June 2018

Dear Members,

To all those who celebrated, I hope you had a happy Eid! 

Greetings from Washington as I prepare to head out to Bangkok this weekend for our 2018 Thailand Business Mission and our meeting with Prime Minister Prayut Chan-o-cha.  This visit to the region will also see short stops in Singapore and Jakarta before returning to the USA. 

We have a busy few weeks starting next week including visits to Washington by Vietnam’s Deputy Prime Minister Vuong Dinh Hue and Indonesia’s Energy Minister Ignasius Jonan.  We hope you and your colleagues will be able to join us for these events and others highlighted below in our looking ahead section.

All eyes were on Singapore recently as it hosted U.S. Secretary of Defense James Mattis at the Shangri-La Dialogue (Secretary Mattis’ speech at Shangri-La can be found here), followed almost immediately by the historic meeting between U.S. President Donald Trump and DPRK Chairman Kim Jong Un.  We were pleased that two Council friends, Ambassador Sung Kim and Assistant Secretary of Defense for Asian and Pacific Security Affairs Randy Schriver, played key roles in the negotiations that led up to the Summit.

President Trump also had a bilateral meeting with Prime Minister Lee Hsien Loong separately, during his visit to Singapore at which Prime Minister Lee invited President Trump to make a formal State Visit to Singapore in November 2018, alongside the ASEAN-US and the East Asia Summits.

The State Department announced a new Chargé d’affaires for the U.S. Mission to ASEAN in Jakarta.  On June 26, the U.S. Mission to ASEAN will welcome its new Chargé d'affaires ad interim Ambassador Piper Anne Wind Campbell.  She will remain in place through the ASEAN and East Asia Summits in November.  Since the U.S. has not yet appointed a full-fledged Ambassador to ASEAN, Ambassador Campbell will lead the Mission in the lead-up to these important engagements, which President Trump is expected to attend.  Ambassador Dan Shields played this role in 2017.  Ambassador Campbell previously served as U.S. Ambassador to Mongolia, as Deputy Chief of Mission in Phnom Penh, and several other key positions.

In the last few weeks, we have held several events in Washington, including a welcome luncheon for Thailand’s Ambassador Virachai, a farewell luncheon for Vietnam’s Ambassador Vinh, and a Defense working luncheon with Assistant Secretary Schriver, as well as a farewell reception in Hanoi for departing Vice Ministers of Foreign Affairs:

Welcome Luncheon for Ambassador Virachai

• On May 31, the Council hosted 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 diplomats, the luncheon included U.S. government officials and other key stakeholders.  The luncheon served as a unique opportunity to engage Ambassador Virachai at the very beginning of his tenure, and underscored the Council's dedication to strengthening the U.S.-Thailand relationship.

Farewell Lunch for Ambassador Vinh, and farewell for the Vice Ministers of Foreign Affairs in Hanoi

• On June 5, the Council hosted 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.  The relationship is at an all-time modern high.  During the Ambassador’s tenure, the relationship moved significantly forward with Presidents Obama and Trump visiting Vietnam and Prime Minister Phuc’s visit to Washington. When President Obama announced an end to the ban on sales of lethal weapons during his visit to Vietnam, U.S.-Vietnam relations were truly normalized.  Ambassador Vinh’s presence in Washington will be sorely missed and we wish him the best of luck in his future endeavors as he returns to Hanoi.
• On June 19, the Council hosted a Farewell Reception in Hanoi for Foreign Affairs Vice Ministers Ha Kim Ngoc and Dang Dinh Quy, who will go on to serve as the new Vietnam Ambassadors to the U.S. and the UN, respectively. The event, which was widely attended by senior Vietnamese government officials, U.S. embassy officials, U.S. corporate executives, local business leaders, heads of intellectual organizations and prominent intellectuals, honored and celebrated the two officials who have been tremendously supportive and helpful to the American business community – we look forward to working with them in their new capacity.

Luncheon Dialogue with Assistant Secretary of Defense Randy Schriver

• On June 19, the Council hosted a working luncheon with Assistant Secretary of Defense Randall Schriver.  The luncheon was attended by senior officials from the Department of Defense, Department of State, the ASEAN diplomatic corps., and other key stakeholders.  During the luncheon, Assistant Secretary Schriver discussed the Trump Administration’s “Indo-Pacific Strategy, his reflections on the Shangri-La Dialogue, developments in the South China Sea, and the US-ASEAN security relationship.

Highlights

Looking Ahead

Thailand Business Mission

On June 26-28, the Council’s annual Thailand Business Mission will take place 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.  Our meeting with the Prime Minister has been confirmed.  Registration for the mission has closed.  Please contact Ella Duangkaew at eduangkaew@usasean.org with any questions.

Meeting with Indonesian Energy Minister Ignasius Jonan

On June 26, the Council will host a roundtable discussion with H.E. Ignasius Jonan, Minister of Energy and Mineral Resources of Indonesia, during his visit to Washington, DC, for the 27th World Gas Conference.  During the roundtable Minister Jonan will provide an update on energy and extractives industry policies and trends in Indonesia.  Minister Jonan's official bio can be found here.  To register for the roundtable, please click here

Digital Policy Consultative Forum

On June 26, the Council will be hosting its first roundtable discussion of the ASEAN-US Digital Policy Consultative Forum on the sidelines of the ASEAN TELSOM-ATRC Joint Working Group Meeting in Malaysia. The aim of this half-day roundtable is to examine and exchange views on policy approaches to innovation and new digital tools to unleash the economic potential derived from these innovations.  Please contact Ella Duangkaew at eduangkaew@usasean.org with any questions or to express interest.

Meeting with Vietnam Deputy Prime Minister

On June 27, the Council will have the unique opportunity to host a private meeting with the Deputy Prime Minister of Vietnam H.E. Vuong Dinh Hue. Deputy Prime Minister Hue, who is also currently a Politburo member, previously served as Minister of Finance and Head of the Party Central Committee’s Economic Commission. In addition to hearing Deputy Prime Minister Hue speak about the outcomes of his visit to D.C, members will also have the chance to raise their top priorities directly with the Deputy Prime Minister and senior government officials on the delegation in a private and intimate setting.

Food and Agriculture Mission to Hanoi

On July 11-12, the Council is organizing its Food & Agriculture Industry Mission to Vietnam.  This sector focused mission will offer members an opportunity to engage key public and private sector stakeholders which make up Vietnam's domestic agriculture ecosystem.  Mission themes will revolve around supporting the Government of Vietnam's agriculture development objectives and promoting the roles of international trade and foreign investment in improving food security and strengthening the role agricultural sector as an engine of growth in the broader economy.  Please contact Hai Pham at hpham@usasean.org with any questions or to express interest.

Business Mission to Laos

Please save the date for the Council's annual Business Mission to Laos, which will take place in Vientiane on August 23-24.  Please contact Ella Duangkaew at eduangkaew@usasean.org with any questions.

