November 2018

Alexander C. Feldman
Alexander C. Feldman
President & CEO
US-ASEAN Business Council

Dear Members,

It’s hard to believe that we are already near the end of the year.  The last 30 days have not seen any slowdown in Southeast Asia and the Council continues to keep pace.

Cyber Security and privacy legislation continues to evolve in ASEAN (please see ICT section for more information).  Earlier this month at the ASEAN Leaders’ Summit in Singapore, the 10 nations of ASEAN agreed to their first digital economy agreement when they signed the ASEAN eCommerce Agreement.  Ambassador Michael Michalak and I attended the ASEAN Business and Investment Summit on the sidelines of the ASEAN Summits, and I was honored to speak on a panel regarding the role that the Council plays in helping ASEAN achieve its goals.  I was joined on the panel by the Ministers of Trade from New Zealand and the United Kingdom.

Vice President Pence represented the U.S. at the ASEAN-U.S. Summit as well as at the East Asia Summit.  During the ASEAN-U.S. Summit, the Vice President announced several new initiatives including the U.S.-ASEAN Smart Cities Partnership.  To access the Vice President’s full remarks at the ASEAN-US Summit, please click here.  In addition to his regional meetings, the Vice President also had several bilateral meetings in Singapore, which included a meeting with Myanmar’s State Counsellor Daw Aung San Suu Kyi.  During the meeting with Daw Aung San Suu Kyi, Vice President Pence raised the issue of the Rohingya people and their plight.  The Vice President’s official remarks can be found here.

The Vice President also met with Prime Minister Lee bilaterally during the Vice President’s first ever visit to Singapore.  You can find Prime Minister Lee’s press conference remarks here.  After meeting with Vice President Pence in Singapore, Singapore’s Prime Minister Lee raised the possibility of ASEAN having to pick sides amidst a US-China trade war during a Q&A session during the ASEAN summit.  The article encapsulating what he said can be found here.

The Vice President attended the APEC Summit immediately after his time in Singapore, where he delivered a major policy address at the APEC CEO Summit on the Indo Pacific Policy of the Trump Administration.  The Vice President also continued his critique of China (first raised a couple weeks ago during a China-focused speech to the Hudson Institute in Washington, DC) during his speech at the CEO Summit.  Please click here for the Vice President’s full speech at APEC.  The speech also talks about the Trump Administration’s goals for trade in the Indo Pacific, focusing on free and reciprocal trade.

Meanwhile in ASEAN, trade agreements were moving forward.  Seven countries have now ratified CPTPP, including Singapore and Vietnam from ASEAN.  CPTPP will go into effect on December 30 this year.  (Please see the TPP section for more details.)  The RCEP negotiations are moving forward but not as quickly as some leaders had hoped.  No new advancement was announced at the ASEAN Summit, but the leaders committed to reaching a conclusion in 2019.   Following last year’s ASEAN Summit in Manila, talks continued between USTR and the Philippine Department of Trade on the possibility of a U.S. – Philippines FTA, and those talks seem to be moving forward slowly despite the formal announcement to Congress by the Trump Administration that it intends to move forward with Trade Agreements with Japan, the UK and the EU. 

Speaking of the Philippines, last Wednesday, Secretary of Defense Mattis announced that the U.S. would be returning the Bells of Balangiga to the Philippines, ending more than a decade of controversy between the U.S. and the Philippines.  The Bells of Balangiga were taken by American soldiers in 1901 during the Philippine-American War.  More on this story can be found here.

The run up to 2019 elections in Indonesia and Thailand continue.  The Thai elections are now slated for February 24 and preparations seem to indicate that this date may stick.  President Jokowi continues to lead in the Presidential polls for Indonesia’s April 2019 elections.  In Singapore, in a surprise to many, it now appears that Finance Minister Heng Swee Keat is the leading candidate to succeed Prime Minister Lee.   Minister Heng was elevated to first assistant secretary-general in the ruling People’s Action Party.

In Council-specific news, on November 4-11, the Council organized a U.S. Innovation Study Tour for the Vietnam Prime Minister’s Economic Advisory Team (PMEAT), traveling to Washington, DC, Atlanta, GA, and San Francisco, CA.  The delegation, led by Chairman of PMEAT Dr. Vu Viet Ngoan, aimed to gain insights on how various economic sectors in the United States are inventing and re-inventing themselves.  Throughout the trip, members also had opportunities to raise advocacy issues related to cybersecurity, the digital economy, tax policies, and various market access challenges.

Looking Ahead

  • On December 4-6, the Council will be organizing a business mission to the 18th ASEAN Telecommunications and Information Technology Ministers Meeting (TELMIN) in Ubud, Indonesia.  The Council has proposed a 90minute working luncheon and dialogue with the Ministers, as well as presentations from select member companies. We will also request individual bilateral meetings with Ministers from all ASEAN countries.  For more information, please contact Ella Duangkaew at eduangkaew@usasean.org.
  • On December 11-13, the Council will be holding its annual business mission to Myanmar, which will take place in Yangon and Nay Pyi Taw.  Requested meetings for the Mission include: President U Win Myint, State Counsellor Daw Aung San Suu Kyi, Key Cabinet Ministers, Members of Parliament including Speaker of the Pyithu Hluttaw (Lower House) U T Khun Myat, Myanmar Investment Commission, and the UMFCCI. Please contact Jack Myint at jmyint@usasean.org with any questions or to express interest.
  • Just prior to the Council's 2018 Senior Executives Business Mission to Myanmar on December 11-13, the Council is pleased to invite Members’ participation in a one-day Small and Medium Enterprise (SME) workshop “Digital Transformation to Boost SME Competitiveness” in Yangon, Myanmar. This workshop will be conducted in close collaboration with the US ICT Council for Myanmar, Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI), and Max Myanmar.  Click here to see the workshop draft agenda.  Please contact Vinsensius Kangen at vkangen@usasean.org  with any questions or to express interest.

Highlights

Advocacy

  • The Council’s annual mission to the ASEAN Transportation Ministers meeting provided a platform for members to advocate for various policy and regulatory reforms at the national and regional levels related to advancing transport infrastructure safety and issues affecting private sector participation in transportation infrastructure development.  Some of the issues raised included the value of lifecycle costs in projects, alternative delivery approaches and how to utilize government led initiatives (FOIP, Belt & Road and US-Japan Cooperation) to develop commercially attractive infrastructure projects.  One follow-up activity to the mission is a plan to conduct country-specific roadshows on “Safety and High-Quality Infrastructure.”
  • Last month, the Council led a delegation of members to a workshop in Yogyakarta we organized for the ASEAN Customs Procedures and Trade Facilitation Working Group (CPTFWG).  The workshop, “Facilitating Trade: Emerging Technology Use Cases and Policy Impacts,” served as a platform for members to advocate for the types of policy and regulatory reforms and best practices which could facilitate the adoption of new technologies in customs such as blockchain.  Some of the key points highlighted in the discussions included the need for deepening collaboration across bureaucracies, the need for technology providers to help build knowledge and capacity of customs agencies, and the desire of customs authorities to develop ways of sharing data with the private sector.

