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TRADE IN SERVICES
While the ASEAN region has long been considered a leading global region in terms of trade in goods, there is also a fast-growing trade in services, which has developed in line with manufacturing. Logistics and transport services are needed to move goods in and out of countries, often combined with legal, accountancy and tax advisory services. Increasingly, in an effort to move up the global value chain, countries are increasingly focusing on research and development, design, and intellectual property, which are increasingly traded internationally. At the same time, global trade has been facilitated by electronic communications and payment systems and internet banking.
Within ASEAN, the ASEAN Framework Agreement on Services (AFAS) was signed in 1995 to be used as a framework to guide and gradually open the trade in services. AFAS adopted the WTO General Agreement on Trade in Services (GATS) as a baseline for integration, with ASEAN embers agreeing to apply Most-Favoured-Nation (MFN) and National Treatment (NT) to cross-border services trade. Despite this, there was little change in intra-ASEAN service trade, which remained relatively constant at around 17% over the next two decades.
Download the ASEAN integration in Services publication here
Recognising the growing importance of services, the ASEAN Economic Community (AEC) in 2015 included the goal of free flow of services as part of plans for a single market and production base. This was to be achieved through the progressive liberalisation of the services sector within ASEAN as well as with seven key partners - Australia, China, India, Japan, New Zealand, South Korea and Hong Kong. This led to the ASEAN Trade in Services Agreement (ATISA), which was finally signed in April 2019, replacing the original AFAS agreement.
ATISA builds upon the existing agreements made under AFAS, at the same time committing Member States to targets set under the AFAS. A major change is that ATISA works on a “negative list” approach. Countries may list sectors or sub-sectors, which they wish to exclude from the agreement, but the default setting is that all services are considered liberalised.
Status
The ten ASEAN Member States have now concluded 10 packages of commitments under AFAS. Each of the packages provides details of commitments of each state in various service sectors. A further seven packages of commitments covering financial services, and eight packages covering air transport services have also been signed. During each of the packages, ASEAN has moved towards a progressively more liberalised service and investment sector, which now covers:
- Air transport, including sales and marketing of air transport services, computer reservation, aircraft repair and maintenance.
- Business services, including IT, accounting, and auditing, legal, architecture, research and development, advertising, etc.
- Construction, including civil engineering, engineering, installation works, and rental of construction equipment.
- Distribution, including commission agencies, wholesale and retail trade.
- Education, from primary to adult education.
- Environment, including water, wastewater, household and industrial waste, noise abatement, nature, and landscape protection services.
- Financial services, including banking, insurance, and capital markets.
- Healthcare, including medical and dental services, hospitals, ambulances etc.
- Telecommunication, including telecommunication and mobile phone services, business network services, data and message transmission, e-mail, etc.
- Transport services, including international passenger and freight transport, maintenance and repair of transport equipment and vehicles, storage and warehousing, freight forwarding, etc.
- Tourism, including hotel, restaurant and catering services, tour operators and travel agencies.
More detailed information on the commitments to date, can be found here, under the “Agreements” tab .
Mutual Recognition Arrangements
ASEAN has undertaken a number of initiatives to facilitate mobility of people related to cross-border provision of services, which is a prerequisite for many aspects of trade in services. The Mutual Recognition Arrangement (MRA) allows the mutual recognition of professional qualifications within the ASEAN Member States, which will facilitate the mobility of service providers in the region.
Seven MRA have been concluded to date :
- ASEAN Mutual Recognition Arrangements on Engineering Services (2005)
- ASEAN Mutual Recognition Arrangement on Nursing Services (2006)
- ASEAN Mutual Recognition Arrangement on Architectural Services (2007)
- ASEAN Mutual Recognition Arrangement on Dental Practitioners (2009)
- ASEAN Mutual Recognition Arrangement on Medical Practitioners (2009)
- ASEAN Mutual Recognition Arrangement on Tourism Professionals (2012)
- ASEAN Mutual Recognition Arrangement Framework on Accountancy Services (2014)
A further framework arrangement is in place for surveying qualifications:
ASEAN Qualifications Reference Framework (AQRF)
Endorsed finally in 2016, the ASEAN Qualification Reference Framework (AQRF) is a common reference framework to compare qualifications throughout all education and training sectors across ASEAN. Using this system, Member States can reference their national-level qualifications and compare them with other ASEAN regions, obtaining a common understanding and mutual recognition of the qualifications. Not only does this increase the opportunities for increased worker mobility, but it enables the Member States to learn from the experience of others, to develop higher quality education systems and encourage lifelong learning.
More detailed information on the AQRF can be found here, under the “AQRF” tab.
Movement of Natural Persons (MNP)
In November 2012, the ASEAN Economic Ministers (AEM) signed into effect the ASEAN Agreement on Movement of Natural Persons (MNP), which was designed to replace earlier elements within the AFAS. MNP is intended as a legal framework towards the elimination of nearly all restrictions in the temporary cross-border movement of natural persons involved in the provision of trade in goods, trade in services and investment. It covers only the types of services actively named in the schedules including Business Visitors (BV), Intra-Corporate Transferees (ICT), and Contractual Service Suppliers (CSS), and does not cover permanent immigration to seek work, or unskilled labour.
Over the longer term, the MNP is intended to be a mechanism to facilitate a free flow of skilled labour in ASEAN, engaged in the conduct of trade in goods, services, and investments.
Regulations for trade with ASEAN
More detailed information on laws and procedures, rules, and regulations for trade within ASEAN can be found on the individual national trade repository websites
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