Advocacy

• On June 5, the Council submitted an advocacy letter to the Office of the United States Trade Representative (USTR), which is currently reviewing the eligibility of Indonesia’s participation in the Generalized System of Preferences (GSP) program.  The Council noted its confidence in Indonesia’s ability to be a valuable partner in trade, and encouraged USTR to work with the Indonesian government to address some of the measures undertaken that limit American players’ ability to do business in Indonesia.  To read the letter, please click here.
• On May 31, the Council and several member company representatives met with the Hon. Dakila Carlo E. Cua, Chairperson of the Ways and Means Committee in the Philippine House of Representatives, to discuss the proposed second package of the Tax Reform for Acceleration and Inclusion (TRAIN 2).  During the meeting, Congressman Cua emphasized that the private sector should submit clear reasons and data for their criticisms of TRAIN 2.  The meeting resulted in several follow-ups, including the suggestion that the Ways and Means Committee consider including sector-based incentives, that Regional Operating Headquarters (ROHQs) be given a reasonable period to adjust to incentive and tax changes, and that industry-specific incentives include costs for retraining workers.  Congressman Cua also said that he hoped to hold another public hearing on TRAIN 2 over the period when Congress is adjourned (June 2-July 22).  The meeting was a follow-up to a letter that the Council submitted to Congressman Cua that contained member company input on TRAIN 2.  A copy of that letter can be found here.
• While Malaysia continues its political transition process, the Council continued its advocacy efforts with the government regarding the implementation of new regulations governing the provision of e-payment services by bank and non-bank financial services companies. In addition to transmitting a formal letter noting our concerns about regulatory provisions related to onshoring of data and e-payment transaction processing to the new Prime Minister, Council Vice President-Policy Marc Mealy visited Malaysia for a series of formal and informal discussions with the Ministry of Trade & Industry, Central Bank (Bank Negara) and other thought leaders. He also made print and radio media appearances where he highlighted the importance of improving the e-payments regulatory environment as a critical component of Malaysia’s digital economy ecosystem. While the new administration of Prime Minister Mahathir is at the beginning stages of reviewing a wide range of economic policies and regulations, the Council has noted its interests in potential reforms to policies and regulations related to taxes, the digital economy and international trade policy and envisions including these themes as discussion items during our 2018 Senior Executives business mission to Malaysia in October.

Intelligence

• On June 12, Vietnam’s National Assembly passed its controversial Law on Cybersecurity with an 86 percent majority.  The approved version (Draft 18) includes slight revisions to the provisions specifying which types of enterprises will be required to store user data within Vietnam.  For more information, view the Council’s June 11 update here.  The Vietnamese Government will need to issue a unilateral decree for its implementation, which may take six to eight months to draft and finalize before the Law comes into effect on January 1, 2019.
• From June 2-4, the Shangri-La Dialogue, the leading Asian security summit, took place in Singapore with representatives from more than 50 countries including the United States, China, Korea, Japan, Malaysia, Australia, and ASEAN member countries.  This year’s summit served as an important platform for defense professionals in the Asia-Pacific to discuss regional security challenges as well as the future of the rules-based order in Asia, counterterrorism, Rohingya refugee crisis, and the Korean Peninsula.  One of the key spotlights of this year’s summit was on U.S. Defense Secretary James N. Mattis’s elaboration on the Trump Administration’s concept of a “Free and Open Indo-Pacific Strategy.”  The core message of the United States is to strengthen regional alliances beyond security measure by incorporating the promotion of rule of law, support of regional economic institutions, and the recognition of ASEAN and India as important regional actors in the Asia-Pacific power balance.  The full transcript of the speech can be found here. The comprehensive strategy has four key themes as follows:
  • First, expanded attention towards the maritime space: The United States recognizes that there has been a number of economic and political controversies surrounding the Asia-Pacific maritime space and expresses willingness to aid U.S. allies in building up naval and law enforcement capabilities to improve monitoring and protection of maritime orders and interests.
  • Second, interoperability: The diverse Asia-Pacific region has a number of varying military and communication systems which has made it difficult for U.S. allies and partners to communicate. The United States will offer support to make networks more easily accessible and adaptable to the varying systems in place, across different countries. 
  • Third, the strengthening of rule of law, civil society, and transparent governance:  The United States emphasizes the need for greater transparency, better governance, and rule of law across the Asia Pacific and pledges support in promoting these initiatives. And fourth, private sector-led economic development:  The United States recognizes that the Asia-Pacific region is growing rapidly and in need of greater investment, particularly in infrastructure, a gap that the U.S. will seek to fill in collaboration with other countries, and development and financial institutions.

Mattis’ speech signals the United States’ stance in taking a more proactive role in supporting its Asia Pacific allies beyond the security realm. The U.S. is also looking to reinforce ties with ASEAN through its support of ASEAN’s continuous pursuit of a regional security structure and its partnership with existing institutional mechanisms including the ASEAN Regional Forum, the ASEAN Defense Ministers Meeting-Plus, the East Asia Summit, and the Asia-Pacific Economic Cooperation Forum. The U.S. is also considering developing new military partnerships with players across the region such as Indonesia, Malaysia and Vietnam, while maintaining longstanding alliances with Philippines, Thailand, and Singapore.

Membership

We are pleased to announce I.M. Systems Group (IMSG) and PepsiCo have both upgraded to Chairman’s Council as of June 1. Our total membership stands at 154 members with 72 Corporate members and 82 Chairman’s Council members.

Regional Highlights

APEC

Major Developments

As a member of the U.S. APEC Business Coalition, the Council is supporting the U.S. government’s search for a senior executive to represent the U.S. private sector on the APEC Business Advisory Council (ABAC).  The period of service will begin in December 2018 and will last two to three years.  The National Center for APEC (NCAPEC) will serve as a collection point for indications of interest from candidates.  Interested executives should provide a résumé and a company profile to NCAPEC by July 2.  NCAPEC will then send the information from all candidates in a single transmission to the State Department and the National Security Council.  Required qualifications and the process that will be used to select a new ABAC member can be found here, and an outline of the time and resource commitment required for ABAC membership can be found here.  If you would like more details, please contact Barbara Hazzard (bhazzard@ncapec.org).

View the Council's latest APEC updates

ASEAN

Major Developments

• On June 26, the U.S. Mission to ASEAN will welcome its new Chargé d'affaires ad interim Ambassador Piper Anne Wind Campbell.  She will remain in place through the ASEAN and East Asia Summits in November.  Since the U.S. has not yet appointed a fullfledged Ambassador to ASEAN, Ambassador Campbell will lead the Mission in the lead-up to these important engagements, which President Trump is expected to attend.  Ambassador Dan Shields played this role in 2017.  Ambassador Campbell previously served as U.S. Ambassador to Mongolia, Deputy Chief of Mission in Phnom Penh, and several other key positions.  Her bio is available here.
• On June 12, the Congressional Caucus on ASEAN sent a letter to President Trump, urging him to nominate an Ambassador to ASEAN.  ASEAN Caucus CoChairs Joaquin Castro (TX20) and Ann Wagner (MO-02) wrote that “the U.S. Mission to ASEAN has now gone over a year without an Ambassador, the longest period since the position was created. Last fall, you articulated your vision for a free and open IndoPacific, and we believe that nominating an Ambassador to ASEAN will help promote your priorities in engaging our partners and allies in the region.”  The letter was also signed by Reps. Ami Bera (CA07); Rick Larsen (WA-02); Ted Lieu (CA-33); Dave Reichert (WA-08); Pramila Jayapal (WA-07); and Denny Heck (WA-10).  The letter is available here.
• While in Singapore for his meeting with North Korea leader Kim Jongun, President Trump met with Singapore Prime Minister Lee Hsien Loong.  According to the readout from Singapore’s Ministry of Foreign Affairs, in addition to accepting Prime Minister Lee’s invitation to return for a state visit in November, President Trump “expressed the U.S.' continued commitment to engage the region and his support for Singapore's chairmanship of ASEAN."

