President's Newsletter - June 2019

 

President's Newsletter

June 2019 

Dear Members,

For those of you observing, I hope you had a wonderful Eid!

You will notice a new look to this monthly message, which I am pleased to present to you in the same month we celebrate our 35th anniversary at our annual gala, as well as my own ten-year anniversary with the Council.

As usual, I will continue to share my selection of top developments in ASEAN and advocacy efforts the Council has advanced. To see our full spectrum of advocacy activities and comprehensive analysis in industry- and country- specific updates, I encourage you to visit the links below.


Thailand will see a new prime minister and government assume official duties. On June 11, Prime Minister Prayut Chan-o-Cha received a royal endorsement. On June 5, Thailand’s Parliament elected current Prime Minister Prayut Chan-o-cha as Prime Minister for the next government, an outcome that did not surprise many but was not assured only a few weeks ago.  Prime Minister Prayut received 251 out of 500 members of the lower House of Representatives and all but one of 250 votes in the Senate.  Next, the new prime minister must form a Cabinet and deliver a policy statement to Parliament outlining all coalition party views, which must take place within 15 days of an official swearing-in ceremony. The exact dates are not yet clear but are expected by July. The Council will keep members updated.

Official results from the General Elections Commission (KPU) of Indonesian elections confirm President Joko “Jokowi” Widido’s victory.  Runner-up, former General Prabowo Subianto has contested the result of this election and has taken his argument of fraud to the Constitutional Court. The Constitutional Court will hold a preliminary hearing on June 14 and make a final ruling by June 28. The current belief is that the suit is unlikely to overturn the result. A small cabinet reshuffle may happen after the Constitutional Court ruling on June 28 and is likely to precede a more substantive reshuffle closer to the October 20 swearing-in of the President and Vice President. We have reason to believe that new economic-focused ministries may be formed as part of a restructuring of the Indonesian government for President Jokowi’s second term.

In the Philippines, May 13 midterm Congressional and local elections resulted in sweeping wins for supporters of President Rodrigo Duterte in the Senate, without a single seat won by a candidate from the opposition “Ocho Derecho” party. President Duterte’s allies also retained control of the House. Observers expect the Congress to focus on a second tax reform package and possibly attempt to shift the nation’s government to a federal system, which would require amending the country’s constitution. The move to a federal system would help distribute wealth to the countryside more equitably. The 18th Congress will convene July 22.

The Council just wrapped up its annual mission to the ASEAN Customs Directors General Meeting, which took place in Vientiane, Laos. The Mission is a centerpiece of our Customs and Trade Facilitation Committee and focused this year on opportunities to leverage technology and data in facilitating cross border e-Commerce and addressing anti-Illicit trade and counterfeit goods. Additionally, delegates discussed industry participation in the Mutual Recognition Agreement around Authorized Economic Operator Programs, supporting the WTO Moratorium on Customs Duties on Electronic Transmissions.

We will also soon launch the fourth edition of “ASEAN Matters for America” in partnership with the East-West Center and ISEAS-Yusof Ishak Institute.  The latest trade data and trends in the 2019 edition of “ASEAN Matters” reinforce ASEAN’s role as a partner for American economic growth, now and into the next decade. It also makes a strong case for why the United States matters for ASEAN.  We look forward to sharing the exact findings with you in the coming days.

All the best,
Alex
June Highlights
From Left to Right: Alexander C. Feldman (US-ABC President and CEO), Dr. Vivian Balakrishnan (Singapore Foreign Minister), Karl Cox (Oracle Vice President for Global Pubic Affairs), Ambassador Michael W. Michalak (US-ABC Senior Vice President and Regional Managing Director). On May 7-9, the US-ASEAN Business Council led a business delegation to Singapore where U.S. firms engaged with government ministers to deepen partnerships with Singapore and to promote free and open trade in Southeast Asia. Dr. Balakrishnan, who is Minister-in-charge of the Smart Nation initiative, underscored Singapore’s role as a launchpad for innovation.  
On May 3 the Council held an SME Workshop in Manila, titled "Strengthening a Sustainable Tourism Model for SMEs in Digital Transformation,” for more than 165 owners and executives of travel and tourism small and medium-sized enterprises. The workshop was a joint initiative with the Philippine Department of Trade and Industry (DTI) and the Philippine Department of Tourism (DOT) with support from the Philippine Trade Training Centre (PTTC), the Philippine Chamber of Commerce and Industry (PCCI) and the Philippine Exporters Confederation, Inc. (PHILEXPORT). 
Senior Vice President and Regional Managing Director Ambassador Michael W. Michalak speaks at the US-ASEAN Internship Fair in Jakarta on May 14. The Council and US Mission to ASEAN jointly hosted an internship fair to celebrate the first anniversary of the program. Nearly 900 students attended or watched the event live stream.
Country, Industry and Advocacy Updates

