Open
Regionalism and Deeper Integration: The Implementation of ASEAN Investment
Area (AIA) and ASEAN Free Trade Area (AFTA)
Dr.
Lawan Thanadsillapakul
Part
16
In
maritime transport: passenger services, freight services and maintenance
and repair of vessels, there are fewer limitations on market access and
national treatment in this sector compared to the others. Brunei has no
limitation at all on market access; Singapore has limitations on market
access only on the presence of natural persons; Thailand has restrictions
involving freight traffic between Thailand and Vietnam as well as Thailand
and China that may be not fully participated in by third countries.
As
regards the air transport sector, Indonesia and Singapore have no specific
schedule of commitments in air transport, and the others made commitments
but subject to limitations on market access. On leasing of aircraft, Brunei
and Malaysia allow commercial presence only through a representative office
while the Philippines allows lease contracts subject to approval by its
air transport authority (the Civil Aviation Board). The Philippines has
no limitations on commercial presence in case of maintenance and repair
of aircraft, while Thailand's measures with regards to commercial presence
are unbound. In the case of general sales and cargo sales, distribution
through CRS is allowed by Thailand only for airline offices and one general
sales agent office. In addition, such providers must use the Thai public
telecommunication network.
Finally, as regards MFN exemptions (see Table 3), ASEAN countries have
extensive MFN exemptions under GATS. These exemptions include limitations
on foreign equity participation and the entry of semi-skilled or unskilled
workers. All ASEAN countries have MFN exemptions in their financial and
transport sectors. Brunei, Malaysia, the Philippines, and Singapore have
MFN exemptions covering all sectors. Also Brunei and Singapore have exemptions
in legal services. Singapore has exemptions in broadcasting, computer
reservation systems, reinsurance and retrocession, Malaysia has an exemption
in advertising, and Thailand has exemptions in business services, and
computer reservation systems. Most of these sectoral MFN exemptions are
the result of broad national policies (e.g. limitations on equity participation
of foreign investors) or the result of bilateral agreements involving
reciprocal favourable treatment that are allowed under the GATS (Art.
II. 2)(117) . For instance,
Thailand has restrictions involving freight traffic as mentioned above,
based on bilateral agreements made between Thailand and Vietnam, and Thailand
and China.
From
this review, ASEAN countries need to consider, under GATS-Plus, to improve
the coverage of service sectors to be liberalised, both horizontal and
specific sectoral service commitments and mode of service supply as well
as to refrain from MFN exemptions in such service sectors. Since Art.
V of GATS permits preferential treatment among members of a regional economic
integration agreement, provided that such arrangements have substantial
sector coverage and eliminate substantially all discrimination among the
members, AFAS cannot be implemented on a piecemeal or selective basis.
Therefore, ASEAN countries need to liberalise service sectors on a broad
base of both horizontal commitments and specific sectors.
Preferential
Treatments Extended to ASEAN Countries under GATS-Plus
Packages
ASEAN
countries' offers under GATS-Plus scheme (see detailed offers in Table
6) are an improvement on their commitments under GATS in some or all of
the seven sectors and sub-sectors involving modes of supply, market access
and national treatment. The service sectors in which individual ASEAN
countries offer preferences over GATS are summarised in Table 7
Table
7 |
Summary
of GATS-Plus Commitments of ASEAN Countries |
(symbol
X- commits to liberalise, symbol - do not commit to liberalise)
|
|
|
|
|
|
|
|
|
|
|
Air
Transport |
X |
X |
X |
- |
X |
X |
X |
X |
X |
Business
Services |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Construction |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Financial
Services |
- |
X |
X |
- |
X |
X |
X |
X |
X |
Marine
Transport |
X |
- |
X |
- |
X |
X |
X |
X |
X |
Telecommunications |
- |
X |
X |
X |
X |
X |
X |
X |
- |
Tourism |
- |
X |
X |
X |
X |
X |
X |
X |
X |
|
Source: Compiled
by the author from ASEAN countries schedules under GATS-Plus as at September
1998.
It
needs to be made clear here that offers made by each individual ASEAN
country summarised in Table 6 and 7 are the GATS-Plus commitments. So
if an individual ASEAN country did not make further offers in a particular
sector here it does not mean that the country did not commit in such sector
at all, but rather that it may already have made offers in such sector
under GATS quite extensively (see Table 1-5). On the other hand, where
ASEAN countries made offers under GATS-Plus it does not mean offers have
not been made at all under GATS, but rather that the additional offers
were made in more sub-sectors of that sector under GATS-Plus.
Laos
and Vietnam(118) , who are
non-WTO members, made offers in all sectors because they did not commit
under GATS before. Malaysia did not make further offers in financial sectors
other than those made under GATS, because after the 1997 crisis Malaysia
has been cautiously overseeing its financial sector. Scholars(119) also widely accepted that before liberalising the financial sector there
should be a strengthening of the legal infrastructure, and of supervision
and prudential measure, and this increasing scrutiny may entail a slow-down
in liberalisation or deregulation for a time. In some cases, like the
financial sector, it is possible that activities that have never been
regulated will become regulated because of greater attention to prudential
concerns. The restructuring of the financial sector in Asia after the
crisis shows that adequate prudential measures, supervision and legal
framework should be established before further liberalisation.
Part
17
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(117)
WTO reported that "MFN exemptions have been claimed by most current
and prospective WTO Members. Roughly 350 measures are involved, mainly
bilateral or plurilateral agreements without a fixed termination date".
See World Trade Organization, 1999: 193.
(118)
Vietnam did not commit to liberalise its telecommunication sector in this
schedule because the country has modest telecommunication infrastructure
and it needs to develop this service sector before welcoming foreign service
providers.
(119)
See, for example, Raghavan, Chakravarthi, (1997) "Financial Liberalisation" Third World Resurgence. No. 86, October. Also UNCTAD's Secretary-General,
Rubens Ricupero has advised the countries of the South to retain a degree
of flexibility on measures to control movements of capital until a satisfactory
international agreement is reached on this issue. He further suggested
that "you need to take into your level of development, the financial
institutions of each country, the current state of domestic supervisory
capabilities, the current state of your financial system as a whole".
The situation varies from country to country, and it is difficult to generalise.
But I hope each country will make its decisions in the light of their
own situations, and this will be seen as a valuable contribution to the
liberalisation of the financial services sector.' (TWR, No. 86, October,
1997). |