May - 2018

Dear Members,

We hope your Spring is going well. It has been a busy time in ASEAN.

All eyes will be on Singapore at the end of the week as it hosts the annual Shangri-La Dialogue, Asia’s premier security forum from June 1-3, 2018. U.S. Secretary of Defense Mattis will be in attendance and delivering a major policy speech on the IndoPacific region. India’s Prime Minister Modi will also be in attendance and delivering a keynote address.

On May 9, we witnessed a historic election in Malaysia where the ruling UNMO party was defeated for the very first time in Malaysian history by a party lead by former UNMO Chairman and Prime Minister, Dr. Mahathir Mohamad who led the new Pakatan Harapan (PH) coalition to victory. Prime Minister Mahathir was sworn in on May 10 and has announced the initial members of his Cabinet which, for the first time, includes a Chinese Finance Minister, Lim Guan Eng. Prime Minister Mahathir, during the campaign, promised to pardon his former Deputy Prime Minister Anwar Ibrahim and turn over the role of Prime Minister to him within 12-24 months. Anwar Ibrahim has in fact been pardoned and released from jail. His wife, Wan Azizah Wan Ismail, PKR leader, has been named Deputy Prime Minister. To read the Council’s latest analytical update on the new government formation and cabinet change, please click here.

On April 24, Singapore’s Prime Minister Lee Hsien Loong announced a cabinet reshuffle involving 16 ministries in effect as of May 1. All eyes were on the 4th Generation (4G) Ministers, one of whom is widely expected to replace Prime Minister Lee when he turns 70 years old in a little under four years. 4G ministers now oversee two-thirds of the country’s ministries. Three of the 4G ministers are considered to be on the short list to become the next Deputy Prime Minister and then succeed Prime Minister Lee. They include Finance Minister Heng Swee Keat, Trade and Industry Minister Chan Chun Sing and Education Minister Ong Ye Kung. In the April 24 reshuffle, all the current Deputy Prime Ministers kept their posts and no new Deputy Prime Ministers were named. It is therefore widely anticipated that another cabinet reshuffle will occur in the next year or two to clearly indicate who will be in line to become Singapore’s 5th Prime Minister.

On April 26, the Council hosted our annual dinner in Washington, D.C., featuring the first public remarks by newly sworn-in Deputy United States Trade Representative for Asia, Europe, the Middle East and Industrial Competitiveness, Ambassador Jeffrey Gerrish (click here to access Amb. Gerrish’s remarks). Ambassador Gerrish will have the lead for any bilateral Free Trade Agreements with the Philippines and possibly other countries in Southeast Asia. He will also be the lead as USTR reevaluates the CPTPP and America’s reengagement in this important trans-Pacific agreement and just before the Ambassador spoke to us, he was named acting President of the Export Import Bank – a crucial organization for many of our members. Our dinner also featured remarks from Congressman Joaquin Castro, the co-Chairman of the ASEAN Caucus in the United States’ Congress (click here for Congressman Castro’s remarks) and Congressman Ted Yoho, the Chairman of the Asia Subcommittee of the House Foreign Affairs Committee. (click here for Congressman Yoho’s remarks)

Following our annual dinner, the Council organized its annual U.S. Ambassadors’ Tour, this year hosting U.S. Ambassador to Indonesia Joe Donovan, U.S. Ambassador to Laos Rena Bitter, U.S. Ambassador to Thailand Glyn Davies and U.S. Ambassador to Vietnam Dan Kritenbrink. The Ambassadors visited Washington, D.C., Seattle and Los Angeles for a week of engagements with Council members, business leaders, local government and the academic community. Highlights included a private meeting with the Mayor of Los Angeles Eric Garcetti; an immersive tour of historic Seattle at the Wing Luke Museum of the Asian Pacific American Experience; panel discussions with students and faculty from American University, University of Washington, and University of Southern California; and public events with the Seattle and Los Angeles business and trade community.

On May 2-3, the Council joined the 27th Meeting of the ASEAN Directors-General of Customs in Malaysia with a delegation of nine companies. The delegation held a formal consultation with the assembled Directors-General to propose deeper collaboration on e-commerce, emerging technologies, intellectual property protection, dual-use technology, and transfer pricing. The Council also met bilaterally with customs officials from Indonesia, Singapore, Australia, Malaysia, Myanmar, Vietnam, Cambodia, the Philippines, China, and the World Customs Organization. Potential follow-ups were identified for several of the themes and more information will be distributed about next steps shortly (for more information, please contact Ian Saccomanno at isaccomanno@usasean.org ).

Looking Ahead:

• On May 31, the Council is hosting a welcome luncheon for the newly Appointed Ambassador of Thailand to the United States, H.E. Virachai Plasai. Ambassador Virachai has enjoyed a distinguished diplomatic career, most recently as Ambassador and Permanent Representative of Thailand to the United Nations (2015-2018), and previously as Ambassador of Thailand to the Netherlands (2009-2015). In addition to attendance from the Royal Thai Embassy and other ASEAN officials, the luncheon will include U.S. government and other key stakeholders. The luncheon will be a unique opportunity to engage Ambassador Virachai at the very beginning of his tenure, to underscore the Council's dedication to strengthening the U.S.-Thailand relationship. Please click here to sponsor. Please contact Ella Duangkaew at eduangkaew@usasean.org with any questions.
• On June 5, the Council will be hosting a farewell luncheon in honor of H.E. Pham Quang Vinh, Ambassador of Vietnam to the United States, in Washington, D.C. Since his arrival at the end of 2014, the Council and Ambassador Vinh have worked closely to further develop the U.S.-Vietnam business relationship, a goal that the Council and its members share. During the Ambassador’s tenure, the relationship moved significantly forward with Presidents Obama and Trump visiting Vietnam and Prime Minister Phuc We hope you will join us in honoring the Ambassador and wishing him the best of luck in his future endeavors as he returns to Hanoi. Sponsorship opportunities for this event are available. For questions or to express interest, please contact Hai Pham at hpham@usasean.org.
• The Council is now registering senior executives for its annual Thailand Business Mission from June 26-28 in Bangkok, Thailand. This year’s mission will focus on building upon the momentum created by recent high-level G2G engagements, and supporting the government in developing and implementing critical economic reforms and trade policy directions in advance of the planned 2019 elections. Meetings with the Prime Minister and the Bank of Thailand have been confirmed. The registration deadline is June 12. Please click here to register and contact Ella Duangkaew at eduangkaew@usasean.org with any questions.

To our friends celebrating the holy month of Ramada, I wish you a period of peace and tranquility. Ramadan Mubarak!

MEMBERSHIP

We are pleased to welcome Agoda to the Council as of May 1. Agoda is one of the world’s largest online travel accommodation platforms. Founded in 2005 and now part of Booking Holdings (Nasdaq:BKNG), Agoda has a network of over 1,000,000 vacation rentals and hotels worldwide. Agoda has joined the Council at the Corporate level.

