than 3,000 megawatts (MW) of capacity to the national network.  According to data from 2017, Myanmar has an installed capacity of electricity generation of 3,495 MW generated from 30 plants, 19 of which are hydropower plants.  Three out of the four projects make use of imported LNG, while one makes use of natural gas.  The approval has prompted industry players to speculate that the government may rely on imported LNG as one of its main sources of power going forward, given the delays in hydropower projects due to environmental concerns and the decline in domestic gas production.  More information on these LNG and natural gas projects in Myanmar can be found here.

View the Council's latest Myanmar updates

Philippines

Major Developments

• On February 8, International Criminal Court (ICC) Prosecutor Fatou Bensouda announced that she will be opening preliminary examinations into actions by Philippine police and security forces as part of President Rodrigo Duterte's anti-drug campaign.  The ICC’s preliminary examination is designed to help prosecutors determine if there is sufficient evidence of crimes that fall under its jurisdiction.  Despite initially saying that he welcomed the examination and would cooperate with it, President Rodrigo Duterte announced his decision to withdraw from the ICC on March 13.  President Duterte cited “baseless, unprecedented and outrageous attacks” by U.N. officials and accused the ICC of not following due process and the presumption of innocence.  More information on the ICC’s preliminary examination and President Duterte’s decision to withdraw from the ICC can be found here and here, respectively.
• On February 12, Surbana Jurong, a Singapore government-owned consultancy company focusing on infrastructure and urban development, signed an agreement to develop New Clark City in the Philippines.  Surbana Jurong will be partnering with Philippines Bases Conversion and Development Authority (BCDA) and Japanese Overseas Infrastructure Investment Corporation for Transport and Urban development (JOIN).  New Clark City is among the largest projects in President Duterte’s “Build, Build, Build” infrastructure program and is touted as the first “smart, green, disaster-resilient” city.   Authorities estimate that New Clark City will be bigger than Manhattan when completed in 30 to 40 years, with a population of some two million, and the city may contribute up to 1.57 trillion pesos per year to the Philippines’ national economy.  More information on the New Clark City project can be found here.
• On February 27, during a public consultation on the selection of the third company to enter the Philippine telecommunications (telco) sector, Department of Information and Communications Technology (DICT) Officer-in-Charge (OIC), Eliseo Rio, Jr., said that a previously stipulated P10 billion (US$192.3 million) net worth requirement for the selection may be removed.  In addition to potentially scrapping the P10 billion net worth requirement, authorities are considering changing the formulation for computing the highest bid.  This will involve moving from the inclusion of the highest five-year committed investment to the inclusion of the highest committed level of service.  Authorities believe that this change will ensure efficiency of investment and avoid distinguishing between operational and non-operational expenses.  More information on the new requirements for a third telco company to enter the Philippine market, can be found here.
• On February 28, the Department of Budget and Management (DBM) released a Highlights of National Government Disbursement Performance document, showing how spending in December 2017 was buoyed by subsidies and spending on infrastructure and other capital outlays.  Despite the positive trend of government spending in infrastructure, the ambitious infrastructure program will still need to be heavily reliant on other sources of capital for financing.  In that respect, Japan has undoubtedly emerged as a key foreign funder and partner in the implementation of the Duterte administration's flagship infrastructure development initiative - Build, Build, Build (B3).  Recognizing the role that Japan has played and continues to play in infrastructure development in the Philippines, the U.S. Embassy in Manila has offered to help look for partnership opportunities for U.S. companies with Japanese companies on Japan International Cooperation Agency (JICA)-supported infrastructure projects.  U.S. companies interested in learning more about potential partnership and sub-contractor opportunities are encouraged to contact the U.S. Embassy in Manila.  More information on this topic can be found here.

Advocacy

• From March 6-7, the Council led a delegation of 23 U.S. companies on its annual business mission to the Philippines.  During the mission, the delegation met with 11 Government departments and agencies, as well as representatives from the House of Representatives, the Senate, and the U.S. Embassy in Manila.  The delegation also received updates on priority economic reforms and initiatives. Government efforts to liberalize sectors of the economy to attract more foreign direct investment (FDI), including through the release of a new, shortened Foreign Investment Negative List and proposed amendments to the Public Service Act, were a major theme of the mission.  The mission delegation also received an update on the Government’s Comprehensive Tax Reform Program (CTRP), including the second package of the Tax Reform for Acceleration and Inclusion (TRAIN 2), its ambitious “Build, Build, Build” infrastructure initiative, and its social development initiatives.