Intelligence

  • On November 23, the People’s Action Party of Singapore announced the new office bearers of its 35th Central Executive Committee (CEC). Finance Minister Heng Swee Keat will serve as the first Assistant Secretary General, while Minister of Trade & Industry Chan Chun Sing was selected as Assistant Secretary General. Singapore’s third and current Prime Minister Lee Hsien Loong remains as Secretary General.  Minister Heng’s appointment heralds strong indications via party insiders and media analysts that he might be the next Prime Minister of Singapore as Prime Minister Lee himself was a former first Assistant Secretary General of the party.  He is also expected to be named Deputy Prime Minister sometime next year. Minister Heng was widely tipped to be the leading frontrunner for the Prime Minister role until a medical lapse in 2016.  His “miraculous recovery” as described by The Straits Times has put him back on track for potential eventual premiership. Singapore’s first Prime Minister Lee Kuan Yew once said that whoever takes on the PM role needs to have helmed significant ministries such as the Ministry of Defense, Ministry of Education, and Ministry of Finance.  With this criterion in mind, Minister Heng certainly checks the boxes. He was previously Minister of Education (2011 to 2015), Managing Director for the Monetary Authority of Singapore (2005 to 2011), Principal Private Secretary to the then Senior Minister Lee Kuan Yew (1997 to 2000), and also served in the Singapore Police Force.  He also has a more substantive international reputation vis à vis other leading contenders due to his stint at the Finance Ministry, and with Singapore chairing ASEAN in 2018.  Former Prime Minister Lee Kuan Yew also once described him as the “best principal private secretary I have ever had.”  Constitutionally, the next general election must be held by 15 January 2021, though government insiders have frequently commented to expect late 2019 or early 2020 to be a more realistic timeframe.
  • The People’s Justice Party’s (PKR) internal elections, which began on September 22, have seen fierce competition over its Deputy President position currently held by Minister of Economic Affairs Azmin Ali.  The incumbent is currently locked in a fierce fight against Rafizi Ramli.  While official results have yet to be announced by PKR’s Central Election Committee, Azmin has hinted at his victory over Rafizi in a social media post.  Unofficial results show that Azmin is leading with 67,449 votes to Rafizi’s 62,716.  Without an official announcement, it is still possible that the situation may shift in Rafizi’s favor.  Rafizi is viewed as a member of PKR President Anwar Ibrahim’s faction.  In the event of an Azmin Ali victory, it may be necessary for Anwar to ease internal tensions to ensure party unity.  PKR’s internal election may also affect the Cabinet’s composition as PKR may submit names to the Prime Minister for consideration, in light of the election results.  In a recent interview with the Straits Times, Prime Minister Mahathir stated that he is open to the idea of a Cabinet reshuffle but maintained that the final decision rests solely with him as head of the Cabinet.

Promotion

On November 12-13, the Council supported the ASEAN Business and Investment Summit (ABIS) in Singapore.  I participated in a panel entitled “Engage & Collaborate with ASEAN – Unravelling Vast Opportunities in the ASEAN Region.”  During the panel, I stressed the degree to which the Digital Economy cuts across all industries in the modern economy.  I reaffirmed the importance of Southeast Asia as a region for U.S. companies and FDI, the need for more harmonization in ASEAN, as well as the Council’s commitment to support SMEs and human capital development in ASEAN.  I also recognized efforts that ASEAN has taken in concluding the ASEAN E-Commerce Agreement.

Membership

A special thank you to all of our members who have already taken the time to complete our 2018 end-of-year survey.  If you have not yet done so, there is still time, and we would truly appreciate your input.  The only way that we can grow and improve as a member-driven organization is with your honest feedback.  Please click here to complete this brief, ten-minute survey.

Regional Highlights

APEC

Major Developments

On November 15-17, as part of the 2018 APEC CEO Summit, the U.S. APEC Business Coalition arranged a number of opportunities for companies to engage with leaders and ministers from APEC economies.  From ASEAN, the coalition met with Secretary Ramon Lopez, Secretary of Trade and Industry for the Philippines, H.E. Mahathir bin Mohamad, Prime Minister of Malaysia, and H.E. Nguyen Xuan Phuc, Prime Minister of the Socialist Republic of Vietnam.

View the Council's latest APEC updates

ASEAN

Major Developments

On November 12-13, the Council supported the ASEAN Business and Investment Summit (ABIS) in Singapore.  I participated in a panel entitled “Engage & Collaborate with ASEAN – Unravelling Vast Opportunities in the ASEAN Region.”  During the panel, I stressed the degree to which the Digital Economy cuts across all industries in the modern economy.  I reaffirmed the importance of Southeast Asia as a region for U.S. companies and FDI, the need for more harmonization in ASEAN, as well as the Council’s commitment to support SMEs and human capital development in ASEAN.  I also recognized efforts that ASEAN has taken in concluding the ASEAN E-Commerce Agreement.

Advocacy

  • On November 5-6, the Council participated at the 6th ASEAN Coordinating Committee Meeting on Micro, Small, and Medium Enterprises (ACCMSME) in Nay Pyi Taw, Myanmar.  It was the Council’s second official engagement with SME government agencies across ASEAN.  During the meeting, the Council gave a presentation highlighting the progress, collaboration opportunities and 2019 plans for the US-ASEAN Business Alliance for Competitive SMEs.  The Council’s 2018 SME lead member company, Cisco, also participated in the meeting and presented on how Industry 4.0 is likely to affect jobs and SMEs.  Additionally, the Council joined the 10th Meeting of the “Regional Policy Network on SMEs” to discuss various policy issues for SME development in ASEAN.  Click here to access the Council’s presentations.
  • On November 21, more than 200 entrepreneurs from Hai Phong and neighboring cities participated in a one-day SME workshop entitled “Elevating SMBs into Industrial Revolution 4.0 and Inclusive Global Value Chains.”  A joint initiative with Hai Phong People’s Committee, the workshop featured knowledge-sharing sessions from the Prime Minister’s Economic Advisory Team (PMEAT), General Department of Vietnam Customs, and Council members such as Cisco, Coca-Cola, FedEx, Microsoft and Visa.

Looking Ahead

  • On December 6 in Jakarta, the Council and the U.S. Mission to ASEAN will organize a US-ASEAN Internship promotional workshop titled “How to Prepare for Your Internship Application:  Walk in as a Jobseeker, Walk out as a Hired Employee.”  This workshop will feature a series of knowledge-sharing sessions for ASEAN-based university students by the Regional English Language Office (RELO) of the U.S. Embassy, along with Council members such as Apple and General Electric.  Members are welcome to attend this workshop and become contributors to the Internship Program.  Please contact Vinsensius Kangen (vkangen@usasean.org) and Marcella Suwandhi (msuwandhi@usasean.org) for more details and click here for the workshop concept note and draft agenda
  • On December 10, and just prior to the Council's 2018 Senior Executive Business Mission to Myanmar, the Council will conduct a one-day Small and Medium Enterprise (SME) workshop entitled “Digital Transformation to Boost SME Competitiveness” in Yangon.  The workshop will focus on improving Burmese SMEs’ digital competitiveness and highlight ICT-related policy and regulatory approaches which could enhance opportunities for local SMEs to access regional e-commerce markets.  Members are welcome to participate in the Council’s last SME engagement in 2018.  Please contact Vinsensius Kangen at  vkangen@usasean.org or click here for more details.

View the Council's latest ASEAN updates

TPP

Major Developments

Earlier this month, the National Assembly of the Government of Vietnam ratified the CPTPP agreement, making Vietnam the seventh of the 11-nation group to complete its national ratification process.  The first round of tariff reductions and commitments in the CPTPP agreement will go into force on December 30, followed by a second round of tariff cuts on January 1.

With the CPTPP agreement going into force later this year, the Government of Thailand announced that it is continuing to study the economic costs and benefits of formally seeking admission into the CPTPP in 2019.  If Thailand were to seek admission into this preferential trade area, it would join four other ASEAN nations (Brunei, Malaysia, Singapore and Vietnam) in the agreement.  In a recent study by the World Bank on the impacts of the U.S.-China tariff conflict on ASEAN, one of the conclusions was that as intra-Asia trade flows expand, opportunities to increase regional value chains in ASEAN could increase if more nations joined the CPTPP.

Advocacy

On the sidelines of the APEC Summit meetings earlier this month, Council members participating in bilateral meetings with the Prime Ministers of Malaysia and Vietnam were provided with CPTPP-related talking points to use in the discussions.

