Phuket, Thailand, 9 June 2010

H.E. Mr. Pradit Phataraprasit, Vice-Minister of Finance, Kingdom of Thailand,

Honourable Dr. Somchai Sujjapongse, Director-General of Royal Thailand Customs Department and Chair of the 19th Meeting of ASEAN Customs Directors-General,

Honourable Mr. Kunio Mikuriya, Secretary General of the World Customs Organisation,

Honourable Dato’ Seri Hj. Ibrahim bin Jaapar, Director-General of Royal Malaysia Customs and Out-going Chair of ASEAN Customs Directors-General Meeting,

Distinguished Directors-General of Customs of ASEAN Member States,

Distinguished delegates,

Ladies and gentlemen,

Good morning!

It is indeed an honour to join you again at this 19th Meeting of the ASEAN Directors-General of Customs. At the outset, let me convey the best wishes of H.E. Dr. Surin Pitsuwan, Secretary-General of ASEAN for a successful meeting in achieving concrete outcomes to support the establishment of a Single Market and Production Base under the ASEAN Economic Community (AEC) by 2015.

I would like to take this opportunity to extend my sincere appreciation to the ASEAN Customs Directors-General and their officials for the progress achieved during the period June 2009 to May 2010 under the able stewardship of Honourable Dato’ Seri Hj. Ibrahim bin Jaapar, Director-General of the Royal Malaysian Customs Department. At the same time I would like to welcome the new Chair, Dr. Somchai Sujjapongse, Director-General of Royal Thailand Customs and wish him all the best in moving ASEAN Customs cooperation to a new height. The ASEAN Secretariat stands ready to assist you in this important effort.

I recall last year in my remarks at the 18th Meeting of the ASEAN Customs Directors-General I had highlighted that despite the bleak economic outlook in 2009, the ASEAN Economic Ministers had launched several initiatives to support regional integration. These included the signing of the ASEAN Trade in Goods Agreement (ATIGA) and the ASEAN Comprehensive Investment Agreement (ACIA); the conclusion of the seventh package of services liberalisation under the ASEAN Framework Agreement on Services (AFAS) and; the completion of several free trade agreements with ASEAN’s Dialogue Partners such as Australia and New Zealand, South Korea, China and India.

I am pleased to inform you today that with the strong commitment and concerted efforts of all ASEAN Member States, the ATIGA entered into force on 17 May 2010; and 1 January 2010 saw the full realisation of the ASEAN-China and ASEAN-Republic of Korea FTAs and the entry into force of the ASEAN-Australia-New Zealand and the ASEAN-India Trade in Goods Agreements. While these are benchmark achievements for ASEAN, it will have significant implications for the work of Customs Administrations in ASEAN. Indeed Customs will be the frontier for the successful implementation of these agreements.

As all of you may be aware, beginning 1 January 2010 additional 7,881 tariff lines for ASEAN-6 have came down to zero tariffs, bringing the total tariff lines traded under the Common Effective Preferential Tariffs for ASEAN Free Trade Area (CEPT-AFTA) to 54,467 or 99.65% of the total tariff lines making this the most tangible high-impact outcome for ASEAN. Besides, the average tariff rate for these countries decreased from 0.79% in 2009 to just 0.05% in 2010. As for the CLMV (Cambodia, Lao PDR, Myanmar and Viet Nam) countries 99.86% of their tariff lines were also brought down to 0-5% tariff. We are also now addressing non-tariff barriers to trade that may negate any gains made in tariff liberalisation. For the ASEAN-China and ASEAN-Republic Korea FTAs, 90% of the tariff lines were brought down to zero tariffs. Similarly, 1 January 2010 also saw the entry of certain goods from Australia, India and New Zealand into ASEAN at concessional tariff rates.

I must say that all these developments has made the year 2010 a year of implementation for Customs where business is not usual – in having to deal with the multitude of new requirements, forms and procedures, including having to address the “spaghetti bowl” effect with regard to the rules of origin when considering tariff concessions under the various FTAs. Added to these are the increasingly high expectations of the business sector to benefit from these tariff concessions that would entail low transaction costs. Indeed, any additional burden or delay in the application and approval processes to enjoy the tariff concessions would only negate the gains made in tariff concessions for the business community in our region.

The new developments also transforms the traditional role of Customs related to revenue collection to that of facilitating legitimate trade and ensuring safety in terms of protecting citizens by ensuring the imported goods are safe and deter illegal entry of goods. The Customs of today will have to balance its traditional role with the new roles as the region becomes more integrated within and with the global economy.

Excellencies, Distinguished Delegates, Ladies and Gentleman

Let me take a moment to inform you of some of the key developments in the AEC since our last meeting. On the macroeconomic front, ASEAN has emerged in good shape despite from the current global crisis, reflecting the region’s continued dynamism and the positive impact of ASEAN community building efforts as a whole. The region is expected to grow between 4.9% and 5.6% in 2010 from a meagre 1.5% last year. Our economies have rebounded strongly due to the resilience of domestic demand, a robust financial system and sound economic framework, recovery in global trade and financial markets as well as swift and appropriate policy responses. These favourable conditions and pro-business policies have cushioned ASEAN economies from the impact of the external shocks and helped to attract investments again quickly.