View the Council's latest ASEAN updates

TPP

Major Developments

Ratification processes among the 11-member nations of the CPTPP continue to move forward. While Mexico is the first nation to fully ratify the agreement, ratification processes have also been started in Japan and Canada. Ratification processes have not started in Singapore or Brunei, but once they do, both are expected to be completed rather easily. Malaysia’s new Prime Minister Mahathir has signaled that the CPTPP will be examined as part of a comprehensive review of the previous administration’s economic policies. The Government of Vietnam has yet to initiate its CPTPP ratification process, but is also in the middle of several other FTA processes, including the RCEP negotiations.

View the Council's latest TPP updates

Industry Highlights

Customs

Major Developments

On May 14, the United States and Indonesia met alongside the Trade and Investment Framework Agreement (TIFA) negotiations and agreed to an intellectual property rights protection work plan for Indonesia after five years of negotiations to move Indonesia off the Special 301 Report Priority Watch List.  Fixes to problems with the Patent Law, including localization requirements, are high on the workplan’s agenda.  It also includes provisions on strengthening intellectual property rights enforcement, both domestically and by customs at the border. In the year leading up the agreement, the customs administration began improving policies to give itself more power to intercept IPR-violating shipments through Ministry of Finance issued Regulation No. 40/2018 and Government Regulation 20/2017.

Advocacy

The Council is planning several events and advocacy programs, in addition to the events announced below in Looking Ahead, following the ASEAN Directors-General of Customs Meeting:

1. Continued advocacy for the Joint Business Council’s low-value shipping facilitation proposal.
2. Development of the ASEAN Handbook for Online Shoppers: The Council is reviewing the content with the ASEAN customs administrations, and the unveiling is scheduled for the ASEAN Economic Ministers Meeting in August.
3. Launching the customs technology seminar series: The Council is continuing to plan a series of engagements with ASEAN customs leaders on new technologies in the customs space, as proposed at the Directors-General meeting.
4. Launching anti-counterfeiting workshops: The Council is continuing to plan a series of engagements with ASEAN customs leaders on how to improve public-private collaboration on anti-counterfeiting enforcement, as proposed at the Directors-General meeting.

Looking Ahead

July 4 - ASEAN Trade Facilitation – Joint Consultative Committee (ATF-JCC) meeting: The Council will be returning the ATF-JCC as part of the Joint Business Council’s delegation to discuss trade facilitation programs.  More details will be circulated soon.

July 12 - WCO Workshop for ASEAN on Border Enforcement on Counterfeiting and Piracy, Malaysia: The World Customs Organization has invited Council members to speak at a workshop on identifying counterfeit products.  Please contact Ian Saccomanno at isaccomanno@usasean.org for more information.

View the Council's latest Customs updates

Defense & Security

Major Developments

From June 2-4, the Shangri-La Dialogue, the leading Asian security summit, took place in Singapore with representatives from more than 50 countries including the United States, China, Korea, Japan, Malaysia, Australia, and ASEAN member countries.  This year’s summit served as an important platform for defense professionals in the Asia-Pacific to discuss regional security challenges as well as the future of the rules-based order in Asia, counterterrorism, Rohingya refugee crisis, and the Korean Peninsula.

One of the key spotlights of this year’s summit was on U.S. Defense Secretary James N. Mattis’s elaboration on the Trump Administration’s concept of a “Free and Open Indo-Pacific Strategy.”  The core message of the United States is to strengthen regional alliances beyond security measure by incorporating the promotion of rule of law, support of regional economic institutions, and the recognition of ASEAN and India as important regional actors in the Asia-Pacific power balance.  The full transcript of the speech can be found here. The comprehensive strategy has four key themes as follows:

First, expanded attention towards the maritime space: The United States recognizes that there has been a number of economic and political controversies surrounding the Asia-Pacific maritime space and expresses willingness to aid U.S. allies in building up naval and law enforcement capabilities to improve monitoring and protection of maritime orders and interests.

Second, interoperability: The diverse Asia-Pacific region has a number of varying military and communication systems which has made it difficult for U.S. allies and partners to communicate. The United States will offer support to make networks more easily accessible and adaptable to the varying systems in place, across different countries. 

Third, the strengthening of rule of law, civil society, and transparent governance:  The United States emphasizes the need for greater transparency, better governance, and rule of law across the Asia Pacific and pledges support in promoting these initiatives.

And fourth, private sector-led economic development:  The United States recognizes that the Asia-Pacific region is growing rapidly and in need of greater investment, particularly in infrastructure, a gap that the U.S. will seek to fill in collaboration with other countries, and development and financial institutions.

Mattis’ speech signals the United States’ stance in taking a more proactive role in supporting its Asia Pacific allies beyond the security realm. The U.S. is also looking to reinforce ties with ASEAN through its support of ASEAN’s continuous pursuit of a regional security structure and its partnership with existing institutional mechanisms including the ASEAN Regional Forum, the ASEAN Defense Ministers Meeting-Plus, the East Asia Summit, and the Asia-Pacific Economic Cooperation Forum. The U.S. is also considering developing new military partnerships with players across the region such as Indonesia, Malaysia and Vietnam, while maintaining longstanding alliances with Philippines, Thailand, and Singapore.

Advocacy

On June 19, the Council hosted a working luncheon with Assistant Secretary of Defense Randall Schriver.  The luncheon was attended by senior officials from the Department of Defense, Department of State, the ASEAN diplomatic corps, and other key stakeholders.  During the luncheon, Assistant Secretary Schriver discussed the Trump Administration’s Indo-Pacific Strategy, his reflections on the Shangri-La Dialogue, developments in the South China Sea, and the US-ASEAN security relationship.

