ASEAN: Regional Trends in Economic Integration, Export ... - USITC

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engineered flooring, and other products. Similarly, investments in oil palm are envisioned to supplement wood supply for plywood and other wood products. 77 The plywood industry is slowly adapting to smaller diameter rubberwood and oil palm trees that can be used after their productivity for latex and oil wanes (see box 5.1). The continuing addition of rubberwood and other forest plantations is expected to add to the region’s wood supplies and therefore contribute to ASEAN competitiveness. BOX 5.1 Hardwood plywood and flooring: Profile of ASEAN integration By most measures of cross-border investment and cross-border links in manufacturing, the hardwood plywood and flooring industry has not experienced significant regional integration. The industry is highly parochial because of its long-established history within the major producing countries and close linkages to locally available forest resources. Nevertheless, there are instances of plywood and flooring companies investing and/or operating in more than one ASEAN country. The most successful cross-border investments involve vertically integrated companies. For example, one Malaysian company is in both the oil palm and the wood flooring business. a It manufactures flooring in Malaysia and maintains oil palm plantations in both Malaysia and Indonesia. Although the technology is not yet fully commercialized, oil palm wood is beginning to be used for core layers in some plywood manufacture. The potential advantage of using oil palm wood in plywood production is that it would reduce reliance on wood from natural forests. Some regional integration is also occurring by virtue of FDI from outside of ASEAN. For example, Taiwanese companies are reportedly sourcing lumber and veneer of coconut palm from Indonesia and sugar palm from Thailand for use in furniture and flooring products manufactured both in Vietnam and in Taiwan. b ASEAN efforts to reduce and eliminate intra-ASEAN tariffs on hardwood plywood and flooring may provide additional opportunities for regional industry integration. If tariff elimination makes it more economically attractive, core plywood material could be imported from another ASEAN country and finished with a locally manufactured decorative outer ply or “wear” layer. Similarly, wood laminate flooring uses medium-density fiberboard (MDF), which could be imported and finished with a locally printed paper and melamine overlay, assuming there are cost-savings or other advantages for doing so. a The company referenced is TSH Resources Berhad, which has a wood flooring subsidiary called Ekowood. b Industry representative, interview by USITC staff, Washington, DC, March 30, 2010. Trade Facilitation, Logistics Services, and E-Commerce Trade Facilitation ASEAN trade facilitation efforts have led to some improvements—streamlining procedures at ports of entry and harmonizing documentation requirements—that have benefited trade in hardwood plywood and flooring, along with trade in the region more generally. 78 Further progress is anticipated over the next several years through the development of national and ASEAN single windows. 79 Considerable effort has also been made to harmonize intra-ASEAN tariffs and trade by implementing a common 8-digit tariff nomenclature based on the Harmonized System (HS), although not all ASEAN countries are reporting both trade data and applied tariffs consistently yet. 80 77 Industry representative, interview by USITC staff, Kuala Lumpur, March 11, 2010. 78 Ibid., March 12, 2010. 79 See discussion on trade facilitation in chap. 2. 80 ASEAN official, e-mail message, April 21, 2010. Not all ASEAN members are reporting trade and tariff data at the same level of detail for external as well as intra-ASEAN trade, nor are all members using the most recent 2007 ASEAN Harmonized Tariff Nomenclature (AHTN). 5-18
Trade across land routes has been and continues to be a significant issue for wood products, particularly along remote borders. Relatively little plywood and flooring is transported by rail, and transport by truck across borders can pose bureaucratic difficulties. 81 At border crossings in the Greater Mekong Subregion (GMS), goods being trucked from one country to another are often unloaded, inspected by officials of both countries, and then reloaded onto separate trucks for the balance of the journey. Thailand requires permits and collects fees for transit of goods from Laos. 82 The Cross Border Transit Agreement signed in 1998 by Vietnam, Laos, and Thailand and later joined by Cambodia, Burma, and China was designed to streamline the land route border crossings. 83 However, not all of the annexes and protocols have been ratified by all signatories, and differences in laws and regulations continue to inhibit full implementation. That Thailand, Malaysia, and Singapore use the British left-side road convention while other ASEAN countries use a right-side driving system also presents difficulties for transport and at border crossings. Nonetheless, government officials report that progress has been made towards making border crossings smoother. 84 Export taxes and cess fees (i.e., additional excise or product taxes) are assessed by some ASEAN members and add costs to exported plywood and flooring. Malaysia applies a cess rate of US$1.55 per cubic meter for plywood, and much higher rates for wood products made of rubberwood. 85 In 2008, Vietnam began imposing a 10 percent export tax on wood products, including plywood and flooring, made from imported wood. The tax was modified in 2009 to provide an exemption for wood boards less than 100 mm wide and 30 mm thick, which would include many solid wood flooring products. 