View the Council's latest Philippines updates

Singapore

Major Developments

• On March 2, the Council published an Analytical Report on Singapore’s Budget 2018, which focuses on strengthening Singapore’s economic future and preparing the country for anticipated challenges in the years to come.  The report includes an examination of how Budget 2018 deals with projected infrastructure investment and rising healthcare costs, including an increase in the GST to help address the latter.  The full Analytical Report can be found here.
• On February 27, Prime Minister Lee Hsien Loong said in a Facebook post that he plans to reshuffle the Cabinet after Parliament re-opens in May, following its break after the budget process.  President Halimah Yacob is set to give her inaugural address at the opening of the new parliamentary session, which would lay out the Government’s agenda for the remaining term.  PM Lee has asked the fourth-generation ministers to draft the agenda, to give Singaporeans a “better sense of them and their thoughts.”  The reshuffle is aimed at providing more exposure and responsibility to the younger members, who can then better support the next Prime Minister.  More information on planned Cabinet reshuffle can be found here.

Advocacy

• On February 20, the Inland Revenue Authority of Singapore (IRAS) released two Draft GST Guides which impose GST on imported digital services in the context of both business-to-business (B2B) and business-to-customer (B2C) transactions.  In response to the IRAS's announcement that it is accepting comments on the two Draft Guides to facilitate the official implementation of both regulations starting on January 1, 2020, the Council solicited input from member companies in order to prepare two submissions to offer feedback on the Draft Guides.  Previously, IRAS had issued a call for input on a proposal for a broader, simplified vendor registration system for imports of low-value goods and digital services.  The Council submitted a letter on June 30, 2017 commenting on the proposal (final submission found here).  More information on the call for input can be found here.
• The Agri-Food and Veterinary Authority (AVA) of Singapore has issued a public consultation (here) inviting interested members of the food industry (local food manufacturers and importers) to submit applications for:
  • The use of new food additives currently not permitted for use in Singapore; and/or
  • The extension of the use of existing food additives to a wider range of food products.

The Food Regulations specify the types of food additives that may be added to food imported/manufactured and sold in Singapore, and the categories of food to which they may be added. AVA has invited industry to submit applications for the use of new food additives and/or the extension of the use of currently permitted food additives for the agency’s safety assessment.  The full public consultation can be found here.  The Council is soliciting interest from member companies on this issue for a potential joint submission during the public consultation period.  If you are interested in joining a joint submission on this topic, please contact Sunita Kapoor (skapoor@usasean.org) and Hai Pham (hpham@usasean.org).

Looking Ahead

• From April 5-6, the Council will conduct its annual mission to the ASEAN Finance Ministers and Central Bank Governors Meeting, which is taking place in Singapore this year.  As the Chairman of ASEAN for 2018, the Government of Singapore has identified the regional development of ASEAN’s digital economy and e-Commerce as one of their top priorities in 2018.  The Mission will consist of a formal consultation session and bilateral meetings with the attending delegations.  More information on the mission can be found here.
• On May 14, the Council will hold its next event in the Presidents’ Luncheon series.  The lunch will feature a presentation by Professor David Lee Kuo Chuen on Blockchain and its implications for businesses.  Professor Lee’s bio can be found here.  The events comprising the Presidents' Luncheon series are only for member representatives who are Asia-Pacific or ASEAN Presidents and are intended to serve as a platform for business leaders to engage in robust and informative discussions on broad issues in the region.  Their aim is to understand better our members' concerns, and to provide an avenue for exploring cross-sectoral solutions and partnerships.

View the Council's latest Singapore updates

Thailand

Major Developments

• The Government of Thailand is set to complete the master plan for Digital Park Thailand, a flagship project of the Eastern Economic Corridor (ECC), this month.  For more information, see our recent Thailand Update here.
• On February 22, the National Legislative Assembly (NLA) voted to reject all seven candidates for the Election Commission (EC).  Each of the seven candidates needed at least half (124) of the 248 votes that were cast, but all failed to get the required number of votes.  For more information, see our recent Thailand Update here.
• The U.S. has nearly doubled its presence at the 2018 Cobra Gold exercises in Thailand with 6,800 personnel present.  This is a substantial increase over the 3,600 personnel that were present at the exercises last year.  Cobra Gold is an annual military exercise that the United States conducts with Southeast Asian militaries in Thailand. The 2018 Cobra Gold exercises began on February 13 and ended on February 23.  For more information, see our recent Thailand Update here.
• Energy policymakers in Thailand are planning to increase the legal reserve stock of refined oil from 1% (a 3.65 day supply) to 2 percent (a 7.3 day supply).  Simultaneously, oil refiners are planning on cutting crude oil reserves from 6% (a 21.9 day supply) to 5% (a 18.25 day supply). For more information, see our recent Thailand Update here.