View the Council's latest Defense & Security updates

Energy

Major Developments

On June 4, Malaysia’s national oil company, Petronas, filed an application before the Malaysian Federal Court seeking declaration as the exclusive owner of the country’s petroleum resources, as well as the regulator for the upstream oil industry.  In March, the state of Sarawak was granted complete mining rights over its territory and formed its own oil and gas company, Petros, in a move to earn its own revenues directly through exploration and downstream activities, rather than solely relying on payments from Petronas.  The Sarawak state government was set to assume full regulatory authority for the upstream and downstream industries in its territory by July 1 in accordance to several state laws, including the Oil Mining Ordinance 1958 (OMO), the Land Code of Sarawak, and the Gas Distribution Ordinance 2016.   Petronas said it has the exclusive powers to regulate upstream oil and gas activities throughout Malaysia under the Petroleum Development Act 1974 (PDA) (available here) and that the law supersedes the OMO.  Petronas also added that “it remains committed to supporting Sarawak’s aspiration to participate in the oil and gas industry in the state, for as long as it is within the framework of the PDA.”  The pending decision is significant because Petronas is a substantial contributor of Malaysia’s national revenue, generating more than US$2 billion in corporate taxes and dividends to the government in 2017 alone, and is the country’s largest employer.   However, there has been growing dissatisfaction in the Sarawak and Sabah governments over the years on oil royalties, despite the bulk of Petronas’ hydrocarbons coming from the two states.

Looking Ahead

On June 26, the Council will host a roundtable discussion with H.E. Ignasius Jonan, Minister of Energy and Mineral Resources of Indonesia, during his visit to Washington, DC, for the 27th World Gas Conference.  During the roundtable Minister Jonan will provide an update on energy and extractives industry policies and trends in Indonesia.  Minister Jonan's official bio can be found here.  To register for the roundtable, please click here.

View the Council's latest Energy updates

Financial Services

Major Developments

• Indonesia’s markets were the hardest hit in the April and May emerging market sell-off.  About US $4 billion in foreign cash left the country, the rupiah fell to its lowest point since 2014, and the Jakarta Composite Index beat out Philippine markets to become the worst performer in Asia.  An aggressive response from Bank Indonesia (BI), including two interest rate increases in quick succession and direct intervention in bond and foreign exchange markets appears to have stabilized markets since mid-May.  Recognizing that monetary tightening could reduce already lackluster growth, Governor Perry Warjiyo asserted that BI would support long-term growth by loosening macroprudential policies, accelerating money market development plans, and reforming payments systems simultaneously.  Despite a return to financial stability, Indonesia remains relatively exposed to market turmoil due to its dependence on foreign capital inflows.  Market stability and the foreign exchange rate will likely remain a subject of political attention as the country heads into its general elections next year.
• Market instability came to Malaysia following Pakatan Harapan’s unexpected win in the May 9 elections when foreign investors responded negatively to the general policy uncertainty, revelations that government debt and contingent liabilities were higher than previously reported, and concerns over the fiscal impact of populist economic policies.  Markets were hit by their largest falls in years after reaching record highs as recently as April.  Most of the selling, however, seems to have come from foreign investors.  Bank Negara Malaysia was one of the first central banks in Asia to begin raising interest rates in January, likely forestalling the need to raise rates as quickly as BI has.  As governance is improved and policy continues to be clarified, it is likely that the markets will return to relative stability.

View the Council's latest Financial Services updates

Food & Agriculture

Major Developments

In the last few years, many ASEAN member states have implemented or proposed regulations to increase access and use of innovation and technology in the agricultural sector - in many forms, from agricultural technology and climate-smart agriculture, to using big data and analytics to identify trends and determine necessary adjustments to maximize crop yields.  This has been done largely to leverage available technologies globally to improve production and yields of local farmers, and as one element in pursuing greater food security.  Studies have shown that to keep up with growing populations, and taking into account other factors such as climate change and availability of resources, a 60 percent increase in global agricultural output is needed by 2030.  As such, investments in disruptive technologies in the agricultural industry are increasing, as well as generating global digital transformative trends such as more advanced agriculture equipment, use of Internet of Things (IoT) and sensors in the fields, and innovation in robotics and advanced analytics (use of big data).

While the ASEAN region is currently at an early stage in deepening technology innovation utilization in agriculture, there are examples of “green shoots” throughout the region:  The "Green Way" app in Myanmar; IoT precision farming in Malaysia; and agriculture digital development in Indonesia.  The Council continues to include this theme as a key component of its 2018 Food & Agriculture work plan by advocating for a range of policy and regulatory reforms along with strategic investments to improve agricultural innovation systems (AIS) in ASEAN to position U.S. companies as sources of solutions to the challenges ASEAN governments face in addressing gaps in their AIS.

Advocacy

In late May, the Myanmar Ministry of Commerce issued Regulation No. 25/2018, permitting trading of all domestically-manufactured or internationally-imported commodities throughout the country, with the exception of those prohibited by law.  A full list of prohibited imports can be accessed here as well as exports here.  This will have a major impact on the wholesale and retail of foreign products in Myanmar, particularly those in the agriculture sector.  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 is registering members for its Food & Agriculture Industry Mission to Vietnam July 11-12 .  The sector-focused mission will offer members an opportunity to engage key public and private sector stakeholders who make up Vietnam’s domestic agriculture ecosystem.  To register, please click here. Deadline for receipt of registration and mission materials is June 22.  For questions, please contact Sunita Kapoor (skapoor@usasean.org) and Hai Pham (hpham@usasean.org).

View the Council's latest Food & Agriculture updates

Health & Life Sciences

Major Developments

At a press conference following a monthly Malaysian Ministry of Health meeting earlier this month, new Minister of Health Dr. Dzulkefly Ahmad announced that a cabinet paper on the formation of the new Health Advisory Council will be tabled next week.  The Health Advisory Council will primarily focus on advising the government on solutions to problems that may arise in the provision of universal healthcare and helping the government provide a better healthcare delivery system, and will comprise five to seven experts from various fields.  Minister Dzulkefly added that the Ministry would be open to adopting blockchain technology to streamline operations, as part of his goal to modernize the Ministry and transform its image to keep in line with the “New Malaysia.”  The Council will continue to track and report the formulation of this Health Advisory Council, which is expected to become a key stakeholder in the health sector under the new government.

Advocacy

• Vietnam's Ministry of Health - Department of Medical Equipment & Construction (DMEC) is currently drafting Decree 36, which sets out regulations for medical devices and diagnostics.  In early May, DMEC organized two workshops with local stakeholders to review and receive feedback on the draft decree, and proposals were given to DMEC by local associations.  According to DMEC, the draft Decree 36 is expected to be submitted for the Health Minister's approval by the end of June, with the goal of receiving the Government's approval in Q3 2018.  During this process, DMEC has asked the industry to send a letter to the Government of Vietnam to include recommendations of industry experts on how to improve the draft decree.  For more information, please contact Ying Hui Tng at yhtng@usasean.org.
• The Council is exploring workstreams related to the digitalization of healthcare and how the business community can best support the ASEAN governments which have prioritized this.  If your company has been doing work related to this area (including leveraging innovative technology, AI, IoT, data analytics, etc.), please contact Ying Hui Tng at yhtng@usasean.org.