86 In addition to excise and export taxes, unofficial payments to government officials at various levels in order to process exported goods are reportedly fairly common, particularly in the lesser-developed ASEAN countries, and can complicate export clearing procedures. 87 Logistics Services and E-Commerce Logistics services are not often used in producing and distributing plywood and flooring. These products are bulk items, most often shipped in large volumes by truck and ocean freight. Similarly, e-commerce is not widely used in the hardwood plywood and flooring business in the ASEAN countries. Businesses, particularly those in the flooring industry, use Web sites as the principal advertising medium for their products, and e-mail has clearly both expedited placement of orders and reduced the lead time for fulfillment. 88 However, the use of business-to business (B2B) electronic interchange for ordering and delivery scheduling does not appear to be significant in the industry. 81 Industry representative, interview by USITC staff, Bangkok, March 15, 2010. 82 Nathan Associates, “Toward a Roadmap of Integration,” March 2007, 33. 83 The Cross-Border Transit Agreement is part of a Greater Mekong Subregion (GMS) Program supported by the Asian Development Bank. It was crafted in consultation with ASEAN and the United Nations Economic and Social Commission for Asia and the Pacific. 84 Government official, interview by USITC staff, Hanoi, March 9, 2010. 85 Malaysia Timber Industry Board Web site. Cess rates range from less than US$1.00 per m 3 to as much as US$80.00 per m 3 for certain species of timber. MDF products (that could be used to manufacture laminate wood flooring) have no cess rate. 86 See Vietnam Ministry of Natural Resources and Environment web site and Global Trade Alert. 87 NGO representative, interview by USITC staff, Hanoi, March 8, 2010. 88 Industry representative, interview by USITC staff, Kuala Lumpur, March 12, 2010. 5-19
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United States International Trade C
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U.S. International Trade Commission
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Abstract This report describes tren
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CONTENTS―Continued Chapter 5 Wood
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CONTENTS―Continued Tables—Conti
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Acronyms 3PL ACCSQ ACDD ACE ACIA AD
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LPI MDF MFN MOU MRA MTCC NAFTA NAP
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Executive Summary The Association o
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Infrastructure and the legal framew
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Despite tariff reductions, the regi
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CHAPTER 1 Introduction Purpose, Sco
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Participating countries also gain a
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TABLE 1.2 Export Competitiveness Fa
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transactions, reinvested earnings,
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Bibliography Acoca, Brigitte. Empow
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CHAPTER 2 ASEAN and Selected Region
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BOX 2.1 Timeline of important miles
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BOX 2.2 AEC Blueprint: Goals and me
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BOX 2.3 ASEAN-wide free trade agree
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progress has been only achieved in
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BOX 2.4 What is ATIGA? ATIGA builds
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TABLE 2.2 Intra-ASEAN imports and e
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TABLE 2.4 Total imports, exports, a
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China is often viewed as a major co
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cases of dispute, but does not prov
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TABLE 2.6 Minimum permitted equity
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TABLE 2.8 Ease of trading across bo
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it maximally useful, such as the ab
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TABLE 2.9 ASEAN in the World Bank
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foreign ownership of express delive
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population that regularly uses the
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Bibliography Acoca, Brigitte. Empow
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ASEAN Economic Ministers. “Joint
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Malaysian Institute of Economic Res
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CHAPTER 3 Electronics: Computer Com
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competition between ASEAN countries
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Regional Integration, Export Compet
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Supporting industries Another impor
Page 79 and 80: The AEF is unique within the region
Page 81 and 82: TABLE 3.3 Computer components: ASEA
Page 83 and 84: joint R&D. 71 These advantages of l
Page 85 and 86: order to compete for investment (bo
Page 87 and 88: efficient service to tenants. Despi
Page 89 and 90: Bibliography Asian Productivity Org
Page 91: World Trade Organization (WTO). Inf
Page 94 and 95: Project to stimulate intra-ASEAN pr
Page 96 and 97: TABLE 4.2 Certain cotton woven fabr
Page 98 and 99: includes the production of cotton y
Page 100 and 101: BOX 4.1 Cotton woven apparel: Profi
Page 102 and 103: national government source stated t
Page 104 and 105: strengthen supplier relationships.
