1. 2015
ASEAN Economic
Integration & Implications
for Exporters
JACK ANDRE, NATHAN ASSOCIATES INC.
Southeast Asia NOW!
Business Outlook Conference
November 9, 2011
w w w. n a t h a n i n c . c o m

2. ASEAN
• Five original members
―Indonesia, Malaysia, Philippines, Singapore, and
Thailand
―Newer members are Brunei, Vietnam, Laos,
Burma (Myanmar) and Cambodia
• Founded in 1967 to
―Accelerate regional economic growth, social
progress and cultural development
―Promote regional peace and stability
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3. Why Is ASEAN Important to the
U.S.?
• Population about 620 million, total area of 4.5 million
sq. km
• Combined GDP approaching US$ 2.0 trillion, strong
growth
• U.S. two-way trade with ASEAN was about US$178
billion in 2010
• ASEAN is our 4th largest overall trading partner, also
4th largest market outside NAFTA
• Accounts for 440,000 U.S. jobs
3

4. Trade Details
• 2010 U.S. Exports to ASEAN were $ 70 billion, up
31% over 2009
― Electronic products like unfinished semiconductors and integrated circuits
― Commercial aircraft and related equipment
― Other products include chemicals, agricultural products and machinery
• 2010 Imports from ASEAN were $ 107.8 billion, up
17% over 2009
― Electronic products, computer, peripherals and parts, though trade shifting
to China
― Textiles/apparel
4

5. ASEAN Compared to other
Regional Investment Destinations
• $157 billion U.S. Direct Investment in
ASEAN in 2010 Is More than:
―China - $60 billion
―Japan - $113 billion
―Korea - $30 billion
―Australia - $134 billion
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6. U.S. FDI by ASEAN Country
U.S. Foreign Direct Investment in ASEAN, 2010
Indonesia 15,502
Malaysia 15,982
Philippines 6,579
Singapore 106,042
Thailand 12,701
Brunei 34
Burma (*)
Cambodia 4
Laos (3)
Vietnam 623
Total 157,464
$ million, Cumulative, Historical Cost Basis, Source: USDOC Survey of Current Business, September
2011, Table 14; (*) = + or - $500 k
6

7. ASEAN Integration
• ASEAN is aiming at economic,
political-security and socio-cultural
integration by 2015. Why?
―Singapore Foreign Minister Yeo: ―By 2017 we
know that China and India will be the major
powers. By 2027, they will be very big
powers…Our survival chances are higher if we
have ASEAN, than if we don’t have ASEAN. And
it is this which is really what is galvanising us.”
7

8. ASEAN Integration cont.
• The economic case itself is compelling.
Integration would:
―Raise GDP by 0.5% to 1%
―Greatly increase foreign investment, by an
estimated 28% to 63%
― Provide greater efficiencies, cost of producing
consumer goods down by 20%
―Benefit poorest member countries the most
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9. Key ASEAN Documents
• Bangkok Declaration (August 8,1967)
• ASEAN Charter (2007)
― Provides ASEAN a stronger legal
personality and makes it rules-based THE
ASEAN
― Calls for creation of a human rights
CHARTER
body
• Roadmap for an ASEAN
Community
― Three community blueprints and
the Initiative for ASEAN Integration
(IAI) Strategic Framework and the
IAI Work Plan 2.
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10. Elements of the ASEAN Community of
Interest to Business
Political Security Economic Socio-Cultural
Pillar Pillar Pillar
• Good governance • Economic • Regional
integration environmental
• Rule of law
issues
• Judicial systems • Trade and
investment • Public health
• Legal facilitation • Disaster
infrastructure
• SME integration management
• Strengthen • Sustainable energy
financial systems management
and capital markets
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11. U.S. Role
• U.S. supports ASEAN integration
―Focus on major interests of U.S. business
―Approximately160 areas of cooperation
―State and USAID assistance of about $7 million
per year
―The U.S. was first to name an Ambassador to
ASEAN and opened a mission in Jakarta where
the ASEAN Secretariat is located.
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12. Problems Identified by Business
• ASEAN has:
― Subscale markets. Companies can’t manufacture and
market goods for the whole region.
― Unnecessary costs. Different product standards across
member countries prevent businesses from standardizing
products—adding 10 to 15% to costs.
― Unpredictable policies. Tariff rates can be determined by
the judgment of customs officials rather than government
policy, adding to costs and customs clearance times.
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13. US Cooperation with ASEAN –
Agreements
• Joint Vision Statement for the ASEAN–U.S.
Enhanced Partnership (AEP 2005)
― Set out broad goals for all pillars of ASEAN integration
under the Vientiane Action Program
• AEP Plan of Action (2006)
― 5 year plan; a new plan is will be approved this month
• Trade and Investment Framework Arrangement
(2006) - Led by USTR
• Joint Declaration at each of the ASEAN-U.S.
Leaders Meetings (2009 and 2010)
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14. First ASEAN–U.S. Leaders
Meeting, November 2009
ASEAN Secretary General Surin
Pitsuwan shares with President
Obama a copy of Realizing the
ASEAN Community at the first
ASEAN-U.S. Leaders Meeting in
November 2010.
14

15. Detailed Information Available
Virtual Copy Available at Google
15

16. U.S. Cooperation with ASEAN —
Mechanisms
ADVANCE Program (September 26, 2007)
• Led by Nathan Associates
― With 15 US-based partners like East-West Center, Pacific
Disaster Center, Louis Berger, Social Impact
― And 6 regional partners like Kenan Institute Asia, Asia Disaster
Preparedness Center, Center for Strategic and International
Studies (Jakarta)
― Operates for up to 8 years
― Four projects
ASEAN-U.S. Technical Assistance and Training Facility
ASEAN Single Window Project
ASEAN Value Chain Project
Lao BTA Compliance/WTO Accession Project
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17. ADVANCE Activities of Interest to
Business
• Technical Assistance and Training Facility
(TATF)
― The major part of our cooperation with ASEAN
― Key work areas include industrial standards development,
trade facilitation, customs cooperation.
― Organizes meetings with ASEAN technical and Ministerial
level officials
― Arranges for business meetings with key ASEAN and
member government officials
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18. ADVANCE Activities of Interest to
Business, cont.
• ASEAN Single Window:
― Support ASEAN goals to simplify submission, processing
and decision-making for import and export procedures
― Private sector consultations include email news, case
studies, brainstorming sessions, ASW web portal content
requirements, etc.)
• VALUE Project:
― Promotes integration of supply/value chains.
― Works with governments and companies.
• Lao Project:
― Works with Lao officials on accession to WTO, ASEAN
Community, Bilateral Trade Agreement with the U.S.
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19. Which Pressures Are Centrifugal Centripetal
Greatest?
Economic Sovereignty Pressure
advantages concerns from China
India?
Pressure
from other
partners,
Japan,
Intra-ASEAN
U.S., EU
disputes,
Preah Vihear,
SCS, etc.
Enhanced influence Indonesia’s “Post
via G-20, UN, etc. ASEAN” policy ? 19