Asean Economic Ministers signed two vital agreements on Tuesday on services and investment, aiming to attract more foreign investors to lift the region's economic growth.
Acting commerce minister Chutima Bunyapraphasara, as the chair of Asean, said the two agreements signed at the retreat held in Phuket were the Asean Trade in Services Agreement (Atisa) and the fourth protocol to amend the Asean Comprehensive Investment Agreement (Acia).
Atisa aims to broaden and deepen services integration in Asean by creating a more open environment; enhancing competitiveness; raising standards and efficiency of service regulations; reducing obstacles and increasing transparency of trade in service standards among Asean members; and expanding trade and service opportunities related to healthcare service, tourism, hotels and restaurants.
Atisa will become effective within 180 days after signing.
The agreement will be used to replace the Asean Framework Agreement on Services (Afas), which has been used since 1995.
Ms Chutima said Asean members wishing to maintain rules and regulations for some services can write down their preserved rules to let other countries know the conditions for investing in such businesses.
Atisa allows member countries up to five years to consider rules it may want to preserve after the agreement is effective.
The fourth protocol to amend Acia aims to help Asean remain a competitive investment destination by improving liberalisation and transparency in the investment regime of each member state.
Acia was signed in 2009 and was enforced from March 29, 2012.
Acia covers most forms of investment, with liberalisation provisions for key sectors: manufacturing, agriculture, fisheries, mining and quarrying, as well as services related to these sectors.
The agreement protects investors by levelling the playing field and compensating those who are affected if a country modifies its commitments.
Acia covers not just Asean investors, but also investors based in Asean countries, helping to make the region more attractive to foreign investment.
Acia will be effective after the 10 Asean members ratify the agreement in their countries.
The Asean Investment Report 2018 indicated investment in the region in 2017 continued to grow to more than US$137 billion. Asean members had the largest investment in the region, worth over $27 billion, or 19% of the total.
Countries with the highest investment in Asean were Singapore, Malaysia and Thailand, which together injected over $110 billion.
Major foreign investors in Asean are Japan, China, the EU, Australia and India, with interests in manufacturing, construction, mining, finance, R&D, wholesale and retail, and information technology.
In 2017, total trade among Asean members tallied $2.57 trillion, up from $2.23 trillion in 2016, comprising intra-Asean trade volume of $590 billion and extra-Asean trade of $1.98 trillion.