Looking Ahead

The Government of Malaysia announced that as it continues to examine the CPTPP, it is now also studying the potential impact of ratifying the CPTPP on income equality trends in Malaysia.  Such a review seems consistent with the domestic economic priorities and trade policy of the new administration of Prime Minister Mahathir.

View the Council's latest TPP updates

Industry Highlights

Customs

Major Developments

  • The ministers negotiating the Regional Comprehensive Economic Partnership (RCEP) abandoned their target of a substantial conclusion to the negotiations during November’s ministerial meetings, saying they will now target 2019 for the agreement to finalize.  Despite the delayed again, the ministers were able to close several chapters of the agreement and a conclusion does seem to be within reach.  The newly completed chapters cover issues such as sanitary standards, technical regulations and conformity assessment.  Key chapters on goods and services and market access, as well as the investment reservation lists, remain open, and appear to be making progress.  Disagreement between India and China on tariff offers remains one of the largest obstacles to concluding the deal.  Negotiators appear to be getting closer to a solution to the challenge and Indian Prime Minister Narendra Modi has reportedly been spending much more time with his negotiators, instructing them to stay in the agreement.  One possible solution that is looking increasingly likely is that the RCEP parties will make a deal in which India and several other countries will make smaller tariff cut commitments to the countries they do not already have free trade agreements with, making the deal less valuable for businesses.  The ministerial meeting on November 12 was followed by a leaders’ summit on November 14, where the countries reaffirmed their support for the agreement and called for the commitment of all resources necessary to complete the agreement in 2019.  The Joint Leaders’ Statement, which includes some more details on the status of the negotiations, can be accessed here.  With more of the substantial work being pushed into 2019, the agreement will run into a challenging political calendar.  Australia, India, Indonesia and Thailand will all have general elections in the first half of 2019.
  • On October 25, President Duterte transferred Philippine Customs Commissioner Isidro Lapeña to the Technical Education and Skills Development Authority (TESDA) and ordered all department heads and deputy commissioners in the Bureau of Customs (BOC) to step down, following a new drug smuggling scandal.  The scandal, which had received attention from the House of Representatives and the national media, centers around a shipment of magnetic lifters which apparently contained several tons of methamphetamine that passed through a BOC checkpoint in July.  The development marks the second time the Bureau’s leadership has been replaced following a drug smuggling scandal during the Duterte Administration.  The first time was when Nicanor Faeldon was replaced by Lapeña in August 2017.  Lapeña had previously lead the Drug Enforcement Agency and upon taking charge of the BOC, pledged to crack down on smuggling, tax evasion and especially drug trafficking.  He then quickly won praise from the country’s leadership for consistently meeting the BOC’s revenue collection targets with his crackdown.  Lapeña is replaced by Maritime Industry Authority (Marina) Administrator and former Chief of Staff of the Philippine Armed Forces Rey Leonardo Borja Guerrero.

Advocacy

On October 22, the Council held a day-long workshop in Yogyakarta alongside the October meeting of the ASEAN Customs Procedures and Trade Facilitation Working Group (CPTFWG).  The event featured a series of panel discussions and breakout sessions on how emerging technologies such as blockchain, data analytics, track and trace, and networked platforms could support customs processes and ASEAN economic integration, and the policy considerations for their adoption.  Council member companies were joined by the Australian Border Force, the Singapore Customs Networked Trade Platform Office, and the Customs Administration of the Netherlands to discuss their latest work on digital systems and how public-private partnerships could facilitate trade and customs operations.

View the Council's latest Customs updates

Defense & Security

Major Developments

On November 12, the United States and Brunei kicked off their first army exercise to promote the broader defense relationship between the two countries. The U.S.-Brunei defense relationship has seen a consistent uptick throughout 2018 and shows potential for continued growth.  This past August, the Bruneian and U.S. armies held their first bilateral training exercise as part of Pacific Pathways, in addition to the 17th iteration of SEACAT, and the 26th biennial Rim of Pacific (RIMPAC) exercise.  According to Brunei’s defense ministry, activities during this year’s CARAT will include company attack and area clearance jungle training, improvised explosive device detection and awareness, sea evolutions, and legal and medical symposia, and will feature participation from all three branches of the defense services, the military police, the military medical services, the police force, the maritime port authority, and the fisheries department.

View the Council's latest Defense & Security updates

Energy

Major Developments

  • On October 29, the 36th ASEAN Ministers on Energy Meeting (AMEM) was held in Singapore.  H.E. Mr. Chan Chun Sing, Minister for Trade and Industry of Singapore, chaired the Meeting, and H.E. Dr. Siri Jirapongphan, Minister for Energy of Thailand was the Vice Chair.  All ten ASEAN Member States sent a delegation to the Ministerial.  In addition, the Executive Director of the International Energy Agency (IEA), Dr. Fatih Birol, and the Director-General of the International Renewable Energy Agency (IRENA), Mr. Adnan Z. Amin, attended AMEM, having been invited to join discussions on “Energy Resilience and Innovation” and “Clean Energy Transformation.”  Singapore set energy connectivity and resilience as the focus of this year’s AMEM, and the ASEAN Energy Ministers endorsed several outcomes that aim to enhance both in the region, along with fostering innovation in the energy space.  These include:
    • An MOU on Energy Cooperation between ASEAN and IRENA, with an Action Plan outlining key areas of collaboration
    • A Capacity Building Roadmap on Energy Investment and Financing that was codeveloped by the International Energy Agency (IEA) and Singapore
    • A set of recommendations for the development of Green Building Codes for ASEAN Member States to drive the region’s green building industry
    • A set of recommendations to enhance liquefied natural gas (LNG) cooperation and trade in ASEAN.

More information on the outcomes of this year’s AMEM can be found here.

  • The power industry in Vietnam is undergoing a major transformation with the introduction of a wholesale electricity market.  Deputy Minister of Industry & Trade Hoang Quoc Vuong said in a recent meeting in Hanoi that the competitive electricity wholesale market will be fully operational starting in 2019 after a successful year-long pilot period.  During the pilot period, power generation corporations were able to participate directly in the electricity market.  The Electricity Regulatory Authority of Vietnam (ERAV) reported that 87 power plants have directly entered the electricity generation market with a total installed capacity of nearly 23,000MW.  Nguyen Anh Tuan, Director of ERAV, said that energy generated by the Electricity of Vietnam’s (EVN) hydroelectric plants will be introduced into the market first, followed by renewable energy produced by other companies.  The move is consistent with Vietnam’s plan to diversify its energy mix and give preference to green energy sources.  More information on this topic can be found here.

Advocacy

  • From October 30-31, a delegation of six major U.S. energy companies participated in the Council’s business mission to the 36th ASEAN Ministers on Energy Meeting (AMEM) and Associated Meetings in Singapore.  It was the eighth business mission that the Council has led to AMEM.  Enhancing resiliency and connectivity in the energy sector were major themes of this year’s AMEM.  The Council’s business mission echoed these themes.  The delegation discussed with ASEAN energy officials how the build-out of energy infrastructure, especially infrastructure related to liquified natural gas (LNG) and renewable energy sources, could increase energy security and connectivity.  The delegation also discussed the importance of digital connectivity to ensuring resilience in the energy sector.  During the mission, the delegation met with the Ministers for Energy from Malaysia, Myanmar and Thailand, as well as the Vice Ministers covering energy from Cambodia, Indonesia, the Philippines and Vietnam.  The delegation also met with the Assistant Secretary for the Bureau of Energy Resources at the U.S. Department of State, the Executive Director of the ASEAN Centre for Energy, and the Secretary-in-Charge of the ASEAN Council on Petroleum.  The Vice Chairs of the Council's Energy Committee – Chevron, ConocoPhillips, General Electric and S&P Global – participated in the mission along with Cheniere Energy, Inc. and ExxonMobil.
  • The Council, in conjunction with the ASEAN Centre for Energy, is soliciting sponsorship for a publication that will examine how Industry 4.0 is transforming ASEAN's energy sector.  The changes brought about by the innovative technologies and processes that characterize Industry 4.0 will affect multiple sectors.  In the energy sector, Industry 4.0 is most readily seen in the trend of digitalization and the implications this trend has for improving energy efficiency and the operations of energy assets, as well as the application of big data and analytics to provide deeper insight into patterns and trends.  The main goal is for the report to highlight the best practices and recommendations of our members companies that have had to adapt to digitalization in the energy sector.  We also want the report to serve as a stepping stone to deeper engagement with the ASEAN Energy Ministers during the annual ASEAN Ministers on Energy Meeting (AMEM).  The report will include:
    • An overview of the trend of digitalization in ASEAN’s energy sector
    • Case studies on how U.S. companies operating in ASEAN’s energy sector have successfully adapted to the digitalization trend
    • Recommendations for ASEAN governments on what policies to implement to best position their energy markets for the digitalization trend.

