TradeLane

Spotlight on Southeast Asia

Posted by Noel Chow

3/11/19 1:24 PM

Same Same-1

As I sat along the streets of Hanoi one winter morning in January, observing the patrons at surrounding tables over a bowl of phở, I couldn’t help but notice a familiar sight. From the fragrant yellow teas in Vietnam to the thick sweet milk varieties of Bangkok and Jakarta, same same – to borrow a popular Thai catchphrase, communal tea drinking seems to be the common thread binding 600 million inhabitants who call Southeast Asia (“SEA”) home.

With the US-China trade tensions forcing multinationals to look elsewhere and an increasing number of food and lifestyle programs featuring the region, including the likes of Anthony Bourdain, Andrew Zimmern, Martin Yan, Martha Stewart and a handful of exciting local upstarts to name a few, SEA really has had the benefit of some attention in recent times.

International relations are no exception. Bali played host to the 9th WTO Ministerial Conference in 2013 and more recently in 2018, Singapore hosted the groundbreaking Trump-Kim summit. Hanoi hosted the sequel this year.

The Association of South East Asian Nations (ASEAN) to which most of the SEA countries belong, has contributed to that momentum with the successful implementation electronic Certificate of Origin (“CoO”) exchange under the ASEAN Single Window project (ASW).

Six of the ten ASEAN member countries can now exchange CoO’s electronically. The fact that other documents are now being tested for e-exchange has understandably captured the imagination of many a supply chain aficionado.

Will this pave the way to EU-style freedom of movement and the eventual end to SEA’s trademark border delays?

Wishful, but not unexpected. After all, managing compliance in a diverse, non-uniformed trade environment remains the one gripe of SEA compliance managers. But let us understand what ASEAN is not. It is not remotely similar to the EU, nor will it adopt an EU model of integration. In fact, it wasn’t until recently an economic bloc at all.

It started with the Bangkok Declaration of 1967 involving five founding members – Indonesia, Malaysia, Philippines, Singapore, and Thailand. At that time, most of SEA was in a state of post-colonial chaos. Borders were an unfamiliar foreign introduction, intra-region diplomatic relations were prickly and there was an urgent need to foster solidarity between neighboring countries with otherwise nothing in common.

The idea of “economic integration” was met with reluctance from ASEAN leaders and with indifference from the private sector. Put simply, ASEAN pursued economic cooperation led by FTAs instead. Still, the good news is that cooperation is translating into what is now the latter stages of the ASW project. Currently only the ASEAN Trade in Goods Agreement (ATIGA) Form D’s can be exchanged electronically (albeit with teething problems occasionally requiring manual intervention).

Barring another economic disruption, many more customs procedures will become uniform and more documents electronically exchangeable. These include, amongst other initiatives, an ASEAN Customs Declaration Document (ACDD) and electronic Sanitary and Phytosanitary Certificates (e-SPS). 

Perhaps soon, the ASEAN trade environment will truly be “same same,” but different.

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Topics: Asia

Written by Noel Chow

Noel joined Tradewin from a major US multinational where he was a key member of the APAC global trade compliance team in Singapore. He brings with him a combined 10 years of industry and consulting experience in trade, customs and transfer pricing having previously worked with a diverse clientele across industry groups as a consultant with the Big 4. He holds a law degree from the University of London and a Masters in International Law from the University of Malaya researching WTO law. His academic works in the area of WTO law have been published in peer reviewed law journals.