View the Council's latest Health & Life Sciences updates

ICT

Major Developments

• On June 12, the National Assembly of Vietnam passed the Law on Cybersecurity with an overwhelming majority of 86 percent.  The law will take effect on January 1, 2019.  The Government of Vietnam will need to issue a decree to implement the law, which will take around 6-8 months to complete. 
• On May 23, the Cambodian Ministers of Information, Interior, and Post and Telecommunication issued a joint regulation to monitor online media to crack down on “fake news.”  More information can be found in our most recent update here.
• On May 28, Malaysia’s Communications and Multimedia Minister (MCMC) Gobind Singh Deo revealed his intentions to repeal the controversial Anti-Fake News Act 2018.  The Anti-Fake News Act is one of many laws involving MCMC which Minister Gobind hopes to annul.  More information can be found in our most recent update here.
• On May 18, Vietnam’s Minister of Information and Communications Truong Minh Tuan announced the formulation of a code of conduct for internet users.  More information can be found in our most recent update here.

Advocacy

• On June 5, the Council and partner associations AIC, BSA, JEITA and ITI submitted comments to the National Assembly on Draft 18 of Vietnam's Draft Law on Cybersecurity (found here in English and Vietnamese).  The new draft can be found here in English.  Please contact Ella Duangkaew (eduangkaew@usasean.org) and Matt Solomon (msolomon@usasean.org) with any questions.
• On May 21, the Council and BSA | The Software Alliance submitted a set of supplemental joint comments (English and Thai), which serve to supplement the joint comments which were previously submitted on April 17 on Thailand's Draft Cybersecurity Bill (found here in Thai, with an unofficial translation found here). For any questions, please contact Ella Duangkaew at eduangkaew@usasean.org.

Looking Ahead

• 1st ASEAN-US Digital Policy Consultative Forum: The Council will be hosting its first roundtable discussion of the ASEAN-US Digital Policy Consultative Forum on the sidelines of the ASEAN TELSOM-ATRC Joint Working Group Meeting in Malaysia on June 26.  Please contact Ella Duangkaew (eduangkaew@usasean.org) or Mario Masaya (mmasaya@usasean.org) with any questions.
• June 29: Second Lao Digital Forum: The Bank of Lao PDR is partnering with the U.S. Embassy in Vientiane to hold the second Lao Digital Forum.  If you are interested in sponsoring and/or participating in the forum, please contact Ella Duangkaew (eduangkaew@usasean.org).

View the Council's latest ICT updates

Infrastructure

Major Developments

• Two days after newly-elected Malaysian Prime Minister Dr. Mahathir Mohamad announced that Malaysia will pull out of the Kuala Lumpur-Singapore high-speed rail project (HSR), citing as the primary reasons the project’s cost and the need for Malaysia to decrease government expenditures, the country’s new Cabinet voted on May 30 to scrap the project.  Calling off the HSR, which was estimated at RM60 billion (US $15 billion), is part of a broader review of major infrastructure projects, the terms of which were negotiated under the previous Government of former Prime Minister Najib Razak.  Mahathir first announced that reducing Malaysia’s national debt was one of his priorities after his first cabinet meeting on May 23.  According to the new Minister of Finance, Lim Guan Eng, the country’s debt exceeds RM1 trillion (US $251 billion).  Due to be completed in 2026, the HSR would have stretched 350 km (217 miles) across four states in Malaysia before reaching Jurong East in Singapore.
• According to Thailand’s Ministry of Foreign Affairs, a regional fund is currently being created among Thailand and its neighbors Cambodia, Laos, Myanmar and Vietnam (CLMV), to support infrastructure and other development projects across the Mainland Southeast Asia region.  Thailand is set to make the initial contribution to the fund and while an official figure has not yet been revealed by the Ministry, it is “likely to be in the millions of dollars.”  The idea was proposed by Thai Prime Minister Prayut Chan-o-cha on June 16 to CLMV leaders at the 8th summit of the Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy (ACMECS).  The proposed fund, which is expected to be operational by 2019, will be made available for projects that fall in line with ACMECS' 2019-2023 master plan that were adopted during the June 16 summit.  The plan aims to enhance connectivity, promote harmonization of trade and logistics rules, improve infrastructure, and develop information technology platforms across the CLMV by upgrading the East-West and North-South economic corridors.  Aside from the substantive material gains to the region, there seems also to be a largely political tangent at play, for ASEAN allies to place a counterbalance on the rising influence of China over the CLMV through its rapidly growing infrastructure investments in each of these countries per its Belt and Road Initiative.  According to Professor Prapat Thepchatree at Thammasat University, a regional fund seems the best approach to reduce the rising influence of China in ASEAN.  "The increasing dependence on China is a big issue in ASEAN," he said.  "Myanmar, Laos and Cambodia have been relying heavily on investment and trade but that comes with a trade-off of their economic freedom."  With that being said, it is often difficult to establish a durable funding source within ASEAN, given the wealth disparity between nations and their varying priorities and constantly shifting political atmospheres.  As such, the new infrastructure fund will look to financial institutions and countries outside ASEAN and the ACMECS framework, in addition to raising capital through the stock and bond markets by issuing debt.

View the Council's latest Infrastructure updates

Country Highlights

Brunei

Major Developments

On May 12, Singapore President Halimah Yacob visited Brunei on her first state visit since she took office in September 2017.  President Halimah met with Sultan Hassanal Bolkiah, and the two leaders witnessed the signing of two major bilateral agreements: the Memorandum of Understanding to exchange information related to money laundering and terrorist financing, and an agreement on financial technology cooperation.  

Previously on May 3, Sultan Hassanal Bolkiah met with Indonesian President Joko Widodo in Bogor, Indonesia to discuss ways to expand Brunei-Indonesia bilateral ties.  The two leaders agreed to expand economic cooperation and investment, in addition to better cooperation in protecting Indonesian migrant workers in Brunei.  There are currently at least 80,000 Indonesians living and working in Brunei, who make up 20 percent of Brunei’s approximately 400,000 population.  As a follow-up to this discussion, Indonesia is currently preparing a draft MOU on the protection of Indonesian migrant workers in Brunei, which will be further discussed by the two countries in due course.  President Jokowi stated that his discussions with the Sultan included opportunities for Brunei to purchase defense equipment from Indonesia, and featured several exhibitions of Indonesia’s military capabilities and equipment.  Indonesia under President Jokowi has been relatively more active in advertising its defense products at home and abroad to select countries as it promotes opportunity for its local defense industry. Despite this discussion, it remains unclear whether there will be sales from Indonesia’s state-owned enterprise PT Pindad to Brunei, although PT Pindad’s Corporate Secretary had mentioned that engagements are expected following these high-level discussions between the two leaders.

Advocacy

On June 11, the Council hosted a roundtable with H.E. Dato Erywan, Second Minister of Foreign Affairs and Trade in Washington, D.C.  The Minister discussed Brunei’s latest diversification efforts and policy trends following the cabinet reshuffle in February.  Dato Erywan was visiting Washington for the Brunei-U.S. bilateral talks, including meetings with Deputy USTR Jeffrey D. Gerrish and Deputy Secretary of State John J. Sullivan.  