For more information on the report and sponsorship opportunities, please contact Riley Smith at rsmith@usasean.org.

Looking Ahead

On December 5, the 1st Asia Pacific LNG Investment Summit Philippines is set to take place in Manila. Aiming for big-ticket investments to become Southeast Asia’s LNG hub, the Philippines is poised to have a thriving liquefied natural gas (LNG) industry within a few years with a projected capacity of 7 million metric tons annually by 2020. Themed “Fueling Change.  Energizing Growth.”, more information about the event may be found here.

View the Council's latest Energy updates

Financial Services

Major Developments

  • Thailand’s Fintech Act is on track to be enacted by the end of the year according to industry groups involved on drafting.  The Fintech Act, which the Council first covered in 2017 in this update, will include measures on electronic transactions, know-your-customer rules and due diligence.  It will also require the government to provide open data sources to entrepreneurs to support innovation.  This work to build the regulatory infrastructure of a digital financial services system will be critical to building a thriving and modern financial ecosystem, which has been a priority of the Thai government and especially the Bank of Thailand in recent years.  Financial services regulators in ASEAN have recently been re-examining regulations on how financial institutions outsource IT systems, with changes to regulations in Thailand, Malaysia, and Vietnam
  • On October 1, Thailand’s Capital Market Supervisory Board (CMSB) issued a new outsourcing regulation that greatly reduces regulatory burden for securities companies. Unlike the previous regulation, which requires securities companies to obtain approval from the Office of the Securities and Exchange Commission (Office of the SEC) prior to outsourcing, now companies only need to notify the Office of the SEC within 15 days after they outsource business functions to external providers.
  • On August 21, the State Bank of Vietnam (SBV) issued Circular No. 18/2018/TT-NHNN (Circular 18) on the use of cloud computing services by banks.  The regulation sets out the criteria for using cloud services and how outsourcing should be handled.  It also defines a risk-based classification system for banking data.  Like the new Thai regulations, the regulation requires notification of higher risk outsourced activities. Circular 18 will become effective on January 1, 2019, replacing Circular No. 31/2015/TT-NHNN.  It applies to all credit institutions (except for people’s credit funds and microfinance institutions), foreign bank branches and organizations providing intermediary payment services.
  • Bank Negara Malaysia (BNM) has circulated an update to the Outsourcing Exposure Draft that had previously been floated in late 2017.  Some key additions in the update include the introduction of materiality thresholds to certain parts of the regulation, recognition and regulations covering cloud service providers, and additional details in the approval system.  In contrast with Vietnam and Thailand, BNM’s preference for an approval regime and continued application of certain parts of the regulation to non-material low risk outsourcing arrangements remain areas of significant concern.  Despite those challenges, which the Council continues to encourage BNM to address, implementation of the regulation would represent a significant improvement over the status quo.

Advocacy

  • The Council has continued its advocacy efforts on Bank Negara Malaysia’s Risk Management in Technology (RMiT) Exposure Draft.  A first draft of the Council’s submission based on member input has now been circulated for review. A final draft of the Council's letter will then be circulated for further review and edits.
  • On October 19, the Council also submitted comments on the new Outsourcing Exposure Draft, which was an update to the draft that was previously circulated by BNM in November 2017.  The Council's letter encourages further improvements to the regulation by expanding the application of the materiality thresholds, replacing the permit system with a notification system, and making numerous technical fixes.

View the Council's latest Financial Services updates

Food & Agriculture

Major Developments

Speaking at a conference in Hanoi earlier this month, Vietnamese government leaders shared plans and goals of the Government on its agricultural restructuring efforts.  Deputy Minister of Agriculture and Rural Development Ha Cong Tuan said the agriculture sector will aim to grow at a minimum of 3 percent per year, and labor productivity will improve 3.5 percent a year by 2020.  Deputy Minister Tuan also announced plans to review and develop three product lines: the national key product group, the provincial key product, and products under the model “one commune, one product.”  At the same conference, Deputy Prime Minister Trinh Dinh Dung reaffirmed the government’s goals to restructure and build a modern, smart agriculture sector that is globally competitive, while at the same time emphasizing the important roles of both the Vietnamese people and businesses in the restructure. 

Advocacy

The National Assembly of Vietnam is currently deliberating the draft Law of Animal Production, which contains two provisions that may affect imports of U.S. livestock products:  a ban on the import of livestock products produced using domestically prohibited substances, and a requirement for inspections to be conducted on a “plant-by-plant” basis in the exporting country for imports of high-risk livestock products. 

View the Council's latest Food & Agriculture updates

Health & Life Sciences

Major Developments

On November 2, Finance Minister Lim Guan Eng tabled before parliament the 2019 national budget “A Resurgent Malaysia, A Dynamic Economy, A Prosperous Society.”  Of particular focus for HLS committee members, Malaysia’s 2019 national budget allocated RM29 billion (US$6.95 billion) to healthcare, representing 9.2 percent of 2019’s total budget and a 7.8 percent increase from last year’s RM27 billion allocation.  The healthcare budget seeks to address issues laid out in the ruling Pakatan Harapan (PH)’s election manifesto such as rising healthcare costs, expensive health insurance and inadequate public-private collaboration to extend service coverage for rural citizens.

The Malaysian Government, in partnership with the private insurance industry, will also introduce a Health Protection Fund for the B40 group which will provide free coverage for four critical illnesses up to RM8,000 and a maximum of 14 days replacement income at RM50 per day, starting January 1, 2019.  In addition, to encourage a higher insurance take-up rate among the B40 group, the Government also proposed to waive stamp duty on certain Bank Negara Malaysia insurance products for two years from January 1, 2019 and offered tax relief for insurance premiums.

The Malaysian Government will also expand public-private partnership programs in which the government will invest in healthcare facilities while the private sector will deliver services to patients.  No further details have been provided yet.

Most analysts were surprised that the PH's maiden budget and its healthcare allocation exceeded last year's under the then-Barisan Nasional Government, given Malaysia's current fiscal and debt issues. However, others questioned whether the increased healthcare budget was enough to cover growing costs and if the budget was allocated to the right areas.

Advocacy

The Council has collected feedback and recommendations from members on how Thailand’s Innovation List affects U.S. healthcare companies.  Introduced in 2015, the Innovation List includes products deemed to have been developed or improved through research and development by Thai majority-owned companies.  Companies with healthcare products on the Innovation List are granted special government procurement privileges.  For example, Thai public hospitals are mandated to spend at least 30 percent of their budget on Innovation List products without undergoing a public procurement process.  Members’ input will be used to update stakeholders and in our engagements with the Thai Government.  If you have any questions, please contact Lucius Lee at llee@usasean.org.