REGIONAL HIGHLIGHTS

ASEAN

Major Developments

On May 18, the Council celebrated the formal launch of the U.S.-ASEAN Internship Program at an event in Jakarta. The event featured a keynote speech from ASEAN Secretary-General Lim Jock Hoi and remarks from U.S. Mission to ASEAN Chargé d’affaires Peter Thorin and US-ABC Senior Vice President and Regional Managing Director Ambassador Michael Michalak. The Internship Program is a platform that connects Southeast Asian students to internship opportunities at US-ABC member companies. The platform already advertises 37 positions with six companies throughout ASEAN. If you are interested in learning more about the program, or linking your company’s existing internship program, please contact Mario Masaya at mmasaya@usasean.org.

Looking Ahead

On June 27, the Council and the Philippines Department of Trade and Industry (DTI) will conduct an SME Workshop titled "Empowering Philippines SMEs with Digital Tools and Mentorship Opportunities" in Manila, Philippines. The full-day workshop aims to improve the competitiveness of Philippines SMEs through the use of available digital tools, introduce them to the opportunities and services relating to cross-border trade, and support the government’s MSME development agenda. The workshop will also mark the official partnership between the Council and DTI to administer the ASEAN SME Academy, an online platform offering free learning courses and resources to help ASEAN SMEs grow. Click here for the workshop draft agenda and contact Vinsensius Kangen at vkangen@usasean.org with any questions or to express interest.

View the Council's latest ASEAN updates

TPP

Major Developments

On April 24, Mexico’s Senate ratified the CPTPP agreement making Mexico the first of the eleven member group to complete its ratification process. On May 18, Japan’s Lower House passed a bill to ratify the CPTPP agreement. If Japan’s Diet ratifies the agreement before their current session ends in June, Japan will become the second nation to conclude its ratification process.

Earlier this week, the Government of Canada initiated its CPTPP ratification process by tabling the agreement with the House of Commons. The agreement will have to be passed by both the House of Commons and the Senate.

Once six of the eleven-member nations ratify the agreement, it will go into force within 60 days. Most analysts believe that by the end of 2018 or early 2019, the agreement will be enacted.

Advocacy

1. Government of Vietnam appears to be moving at a measured pace in terms of its CPTPP ratification process. Vietnam currently has two “FTA” agreements which have been signed (the other being the ASEAN-Hong Kong FTA) but have yet to be ratified of entered into force. Singapore and Brunei are generally viewed as having politically easy ratification processes once they decide to move forward. The Council continues to use its engagement opportunities with the governments of all four ASEAN members of the CPTPP to advocate that they ratify the agreement as soon as possible.

Looking Ahead

The Government of Vietnam appears to be moving at a measured pace in terms of its CPTPP ratification process. Vietnam currently has two “FTA” agreements which have been signed (the other being the ASEAN-Hong Kong FTA) but have yet to be ratified of entered into force. Singapore and Brunei are generally viewed as having politically easy ratification processes once they decide to move forward. The Council continues to use its engagement opportunities with the governments of all four ASEAN members of the CPTPP to advocate that they ratify the agreement as soon as possible.

View the Council's latest TPP updates

INDUSTRY HIGHLIGHTS

Customs

Major Developments

The ASEAN Directors-General of Customs held their annual meeting from May 2-4 in Langkawi, Malaysia, to discuss ongoing trade integration work. The DGs agreed to intensify efforts to launch Authorized Economic Operator programs across ASEAN and approved a feasibility study on the ASEAN Mutual Recognition Arrangements on AEO. They also endorsed the new ASEAN Technical Sub-Working Group on Classification, which is meant to settle classification and procedure differences in the ASEAN Harmonized Tariff Nomenclature, and agreed to establish a study group on e-commerce issues.

RCEP’s 22nd negotiating round took place from April 28 to May 8, with forward progress continuing at a slow pace. The talks covered goods market access, trade in services, investment, rules of origin, intellectual property, and e-commerce. Negotiations are gradually moving forward, but remain difficult with significant challenges outstanding on goods market access. The services and investment chapters, meanwhile, seem to be farther along. The negotiations were also discussed at the ASEAN Summit, which preceded the negotiating round in April. There, the heads of state expressed concern over growing protectionism, called for improving the ASEAN+1 FTAs, and then called for an expeditious conclusion to RCEP. As the parties move forward to determine their landing areas for each chapter, it is important for countries to continue seeking commercially meaningful agreements in as many of the chapters as possible. Another ministerial-level meeting is expected to take place in Tokyo in early July. Following that, additional negotiating rounds are scheduled for Bangkok and Auckland.

Advocacy

On May 2-3, the Council joined the 27th Meeting of the ASEAN Directors-General of Customs in Malaysia with a delegation of nine companies. The delegation held a formal consultation with the assembled Directors-General to propose deeper collaboration on e-commerce, emerging technologies, intellectual property protection, dual-use technology, and transfer pricing. The Council also met bilaterally with customs officials from Indonesia, Singapore, Australia, Malaysia, Myanmar, Vietnam, Cambodia, the Philippines, China, and the World Customs Organization. Potential follow-ups were identified for several of the themes and more information will be distributed about next steps soon.

View the Council's latest Customs updates

Defense & Security

Major Developments

• The 34th iteration of Balikatan, the largest annual U.S.-Philippine military exercise, commenced on May 7 and will run until May 18 at various locations throughout Luzon. The larger size and scope of Balikatan 2018 from last year's exercise reaffirms the strong defense ties between the United States and the Philippines. This is concerns that Philippine President Rodrigo Duterte would continue to try to scale back the military relationship as part of his attempts to reorient Philippine foreign policy more towards China. This year's Balikatan involves 8,000 combined troops (compared to last year’s 5,500 combined troops) participating in interoperability training and mutual defense operations, in addition to counter-terrorism drills. More information on this topic can be found here