View the Council's latest Brunei updates

Cambodia

Major Developments

On June 13, the United States imposed sanctions on the Commander of Cambodia’s Prime Minister Hun Sen’s bodyguards, General Hing Bun Hieng, under the Global Magnitsky Act, accusing him of “using force to menace political opposition and for being the leader of an entity involved in serious human rights abuses”.  According to Sigal Mandelker, Under Secretary of the Treasury for Terrorism and Financial Intelligence, “General Bun Hieng commanded a Cambodian unit that engaged in a series of human rights abuses, and was personally implicated in attacks against a number of individuals, including a U.S. citizen.”  General Bun Hieng is the first member of Prime Minister Hun Sen’s inner circle to be hit with Global Magnitsky sanctions, which block any property or business interests held by him within U.S. jurisdiction and also prohibit any U.S. person from engaging in any transactions with General Bun Hieng. 

View the Council's latest Cambodia updates

Indonesia

Major Developments

• On June 8, Indonesia won a seat on the United Nations Security Council.  Indonesia will join the Security Council starting January 1, 2019, along with Germany, Belgium, South Africa, and the Dominican Republic.  Indonesia overwhelmingly defeated the Maldives by a ballot vote of 144-46.  The Security Council has five permanent members (the United States, Russia, China, Britain and France) and 10 non-permanent members.  Each year, the UN General Assembly elects five non-permanent members for a two-year term, meanwhile the ten non-permanent seats are distributed on a regional basis:
  • five for African and Asian countries;
  • one for Eastern European countries;
  • two for Latin American and Caribbean countries;
  • two for Western European and other countries.

Foreign Minister Retno Marsudi stated that Indonesia would strive to promote peacekeeping and peacebuilding, conflict prevention, and UN development and environmental protection goals for 2030.

• Finance Minister Sri Mulyani Indrawati recently announced that her ministry is lowering Indonesia’s economic growth projection, putting it in a range from 5.17 to 5.4 percent, compared to the 5.4 percent economic growth projected in the 2018 national budget.  Meanwhile, Bank Indonesia (BI) is keeping Indonesia’s growth projection at a minimum of 5.2 percent.  Weak domestic consumption continues to keep the growth rate from moving above 5 percent, which it has been for years.  To keep inflation low, the government has announced price control measures on basic necessities such as fuel and rice, aimed at keeping inflation low and purchasing power high.  Sri Mulyani remains hopeful that household consumption is expected to grow by more than 5 percent due to the disbursement of holiday bonuses to civil servants, police officers and military personnel, as well as Indonesia playing host to the Asian Games and the upcoming IMF-World Bank Meeting.  Another encouraging sign for growth is high credit growth, reaching 8.9 percent according to estimates by the Financial Services Authority (OJK).  This is in addition to consumer confidence edging higher and the manufacturing Purchasing Manager’s Index reaching a one-year high in April.

Advocacy

On June 5, the Council submitted an advocacy letter to the Office of the United States Trade Representative (USTR), which is currently reviewing the eligibility of Indonesia’s participation in the Generalized System of Preferences (GSP) program.  The Council noted its confidence in Indonesia’s ability to be a valuable partner in trade, and encouraged USTR to work with the Indonesian government to address some of the measures undertaken that limit American players’ ability to do business in Indonesia.  To read the letter, please click here.  

View the Council's latest Indonesia updates

Laos

Major Developments

• On May 21-23, the ASEAN Power Grid Summit 2018 took place in Vientiane, Laos with a theme of "Enhancing ASEAN Power Grid Investment towards Regional Energy Optimization." The three-day summit included comprehensive tours of Laos’ hydropower plants, a series of keynote speakers on collaboration between the public and private sector in the energy sector, and discussions of investment opportunities and prospects in the ASEAN energy sector.  The ASEAN Power Grid (APG) was also discussed, which has the aim of establishing regional interconnectivity for electricity within ASEAN.  More information can be found in our most recent update here.
• On May 16, delegates from the Lao and Cambodian Ministries of Foreign Affairs met to discuss progress made in resolving border demarcation issues.  This year, Lao Minister of Foreign Affairs Saleumxay Kommasith met with Cambodian Minister of Foreign Affairs and International Cooperation Prak Sokhonn and agreed to establish department-level collaboration mechanisms at both countries’ foreign ministries.  Both sides expressed their desire to ensure peace and security along the Lao-Cambodian common border by working under various bilateral cooperation frameworks.  More information can be found in our most recent update here..

Looking Ahead

June 29: Second Lao Digital Forum: The Bank of Lao PDR is partnering with the U.S. Embassy in Vientiane to hold the second Lao Digital Forum on June 29, following the first Forum held on January 26. The purpose of this forum will be to raise awareness of financial technologies among key policymakers in Laos, and discuss the optimal policy environment needed to help Laos increase prosperity and financial inclusion, promote microenterprises and SMEs, deepen its economic integration into the ASEAN Economic Community, and create a level playing field that allows open competition and innovation in FinTech. If you are interested in sponsoring and/or participating in the forum, please contact Ella Duangkaew at eduangkaew@usasean.org.

August 23-24: Laos Business Mission: Please save the date for the Council's annual Business Mission to Laos in Vientiane. Please contact Ella Duangkaew at eduangkaew@usasean.org with any questions.

View the Council's latest Laos updates

Malaysia

Major Developments

• Malaysian Prime Minister Mahathir is calling for a review of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).  He has not stated considerations of leaving the trade pact nor rejected its significance however, and said that “small, weaker economies must be given a chance to protect their products.”
• On May 21, 13 cabinet members were sworn in, and on June 6, Bank Negara Governor Muhammad Ibrahim resigned.  More new cabinet members are still anticipated and former Bank Negara Deputy Governor Nor Shamsiah Yunus is rumored to replace Ibrahim.  To read more about Malaysia’s new cabinet, read the Council’s update here.
• Pakatan Harapan’s unexpected win in the May 9 elections has brought many campaign promises to the table, several of which the new government has begun to implement.  As of June 1, the Goods and Services Tax (GST) has been cut to zero and the reintroduction of the sales and services tax (SST) is expected as early as September 1.  The government also plans to repeal the Anti-Fake News Act, which will be reviewed by Parliament when it meets in July.  Prime Minister Mahathir has vowed to root out corruption and reexamine contracts for megaprojects, with the high-speed rail project first announced as scrapped (now postponed) and others, such as the East Coast Rail Link, expected to be reviewed.  Plans are in progress to review the minimum wage by the Ministry of Human Resources, and the Finance Ministry has set aside MR 3 billion (US $760 million) to subsidize fuel prices until the end of the year.  Click here for more information on several of these policy changes.

Advocacy

• On May 24, the Council sent a letter to Finance Minister Lim Guan Eng seeking greater clarity on the transition from GST and SST and advocating for adequate transition time for companies to comply with changes to the tax regime.  As a follow-up, the Council has requested a members’ meeting with Deputy Customs Director General Paddy Bin Abd Halim to further discuss expected changes.  To access the letter, please click here.
• The Council has also requested a meeting with Minister of Human Resources M. Kulasegaran to discuss expected changes to the minimum wage.

Looking Ahead

• On June 25, Council Senior Vice President and Regional Managing Director Ambassador Michael Michalak will provide a briefing to members in Kuala Lumpur.  Click here to register.