Page 106 and 107: Indonesia has limited potential as
Page 108 and 109: investment, 67 with much of the inv
Page 110 and 111: Bibliography Association of Southea
Page 113 and 114: CHAPTER 5 Wood-based Products: Hard
Page 115 and 116: some cases, on the export of sawnwo
Page 117 and 118: TABLE 5.1 Hardwood plywood and floo
Page 119 and 120: industry are limited, particularly
Page 121 and 122: important factors continue to hampe
Page 123 and 124: TABLE 5.3 Major intergovernmental p
Page 125 and 126: Export Competitiveness In 2008, ASE
Page 127 and 128: TABLE 5.6 Hardwood plywood and floo
Page 129: FDI in hardwood plywood and floorin
Page 133 and 134: Azarcon, Chulia J. “Comparative T
Page 135 and 136: Malaysia Timber Industry Board (MTI
Page 137 and 138: CHAPTER 6 Healthcare: Healthcare Se
Page 139 and 140: In recent years, the traditional in
Page 141 and 142: services industry by developing the
Page 143 and 144: Only a few countries export large v
Page 145 and 146: growing populations, and increasing
Page 147 and 148: has a healthcare MOU with Cambodia.
Page 149 and 150: BOX 6.1 Healthcare services: Profil
Page 151 and 152: competition for foreign patients in
Page 153 and 154: Singaporean provider provides train
Page 155 and 156: Giusti, Daniele, Bart Criel, and Xa
Page 157: Socio-economic and Environmental Re
Page 160 and 161: Within the broad priority sector, t
Page 162 and 163: Japanese automakers. Their supplier
Page 164 and 165: suppliers must be able to meet QCD
Page 166 and 167: BOX 7.2 Automotive: Profile of ASEA
Page 168 and 169: Thailand is considered to be the mo
Page 170 and 171: Despite the continued implementatio
Page 172 and 173: TABLE 7.2 Certain motor vehicle par
Page 174 and 175: Inbound Investment The investment e
Page 176 and 177: Trade Facilitation The timely movem
Page 178 and 179: Bibliography Aldaba, Rafaelita M.
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Thailand in the 2000’s. “Indust
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(2) the development of ASEAN cooper
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productive in climates further from
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ASEAN members Thailand and the Phil
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Tariff, import tariffs on palm oil
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BOX 8.1 Palm oil: Profile of ASEAN
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chain, from plantations to retailer
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TABLE 8.6 Palm oil: Intra-ASEAN inv
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Brunei Burma Cambodia Indonesia Lao
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Hickman, Martin. “Online Protest
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APPENDIX A USTR Request Letter
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A-4
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E Federal Register /Vol. 74, No. 23
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APPENDIX C Calendar of Hearing Part
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APPENDIX D Positions of Interested
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Mr. Aquino noted that the Philippin
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FTA (AANZFTA), Australian and New Z
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cumbersome rules of origin, customs
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APPENDIX E Country Profiles
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BURMA ECONOMIC PROFILE Economic Ind
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INDONESIA ECONOMIC PROFILE Economic
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MALAYSIA ECONOMIC PROFILE Economic
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SINGAPORE ECONOMIC PROFILE Economic
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VIETNAM ECONOMIC PROFILE Economic I
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TABLE F.1 Agro-based products: Prio
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TABLE F.3 Electronics: Priority sec
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TABLE F.4 Healthcare: Priority sect
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TABLE F.5 Textiles and apparel: Pri
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