View the Council's latest Defense & Security updates

Energy

Major Developments

• On March 27, the Philippines Mining Industry Coordinating Council (MICC) announced that a "fact-finding and science-based" review of 26 mine sites had begun. The MICC announced its decision to conduct its first round of reviews during an October 2017 meeting. It initially targeted finishing the review by the end of 2017, but progress stalled. Finance Undersecretary Bayani Agabin said that the first phase of the review would cover legal, technical and environmental concerns and would be completed within a three-month period. After the first phase is completed, the social and economic aspects of the study will be done, also within a three-month period, per the request of the technical review team. Undersecretary Agabin also said that once the review on the initial 26 mine sites is completed, the interagency body will expand the audit to include 70 large-scale mining operations across the country. More information on this topic can be found here.
• On April 11, Indonesia's Minister of State Owned Enterprises approved the transfer of a 56.96% stake (Series B shares) in gas distributor Perusahaan Gas Negara (PGN) to state-owned energy company Pertamina. The move brings the Government of Indonesia one step closer to its years-long goal of transforming Pertamina into an oil-and-gas holding company. Under the planned restructuring, PGN will be consolidated with Pertamina Gas (also called Pertagas), with PGN being the subholding firm for the midstream to downstream gas business. PGN controls 7,435 km of pipelines across Indonesia – approximately 76 percent of the country's downstream gas pipelines. Pertagas operates 2,085 km of pipelines. The consolidation will combine both companies' gas transmission and distribution networks, further enhancing PGN's leading role in Indonesia's natural gas transmission and distribution activities. More information on this topic can be found here.
• On April 24, after multiple postponements over the last two years, the Minister of Energy of Thailand, Siri Jirapongphan, announced the opening of bidding for exploration and production (E&P) activities in offshore gas blocks No. G1/61 and No. G2/61 in the Gulf of Thailand's Erawan and Bongkot fields, respectively. Rather than relying upon the previously used concession method, the recently announced bidding will adhere to a new Production Sharing Contract (PSC) method, which gives politicians and bureaucrats more of a say in the decision-making process for E&P operations and related investments. The already two-year delay in opening the bidding has led to concerns among analysts that further delays in the auctioning process are possible, and that such delays could lead to higher power generation costs. More information on this topic can be found here.

Advocacy

The Council would like to hear from member companies that are interested in meeting with Singapore's Energy Market Authority (EMA) and National Environment Agency (NEA) to discuss how companies will be affected by Singapore's planned carbon tax. Members interested in attending a meeting with EMA and NEA on this topic, please contact Sunita Kapoor at skapoor@usasean.org and Riley Smith at rsmith@usasean.org. More information on Singapore's planned carbon tax can be found here and here.

Looking Ahead

• On May 31, the Council and Quisumbin Torres, a member firm of Baker & McKenzie International, are holding an Investment Arbitration Workshop that aims to familiarize companies with two of the most widely used dispute resolution measures for cross-border investments, i.e. international commercial arbitration and investment treaty arbitration. By the end of the Workshop, the participants shall also have a better understanding of (a) drafting of arbitration agreements and (b) factors to consider before commencing an arbitration. More information on the workshop can be found here.
• From June 25-29, Washington, DC, will host the 27th World Gas Conference (WGC 2018), a triennial event that aims to raise the voice of natural gas while offering timely updates on strategic, commercial and technical issues facing the entire gas value chain. H.E. Ignasius Jonan, Minister of Energy & Mineral Resources of Indonesia, will be one of the keynote speakers. Officials from Pertamina and Petronas will also be participating in various events touching on current debates in the natural gas industry, industry insights, and technical and innovation-related issues. The Council has submitted a meeting request letter to Minister Jonan for a roundtable with member companies. The Council will keep member companies apprised of the status of this meeting request. More information on WGC 2018 can be found here.
• From October 30 to November 2, Singapore will host Singapore International Energy Week (SIEW) 2018. SIEW is an annual platform for energy professionals, policymakers and commentators to discuss and share best practices and solutions within the global energy space. SIEW aims to facilitate the exchange of ideas and discussions on pertinent energy-related issues, while simultaneously meeting the strategic objectives of Singapore’s commitment to becoming a global leader among energy companies converging on the event, as well as to provide a platform to showcase innovative products and solutions in the energy marketplace. You can find more information about SIEW 2018, including registration information here.

View the Council's latest Energy updates

Financial Services

Major Developments

• On May 1, Indonesia publicized Government Regulation 14/2018 on the Foreign Ownership of Insurance Companies after President Jokowi signed the regulation in April. As long expected, the regulation caps foreign investment in insurance companies at 80 percent, but exempts companies publicly listed in Indonesia and non-listed companies that exceeded the cap prior to its enactment. The cap will, however, prevent these companies from raising additional capital from outside of Indonesia if it increases the companies’ foreign ownership ratio further. Though the decision is positive in that it will likely not require significant divestments and is broadly in line with expectations, the limitations on raising additional capital will reduce the ability of insurance companies to expand their presence in the country and increase insurance penetration.
• Bank of Thailand submitted an amended draft of the National Credit Bureau (NCB) Act to the Finance Ministry that will enable fintech companies to be members of the NCB, Thailand’s only credit information center. The amendment focuses on allowing fintech firms to provide digital lending services, including peer to peer (P2P) and crowdfunding to Credit Bureau members. Currently, fintech companies are not allowed to be NCB members because they are not considered to be financial institutions. Therefore, they do not have access to the NCB’s data and must make requests of their customers to get payment history reports from the NCB’s self-inquiry channel.
• On May 4, Bank Indonesia (BI) issued Regulation No. 20/6/PBI/2018 on Electronic Money, which replaces previous regulations dealing with the same matter including Regulation No. 11/12/PBI/2009 and Regulation No. 18/17/PBI/2016. In addition to merging the regulations and updating certain licensing processes, Regulation No. 20 adds closed-loop payments services to the sectors regulated and imposes a 49 percent foreign equity cap on new non-bank electronic money issuers. Both existing and prospective e-money license holders will have six months to comply with the regulation.

View the Council's latest Financial Services updates

Food & Agriculture

Major Developments

During its recent 51st Annual Meeting on May 3-6, the Asian Development Bank (ADB) said that it supported the Philippines Government’s decision to end its quantitative restrictions (QR) on rice, converting it into a tariff schedule in compliance with commitments to the World Trade Organization (WTO). Whereas the QR would cause more volatility in the international markets for rice prices, this tariff schedule should lead to more stable rice prices and supply in the Philippines, and would also boost local production because there is more stability in the global and domestic markets. Earlier this week on May 21, Agriculture Undersecretary Segfredo Serrano called on the Philippines Senate and House of Representatives to prioritize the passage of the rice tariff bill, which would officially scrap the QR. At the time of this update, the rice tariff bill is currently up for plenary deliberations at the House - the Senate Committee on Agriculture and Food, chaired by Senator Cynthia Villar, has yet to release its version of the bill.

Advocacy

Myanmar’s Ministry of Commerce recently released a new regulation (Notification No.25/2018) that will allow foreign-owned companies to engage in wholesale and retail business. This new notification allows for unrestricted wholesale and retail activities by foreign companies, joint ventures, and local companies, and can potentially be a gamechanger for foreign direct investment in Myanmar. There are several stipulations specific to 100% foreign owned wholesale and retail distribution business. While this development is positive, there are a few areas of clarifications needed. For more information, please contact Sunita Kapoor at skapoor@usasean.org.

Looking Ahead

The Council’s 2018 Food & Agriculture Industry Mission to Indonesia, scheduled for May 8-9, has been postponed. An email will be sent to Food & Agriculture committee members when a new date is confirmed. Please contact Sunita Kapoor at skapoor@usasean.org with any questions.