View the Council's latest Malaysia updates

Myanmar

Major Developments

• In a major first step of the repatriation process for refugees from Myanmar’s Rakhine State, the UN and the Myanmar government reached an MOU agreement. Over the past four months, UN agencies and the Burmese government have been discussing issues of citizenship and identity, with the promise of the “voluntary, safe, dignified, and sustainable” return of the refugees.  Both sides also agreed that the refugees need a stable identity, as well as a clear and predictable pathway to citizenship.  The UN has been granted access to northern Rakhine, the home state of the majority-Muslim refugees, although no timeline has been set.  The government will also form an “independent commission of inquiry” consisting of an “international personality” as well as national and international legal and technical experts to investigate alleged human rights violations in the northern Rakhine state.  The UN and the Burmese government both have expressed hope and positivity in the process.  Details of the deal have not yet been made public.
• Contrary to tradition and expectations that U Soe Win, the newly appointed Minister of Planning and Finance, would become the Chairman of the Myanmar Investment Commission (which is responsible for approving all foreign investments in Myanmar), U Thaung Tun, Minister of the Office of the Union Government and National Security Advisor, has been appointed to the role instead. It is unclear at this point what exactly the NLD Government’s thinking is behind this unorthodox appointment and whether this actually carved away the preexisting authority of the Planning and Finance Ministry.  

View the Council's latest Myanmar updates

Philippines

Major Developments

• On May 28, President Rodrigo Duterte signed Republic Act 11032 (available here), also called the Ease of Doing Business and Efficient Government Service Delivery Act of 2018.  The Ease of Doing Business Act amends the Anti-Red Tape Act of 2007 (Republic Act 9485) and aims to improve the Philippines’ business environment by reducing the processing times for business transactions.  It covers local government units, national government agencies, and government-owned-and-controlled corporations that provide transaction-related services.  Among the measures included in the Ease of Doing Business Act are cutting the processing time of simple and complex transactions and limiting the maximal number of signatures required for licenses, clearances, permits, certifications and authorizations to three.
• The Bangsamoro Basic Law (BBL), the law that would replace the Autonomous Region of Muslim Mindanao (ARMM) in the southern Philippines with a new self-administered region called Bangsamoro, took a step closer to realization on May 30 and May 31, when the House of Representatives and the Senate of the Philippines, respectively, passed their versions of the bill.  The bill will next go to a bicameral conference committee composed of members of both the House of Representatives and the Senate so that differences between the two versions can be reconciled.  President Rodrigo Duterte aims to sign the reconciled bill on July 23, the date of his State of the Nation Address.  Passage and implementation of the BBL is a priority for the administration of President Duterte because of its bearing on two key promises from his campaign: his pledge to improve the security environment by seeking to make peace with insurgent groups, and his pledge to better spread the benefits of economic development and growth to underdeveloped parts of the Philippines through federalism.
• The Philippine Identification System Act, the bill that establishes the country’s landmark national ID system, took one step closer towards implementation on May 30 when the House of Representatives passed the reconciled version of the bill from the bicameral conference committee.  The Senate had ratified the reconciled version the day before. Malacañang voiced support for the bill’s passage, saying that President Duterte intended to sign it.  Unlike the more than 33 different “functional” identification cards that various government agencies currently issue, the new national ID will be “foundational,” meaning each Philippine citizen and legal resident will have a unique, non-transferable identification marker.  The Philippine Statistics Authority (PSA) will be in charge of managing the national ID system.
• On May 22, Senators elected Vicente “Tito” Sotto III as the new President of the Senate of the Philippines, following the resignation of former Senate President Aquilino “Koko” Pimentel III earlier that same day.  The replacement of Pimentel by Sotto, who was Senate Majority Leader, reportedly was part of a planned term-sharing agreement struck between the two after the 2016 general election and the start of the 17th Congress.  Pimentel’s resignation as Senate President allows him to focus more on his re-election bid in the upcoming Philippine Senate elections, which are slated for mid-May 2019.  A former actor, musician, and co-host of the longest-running variety show on Philippine television, Sotto is also the most senior member of the Senate, serving from 1992 to 2004 and then from 2010 to present.  Prior to being elected to the Senate, Sotto served as Vice Mayor of Quezon City for four years.

Advocacy

• On May 31, the Council and several of its members met with the Hon. Dakila Carlo E. Cua, Chairperson of the Ways and Means Committee in the Philippine House of Representatives, to discuss the proposed second package of the Tax Reform for Acceleration and Inclusion (TRAIN 2).  During the meeting, Congressman Cua emphasized that the private sector should submit clear reasons and data for their criticisms of TRAIN 2.  The meeting resulted in several follow-ups, including the suggestion that the Ways and Means Committee consider including sector-based incentives, that Regional Operating Headquarters (ROHQs) be given a reasonable period to adjust to incentive and tax changes, and that industry-specific incentives include costs for retraining workers. Congressman Cua also said that he hoped to hold another public hearing on TRAIN 2 over the period when Congress is adjourned (June 2-July 22). The meeting was a follow-up to a letter that the Council submitted to Congressman Cua that contained member company input on TRAIN 2.  A copy of that letter can be found here.
• On May 31 the Council organized a roundtable with Ceferino S. Rodolfo from the Philippine Department of Trade and Industry.  Dr. Rodolfo is Undersecretary for Industry Development and Trade Policy Group (IDTPG) and Vice Chairman and Managing Head of the Board of Investments.  During the roundtable Undersecretary Rodolfo provided an update on the Philippine economy, prospects for a Philippines-U.S. free trade agreement, and the second package of the Tax Reform for Acceleration and Inclusion (TRAIN 2).  Notes from the roundtable with Undersecretary Rodolfo can be found here.

View the Council's latest Philippines updates

Singapore

Major Developments

• The historic June 12 summit between U.S. President Donald Trump and North Korean leader Kim Jong Un shone an international spotlight on Singapore. While the true economic benefits of hosting the summit are difficult to quantify, the less tangible benefits include a boost to Singapore’s global reputation, especially its reputation with the United States, and its capacity to punch above its weight diplomatically. Most importantly, the successful conclusion of the summit has raised Singapore’s profile with the Trump administration and likely afforded it some valuable credit at a time when ASEAN must compete with other parts of the Indo-Pacific for the administration’s attention. More information on how the summit boosted Singapore’s international profile and especially its standing with the United States can be found here.
• Two days after newly-elected Malaysian Prime Minister Dr. Mahathir Mohamad announced that Malaysia will pull out of the Kuala Lumpur-Singapore high-speed rail project (HSR), Malaysia’s new Cabinet voted on May 30 to scrap it. Mahathir cited the project’s cost and the need for Malaysia to decrease government expenditures as the primary reason for pulling out of the project, which was estimated at RM60 billion (US$15 billion). Calling off the HSR is part of a broader review by the new Malaysian Government of major infrastructure projects that were originally negotiated under the previous Government of former Prime Minister Najib Razak. Due to be completed in 2026, the HSR would have stretched 350 km (217 miles) across four states in Malaysia before reaching Jurong East in Singapore. Prior to Mahathir’s May 28 announcement, Singapore’s Land Transport Authority had already issued a call for tenders for the design and construction of portions of the HSR in Singapore. More information on this development 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 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 Council and BSA | The Software Alliance have prepared a draft paper (available here) to be jointly submitted to the PDPC.  The deadline for member companies to submit input was May 30.  The Council is currently updating the draft paper according to member company input.  A finalized draft will be circulated for review before submission to the PDPC.
• On June 5, the Singapore Committee held its second Quarterly Call for 2018. During the call Dr. Jerrod Hansen, Political Officer at the U.S. Embassy in Singapore, briefed the Committee on the Singapore Joint Cyber Security Working Group (JCSWG), which aims to increase public and private sector cooperation on cybersecurity. Dr. Hansen’s official bio can be found here. The remainder of the call was dedicated to reviewing the revised 2018 Singapore Committee Work Plan (available here). Notes from the call are provided below. A pdf version of the call notes can be found here. If you have any questions about the call or the 2018 Work Plan, please contact Riley Smith at rsmith@usasean.org.