Looking Ahead

The Council's Health & Life Sciences Committee will hold its fourth quarter committee call on Monday, December 3.  During the call, we will review the committee’s recent work and discuss members’ priority issues and desired activities for next year.  To register, please click here.  If you have any questions, please contact Lucius Lee at llee@usasean.org.

View the Council's latest Health & Life Sciences updates

ICT

Major Developments

  • Malaysia recently announced its 2019 budget and introduced a tax on imported online services.  Foreign online service providers will have to register with the Royal Malaysian Customs Department and a service tax on imported online services will go into effect on January 1, 2020.
  • Prime Minister Prayut Chano-cha has ordered a review of Thailand’s Cybersecurity Bill, which continues to draw industry outcry.  For more information, see our Thailand Update here.  Concerns have also come from the National Cybersecurity Committee and Thailand Information Security Association (TISA), which have expressed that the Bill could have a potentially negative impact on business and privacy.  For more information, see our Thailand Update here.
  • The State Bank of Vietnam (SBV) recently issued Circular No. 18/2018/TTNHNN (Circular 18).  Most notably, Circular 18 introduces new regulations on the use of cloud computing services in banking as well as regulations on outsourcing cloud computing services to third party service providers.  For more information, see our ICT Update here.
  • On October 18, Singapore’s Health Promotion Board (HPB) and Integrated Health Information Systems (IHiS) said in a joint statement that unauthorized access to 72 accounts on HPB’s HealthHub portal had occurred on four separate days.  For more information, see our ICT Update here.
  • Indonesia’s Ministry of Communications and Information Technology (KOMINFO) issued Minister of KOMINFO Regulation No. 10 of 2018 (Regulation 10/2018) which replaces Minister of KOMINFO Regulation No. 25 of 2015 on the Universal Service Obligation (USO) for Telecommunications and Information Technology (KPU TIK).  For more information, see our ICT Update here.
  • Thailand’s Ministry of Commerce announced plans to launch feasibility studies on the application of blockchain technology to intellectual property (IP) registration, agriculture supply chains and trade finance.  For more information, see our ICT Update here.

Advocacy

  • On November 3, Vietnam's Ministry of Public Security (MPS) published the official draft decree for the Law on Cybersecurity (LOCS).  The Council is seeking members' comments on the official draft decree by December 2.  Please submit all comments on the LOCS draft decree to Ella Duangkaew at eduangkaew@usasean.org and Vu Tu Thanh at tvu@usasean.org by December 2.
  • On October 30, the Council, in partnership with AsiaDPO, hosted a technical workshop with the Ministry of Digital Economy and Society (MDES) of Thailand to discuss the implementation of the recently revised Thai Personal Data Protection Bill (PDPB).  For more information on the workshop, or for a copy of the Council's joint submission on the PDPB, please contact Ella Duangkaew at eduangkaew@usasean.org.
  • On October 22, the Council held a daylong workshop in Yogyakarta alongside the October meeting of the ASEAN Customs Procedures and Trade Facilitation Working Group (CPTFWG).  More information about followup opportunities and the event’s outcomes will be distributed soon.
  • On October 12, the Council submitted industry comments on Thailand's revised draft Cybersecurity Bill.  For more information, or for a copy of the Council's joint submission on the Cybersecurity Bill, please contact Ella Duangkaew (eduangkaew@usasean.org)

View the Council's latest ICT updates

Infrastructure

Advocacy

On November 8-9, the Council conducted a business mission to the ASEAN Transport Ministers (ATM) Meeting in Bangkok, Thailand. Led by Council’s Senior Vice President and Regional Managing Director, Ambassador Michael Michalak, six U.S. companies engaged senior ASEAN transport officials to discuss safety and opportunities to advance transport infrastructure development in ASEAN. This year marks the Council’s third consecutive meeting with all ten ASEAN Transport Ministers, Senior Transport Officials, along with the Secretary-General of ASEAN, H.E. Dato Lim Jock Hoi. During the mission, the Council delegation reiterated that safety should be addressed holistically in all phases of infrastructure projects from planning, design, construction, turnover, operations and maintenance.  Going forward, the Council will be organizing a “Post-ASEAN Transport Ministers Meeting Roadshow” to the Philippines, Vietnam and Thailand in the first quarter of 2019.  The primary objective of this roadshow will be to demonstrate how the capabilities and experiences of U.S. companies can be utilized as solutions to current challenges across the full transport infrastructure value chain.  The Council’s Infrastructure Committee will be shaping the roadshow’s agenda over the next few months. For feedback and inputs, please contact Council’s Infrastructure Senior Manager, Sunita Kapoor at skapoor@usasean.org.

View the Council's latest Infrastructure updates

Country Highlights

Brunei

Major Developments

Brunei has yet to ratify CPTPP and has not made this timeline public.  A possible reason for Brunei’s hesitation is its concerns over its rights to develop its coal reserves.  While the issue was addressed in the negotiations, ongoing internal domestic discussions could delay ratification.  Brunei’s excitement could also be lessened with the new deal as growth projections are not as high.  The Peterson Institute for International Economics estimates that Brunei’s GDP will grow by over two percent under CPTPP compared to six percent under TPP.  While Brunei is expected to gain US$1 billion over the next five to ten years according to the Ministry of Foreign Affairs and Trade, it may be carefully considering its option to maximize growth potential.  In addition to the CPTPP, there is an ongoing Regional Comprehensive Economic Partnership (RCEP) negotiation - both are considered as possible pathways towards a larger deal that could encompass much of the Asia-Pacific region.  CPTPP and RCEP differ in objectives and scope; most notably RCEP involves 16 countries including the 10 ASEAN countries and Australia, China, India, Japan, New Zealand and South Korea.  If concluded, RCEP will become the world’s largest trading bloc covering a third of the world’s GDP of approximately US$49.5 trillion and accounting for 3.4 billion people.  The consolidation of trade rules and reduction in tariffs under RCEP could allow Brunei to increase its trade with Asia’s biggest economies and allow greater integration of manufacturing value-chains among RCEP members.

View the Council's latest Brunei updates

Cambodia

Major Developments

  • At a high-level seminar on the Fourth Industrial Revolution (4IR) and regional cooperation, Jayant Menon, ADB lead economist on trade and regional cooperation called on the Cambodian Government to step up its efforts to align its institutions and policies with the 4IR, which Menon said is already having an impact on multiple aspects of Cambodian society and economy.  He highlighted that developing nations such as Cambodia have the advantage of bypassing traditional industrial development phases and taking advantage of the technology that developed countries are utilizing, in a process Menon called “technological leapfrogging.”  This process is particularly crucial for Cambodian small and medium enterprises (SMEs), which make up a significant bulk of business and employment in Cambodia, as they work towards participating in regional and global trade. Pursuing educational reforms that prioritize science, technology, engineering and mathematics (STEM) will help to train a new generation of skilled laborers, for which Cambodia is currently facing a deficit, and make way for a more vibrant, innovative and knowledge-based economy.
  • On November 6, at the regional conference “Combatting Falsified and Substandard Medicine” in Phnom Penh. Cambodia’s Ministry of Health signed a joint declaration with China, Laos, Myanmar, Thailand and Vietnam that recognizes the threat posed by counterfeit medicine and commits the signatories to cracking down on its distribution.   Concerns over the issue of counterfeit drugs have grown amidst a rising number of scams for fake medicine among Cambodian Facebook users, scams which pose both financial and health risks for citizens.  Mr. Sophana said that the Royal Government will investigate and take legal action against online distributors selling counterfeit and substandard medical products.  Also speaking at the conference, Prime Minister Hun Sen told authorities to cooperate in locating counterfeit medicine and develop exchange programs to investigate supply chains and distribution companies to help identify criminals.  The Prime Minister added that cooperation between state and local governments and private institutions is critical to preventing the circulation of counterfeit medication.