Key Developments

  • Shangri-La Dialogue highlights tensions between the United States and China:  The 2019 Shangri-La Dialogue, Asia’s premier defense summit took place in Singapore from May 31-June 2.  As expected, attention and discussion centered on the increasingly contentious relationship between the United States and China.  For the first time in many years, China sent its State Councilor and Defense Minister Wei Fenghe.  Both the Chinese minister and U.S. Acting Secretary of Defense Patrick Shanahan made major policy addresses, emphasizing their commitment to the region. See U.S. Secretary Shanahan’s remarks here. At the same time, the U.S. released its Indo-Pacific Strategy Paper, produced by the U.S. Department of Defense, which can be found here.
  • Vietnam’s exports to United States surge in Q1: Following reports of Vietnam’s global export surge in Q1 of 2019, particularly to other members of the CPTPP like Japan and Canada, Vietnam’s exports to the U.S. have also surged to US $20.7 billion in Q1 of 2019, a 38 percent increase from Q1 2018. Vietnam is currently ranked as America’s third fastest growing trade partner in the world.  When combining Vietnam with ASEAN’s other five largest economies, they collectively represent America’s fourth largest trading partner, globally, only behind Canada, Mexico and China.  Although these numbers are favorable for Vietnam, global trade projections have been revised downward considering the U.S.-China trade conflict, and global and regional GDP growth rates are also slower in the first quarter of this year relative to last year.
  • Brunei Sharia Law implementation in 2nd and 3rd phases: Brunei has progressed in implementing its Sharia Law into the penal code. The Brunei government has upheld its longstanding moratorium on the death penalty and maintains that these laws are intended for religious alignment and not as a mandate for active prosecution.
  • Progress Measured after the Malaysian government’s first year in office: Prime Minister Mahathir and his coalition, Pakatan Harapan, have fallen under scrutiny as many review their progress on ambitious campaign promises outlined in their manifesto. While the Institute for Democracy and Economic Affairs (IDEAS) stated the government has delivered on only a third of their promises, the government can point to a success with their renegotiation of the East Coast Rail Link, saving a third of the project’s costs and negotiating a greater role for Malaysian subcontractors.
Relationship Building
  • Regional convening power supporting relationship-building in industry sectors: The Council’s ability to leverage its regional convening power continues to create platforms for individual members. The Council recently supported a member in organizing an ASEAN regional gathering of agricultural government stakeholders in Thailand to support capacity-building partnerships to address the Fall Armyworm issue.  The Council is also working with another member to organize a regional gathering for ASEAN government officials in Singapore regarding pharmaceutical product regulatory frameworks.
Current Advocacy
  • Energy Committee hosts Asia EDGE Briefing: On May 9, the Energy Committee held its first roundtable featuring a briefing on Asia EDGE by Deputy Assistant Secretary Melissa Simpson of the Energy Transformation Office at the State Department's Bureau of Energy Resources. Asia EDGE (Enhancing Development and Growth through Energy) is the energy-focused pillar of the U.S. Government's Free and Open Indo-Pacific (FOIP) strategy, described as a whole-of-government effort to grow sustainable and secure energy markets throughout the Indo-Pacific by strengthening energy security, increasing energy diversification and trade, and expanding energy access across the region. Contact: Riley Smith (rsmith@usasean.org)
  • UN Every Woman Every Child: The UN Secretary General’s Office has approved the Council’s commitment to the UN’s Every Woman Every Child (EWEC) movement, signifying our pledge to work together with ASEAN governments, the U.S. private sector and civil society to promote child, adolescent and maternal health.  We are putting together a Work Plan for members’ input, and we look forward to working with members over the coming years to showcase our commitment to the EWEC movement and advancing the EWEC global strategy.  Contact: Hai Pham (hpham@usasean.org)
  • Technical Barrier to Trade in U.S.-Vietnam Agricultural Trade: On March 1, Vietnam's Ministry of Agriculture and Rural Development (MARD) implemented regulations on imports of wheat which have resulted in the creation of a technical barrier to trade - a zero tolerance policy on traces of Canadian Thistle in wheat shipments entering Vietnam, requiring processing before the shipment enters Vietnam and re-exportation if traces are found. Following the policy implementation, the Council transmitted a letter to MARD to offer its assistance in working through this issue with officials. The Council also plans to convene a meeting between U.S. industry representatives and MARD officials during our upcoming Food & Agriculture industry mission to Vietnam later this month. Contact: Hai Pham (hpham@usasean.org) or Sunita Kapoor (skapoor@usasean.org)
  • Second Consultation on Singapore’s 5G Mobile Services and Networks Policies: On May 7, Singapore's Info-communications Media Development Authority (IMDA) issued a second public consultation on its proposed regulatory frameworks and policies for 5G applications and services, following its first public consultation which concluded in July 2017.  The Council is submitting comments for this second consultation. Contact: Ella Duangkaew (eduangkaew@usasean.org) or Jamie Lim (jlim@usasean.org)
  • Consultation on 2019 ASEAN Cybersecurity Ministerial Proposal: The Council, in partnership with the BSA | The Software Alliance, is looking to hold a second engagement with the 4th ASEAN Ministerial Conference on Cybersecurity (AMCC), which will be held alongside Singapore International Cyber Week on either October 2 or 3. The Council is seeking member input on the theme of engagement, "Interoperable Regional Frameworks: The Future of ASEAN's Cyber Resilience Strategies," as well as topics and format for our proposed engagement. Contact: Jamie Lim (jlim@usasean.org) or Ella Duangkaew (eduangkaew@usasean.org)
  • Vietnam Cybersecurity Law Implementation Decree: The Council will be engaging with the Government of Vietnam to advocate for another round of industry comments to the decree. Contact: Vu Tu Thanh (tvu@usasean.org) and Ella Duangkaew (eduangkaew@usasean.org)
  • Vietnam Decree 06/2016 (OTT Regulation): The Council's advocacy efforts on Vietnam's Decree 06/2016 (OTT Regulation) with the Government of Vietnam has stalled the drafting process, and a new draft requested by the Minister of Information and Communication (MIC) has not been completed by the drafting team. There is currently no indication of when this draft will be completed and submitted to the government for approval. Contact: Contact: Vu Tu Thanh (tvu@usasean.org) and Ella Duangkaew (eduangkaew@usasean.org)
  • Laos Engagements: Following the ASEAN Customs Directors General Meetings in Vientiane, Laos the Council's Senior Vice President and Regional Managing Director Ambassador Michael W. Michalak engaged in a series of meetings on June 13 with various key Ministries in the Lao Government, specifically the Ministry of Industry and Commerce, the Ministry of Planning and Investment, the Ministry of Finance, the Ministry of Post and Telecommunications and the Bank of Lao PDR. Contact: Ella Duangkaew (eduangkaew@usasean.org)
Looking Ahead
Upcoming Events See our full calendar
 
