Policy Proposals Asia and Oceania Stronger Ties with ASEAN Member States A Message to the ASEAN-Japan Commemorative Summit Meeting
On the occasion of the 40th anniversary of the establishment of Japan-ASEAN Friendship and Cooperation, the Japanese business community warmly welcomes the Commemorative Summit Meeting taking place in Tokyo.
Economic exchange between Japan and ASEAN has expanded dramatically in recent years. Although exports and imports between Japan and ASEAN were each valued at approximately US$54.0 billion in 2001, they were worth approximately $130 billion in 2012. Over the same period, the cumulative total of Japanese investment in ASEAN rose from about $35 billion (2001) to about $120 billion (2012). A total of around 4,700 Japanese firms have business operations in ASEAN member states today.
From a strategic business perspective, economic liberalization efforts under way in Myanmar and steps to reinforce connections between the Mekong region and India have increased the importance of the ASEAN region to Japanese corporations. Furthermore, economic ties between Japan and ASEAN will likely become even stronger if the vision of an ASEAN Economic Community is transformed into reality in 2015 under the effective leadership of the region's heads of state.
To reinforce ties between Japan and ASEAN, Keidanren takes this opportunity to declare its interest in contributing to sustained region-wide growth through the promotion of infrastructure and human resources development as well as regional economic integration based on the Regional Comprehensive Economic Partnership (RCEP).
1. Cooperation with the Development of Hard and Soft Infrastructure
Region-wide undertakings in infrastructure development will be essential to the formation of the region's foundations for growth. As exemplified by the Master Plan on ASEAN Connectivity and the economic corridor development plans, the region's member states are moving forward to build new infrastructure network. Carrying those plans to the implementation stage, however, will demand that priority projects be selected and put into motion on a steady schedule.
Large-scale infrastructure projects require enormous amounts of funding that cannot always be fully budgeted with public-sector sources alone. We welcome the Public-Private Partnership (PPP) frameworks that several ASEAN member states have established to effectively harness the technologies and funding power of the private sector. We anticipate that widespread adoption and appropriate implementation of PPP frameworks by ASEAN governments will lead to the formation of projects that harness private-sector ingenuity. It will also be important to implement bidding frameworks that facilitate project selection based not on bid price but on project quality in terms of the expected contribution it will make to the sustained economic development of member states.
Additionally, utilization and promotion of the bilateral offset mechanisms will prove effective in aiding the penetration and acceptance of Japan's exceptional energy-saving and low-carbon technologies and encouraging member states to curb and reduce their emission levels. Japan has already signed bilateral memorandums with Vietnam and Indonesia on such mechanisms, and we anticipate that similar memorandums will be concluded with additional ASEAN member states in the future.
In conjunction with efforts in this area, Japan's business community will continue to assist ASEAN with the enhancement of soft infrastructure including the spread of automated cargo and port consolidated System (NACCS), the improvement of business-related laws and regulations, and the development of human resources.
2. The Early Establishment of the Regional Comprehensive Economic Partnership (RCEP)
ASEAN's strengths are the growth potential of its consumer markets supported by emerging middle class and the intense competitiveness it has achieved as a manufacturing hub driven by the international division of labor. To fully exploit these strengths, promotion of regional economic integration will be the key. We applaud the RCEP negotiations that were launched in May this year in parallel with the process toward the establishment of the ASEAN Economic Community. We urge each ASEAN member state to cooperate closely with Japan to bring about the early conclusion of a high-level agreement. It is important that RCEP facilitates the abolishment (including phase-outs) or reduction of tariffs in substantially all the trade, the liberalization of investment and trade in services, the protection of intellectual property rights, the establishment of favorable business environments, and the unification of various industrial standards. Additionally, because RCEP would set common rules for the region as a whole, we anticipate that supply chain and value chain continuity would also be secured.
The Japanese business community is prepared to cooperate in the stimulation of regional trade and investment, infrastructure development, and technology transfers within the open business space that would be created under the framework of RCEP.