View the Council's latest Cambodia updates

Indonesia

Major Developments

  • The World Bank’s 2019 Ease of Doing Business Index saw Indonesia drop from number 72 to number 73.  Indonesia’s ranking puts it behind other ASEAN neighbors including Singapore (2), Malaysia (15), Thailand (27) and Brunei (55).  Under President Jokowi, Indonesia’s ranking has improved from 120 in 2014 to a record high of 72 in 2018.  President Jokowi in the past emphasized the importance of Indonesia improving its Ease of Doing Business ranking and even stated his target of elevating Indonesia to number 40 in the rankings.  However, changes in President Jokowi’s priorities as he prepares to mount a reelection campaign in 2019 temporarily sidelined more extensive reform efforts. Indonesian Investment Coordinating Board (BKPM) head Thomas Lembong recently stated to the media that the government has lost its focus in improving the ease of doing business in Indonesia.  He urged the government to carry out a comprehensive review process, because Indonesia will be left behind by investors as other countries work towards improving their business environment.  
  • On October 2, the Indonesian government canceled its plan to increase the excise tax for tobacco and tobacco products in 2019.  The plan had proposed an increase of around 10 percent.  Last year, Indonesia’s House of Representatives proposed a draft law on the production, distribution and excise taxes on tobacco although the status is currently not clear as it did not receive the government’s support.  Industry stakeholders welcomed the government’s cancellation of the tax, citing pressure from Jakarta’s 1011 percent increase of the tobacco excise tax every year since 2014.  The government’s plan to simplify tobacco taxation has also been postponed.  Currently, different excise taxes are imposed on different tobacco products.  Clove cigarettes are charged a 10.9 percent tax, tobacco cigarettes are charged 13.5 percent and handmade cigarettes are charged 7.3 percent.  Indonesia’s tobacco tax contribution to the country’s coffers have increased by around 10 percent.  Indonesia is the fourth largest cigaretteproducing nation in the world.  In addition to providing employment for millions of Indonesians, the industry is a significant contributor to the national tax revenue.  The government targets IDR165.5 trillion from the tobacco excise in 2019 which represents a 6.5 percent increase from 2018.

Advocacy

  • On October 30, the Council submitted our industry letter on the latest Draft Amendment to Indonesia's GR 82/2012 on Electronic Systems and Transaction Operations to Cabinet Secretary Pramono Anung, who is overseeing the harmonization process. The Draft Amendment is expected to be issued in November although the government has not announced a set deadline. While the Draft Amendment is an improvement to the original regulation as it allows the offshoring of "high electronic data" and "low electronic data", it still states that onshoring is required for "strategic" data. "Strategic data" will be stipulated by the President as per the recommendation by the relevant sectoral agencies. In line with the Council's perspective and our members' feedback per June 2018, we are encouraging the Draft Amendment be signed in its latest form and then continuing to work with the Government of Indonesia to edit burdensome provisions, particularly keeping in mind the risk of a new, more nationalist government assuming power given the upcoming election in 2019. Please contact Artha Sirait (asirait@usasean.org) and Angga Antagia (aantagia@usasean.org) for more information.

View the Council's latest Indonesia updates

Laos

Major Developments

  • A trilateral free trade zone linking China, Laos and Thailand will be developed and established in the next few years.  The planned trade zone will waive tariffs and valueadded tax on imports from countries not bordering China, such as other ASEAN nations, and strengthen trade between China and the Mekong region.
  • Construction on the ChinaLaos Railway has seen major developments, including key progress toward the critical Luang Prabang cross-Mekong River bridge.  The Railway broke ground in December 2016 and is more than 20 percent complete as of August 2018.  For more information, see our Laos Update here.
  • On October 4, Deputy Prime Minister Sonexay Siphandone announced in a meeting that the search for victims of the July collapse of the XePian Dam in the Sanamxay District of the southern province of Attapeu has ceased.  The search is set to immediately resume upon receipt of any new information about a missing person.  For more information, see our Update here.

View the Council's latest Laos updates

Malaysia

Major Developments

  • On November 2, Finance Minister Lim Guan Eng tabled before parliament the 2019 national budget “A Resurgent Malaysia, A Dynamic Economy, A Prosperous Society” (the full text of the budget can be found here).  Despite the tight financial situation that Pakatan Harapan inherited, there were no drastic cuts made to the budget.  To improve its financial position the government plans to introduce a digital tax on imported online services, a sugar tax on sweetened beverages, a departure levy for outbound air travelers, an increase in Real Property Gains Tax and stamp duties on properties exceeding RM 1 million.  In line with the government’s emphasis on improving quality of life, the Education Ministry and the Health Ministry received larger allocations this cycle.  Allocations were specifically made for improving or upgrading schools, developing and providing training programs at community colleges and polytechnics, programming for breast cancer awareness, HPV vaccination and other public health issues.  Notably, the Budget introduced a National Health Protection Fund and a Health Protection Scheme (Peka) that will provide free coverage for four critical illnesses and 14 days replacement income for Malaysia’s B40.  The Finance Minister also announced plans to accelerate Industry 4.0 adoption in both infrastructure and capacity building.  Institutional reforms such as the Fiscal Responsibility Act and a new Government Procurement Act were announced to increase transparency and reduce inefficiencies.
  • The People’s Justice Party’s (PKR) internal elections, which began on September 22, have seen fierce competition over its Deputy President position currently held by Minister of Economic Affairs Azmin Ali.  The incumbent is currently locked in a fierce fight against Rafizi Ramli.  While official results have yet to be announced by PKR’s Central Election Committee, Azmin has hinted at his victory over Rafizi in a social media post.  Unofficial results show that Azmin is leading with 67,449 votes to Rafizi’s 62,716.  Without an official announcement, it is still possible that the situation may shift in Rafizi’s favor.  Rafizi is viewed as a member of PKR President Anwar Ibrahim’s faction.  In the event of an Azmin Ali victory, it may be necessary for Anwar to ease internal tensions to ensure party unity.  PKR’s internal election may also affect the Cabinet’s composition as PKR may submit names to the Prime Minister for consideration, in light of the election results.  In a recent interview with the Straits Times, Prime Minister Mahathir stated that he is open to the idea of a Cabinet reshuffle but maintained that the final decision rests solely with him as head of the Cabinet.

Advocacy

The Council has continued its advocacy efforts on Bank Negara Malaysia’s Risk Management in Technology (RMiT) Exposure Draft.  This draft sets out extensive rules for financial institutions' technology risk management frameworks, covering topics including cybersecurity management, cryptography, data center management, standards and regulator notification of technology projects. A first draft of the Council’s submission has been circulated based on member input.  A final draft of the Council's letter will then be circulated for further review and edits.

View the Council's latest Malaysia updates

Myanmar

Major Developments

On October 3, Reuters reported that three European Union officials said the EU is considering placing trade sanctions on Myanmar.  If imposed, the sanctions could place a strain on Myanmar’s clothing industry. According to Al Jazeera, the European Chamber of Commerce estimates that trade sanctions, specifically the removal of tariff-free trading with the EU under its Everything But Arms (EBA) program, would harm the livelihoods of 500,000 households and affect up to 2 million people.

Talk of imposing sanctions by the EU comes after the release of a United Nations report in August that identified “genocidal intent” as a motivation for Myanmar army operations in Rakhine state last year targeting Rohingya Muslims.  Just prior to the release of the UN report, the United States, in a rare move, imposed sanctions on two military units, in addition to four military and police commanders, for what the Treasury Department called “violent campaigns” against Rohingya Muslims and other ethnic minority communities, “including ethnic cleansing.”  (For more information on the UN report, see our previous update here.)

