At the Opening of the ASEAN Forum on Trade in Services
Ha Noi, Viet Nam, 5 July 2005

His Excellency Vu Khoan, Deputy Prime Minister of Viet Nam
Excellencies, Distinguished Guests
Ladies and Gentlemen,

It gives me great pleasure to address the distinguished participants of this important ASEAN Forum on Trade in Services today. I would like to thank H.E. Vu Khoan, Deputy Prime Minister of Viet Nam for his time to grace our forum. I would like also to thank our host, the Ministry of Planning and Investment of Viet Nam and our main sponsor, the Government of Japan for their cooperation and assistance. I want to express my appreciation of the work done and to thank all involved in the preparation to make this Forum possible.

Coming to this Forum, I am delighted that international experts, our colleagues from other international and regional organizations and our dialogue partners have accepted our invitation as we are very much eager to hear and learn from their experiences on a number of areas, which we ourselves in ASEAN are trying to find answers and solutions for.

Ladies and Gentlemen,

This time is momentous for ASEAN as the year 2005 marks two important events in our history: the 10th year anniversary of Vietnam’s entry into the ASEAN family this month of July, and the 10th year of signing of the ASEAN Framework Agreement on Services, also known as AFAS, in December.

As the Secretary-General of ASEAN, I would like to extend our warmest congratulations to the Government of Viet Nam, to all Vietnamese people for their achievements over the past 10 years of being in ASEAN. Viet Nam’s active participation in ASEAN and global economic integration has resulted in its continuous economic growth, which is highest in ASEAN. A number of historic decisions for ASEAN development have been made in Viet Nam. I just would like to cite one. The Hanoi Plan of Action or HPA adopted during the 6th ASEAN Summit in 1998 together with the bold measures in response to the financial and economic crisis that has severely affected the ASEAN economies and business dynamism, have brought the early realization of the AFTA and strong economic recovery and growth in the region.

On AFAS, if you recall, it is the agreement that set in motion services liberalization in ASEAN. Over the past nine and half years, ASEAN engaged in three rounds of services negotiations producing four packages of commitments on services sectors.  This year, ASEAN is gearing up for the 4th round of services negotiations with hopefully, higher quality and deeper level of services commitments.

Free flow of services is one of the features of the ASEAN Economic Community or in short AEC as envisaged by the ASEAN Leaders. Other features of the AEC include a free flow of goods, investment, skilled labor and freer flow of capital.  We have done well with the tariff cutting to make the ASEAN Free Trade Area a reality since January 2003. We are making every effort to provide investors with a competitive and attractive environment for investment and business operations in ASEAN.

We are working towards achieving a free flow of services earlier than 2020 (the original target, tied to ASEAN Vision 2020). Possible end date for a free flow of services in ASEAN now is being considered by 2015. In order to achieve this goal, ASEAN agreed to set clear targets and schedules of services liberalization for each sector and each round. ASEAN also adopted the ASEAN Minus X formula for services liberalization so that countries which are ready could liberalize first and the others will join in later.

ASEAN is in the process of concluding Mutual Recognition Arrangements (MRAs) for qualifications in major professional services by 2008 to facilitate free movement of professionals, skilled labor and talents. ASEAN is also working on liberalizing the health-care, air-travel and electronic-commerce sectors by 2010.

Ladies and Gentlemen,

While we have done a lot and will do more to realize the AEC, greater challenges confront ASEAN. The tide of change towards greater economic integration elsewhere in the world is still rolling strongly. Many bigger economies in the developing world are also growing strongly. They have become factory of world or back office of the world. ASEAN cannot afford to wait and see until things unfold themselves. We must play an active role and shape our economic strategy and keep ASEAN’s competitive edge. In doing so, the services sector will have a pivotal role.

Trade in services cannot be isolated from trade in goods. The services sector is an indispensable part of our economies. Our growth in agriculture, manufacturing and natural resources production is dependent on the quality and spread of the related services. Indeed, without the services, we cannot grow. Without the services, our bargaining power is weakened. If we do not deal with the services sector, our economies will not be as attractive to the foreign investors.

To put it very starkly, ASEAN’s drive towards the AEC cannot be substantiated without a well-thought out policy of dealing with trade in services. Moreover, ASEAN cannot gain adequate leverage in its FTA negotiations with Dialogue Partners if we do not liberalise and accelerate ASEAN’s trade in services. To consolidate what ASEAN has accomplished so far with AFTA and its market integration efforts beyond Southeast Asia, ASEAN has to take the proactive approach and be on the services bandwagon. To be sure, several ASEAN economies are not ready to contend with the more developed countries in managing the trade in services. However, ASEAN has never wavered in joining the wealthy and advanced parties at the main negotiating table.

Ladies and Gentlemen,

The Forum we have here today is the opportunity for all of us to exchange views and learn from each other’s experiences concerning services liberalization. We are fortunate to have with us a very good line-up of distinguished experts who have done significant work on services liberalization all over the world. I therefore, encourage everyone, especially our trade negotiators, our regulatory bodies and our service suppliers, to meaningfully use this time and the presence of our speakers by actively participating and engaging in the discussions.

I have no doubt that the next two days will be very interesting and lively and we would have gathered a full load of insights that can serve as inputs on how we in ASEAN can approach and move forward our own liberalization track in a significant and pro-development manner to achieve the goal of free flow of services in ASEAN as early as we can, possibly by 2015.

I wish the Forum every success!

Thank you.