Looking Ahead

On July 16, the Council will host Ambassador Bilahari Kausikan for its upcoming ASEAN Presidents' Luncheon to speak on US-China relations.  He will address topics such as China after the 19th Party Congress, ASEAN in the midst of various elections, and U.S. policy one year into the current administration, before opening up for broader discussion.  Amb. Kausikan is currently Chairman of the Middle East Institute at the National University of Singapore.  Previously, Amb. Kausikan was the second Permanent Secretary and then Permanent Secretary in the Ministry of Foreign Affairs of Singapore (2001-2013), and subsequently Ambassador-at-Large (2013- May 2018) (biography here).

View the Council's latest Singapore updates

Thailand

Major Developments

• On May 21, the National Economic and Social Development Board (NESDB) reported that it projects Thailand’s GDP to grow in the range of 4.2 to 4.7 percent for 2018.  The report also shows several promising growth indicators including exports rising by 6 percent, tourism-based income jumping 16.8 percent, private consumption gaining 3.6 percent, and government spending rising by 1.9 percent.  Moreover, the baht is among the few emerging-market currencies that has gained against the dollar this year.  More information can be found in our most recent update here.
• On May 21, Director General of the Ministry of Commerce’s Business Development Department Kulanee Issadisai announced that the department will be reviewing specific laws governing foreign ownership caps of Thai businesses.  The call for change transpired after foreign businesses repeatedly raised concerns regarding the limit on foreign ownership in certain areas to only 49 percent under Thailand’s Foreign Business Act (FBA).  The FBA limits foreign shareholding to 49 percent and includes three categories of activity where foreign participation may be prohibited or restricted.  Director General Kulanee stated that the review will focus on activities in List 3 for which Thai nationals are now ready to compete, as well as businesses related to the targeted S-curve industries.  More information can be found in our most recent update here.
• On May 30, Minister of Industry Uttama Savanayana expressed confidence that the construction of the U-Tapao International Airport project will commence as scheduled despite delays in the implementation of the Eastern Economic Corridor Act, which dictates the project. The Minister stated that he is optimistic the delays have not warded off any potential investors, as the project’s international bidding will commence as planned with private companies competing for various jobs in the aviation facilities within the airport.  More information can be found in our most recent update here.

Looking Ahead

On June 26-28, the Council’s annual Thailand Business Mission will take place in Bangkok.  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.

View the Council's latest Thailand updates

Vietnam

Major Developments

• On June 11, the National Assembly postponed voting on a new bill to create three new special economic zones (SEZs) until October.  These SEZs – proposed to be located in the coastal districts of Van Don in the northern province of Quang Ninh, Bac Van Phong in the central province of Khanh Hoa, and Phu Quoc Island – will attempt to create economic growth within the country, in the face of resource scarcity and political and social complexities.  A provision within the measure also allows for 99-year leases within the three new economic zones.  While the goal of this bill is to increase Vietnam's economic competitiveness within the region, dissent is stemming from lawmakers and government officials, as well as from local tech groups, who are warning that the bill will do more harm to the economy than good.  The 99-year lease provision within this new measure has also been highly scrutinized.  Critics fear that the leases will open the Vietnamese economy up to foreign encroachment, particularly from Chinese investors.  While the bill did not mention any specific countries, it is speculated that China, Vietnam's top trade partner, would monopolize the incoming investments in the three new SEZs.  In opposition to the government's drafting of the bill, violent protests erupted in Hanoi, Hai Duong, Nghe An, Da Nang, Dak Lak, Binh Thuan, Khanh Hoa, Ho Chi Minh City, Binh Duong, Tien Giang, and other locations.  With popular Vietnamese anger simmering over China's claims in the South China Sea, officials fear an even more explosive anti-China response if the bill were to be passed.  Following mounting pressure from the public to drop this bill, the National Assembly voted overwhelmingly (over 85 percent) to postpone the vote on the bill until the next session in October. 

Advocacy

On June 12, Vietnam’s National Assembly passed its controversial Law on Cybersecurity with an 86 percent majority.  The approved version (Draft 18) includes slight revisions to the provisions specifying what types of enterprises will be required to store user data within Vietnam.  For more information, view the Council’s June 11 update here.  The Vietnamese Government will need to issue a unilateral decree for its implementation, which may take six to eight months to draft and finalize, before the law comes into effect on January 1, 2019.

For the past 10 months, the Council and its partner associations have undertaken a targeted advocacy campaign to address the potential negative impacts of the law.  Draft 18 (found here in English—this document does not include the most recent changes, and is not the final version) contains provisions that criminalize a variety of potentially unintended and non-malicious actions, expand content restrictions, and transfer the onus of policing Vietnamese cyberspace violations to corporations and web platforms, and further broadens data localization requirements for foreign and domestic businesses.  The Council drafted five formal submissions to the Ministry of Public Security, the National Assembly, and other key governmental stakeholders (please click here to access the Council’s submissions).

The Council plans to continue its multifaceted engagement with the Government of Vietnam over the course of the law’s implementation, and will continue to seek clarity on the law’s vague provisions.  For example, Article 26 mandates that data must be stored locally, but does not specify that data cannot be stored outside of Vietnam.  The clause may then be interpreted as requiring companies to maintain the availability of data in Vietnam for a duration to be specified by the government.  Indeed, the vague wording of certain provisions leaves significant room for the Council and the Government of Vietnam to negotiate implementing regulations that minimize the burden placed on businesses operating in Vietnam and mitigate other potential impacts.  Please contact Ella Duangkaew (eduangkaew@usasean.org) and Matt Solomon (msolomon@usasean.org) with any questions.

Looking Ahead

The Council is registering members for its Food & Agriculture Industry Mission to Vietnam on July 11-12. The sector-focused mission will offer members an opportunity to engage key public and private sector stakeholders who make up Vietnam’s domestic agriculture ecosystem.  To register, please click here.  Deadline for receipt of registration and mission materials is June 22.  For questions, please contact Sunita Kapoor (skapoor@usasean.org) and Hai Pham (hpham@usasean.org).

View the Council's latest Vietnam updates