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ASEAN. INTEGRATION. ///////////////// 2015. Undersecretary Nora Kakilala Terrado Department of Trade and Industry. 2 June 2014 Marco Polo Plaza Hotel Cebu City. Enabling Business. Empowering Consumers. ASEAN . ECONOMIC . COMMUNITY. 2 0 1 5.
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ASEAN INTEGRATION ///////////////// 2015 Undersecretary Nora Kakilala Terrado Department of Trade and Industry 2 June 2014 Marco Polo Plaza Hotel Cebu City Enabling Business. Empowering Consumers.
ASEAN ECONOMIC COMMUNITY 2 0 1 5 Enjoy the Video Presentation: GET READY FOR THE AEC
Characteristics of AEC Single Market and Production Base Competitive Economic Region Equitable Economic Development Integration into Global Economy
LEVELS OF ECONOMIC INTEGRATION Economic Union Common market status plus harmonization of fiscal & monetary policies ASEANis FTA-Plus: Conventional areas of goods and services; PLUS other areas such as investments, government procurement, competition, intellectualproperty, et al. Common Market Customs union status plus free movement of labor & capital Customs Union Free trade among members and adopt common external trade policies Free Trade Area All trade barriers in Goods & Services removed among members but each retain own barriers with the Rest of the World (ROW) Preferential Trading Area Lower trade barriers among members
Economic Partnership Agreement (EPA) Conventional areas of goods and services; plus other areas such as investments, government procurement, competition, intellectual property, etc. Free Trade Area • All trade barriers in Goods & Services removed among members but each retain own barriers with ROW • Free Trade Area • All trade barriers in Goods & Services removed among members but each retain own barriers with ROW
THE AEC BLUEPRINT Adopted by ASEAN leaders in 2007, it lays down the roadmap toward an ASEAN Community in 2015 Political-Security Economic Socio-Cultural
AEC BLUEPRINT COMPLIANCE ` • ASEAN Trade in Goods Agreement (ATIGA) • Trading of up to 99.65% of goods at zero tariff • Since 2010 • ASEAN Framework Agreement in Services (AFAS) • Mutual Recognition Arrangements (MRAs) (1) Accountancy services (2) Architectural services (3) Dental practitioners (4) Engineering services (5) Medical practitioners (6) Nursing services (7) Surveyors (8) Tourism ASEAN neighbours are continually improving their competitiveness
ASEAN Ranking in Global Competitiveness Innovation and Sophistication Factors Basic Requirements Efficiency Enhancers Ref. The Global Competitiveness Report 2013-2014 by the World Economic Forum
PhilippinesGlobal Competiveness Index Ref. The Global Competitiveness Report 2013-2014 by the World Economic Forum
Areas of Strengths & Weaknesses in Labor Market Efficiency PhilippinesGlobal Competiveness Index Ref. The Global Competitiveness Report 2013-2014 by the World Economic Forum
Comparative Labor Market Efficiency Ref. The Global Competitiveness Report 2013-2014 by the World Economic Forum
Pattern of Labor Migration in ASEAN Countries of Destination: Thailand Malaysia Singapore • Push Factors • Slow growth • High unemployment rate (origin) • Better wages (destination) • Labor export policy • Pull Factors • Rapid growth • Labor shortage • Changing demographics • Labor market needs `
RESTRICTIONS ON PROFESSIONALS’ MOBILITY • “Free” flow of skilled labor • Most member states apply domestic rules and regulations and impose restrictions on foreign nationals • Mobility of ASEAN professionals dependent on member states’ unilateral moves to change domestic rules and regulations
Prospects and Challenges • Prospects • Labor exports • strong inward remittances • Opportunity to enhance the labor markets • quality/quantity of labor • education • Labor cooperation and dialogues with partners • Brain gain & Brain re-gain • Challenges • Competitive pressures • Paucity of talents needed for our growth • Social effects • Brain Drain
NATURE OF COMPETITIVE ADVANTAGE 1 = low cost labor or natural resources; 7 = unique products and processes 3 5 6th of 10 in ASEAN 67th of 148 globally 2 1 4 Source: The Global Competitiveness Report 2013-2014
PEOPLE DEVELOPMENT Recommended Focus Areas on our Way Forward in AEC 2015 COMPETITIVENESS INNOVATION REGULATORY REFORMS CHANGE IN MINDSET
Thank you. Enjoy the Video Presentation: ASEAN Song
EXTENT OF STAFF TRAINING 1 = not at all; 7 = to a great extent 3rd of 10 in ASEAN 27th of 148 globally Source: The Global Competitiveness Report 2013-2014
RELIANCE ON PROFESSIONAL MANAGEMENT 1 = usually relatives or friends without regard to merit; 7 = mostly professional managers chosen for merit and qualifications 3rd of 10 in ASEAN 32nd of 148 globally Source: The Global Competitiveness Report 2013-2014
CAPACITY FOR INNOVATION 1 = not at all; 7 = to a great extent 5th of 10 in ASEAN 48th of 148 globally Source: The Global Competitiveness Report 2013-2014
EFFECT OF TAXATION ON INCENTIVES TO WORK 1 = not at all; 7 = to a great extent 7th of 10 in ASEAN 40th of 148 globally Source: The Global Competitiveness Report 2013-2014
PAY AND PRODUCTIVITY 1 = significantly reduce the incentive to work; 7 = do not reduce incentive to work 9th of 10 in ASEAN 44th of 148 globally Source: The Global Competitiveness Report 2013-2014
COUNTRY CAPACITY TO RETAIN TALENT 1 = the best and brightest leave to pursue opportunities in other countries; 7 = the best and brightest stay and pursue opportunities in the country 8th of 10 in ASEAN 71th of 148 globally Source: The Global Competitiveness Report 2013-2014
COUNTRY CAPACITY TO ATTRACT TALENT 1 = the best and brightest leave to pursue opportunities in other countries; 7 = the best and brightest stay and pursue opportunities in the country 9th of 10 in ASEAN 86th of 148 globally Source: The Global Competitiveness Report 2013-2014
FLEXIBILITY OF WAGE DETERMINATION 1 = by a centralized bargaining process; 7 = by each individual company 9th of 10 in ASEAN 109th of 148 globally Source: The Global Competitiveness Report 2013-2014
HIRING AND FIRING PRACTICES 1 = heavily impeded by regulations; 7 = extremely flexible 10th of 10 in ASEAN 117th of 148 globally Source: The Global Competitiveness Report 2013-2014