Membership
We are pleased to welcome ZipLine and Splunk to the Council.  Both have joined at the Corporate level, ZipLine as of June 1 and Splunk as of July 1.  The Council now has 77 Corporate members and 88 Chairman’s Council members, breaking our just established record of members.
    Media Highlights
    Cyber attacks are estimated to occur once every 39 seconds. In the face of increasing attacks, building a cyber resilient culture is critical.

    Watch our fourth episode of ACE (American Corporate Excellence) to see how the Cisco Networking Academy has been providing IT skills training to educational institutions in Singapore for almost 20 years. This program is part of Cisco’s corporate social responsibility program, and also goes a long way toward ensuring cyber resilience.

    The ACE video series showcases American companies that have outstanding corporate social responsibility initiatives; high standards for quality, reliability, and partnership; produce innovative products and services; and employ and train exceptional individuals. ACE is brought to you by U.S. Embassy Singapore and the US-ASEAN Business Council.
    Country and Industry Updates
    See our most recent Updates and Analysis for more detail:
    Brunei
    Cambodia
    Indonesia
    Laos
    Malaysia
    Myanmar
    Philippines
    Singapore
    Thailand
    Vietnam
    ASEAN
    Customs & Trade Facilitation
    Defense & Security
    Energy
    Financial Services
    Food & Agriculture
    Health & Life Sciences
    Information & Communications Technology
    Infrastructure
    Manufacturing
    Travel & Tourism
    Questions? Please contact Monica Chritton at mchritton@usasean.org