Looking Ahead

  • December 10: Myanmar SME Workshop
    Just prior the Council's 2018 Senior Executives Business Mission to Myanmar December 11-13, the Council is pleased to invite members’ participation in a one-day Small and Medium Enterprise (SME) workshop entitled “Digital Transformation to Boost SME Competitiveness” in Yangon. This workshop will be conducted in close collaboration with the US ICT Council for Myanmar, Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI), and Max Myanmar.  Click here to see the workshop draft agenda. Please contact Vinsensius Kangen at vkangen@usasean.org with any questions or to express interest.
  • On December 11-13 the Council will hold its annual business mission to Myanmar.  Requested meetings for the mission include:  President U Win Myint, State Counsellor Daw Aung San Suu Kyi, Key Cabinet Ministers, Members of Parliament including Speaker of the Pyithu Hluttaw (Lower House) U T Khun Myat, Myanmar Investment Commission, and the UMFCCI.  Please contact Jack Myint at jmyint@usasean.org with any questions or to express interest.

View the Council's latest Myanmar updates

Philippines

Major Developments

  • The Philippines and China “elevate their relationship into one of comprehensive, strategic cooperation” after signing 29 deals during Chinese President Xi Jinping’ state visit to Manila on November 20-21. Among those signed were a memorandum of understanding on oil and gas, cooperation on China's Belt and Road Initiative, and an infrastructure cooperation program between the two countries.
  • More than a century after one of the most gruesome clashes of the Philippine-American war, the “Balangiga Bells” are officially being returned to the Philippines.  Speaking at an Air Force base close to Cheyenne, Wyoming on November 14, where two of the three bells are located, U.S. Defense Secretary Jim Mattis said the return of the bells will “smooth the bonds that were tested but never broken by war.”  The two bells in Wyoming will first be shipped to a facility in Philadelphia, before joining the third bell in South Korea.  All three are expected back in the Philippines by the end of the year.  President Rodrigo Duterte had earlier asked for the bells in his state of the nation address in July.
  • A much anticipated update to the 10th Foreign Investment Negative List (FINL) issued on May 29, 2015, the 11th FINL brought only modest changes and liberalized a few sectors including internet business, adjustment companies, and practice of professions subject to reciprocity.  Foreign equity was increased to 40 percent in private radio communications networks and contracts for the construction and repair of locally-funded public works.
  • At the sidelines of the 26th Asia-Pacific Economic Cooperation Summit held on November 17-18 in Papua New Guinea, Philippine Secretary of Trade and Industry Ramon M. Lopez met with Deputy US Trade Representative for Asia, Europe, the Middle East, and Industrial Competitiveness Ambassador Jeffrey D. Gerrish. Philippine news sources reported that initial talks for an FTA may come in the form of a “scoping exercise” next year to determine the FTA’s future coverage.
  • The Organization for Economic Cooperation and Development (OECD) adjusted its economic growth forecast from 6.7 percent for 2018 and 2019 to 6.4 percent and 6.5 percent respectively.  Although the forecast was reduced, OECD still rates the Philippines as exhibiting good performance being above the ASEAN average.
  • The Philippines ranked lower in the World Bank’s Ease of Doing Business Report 2019, placing 124th out of 190 countries from 113th previously, largely due to higher business registration costs and increased time for imports inspection.
  • On November 9, a special court sentenced Congresswoman and former First Lady Imelda Marcos to a maximum of 77 years in prison for violating anti-corruption laws. 

Advocacy

The Council strongly supports a US-Philippines free trade agreement.  On November 1, the Council hosted Assistant USTR Karl Ehlers for a briefing on his recent trip to the Philippines.  AUSTR Ehlers highlighted policy engagements in Southeast Asia and recalled when Leaders met in November 2017 and agreed in a Joint Statement to discuss an FTA under the U.S.–Philippines TIFA.  He also discussed the October 22 Joint Statement of U.S. Trade Representative Robert E. Lighthizer and Philippine Secretary of Trade and Industry Ramon M. Lopez that took stock of recent achievements in the TIFA process and demonstrated good cooperation in agriculture, auto regulation and standards, and e-payments.

Looking Ahead

On December 5, the 1st Asia Pacific LNG Investment Summit Philippines is set to take place in Manila.  Aiming for big-ticket investments to become Southeast Asia’s LNG hub, the Philippines is poised to have a thriving liquefied natural gas (LNG) industry within a few years with a projected capacity of 7 million metric tons annually by 2020.  Themed “Fueling Change.  Energizing Growth.”, more information about the event may be found here.

View the Council's latest Philippines updates

Singapore

Major Developments

  • On November 23, the People’s Action Party of Singapore announced the new office bearers of its 35th Central Executive Committee (CEC). Finance Minister Heng Swee Keat will serve as the first Assistant Secretary General, while Minister of Trade & Industry Chan Chun Sing was selected as Assistant Secretary General. Singapore’s third and current Prime Minister Lee Hsien Loong remains as Secretary General.  Minister Heng’s appointment heralds strong indications via party insiders and media analysts that he might be the next Prime Minister of Singapore as Prime Minister Lee himself was a former first Assistant Secretary General of the party.  He is also expected to be named Deputy Prime Minister sometime next year. Minister Heng was widely tipped to be the leading frontrunner for the Prime Minister role until a medical lapse in 2016.  His “miraculous recovery” as described by The Straits Times has put him back on track for potential eventual premiership. Singapore’s first Prime Minister Lee Kuan Yew once said that whoever takes on the PM role needs to have helmed significant ministries such as the Ministry of Defense, Ministry of Education, and Ministry of Finance.  With this criterion in mind, Minister Heng certainly checks the boxes. He was previously Minister of Education (2011 to 2015), Managing Director for the Monetary Authority of Singapore (2005 to 2011), Principal Private Secretary to the then Senior Minister Lee Kuan Yew (1997 to 2000), and also served in the Singapore Police Force.  He also has a more substantive international reputation vis à vis other leading contenders due to his stint at the Finance Ministry, and with Singapore chairing ASEAN in 2018.  Former Prime Minister Lee Kuan Yew also once described him as the “best principal private secretary I have ever had.”  Constitutionally, the next general election must be held by 15 January 2021, though government insiders have frequently commented to expect late 2019 or early 2020 to be a more realistic timeframe.
  • On November 12, Singapore upgraded its Free Trade Agreement (FTA) with China during Chinese Premier Li Keqiang’s first official visit to Singapore.  China will have access to Singapore’s courier and environmental sectors and will be able to deliver parcels and documents in Singapore, as well as provide refuse collection, refuse disposal and waste management services.  One additional Chinese bank will have full banking privileges.  Singapore will have more access to China’s market including the legal, maritime and construction services sectors.  More Singapore petrochemical exports will also qualify for preferential treatment.  Petrochemical products are among Singapore’s top exports to China, accounting for one quarter of Singapore’s total exports to China last year.
  • The Ministry of Health has released fee benchmarks for 222 common surgical procedures by private surgeons to curb rising healthcare costs.  Singapore has seen healthcare costs rise sharply with average total in-patient bill in private healthcare settings increasing by 9 percent each year since 2007.
  • Internet surfing separation (ISS) introduced after the SingHealth cyberattack incident has increased patient wait times, decreased productivity, and increased staff fatigue according to the Ministry of Health’s chief data advisor.  He opines that the operational challenges will lead to manpower and financial costs with reduced employee and patient satisfaction.

Advocacy

Singapore’s Law Ministry is seeking public feedback on reforms to its intellectual property (IP) dispute resolution system.  The Ministry is proposing a Fast Track regime for IP dispute resolution by consolidating cases under the High Court.  Currently, IP disputes are heard in the High Court, State Courts and the Intellectual Property Office of Singapore (IPOS) depending on the nature of the IP right, the type of proceeding and the value of the claim.  For comments on reforms to Singapore’s IP dispute resolution system, Council members may email Sunita Kapoor at skapoor@usasean.org by November 28 for the Council to consolidate its submission.  Public consultation will end on November 30.  The full text of the public consultation paper and IP Dispute Resolution Committee report can be found here.