View the Council's latest Food & Agriculture updates

Health & Life Sciences

Major Developments

On May 15 in Hanoi, officials from the Ministry of Health (MOH) of Vietnam and the World Health Organization (WHO) met to discuss ways to improve primary healthcare in Vietnam, an essential step in achieving universal health coverage (UHC). As part of the discussion, Phan Le Thu Hang, Deputy General Director of the Planning and Finance Department of the MOH identified the grassroots healthcare system as one area that requires support. Vietnam’s grassroots healthcare network, which includes the health facilities in the villages and provinces, aim to provide all citizens with access to low-cost basic healthcare services, thereby contributing to social equity and poverty reduction around the country. While these commune-level clinics are the first line of healthcare for a large portion of the Vietnamese population, they require significant improvements. These challenges include a lack of sufficient investment, weak capacity (lack of staff and equipment) in disease prevention, health management and community-based healthcare, and inefficient use of health services by patients. Deputy Minister of Health Pham Le Tuan said that currently, there is a large gap in primary healthcare between urban and rural areas, where the rural population primarily go to the local clinics while the urban population prefer the major hospitals with more healthcare services. In terms of solutions, MOH officials have policies and programs in place to strengthen the grassroots healthcare network, but more needs to be done. During this session, MOH and WHO officials proposed several solutions, including development of a payment system to better link payment to service quality, more investments in infrastructure, equipment and medicines, capacity building, and technology transfers. In addition, the government will need to revisit health insurance premiums and allocation amounts to primary healthcare providers (overall funding restructure), as well as a revision of the current list of services and medicines offered. WHO officials also recommended that Vietnam consult the private sector in its revision of the national health system.

Advocacy

• On May 23, the Council organized the first of a series of sectoral briefings on Capitol Hill with the U.S. Congressional Caucus on ASEAN. The first session was on topics related to the health and life sciences industry. The briefing series is an opportunity for Council members to engage with ASEAN Caucus members and staffers on key commercial policy challenges American companies face in ASEAN. Each session featured remarks by two to three industry speakers and a moderated dialogue with attendees. Future briefings in the series will focus on: Defense & Security; ICT; Financial Services; and Energy. Please contact Hai Pham at hpham@usasean.org with any questions on the briefing series or the HLS briefing session.
• As a follow-up to the Health & Life Sciences Industry Mission to Vietnam, the Council organized a U.S. Study Trip for three government officials from the Department of Medical Equipment and Construction (DMEC) and Vietnam Social Security agency to Minneapolis, Fort Worth, and San Diego on May 16-23 to visit members’ factories and share best practices on procurement practices, health insurance and HTA. This trip was a precursor to an in-depth workshop in Vietnam to offer industry input on the government’s upcoming central tendering regulation.

View the Council's latest Health & Life Sciences updates

ICT

Major Developments

• The 16th version of Vietnam’s Draft Law on Cybersecurity has been released by the National Assembly (English and Vietnamese). The new draft appears to strengthen data localization requirements by removing the threshold of 10,000 users; requiring local storage of data pertaining to “users in Vietnam,” instead of “Vietnamese users” as in previous versions; and providing that offshore telecommunications and internet services providers only store such data within the territory of Vietnam. The National Assembly is currently considering whether to consider the current draft. More information will be disseminated in a future ICT Update.
• In April 2018, Indonesia issued a new draft personal data protection law. This draft however is not included in the 2018 Prolegnas and therefore it is not clear when the bill will be discussed. This issue was first taken up in 2015 and an “initial” draft law on data protection was published, although progress had been slow until now. Indonesian press has reported a strong push for the law on data protection due to the recent investigation launched by the Indonesian government on the use of Indonesian users’ data by a social media company. More information will be disseminated in a future Indonesia Legislative Update.
• On April 25, Thailand’s Prime Minister Prayuth Chan-o-cha invoked Section 44 to cancel the selection of new board members for the National Broadcasting and Telecommunications Commission (NBTC). For more information, see our recent Thailand Update here.
• On May 8, Philippine President Duterte appointed Eliseo Mijares Rio, Jr. as the acting secretary of the Department of Information and Communications Technology (DICT). Rio has been DICT’s officer-in-charge since the resignation of Rodolfo Salalima in October 2017.
• On May 10, Singapore hosted the Fourteenth Conference of the ASEAN Ministers Responsible for Information (14th AMRI) and the Fifth Conference of ASEAN Plus Three Ministers Responsible for Information (5th AMRI+3). The Ministers endorsed a new framework aimed at addressing fake news. An official joint media statement is available here.

Advocacy

• On April 17, the Council and BSA submitted joint comments on Thailand’s Draft Cybersecurity Bill (found here in Thai, with an unofficial translation found here). BSA previously submitted comments on an earlier draft of the Cybersecurity Bill in 2015. For any questions, please contact Ella Duangkaew at eduangkaew@usasean.org.
• The Council is seeking inputs on Singapore’s recently issued “Public Consultation for Managing Unsolicited Messages and the Provision of Guidance to Support Innovation in the Digital Economy.” Please submit your comments to Shay Wester at swester@usasean.org or Sunita Kapoor at skapoor@usasean.org.

View the Council's latest ICT updates

Infrastructure

Major Developments

• On April 27 during the 32nd ASEAN Summit, a concept note outlining Singapore's proposal to establish an ASEAN Smart Cities Network was released. Singapore has made setting up the Smart Cities Network its flagship initiative under the ASEAN chairmanship themes of "Resilience" and "Innovation", and the release of the concept note marks a concrete step forward in realizing the collaborative platform. Twenty-six cities from the 10 ASEAN member states were named pilot cities for the Smart Cities Network. During the summit, leaders also adopted the ASEAN Leaders' Vision for a Resilient and Innovative ASEAN and released the ASEAN Leaders' Statement on Cybersecurity Cooperation. More information on this topic can be found here.
• On April 25th, Chair of ASEAN, Singapore’s Prime Minister Lee Hsien Loong announced that Hanoi, Ho Chi Minh City and Da Nang will join the ASEAN Smart Cities Network. He made the announcement at a dinner hosted for his Vietnamese counterpart Prime Minister Nguyen Xuan Phuc, who was on a three-day official visit to Singapore ahead of the 32nd ASEAN Summit. These Vietnamese cities will join alongside 23 other proposed pilot cities in the region. While majority of the attention has been focused on smart technologies and the development of digital infrastructures such as seamless e-payment systems, the smart city project is also intended at making cities smarter, infrastructure wise. Vertical integration of innovation and smart solutions will help many cities solve chronic urban challenges and meet its growing infrastructure needs. In Ho Chi Minh for example, the smart city project is intended to help deal with problems such as rapid population growth, inadequate healthcare infrastructures and transport challenges. Vietnam has also hosted a smart city innovation challenge late last year, sourcing for solutions to the country’s urban challenges which include:

• Affordable housing
• Ecotourism and environmental planning
• Greenery and public spaces
• Traffic management and smarter parking
• Drainage, sewerage and waste management
• Water purification and delivery
• Energy efficiency
• Urban agriculture
• Public security and monitoring of natural disasters
• E-government services
• Healthcare
• Education

As evidence that most digital solutions are geared towards meeting modernization especially in developing countries, physical infrastructure will remain a foundational theme for most pilot smart city projects in the region.