Looking Ahead

• Please save the date for the 2018 Thailand Business Mission, scheduled to take place on June 27-28 in Bangkok. Contact Ella Duangkaew at eduangkaew@usasean.org with any questions.

View the Council's latest Thailand updates

Vietnam

Major Developments

On March 8, 11 of the original 12 Trans-Pacific Partnership (TPP) members, including Vietnam, signed the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) in Santiago, Chile.  The United States is notably absent in this revised trade pact, although the Trump Administration has stated publicly that it will consider joining CPTPP if the deal appears to cater to U.S. trade interests.  The completion of the CPTPP, which covers a market of nearly 500 million people, could serve as a model for future trade deals.  The eleven remaining states, which also include Brunei, Singapore and Malaysia from ASEAN, came to a consensus on CPTPP on January 23 and released the text of the deal less than a month after on February 21.  Around 20 clauses of the original TPP were amended or eradicated in the creation of the final CPTPP agreement.  Upon ratification by at least six member states, provisions in the CPTPP go into force immediately with many analysts believing that could happen in late 2018 or early 2019.  Projections estimate that CPTPP will increase imports by 3.8 percent, GDP growth by 1.32 percent, and export growth by 4% in Vietnam.  These numbers are noticeably smaller than what Vietnam would have experienced under the original TPP agreement, which experts say would have created the economic environment to reach the government’s goal of a 6.7% GDP growth rate in 2018.  The biggest loss Vietnam will suffer from the changes between TPP and CPTPP, however, is the missed opportunity to strengthen trade relations with the United States, whose absence from CPTPP reduces diplomatic and economic opportunities for Vietnam to leverage for a stronger overall partnership.  Furthermore, none of the CPTPP members are currently among Vietnam's top export locations.  Thus, the CPTPP could serve as a catalyst for shifts in some existing global value and regional supply chains which Vietnam is globally competitive in and offer new opportunities in emerging industries, which Vietnam could take advantage of as either an attractive market or competitive FDI location for companies operating in CPTPP members states.  Additionally, the CPTPP has the potential to provide additional impetus for the next generation of institutional reforms in Vietnam through competitive market development.  Given the nature of a multilateral trade deal like CPTPP, businesses in each member state feels pressure to perform well, and this competition and drive will lead to sustainable growth in Vietnam. Economists also note that the revised trade pact will not affect Vietnam's state budget but will accelerate economic growth on the global stage, especially export growth.  The World Bank has prepared a study on the economic and distributional impacts of the CPTPP as it relates to Vietnam. The study also compares the impacts of CPTPP to those of the RECEP and original TPP for Vietnam. Please click here to view the World Bank report.

Advocacy

On February 26, the Council, along with partner associations ACT, AmCham Hanoi, BSA, CompTIA, DIGITALEUROPE, ITI, JEITA, SIA, and the U.S. Chamber of Commerce, submitted comments on Draft 15 of Vietnam’s Draft Law on Cybersecurity. View the final submission here: English | Vietnamese. Among other concerns, the submission highlights the negative security and business implications of proposed data localization requirements.  The Council previously submitted detailed comments on the initial Draft Law in August 2017, and then a supplemental letter in response to Draft 14 in October 2017.

Looking Ahead

On March 27-29, the Council is organizing its annual Vietnam Business Mission.  During this year’s mission, the Council will meet with a wide variety of Ministries from all sectors, State-Owned Enterprises, and Prime Minister Nguyen Xuan Phuc.  The mission will begin with a briefing by U.S. Ambassador to Vietnam Daniel Kritenbrink, followed by an evening reception, hosted by the Council, featuring remarks from Vietnam’s Office of the Government Chairman Mai Tien Dung, Chairman of the U.S. House of Representatives Homeland Security Committee Congressman Michael McCaul, and Chairman of the House Rules Committee Congressman Pete Sessions.  Congressman McCaul and Congressman Sessions will be part of the security-focused U.S. Congressional Delegation traveling to Vietnam during the last week of March.  For more information, please contact Hai Pham at hpham@usasean.org and Vu Tu Thanh at tvu@usasean.org.   

View the Council's latest Vietnam updates