Looking Ahead

The Council has recently signed a Memorandum of Understanding with the U.S. Embassy in Singapore to create a series of short videos highlighting American Corporate Excellence ("ACE") and its accompanying programs or partnerships. By publicizing the contributions of the 4,200 American companies based in Singapore to the region, the series aims to improve public opinion and generate positive perceptions about U.S. businesses.  The Council has invited the embassy to conduct a briefing session for companies that are interested in participating in this project.  The November 19 video can be viewed here: November 19, Briefing Session on American Corporate Excellence Video Series

View the Council's latest Singapore updates

Thailand

Major Developments

  • As Thailand prepares to become Chair of ASEAN in 2019, it is also expected to be gearing up for a general election.  The elections are currently set for February 23, and Deputy Prime Minister Wissanu Kreangarm has said that a new government should be in office by early June.
  • At the end of September, Thailand held public hearings on the first tranche of amendments to the 2017 Customs Act.  The consultation proposes 17 changes to the law, which can be found in the consultation document at this link.  For more information, see our Customs Update here.
  • The Thailand Ministry of Public Health recently sought the Cabinet’s approval on a bill to establish a national health policy commission led by Prime Minister Prayut Chano-cha, despite doubts about its usefulness and possible negative impact.  For more information, see our Health and Life Sciences Update here.
  • Prime Minister Prayut Chano-cha has ordered a review of Thailand’s Cybersecurity Bill, which continues to draw industry outcry.  For more information, see our Thailand Update here.  Concerns have also come from state agencies like the National Cybersecurity Committee and the Thailand Information Security Association (TISA), which have expressed concern that the bill could have a potentially negative impact on business and privacy.  For more information, see our previous Thailand Update here.
  • A tourism stimulus package is set to go before the Cabinet to mitigate the sharp decline in tourists felt during the most recent tourism peak season. According to Deputy Prime Minister Somkid, the stimulus package is likely to be implemented between late November through December 2018, in time for foreign tourists to make the necessary plans for their trips.  For more information, see our Thailand Update here.

Advocacy

  • Technical Workshop on PDPB Implementation:  On October 30, the Council, in partnership with AsiaDPO, hosted a technical workshop with the Ministry of Digital Economy and Society (MDES) and the Electronic Transactions Development Agency (ETDA) within MDES, to discuss the implementation of the recently revised Personal Data Protection Bill (PDPB). The workshop directly follows a public hearing period for the PDPB, for which the Council submitted joint industry comments on October 2.  For more information on the workshop, or for a copy of the Council's joint submission on the PDPB, please contact Ella Duangkaew (eduangkaew@usasean.org).
  • Thailand's Innovation List:  The Council has collected feedback and recommendations from members on how Thailand’s Innovation List affects U.S. healthcare companies. Introduced in 2015, the Innovation List includes products deemed to have been developed or improved through research and development by Thai majorityowned companies.  Companies with healthcare products on the Innovation List are granted special government procurement privileges.  For example, Thai public hospitals are mandated to spend at least 30 percent of their budget on Innovation List products without undergoing a public procurement process.  Members’ input will be used to update the Office of the U.S. Trade Representative and other stakeholders, and in our engagements with the Thai Government.  If you have any questions, please contact Lucius Lee at llee@usasean.org.
  • Cybersecurity Bill:  On October 12, the Council submitted industry comments on Thailand's revised draft Cybersecurity Bill.  For more information, or for a copy of the Council's submission, please contact Ella Duangkaew (eduangkaew@usasean.org)

View the Council's latest Thailand updates

Vietnam

Major Developments

  • On November 12, the Vietnam National Assembly voted to ratify the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), becoming the seventh country to ratify the trade deal.  The CPTPP had already been formally ratified by Australia, Canada, Japan, Mexico, New Zealand, and Singapore, and will take effect by the end of the year.  Vietnam is expected to be one of the members with the most to gain from the CPTPP, and the Ministry of Planning & Investment has projected a 1.3 percent GDP boost and a 4 percent increase in exports by 2035.
  • The State Bank of Vietnam (SBV) recently issued Circular No. 18/2018/TT-NHNN (Circular 18) which includes three chapters, six sections and 55 articles regulating information security in banking operations.  Most notably, Circular 18 introduces new regulations on the use of cloud computing services in banking as well as regulations on outsourcing cloud computing services to third party service providers.  Among other things, section 6 of Circular 18 sets out some critical steps financial institutions (FIs) must follow before they outsource cloud computing services.  Risk assessment is an essential component throughout these steps.  First and foremost, FIs must determine the class of information and the level of information system to be outsourced to third party providers.  There are three classes of information and three levels of information systems based on level of complexity and confidentiality.  Circular 18 provides clear instructions on the classification of these systems.  If a third party is hired to perform all administration-related activities of information systems classified at level 2 or higher, FIs will be required to submit a risk assessment report to SVB, which reserves the right to examine the report on a case-by-case basis.  In short, SVB employs a notification system which requires FIs to send a report rather than apply for approval.  However, it is unclear how frequently and what factors SVB shall choose to review the risk assessment report.  Section 6 also recommends several factors FIs should consider when selecting third party providers and specifies provisions an outsourcing contract must entail.  Circular 18 also lists out minimum contents FIs must include in their own information security regulations.  These regulations must be signed by the legal representative and implemented throughout the organization.

    Cloud technology has evolved and matured considerably, disrupting all sectors including banking.  Governments have now recognized that it is vital to all institutions’ operations and have taken different stances on the use of cloud technology.  The regulations vary by country in the region.  In general, FIs are mandated to perform the necessary due diligence and apply good governance and risk management practices to protect sensitive customer data. Singapore requires FIs to adopt a risk-based approach to assure that the level of oversight and controls are commensurate with the materiality of the risks posed by cloud services. However, the Monetary Authority of Singapore (MAS) no longer expects FIs to pre-notify MAS of any outsourcing agreements since 2016.  In contrast, Bank Negara Malaysia (BNM) is proposing a system which requires the Bank’s approval for several outsourcing arrangements including arrangement on cloud computing services.  BNM also expects that FIs maintain control over third party service providers and their subcontractors.  Vietnam’s utilization of a notification system reflects the government’s intention to create a business-friendly environment while retaining some control in conservative sectors.

    Circular 18 will become effective on January 1, 2019, replacing Circular No. 31/2015/TT-NHNN.  It applies to all credit institutions (except for people’s credit funds and microfinance institutions), foreign bank branches and organizations providing intermediary payment services.

Advocacy

  • On November 3, Vietnam's Ministry of Public Security (MPS) published the official draft decree for the Law on Cybersecurity (LOCS).  The Council is seeking members' comments on the official draft decree by December 2.  Please submit all comments on the LOCS draft decree to Ella Duangkaew (eduangkaew@usasean.org) and Vu Tu Thanh (tvu@usasean.org).  Please contact Thanh and Ella with any questions or for a full update on the official release with key take-aways, preliminary analysis and next steps.
  • On November 4-11, the Council organized a U.S. Innovation Study Tour for the Vietnam Prime Minister’s Economic Advisory Team (PMEAT), traveling to Washington, DC, Atlanta, GA, and San Francisco, CA.  The delegation, led by Chairman of PMEAT Dr. Vu Viet Ngoan, aimed to gain insights on how various economic sectors in the United States are inventing and re-inventing themselves.  Throughout the trip, members also had opportunities to raise advocacy issues related to cybersecurity, the digital economy, tax policies, and various market access challenges.

View the Council's latest Vietnam updates