View the Council's latest Infrastructure updates

COUNTRY HIGHLIGHTS

Brunei

Major Developments

Sultan Hassanal Bolkiah recently attended the Commonwealth Heads of Government Meeting and stressed that Brunei continues to promote its trade and addressing trade barriers to allow for greater opportunities. Brunei’s Department of Economic Planning and Development reported an increase in the country’s total trade as of December 2017 at $B1,138.5 million (US$859.6 million), which is an increase of 33.1 percent, compared to the previous year. The trade balance amounted to $B357.5 million (US$269.3 million), a year-on-year increase of 51.3 percent, of which total exports increased by 37% year-on-year from B$545.9 million (US$412.2 million) to $B748 million (US$564.8 million), with mineral fuels as the top contributor (91.6%). The highest exports markets include Japan (35.7%), Singapore (17.5%), Thailand (14.7%), and South Korea (13.9%). Meanwhile total imports increased by 26.1% year-on-year from $B236.3 million (US$178.4 million) to $B390.5 million (US$294.8 million), comprising primarily of manufactured goods (36%), machinery and transport equipment (32.3%), and food (11.4%). The highest imports markets include China (37.4%), Malaysia (15.7%), Singapore (11.4%), and the United States (9.3%). Brunei’s energy sector is still the main contributor to the country’s economy, although Brunei is eager to diversify the industry further by developing its downstream sector; halal industry; tourism; ICT and business services.

View the Council's latest Brunei updates

Cambodia

Major Developments

On April 11, the Asian Development Bank (ADB) released a report on Asian economies, in which it forecasts a seven percent growth for Cambodia, just as it did in 2017. This favorable estimate is backed by a steady growth in merchandise exports, substantial rise in tourism (led by China) over the past year, growth in foreign direct investments, and an increase in concessionary loans from foreign countries. Risks remain, however, due to political uncertainty and anxiety surrounding the upcoming general elections in July, and difficulties in doing business that stems from complicated and cumbersome government procedures and approval processes. The report noted the weakness of the court systems in resolving commercial disputes as another factor for risk. The current National Commercial Arbitration Center, which the government has tasked with dealing with commercial disputes, is widely seen as slow and ineffective. The ADB report also noted a potential slowdown in garment and footwear exports and a rise in the high-tech sector, such as electrical products and automotive parts, over the next two years. To access the full report, please click here.

On April 27, ratings agency Moody's kept Cambodia's credit rating at a stable outlook of “B2,” citing its GDP growth potential, macroeconomic stability, and plans to expand government revenue. At the same time, Moody's warned that "Cambodia's high dollarization of loans and deposits leaves the sovereign credit profile vulnerable to negative shocks, which could stem from a potential sharp appreciation of the US dollar and spikes in US and domestic interest rates in 2018 and 2019." Other factors for risk include a low average income per household and a volatile political landscape, which could very well overshadow Cambodia's credit strength.

View the Council's latest Cambodia updates

Indonesia

Major Developments

• Indonesia’s Parliament officially endorsed Perry Warjiyo as the Governor of Bank Indonesia, succeeding the incumbent Governor Agus Martowardojo whose fiveyear term ends this month. Mr. Warjiyo, currently the Deputy Governor of Bank Indonesia, is President Joko Widodo's sole nominee for the position and his nomination was subsequently approved by Parliament’s financial commission. Mr. Warjiyo has a PhD in monetary and international economics from Iowa State University. He first joined Bank Indonesia in 1984 and has established a long career within the central bank, especially in areas of economic research and monetary policy, international issues, foreign exchange, and foreign debt management. The Council met with Mr. Warjiyo during our 2018 Indonesia Business Mission and will continue to establish channels of communication with the office of the new Governor in order to continue ongoing advocacy efforts in areas under the jurisdiction of the central bank.
• President Joko Widodo has recently ordered his cabinet to open the country’s university sector to 100% foreign ownership and allow overseas institution to open campuses in Indonesia. According to Investment Coordinating Board (BKPM) Chairman Thomas Lembong however has not announced a timeline for when the policy will take effect. Indonesia has had longstanding restriction towards higher education and currently only permits foreign universities to operate in the country if they collaborate with local partners and meet certain requirements. Improvements in education is critical to strengthen the human capital development component of Indonesia’s ecosystems for supporting emerging next generation growth areas related to Industry 4.0, innovative startups, and ecommerce.
• The Ministry of Manpower announced that it is currently drafting a regulation to bring back the language requirement for foreign workers. The requirement was previously removed from Manpower Ministerial Regulation No. 16 of 2015 to accommodate temporary foreign workers with shortterm stay in Indonesia. The Ministry is now considering requiring foreign workers who stay for six months or longer to demonstrate Indonesian proficiency in order to obtain work visas. The government’s recent efforts to simplify the licensing process for foreign worker recruitment triggered an uproar in the run up to the Labor Day demonstration on May 1. President Jokowi’s political opponents are turning the policy reform into a political campaign issue ahead of the 2019 presidential election, deeming the indiscriminate flood of foreign workers detrimental to the local economy.
• On May 15, Bank Indonesia raised its benchmark interest rate by 25 basis points in an effort to bolster rupiah, the first hike since November 2014. Bank Indonesia cited that such action is needed to ensure Indonesia’s macroeconomic stability – a move hinted by the Central Bank in a statement released on May 11. Indonesia is one of the countries worst affected by the combination of rising U.S. yields and higher oil prices, and has seen about $4 billion leave its markets over the past month as foreign investors review their exposure to higher-yielding emerging markets. Bank Indonesia plans to hold an additional monetary policy meeting on May 30, with a possibility to raise its key interest rate for the second time within the same month. The May 15 monetary policy meeting marked the last for Governor Agus Martowardojo who is succeeded by new Bank Indonesia Governor, Perry Warjiyo.

Advocacy

• The Office of the United States Trade Representative (USTR) announced that it is reviewing the eligibility of Indonesia in the Generalized System of Preferences (GSP) based on non-compliance concerns. The review on Indonesia will focus on whether it meets the following two GSP criteria:

(1) The GSP criterion that requires a GSP beneficiary country to assure the United States that it will provide equitable and reasonable access to its market, and

(2) the GSP criterion that requires a GSP beneficiary country to reduce trade-distorting investment practices and reduce or eliminate barriers to trade in services.

The Council is seeking your input as to how your business is specifically affected, and how we can support the continuation of Indonesia’s compliance with the GSP. Please contact Artha Sirait at asirait@usasean.org with your specific input by May 25. Public hearing at USTR will take place on June 19.