Similar to trade integration, ASEAN is also making waves in financial integration. A landscape study is being undertaken to promote further financial integration in ASEAN. Under the ASEAN Plus Three process with China, Japan and South Korea, the US$ 120 billion Chiang Mai Initiative Multilateralisation (CMIM) has now come into force on 24 March 2010 as well as the US$ 700 million Credit Guarantee Investment Facility. The first will help to ensure a facility is in place to help ASEAN Plus Three Countries should there be any balance of payment difficulties that may trigger a new crisis and the second will provide businesses in the region an opportunity to raise funds for their businesses through the issuing of local currency denominated bonds. We will also be exploring the possibility of an infrastructure fund to support regional connectivity. A High-level Task Force on ASEAN Connectivity has been set up by the ASEAN Leaders to look at our regional connectivity from within and with the global economy so that ASEAN can continue to be the hub of growth and development in the region.

We are also looking further afield at a wider free trade arrangement in East Asia with two key studies completed: the East Asia Free Trade Agreement (EAFTA) under the ASEAN Plus Three process; and the Comprehensive Economic Partnership for East Asia (CEPEA) under the East Asia Summit. ASEAN is taking the lead in consolidating the two studies before consulting the other partners. We are also actively looking at other possible partners for new FTAs while w

e implement the existing five FTAs. Other strategies that ASEAN will have to look at will be rebalancing growth with the change in the global trade patterns; the vibrancy of East Asia and opportunities generated with an integrated AEC.

Excellencies, Distinguished Delegates, Ladies and Gentleman

With all these positive developments taking place, there is no time to lose as ASEAN Customs needs be at the forefront of ASEAN integration process in securing benefits for the business community that are due through the negotiated tariff concessions by facilitating trade at the borders. Customs measures and practices will have to be increasingly trade facilitating for the Single Market and Production Base of the AEC to tick and for ASEAN to enhance its competitiveness and productivity.

More importantly, the ASEAN Finance and Economic Ministers are looking forward to concrete progress and actions in the implementation of customs measures stipulated by the AEC Blueprint, development and implementation of the ASEAN Single Window, implementation of ASEAN Customs Declaration Document and the ASEAN Cargo Processing Model, the design and implementation of the ASEAN Customs Transit System, and the development and implementation of a new Customs Agreement that will enhance regulatory cooperation among customs administrations in the region. I must also highlight that these also reflect the expectations of our businesses and industries in benefiting from world class service by ASEAN Customs Administrations, as defined in the ASEAN Customs Vision 2015.

Last year, at this forum, I suggested to the ASEAN Directors-General of Customs to consider eight “areas of concentration”, and today, I am happy to note positive progress achieved. Please allow me to mention some of them. First, on the implementation of the ASEAN Customs Declaration Document, seven Member States have reported that they have implemented it, either in full or partially, while three Member States indicated commitments to accomplish this by 2010.

Second, on the ASEAN Single Window and National Single Windows, Brunei Darussalam, Indonesia, Malaysia, the Philippines, Singapore and Thailand have activated their respective NSWs at varying levels of development in terms of sophistication and comprehensiveness in operating them. The NSWs would be supported by the e-Customs or Automated Customs Systems, which would entail electronic submissions in all Member States. Progress is also achieved in the activation of the ASW such as finalisation of the ASEAN Data Model (V2.0) and the draft MOU for the ASW Pilot Project. I understand these developments are the front-end development of the ASW initiative.

Third is the finalisation of the draft Protocol 7 – ASEAN Customs Transit System, which has been made possible by the hard work and cooperation of all the ASEAN Member States and our officials for the endorsement of the ASEAN Customs Directors-General.

Going forward let me also suggest that the ASEAN Directors-General consider result-based approach to customs cooperation that is being utilised by the other sectors of AEC such as trade, finance and agriculture. In this regard, the 19th Meeting of the ASEAN Customs Directors-General, for the period 2010 – 2011, could identify six main areas of focus for implementation.

First, identify five areas from the fifteen thrusts under Strategic Plan on Customs Development (SPCD) for priority implementation that will add value to market integration under AEC; Second, finalise and implement the ASEAN Agreement on Customs with the inclusion of operational procedures to support the ATIGA. Third, implement the ASEAN Cargo Processing Model. Fourth, adopt and implement risk management and audit-based control in customs intervention. Fifth, implement the harmonisation and simplification of customs procedures and progressive integration of customs structures within ASEAN. Finally, develop and implement the trade facilitating scheme of Authorised Economic Operators to secure and facilitate trade. Implementation of these measures will certainly be a good message for our trading community and for the primary role of Customs in trade integration.

One other point to consider is the inconsistencies between national legislations and implementation of regional commitments to facilitate timely execution of ASEAN commitments, and of accelerating the translation of regional initiatives into national legislations. This is one key impediment for the delays in the implementation of agreements in the various sectors under the AEC.

Excellencies, Distinguished Delegates, Ladies and Gentleman

Looking ahead, I am very confident that Customs cooperation and integration would be able to deliver more specific outcomes which will be measurable against clear benchmarks such as reduction of costs and time required for customs clearance and release, and more importantly bring about better predictability and certainty in the customs intervention on cross border movement of goods.

In closing, I would like to emphasise the increasing importance of Customs in trade facilitation and integration for the AEC. We must stay focused on the customs agenda under the AEC despite the challenges, identify specific high impact deliverables for implementation for the period 2010-2011, and ensure good monitoring and evaluation so that the targets set are delivered as planned.

I wish you a successful meeting. Thank you.