The Malaysian Bar - CAFTA 2011: “Present and Future Trends of ACFTA Trade in Goods, Services and Investment” (Session Three)

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CAFTA 2011: “Present and Future Trends of ACFTA Trade in Goods, Services and Investment” (Session Three)

Monday, 31 October 2011 09:05am

Contributed by Leong Zhi Hong, Co-Deputy Chairperson (Southern Region), Bar Council National Young Lawyers Committee

The third session of the 5th China-ASEAN¹ Forum on Legal Cooperation and Development, sponsored by Rodyk & Davidson LLP, had Attorney Avelino V Cruz, Senior Partner of Angara Abello Concepcion Regala & Cruz Law Offices (“ACCRALAW”) of Philippines serving as the Moderator on 26 Sept 2011. The speakers featured were Josephine Koh, partner in Rodyk & Davidson LLP; Ravindran Palaniappan, Senior Director, ASEAN Economic Cooperation Division, Ministry of International Trade and Industry; Attorney Francisco Edward Lim, Co-Managing Partner of ACCRALAW; and Professor Yang Liyan, Professor of School of Law, Guangxi Normal University.

The first speaker, Josephine Koh, restated that the ASEAN-China Free Trade Area (“ACFTA”) was based on one of the world’s largest free trade agreements. The Framework Agreement on Comprehensive Economic Co-operation (“Framework Agreement”) between ASEAN and China was signed in November 2002, which underlined co-operation between ASEAN and China in trade in goods, trade in services and investment.

Josephine Koh then spoke about the issue of investment and the intentions behind the signing of the Agreement on Investment under the Framework Agreement on 15 Aug 2009, which were to progressively liberalise the investment regime, strengthen co-operation in investment, facilitate investment, improve transparency of investment rules and regulations, and provide for protection of investments. More importantly, the agreement was entered into to promote investment flows and to create a liberal, facilitative, transparent and competitive investment regime in China and ASEAN.

The first speaker also explained the conditions of national treatment in the area of investment, whereby a host party must extend investment treatment to external investors that is no less favourable than that extended to its own nationals. Among other issues that Josephine Koh discussed were fair and equitable treatment, nationalisation or expropriation, and repatriation of profits. Before she concluded her presentation, she expressed her wish for ASEAN and China to work towards liberalisation and elimination of restrictions and thresholds on market access, increased transparency and enforcement efforts in laws, rules and policies, and a more cohesive and stronger Asia.

Ravindran Palaniappan, the second speaker, addressed the mechanism of free trade in ASEAN, and relations between ASEAN and China in all the free trade arrangements. His presentation focused on the achievements in trade in goods, services and investments; challenges to the formation of a deeper ASEAN-China strategic economic partnership; and the way forward.

Ravindran Palaniappan opined that one challenge that needed to be addressed over the next few years was liberalisation of investment sectors, to achieve the objective of creating a transparent and liberal environment. He observed that elimination of restrictions and impediments to investments was still ongoing within ASEAN. He recommended that, in moving forward, certain steps be taken, including those to enhance awareness of the economic policies, laws and regulations of other nations; increase market demand; improve market access for services sub-sectors, by expanding coverage and depth of liberalisation commitments; enhance infrastructure and other logistical facilities; and promote greater connectivity.

The third speaker, Attorney Francisco Edward Lim, spoke about the World Economic Forum and its Centre for Global Competitiveness and Performance. Through its Global Competitiveness Report and its series of reports, the Centre aimed to mirror the business operating environment and competitiveness of economies worldwide. The speaker showed a series of results regarding the Global Competiveness Index and shared his views based on the analyses. He also provided his views on potential areas for cooperation between China and ASEAN.

Before Attorney Francisco Edward Lim ended his talk, he stressed that even though there were a few ASEAN countries that scored well across all indices in the rankings of the results of the analyses, ASEAN economies still needed to improve to be globally competitive. Whilst China has experienced tremendous growth in the last decade, he stated his belief that there was still room for its economy to improve.

Subsequently, Professor Yang Liyan provided in-depth analyses of, in particular, the current situation of China-ASEAN cooperation, as well as the necessity of enlarging the fields of China-ASEAN cooperation, the methods to accomplish this and the substance of such cooperation.