• On May 14, the Council partnered with the U.S. Chamber of Commerce, AmCham Indonesia, KADIN and APINDO to host the private sector consultations for the United States – Indonesia Trade and Investment Framework Agreement (TIFA) talks. At the official private sector consultation, we were joined by the leaders of the U.S. and Indonesian delegation, Karl Ehlers, Acting Assistant USTR for Southeast Asia and the Pacific; and Iman Pambagyo, the Ministry of Trade’s Director General for International Trade Negotiation. These meetings gave us the opportunity to reinforce the importance of the commercial relationship and the need to resolve key challenges so that we can enable more trade and investment. In advance of the meetings, the Council shared an extensive compilation of the challenges that our members face in Indonesia with both the Indonesian delegation and USTR. During the governmentto-government meetings, Indonesia and USTR discussed: GSP review on Indonesia; agriculture import restrictions; digital trade issues including data localization; and financial services issues.

View the Council's latest Indonesia updates

Laos

Major Developments

Investment in Lao Special Economic Zones (SEZs) has continued to grow, due to the proliferation of the zones and increases in tax incentives. Currently, there are 12 special economic zones in Laos, with 71 new investments in 2017 alone. This was an increase of 30 companies compared to 2016. Registered capital of total investments in 2017 totaled approximately US$92 million. Over the past several years, the Government of Laos has prioritized the development of SEZs, aiming to attract investment from the private sector in Laos and overseas to generate more domestic jobs and boost socioeconomic development. More information can be found in our recent Laos Update here.

Looking Ahead

• The Bank of Laos and the U.S. Embassy in Vientiane are seeking private sector sponsorship of the second Laos Digital Forum on June 29, focusing on FinTech. For more information, or if you are interested in sponsoring, please contact Ella Duangkaew at eduangkaew@usasean.org.
• Please save the date for the 2018 Laos Business Mission August 23-24 in Vientiane. Contact Ella Duangkaew at eduangkaew@usasean.org with any questions.

View the Council's latest Laos updates

Malaysia

Major Developments

• Former Prime Minister Dr. Mahathir Mohamad and his opposition coalition, Pakatan Harapan (PH) won Malaysia’s 14th General Election held on May 9 after defeating the incumbent Prime Minister Najib Razak and his ruling coalition, the Barisan Nasional (BN) which had governed Malaysia since its independence in 1957. Mahathir was officially sworn in as the new prime minister on the evening of May 10, ushering in a peaceful transition of power. Click here for an analytical update on the election.
• New Prime Minister Mahathir Mohamed outlined his immediate plans for Malaysia in a briefing session after being sworn in on the evening of May 10. He noted the most pressing objective was to form a new government which will be decided by him and the leaders of the four parties that formed his coalition. So far, Prime Minister Mahathir has named a Deputy Prime Minister and three other cabinet officials as well as formed a Council of Elders and Committee on Institutional Reforms. Read more about these appointments in the recent Malaysia Analytical Update here.

Advocacy

In his first 100 days in office, Prime Minister Mahathir has vowed to repeal the goods and services tax (GST) and the Finance Ministry has announced that the tax will be zero-rated as of June 1. The Council is asking for member input on the GST repeal. Please send input to Kim Yaeger at kyaeger@usasean.org.

Looking Ahead

The Council will hold a Malaysia Committee Conference Call with a briefing on the political transition by U.S. Ambassador to Malaysia, the Honorable Kamala Shirin Lakhdhir, on the evening of May 29 (D.C.)/morning of May 30 (Malaysia). Click here to register for the call.

View the Council's latest Malaysia updates

Myanmar

Major Developments

• On May 25, the Myanmar President’s Office announced that Union Minister of Planning and Finance, U Kyaw Win, has been allowed to resign on his own accord, amidst an ongoing corruption investigation against him and his son. U Aung Kyi, Chairman of the Anti-Corruption Commission, confirmed earlier this week that there has in fact been an investigation against U Kyaw Win since May 7, and that it is now near completion. He added that the commission received complaints on May 3 and has since collaborated with the Bureau of Special Investigation (which is under the Ministry of Home Affairs) to carry out the necessary searches and questioning pertaining to the matter. He did not disclose any further information on grounds that the case is only in its investigative stage and that in order for it to be a public court case, the commission must first find the complaint valid (with sufficient evidence) and additionally receive approval from the President to proceed. Since the NLD took office in 2015, U Kyaw Win has been tasked as the key minister responsible for crafting the Administration’s economic policy. He also served as Chairman of the Myanmar Investment Commission (MIC), the primary government body responsible for all investments in Myanmar, foreign and domestic. During his tenure, a few notable achievements that the Ministry of Planning and Finance was able to roll out include the Government’s 12-point economic plan, Myanmar Investment Law 2017, and the Myanmar Companies Law 2017. With that being said, there seems to be an almost unanimous consensus among the private sector on the general lack of leadership, direction, and effectiveness on the ministry’s part in attracting foreign investment and invigorating the local economy. As such, U Kyaw Win’s departure from office is seen as a welcome development, as speculation begins to grow on who would replace him and whether his replacement would step up to fill the void of much-needed leadership and capacity in Myanmar’s economic policy space.
• All foreign-owned companies and joint ventures between international and domestic investors are now allowed to engage in retail and wholesale trading in Myanmar, and are permitted to trade goods manufactured in Myanmar or imported from overseas. With this action, Myanmar’s Ministry of Commerce aims to expand consumer choice and lower consumer costs through fostering competition. Additionally, the Ministry seeks to develop quality of goods, service, technologies, and enrich small and medium enterprises, while preventing unfair competition and consumer exploitation. The Council has long advocated for the liberalization of wholesale trading, particularly in the agriculture sector, and sent a letter to Commerce Minister U Than Myint last year. To read the Council’s analysis on this new development, please click here.

Advocacy

Myanmar’s Ministry of Commerce recently released a new regulation (Notification No.25/2018) that will allow foreign-owned companies to engage in wholesale and retail business. This new notification allows for unrestricted wholesale and retail activities by foreign companies, joint ventures, and local companies, and can potentially be a gamechanger for foreign direct investment in Myanmar. There are several stipulations specific to 100% foreign owned wholesale and retail distribution business. While this development is positive, there are a few areas of clarifications needed. For more information, please contact Sunita Kapoor at skapoor@usasean.org.

View the Council's latest Myanmar updates

Philippines

Major Developments

• On March 19, the Senate Committee on Public Services, Economic Affairs and Finance jointly submitted a bill (Senate Bill No. 1754) to amend the 1936 Public Service Act (Commonwealth Act No. 146). The Public Service Act lists what are considered public services but provides no explicit definition of what constitutes a public utility, meaning all services listed in the Act must comply with the 40% foreign ownership cap in the Constitution. Senate Bill No. 1754 would designate only electric power distribution and transmission, water pipeline distribution, and sewerage pipeline systems as public utilities. The bill is one facet of a multi-pronged effort by different branches of the Philippines Government to liberalize certain sectors and industries in the national economy with the aim of improving the country's economic competitiveness and its ability to attract foreign direct investment. More information on this topic can be found here.
• National Economic and Development Authority (NEDA) Undersecretary for Planning and Policy (OIC), Rosemarie G. Edillon, announced on April 12 that the agency is pushing for major reforms with the aim of ensuring that state-owned and private firms can compete on equal terms. NEDA, with assistance from the Philippine Competition Commission, will formulate a National Competition Policy this year. The policy aims to flesh out competition strategies in the country's economic blueprint, guided by pro-competitive laws and regulations. In particular, Undersecretary Edillon said that state support such as subsidies should be reserved only for government-owned and -controlled corporations (GOCC) that operate in non-profitable or non-commercially viable markets that private firms eschew. Subsidies to government financial institutions and government corporations hit an all-time high of P131 billion (US$2.5 billion) in 2017. More information on this topic can be found here.
• The 34th iteration of Balikatan, the largest annual U.S.-Philippine military exercise, commenced on May 7 and ran until May 18 at various locations throughout Luzon. The larger size and scope of Balikatan 2018, compared to last year's exercise reaffirms the strong defense ties between the United States and the Philippines. The concern was that Philippine President Rodrigo Duterte would continue to try to scale back the military relationship as part of his attempts to reorient Philippine foreign policy more towards China. This year's Balikatan involves 8,000 combined troops (compared to last year’s 5,500 combined troops) participating in interoperability training and mutual defense operations, in addition to counter-terrorism drills. More information on this topic can be found here.
• On May 8, President Rodrigo Duterte named Bernadette Romulo-Puyat, Undersecretary for Administration, Agribusiness and Marketing, and Regional Engagement at the Department of Agriculture (DA) as the next Secretary of Tourism following the resignation of former Secretary of Tourism Wanda Teo. Secretary Teo resigned amid controversy over a P60-million (US$1.2 million) advertisement placement by the Department of Tourism during a television show featuring her two brothers. A veteran of three different administrations, Puyat has been DA Undersecretary since July 2017. Previously, she was Undersecretary for Special Concerns at DA under President Benigno Aquino III and served as a consultant on President Gloria Macapagal Arroyo's Presidential Management Staff. Details on the direction that Puyat hopes to take the Department are unclear. More information on this topic can be found here.

Advocacy

• As a follow-up to the 2018 Philippines Business Mission, the Council submitted a letter to the Ways and Means Committee in the House of Representatives conveying the private sector's feedback on the Tax Reform for Acceleration and Inclusion (TRAIN) 2. The letter was based on member company input on TRAIN 2, which is one of the main areas of focus for the Philippines Committee in 2018 and was also one of the main discussion topics during the 2018 Philippines Business Mission. A copy of the letter can be found here.
• On May 2, the Meridian International Center and the Council held a roundtable discussion on Developing Infrastructure for Economic Growth in the Philippines with a delegation from the Philippine Department of Transportation, Bases Conversion and Development Authority, Public-Private-Partnership Center of the Philippines.

Looking Ahead

• On May 29, the Pharmaceutical and Healthcare Association of the Philippines (PHAP) is holding a forum entitled “Moving Forward with the Philippine Health Agenda.” The forum will put on spotlight successful healthcare models both in the Philippines and around the world as the country accelerates its bid for Universal Healthcare. The forum will aim to demonstrate a whole-of-government and whole-of-society approach to Universal Healthcare, where the government spearheads collaboration with the private sector. More information on the forum can be found here.
• On May 31, the Council and Quisumbin Torres, a member firm of Baker & McKenzie International, are holding an Investment Arbitration Workshop that aims to familiarize companies with two of the most widely used dispute resolution measures for cross-border investments, i.e. international commercial arbitration and investment treaty arbitration. By the end of the Workshop, the participants shall also have a better understanding of (a) drafting of arbitration agreements and (b) factors to consider before commencing an arbitration. More information on the workshop can be found here.
• On May 31, the Council will hold a roundtable discussion with Mr. Ceferino Rodolfo, Undersecretary of the Industry Development and Trade Policy Group at the Philippines Department of Trade and Industry, in Washington, D.C. Undersecretary Rodolfo is also Vice Chairman and Managing Head of the Bureau of Investments of the Philippines. During the roundtable Undersecretary Rodolfo will provide an update on the Philippine economy, prospects for a Philippines-U.S. free trade agreement, the first two packages of the Tax Reform for Acceleration and Inclusion (TRAIN), and recent work with ASEAN. Click here for Undersecretary Rodolfo's bio. More information on the workshop can be found here.

View the Council's latest Philippines updates

Singapore

Major Developments

• On April 24, Singapore's Prime Minister Lee Hsien Loong announced a cabinet reshuffle involving 16 ministries. Key leadership changes were made to the portfolios of trade, communications, education and manpower. Mr. Chan Chun Sing, who is currently Minister in the Prime Minister's Office and is seen by many to be a potential candidate for Singapore's next Prime Minister, will be appointed the new Minister for Trade and Industry. Current Minister for Trade and Industry, Mr. S. Iswaran will head the Ministry of Communications and Information, as well as take on the newly created role of Minister-in-charge of Trade Relations, in which he will cover trade negotiations and bilateral economic relations management. With the new roles taking effect on May 1, the Fourth-Generation (4G) ministers now oversee two-thirds of the country's ministries. The 4G leadership refers to the next generation of political leaders from the People's Action Party who are expected to lead the Singapore government. More details on the reshuffle can be found here in the analytical brief prepared by the Council.
• On April 27 during the 32nd ASEAN Summit, a concept note outlining Singapore's proposal to establish an ASEAN Smart Cities Network was released. Singapore has made setting up the Smart Cities Network its flagship initiative under the ASEAN chairmanship themes of "Resilience" and "Innovation", and the release of the concept note marks a concrete step forward in realizing the collaborative platform. Twenty-six cities from the 10 ASEAN member states were named pilot cities for the Smart Cities Network. During the summit, leaders also adopted the ASEAN Leaders' Vision for a Resilient and Innovative ASEAN and released the ASEAN Leaders' Statement on Cybersecurity Cooperation. More information on this topic can be found here.
• On March 6, the Personal Data Protection Commission of Singapore announced that it had become the sixth APEC economy to join the Cross-Border Privacy Rules System (CBPR) and the second APEC economy to join the Privacy Recognition for Processors System (PRP). Alongside Singapore, the United States, Mexico, Canada, Japan, and the Republic of Korea also participate in the CBPR, while the United States was the lone participant in the PRP until Singapore joined. Joining CBPR shows that Singapore’s Personal Data Protection Act adheres to a framework that facilitates data flows between countries, and also allows for the prevention of the accidental disclosure and misuse of personal data that is utilized for online transactions. The press release issued by APEC called Singapore’s move to join the CBPR a, “further boost for e-commerce growth and the protection of sensitive online consumer data in the Asia-Pacific.” More information on this topic can be found here.
• On April 2, the Monetary Authority of Singapore announced that it is working with stakeholders to develop a guide to promote the responsible and ethical use of artificial intelligence (AI) and data analytics by financial institutions. The guide “will set out key principles and best practices” for the use of AI and data analytics, which will help financial institutions “strengthen internal governance and reduce risks of data misuse”. MAS intends to cover all segments of the financial sector, including FinTech firms. To co-create the guide, MAS brought together a group of leaders and practitioners in data analytics as a Fairness, Ethics, Accountability and Transparency (FEAT) Committee. MAS stated that it will be engaging the industry to obtain views and feedback on the proposed guide in Q2 2018, with the aim of completing the guide by the end of this year. More information on this topic can be found here.

Advocacy

Singapore's Personal Data Protection Commission (PDPC) recently issued a "Public Consultation for Managing Unsolicited Messages and the Provision of Guidance to Support Innovation in the Digital Economy." This consultation paper (available here) seeks views on the review of the Do Not Call Provisions and the Spam Control Act, and the proposed Enhanced Practical Guidance (EPG) Framework under the Personal Data Protection Act (PDPA). The proposed EPG framework will address the current gap for addressing complex compliance queries that cannot be addressed by published resources and professional data protection services or legal advice. It will also provide regulatory certainty that is otherwise not covered by current PDPC guidance. The Council is currently seeking inputs on this public consultation paper, especially on the EPG framework. Any feedback provided should have sufficient details in order for the PDPC to understand practical issues faced. The PDPC will not consider any feedback that is unsubstantiated or theoretical. Please submit your inputs to Shay Wester at swester@usasean.org, or Sunita Kapoor at skapoor@usasean.org. A consolidated draft will be circulated for review before final submission to the PDPC.

Looking Ahead

• On June 4, US-ASEAN Connectivity through Trade and Investment (US-ACTI) will hold a symposium on the current impact and future opportunities of the ASEAN Single Window. The symposium aims to examine the impact of the National Single Windows and ASEAN Single Window on ASEAN trade and provide an opportunity for the business community to share its views with the key government officials managing NSWs and ASW on how these platforms can be expanded and improved. More information on the symposium can be found here.
• The Council and Quisumbin Torres, a member firm of Baker & McKenzie International, are holding an Investment Arbitration Workshop on May 31 that aims to familiarize companies with two of the most widely used dispute resolution measures for cross-border investments, i.e. international commercial arbitration and investment treaty arbitration. By the end of the Workshop, the participants shall also have a better understanding of (a) drafting of arbitration agreements and (b) factors to consider before commencing an arbitration. More information on the workshop can be found here.

View the Council's latest Singapore updates

Thailand

Major Developments

• On May 1, Deputy Prime Minister Somkid Jatusripitak announced that Thailand is ready to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, and “may request to become a member” when the trade agreement body officially enlists new member countries. More information can be found in our recent Thailand Update here.
• On May 1, the Ministry of Digital Economy and Society announced that it will aim to submit an updated draft bill on data protection for Cabinet approval by the end of May. The Ministry released an updated version of the draft in early April following a public hearing period in January. The most concerning amendment states that operators overseas are subject to the law’s requirements for collection, use or disclosure of personal data occurring in Thailand. More information can be found in our recent Thailand Update here.
• On May 15, the long-awaited Eastern Economic Corridor Act was published in the Royal Gazette, after being passed by the National Legislative Assembly in February. The Act consists of 73 sections that dictate a wide range of policies for the EEC. More information can be found in our recent Thailand Update here.
• On May 15, the government of Thailand passed an emergency decree, administered by the Ministry of Finance, that defines how cryptocurrency can be used in Thailand. More information can be found in our recent Thailand Update here.

Looking Ahead

• The Council is hosting a welcome luncheon for the new Appointed Ambassador of Thailand to the United States, H.E. Virachai Plasai, on Thursday, May 31. The deadline for sponsorship is May 25, click here to sponsor. Please contact Ella Duangkaew at eduangkaew@usasean.org with any questions.
• The Council is now registering senior executives for its annual Thailand Business Mission from June 26-28 in Bangkok Thailand. Click here to register. The registration deadline is June 12. Please contact Ella Duangkaew at eduangkaew@usasean.org with any questions.

View the Council's latest Thailand updates

Vietnam

Major Developments

On May 7, the 12th Central Committee of the Communist Party of Vietnam (CPV) held its 7th Plenary Session in Hanoi. During the session, which concluded on May 12, the members of the committee voted to adopt three resolutions on the development of a contingent of senior officials, the reform of wage policies, and the renewal of social insurance policies. CPV General Secretary Nguyen Phu Trong highlighted the necessity to renew and improve the quality of personnel work, and seek a new performance assessment method for officials that is more objective and accurate. Following the Central Committee meeting, the 24th Session of the Standing Committee of the 14th National Assembly (NA) kicked off in Hanoi on May 14. This meeting focused on the Government’s updated report on the socio-economic development, the State’s budget of 2017, and the implementation of the national socio-economic development plan in its first months of 2018. One update was that Vietnam’s GDP growth in 2017 was higher than originally reported, at 6.81 percent instead of 6.7 percent reported at the 4th plenary session of the 14th NA in October 2017 – this was highlighted by the NA Standing Committee as the country’s biggest achievement in 2017 as it was the biggest economic growth since 2011. The NA Committee for External Affairs Chairman Nguyen Van Giau also praised the Government and the Prime Minister for their strong actions to address bottlenecks in Vietnam’s economy, resulting in stable macro-economic growth, especially in import and export activities. One area of concern raised was that Vietnam’s labor productivity continued to be lower than that of other ASEAN countries. Vietnam’s GDP growth for Q1 2018 reached 7.38 percent, a figure that surpassed projections and will bring high expectations and pressure for the government in the quarters to come.

Advocacy

• Several companies were surprised by the Ministry of Industry and Trade (MOIT) regulation Circular 21 that required them to provide certain assurances regarding a textile material used in certain products. The requirements were specialized, the deadline was very short, and it was not clear who to contact in the government or how to avoid noncompliance regarding this regulation. The Council successfully advocated for an extension until January 1, 2019 for our companies to comply with the regulation – this extension allows for adequate time to assemble the necessary information for full compliance.
• During our annual Vietnam Business Mission, the delegation was able to discuss Decree 116, which mandates certain type approvals for imported autos which amount to a technical barrier to trade, with Prime Minister Nguyen Xuan Phuc and several members of his cabinet. Following the Mission, the Vietnamese Ministry of Transport and Ministry of Industry and Trade agreed to conduct a review of the regulation which we believe is discriminatory against our companies. The review is ongoing.

Looking Ahead

On June 5, the Council will be hosting a farewell luncheon in honor of H.E. Pham Quang Vinh, Ambassador of Vietnam to the United States, in Washington, D.C. Since his arrival at the end of 2014, the Council and Ambassador Vinh have worked closely to further develop the U.S.-Vietnam business relationship, a goal that the Council and its members share. We hope you will join us in honoring the Ambassador and wishing him the best of luck in his future endeavors as he returns to Hanoi. Sponsorship opportunities for this event are available. For questions or to express interest, please contact Hai Pham at hpham@usasean.org.

View the Council's latest Vietnam updates