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

Brunei
Burma
Cambodia
Indonesia
Laos
Malaysia
Philippines
Singapore
Thailand
Vietnam
Foreign investment stake may reach 100 percent, but the government may impose restrictions.
Foreign partner share in joint ventures must be at least 35 percent, but can reach 100 percent. The
government reserves the absolute right to cultivate the land.
Foreign investment stake may reach 100 percent, except for land ownership.
Foreign partner stake must be no more than 95 percent.
Foreign partner share in joint ventures must be at least 30 percent, but can reach 100 percent.
Foreign investment in export enterprises may reach 100 percent. Acquisitions of land restricted.
Foreign partner stake limited to 40 percent on public lands. Foreign investment in export enterprises
may reach 100 percent. Nationality requirement may be suspended for certain ASEAN-related
activities. Foreign ownership of land prohibited.
Foreign partner stake must be no more than 49 percent.
Foreign partner stake must be no more than 49 percent.
Must be in the form of a joint venture, with the foreign partner holding no more than a 49 percent
stake. Foreign ownership of land prohibited.
Sources: Jenny Corbett and So Umezaki, eds., “Deepening East Asian Economic Integration,” ERIA Research
Project Report 2008, no. 1, chap. 5, table 6; USTR, “National Trade Estimate,” 2010, 185, 289; industry
representative, interview by Commission staff, Singapore, March 5, 2010.
Some ASEAN countries are considering economic policies that would effectively make
their country less attractive to palm oil investment. For example, Vietnam is considering
a price control measure that would affect the price of palm oil, which Vietnam imports in
comparatively large quantities. Government-mandated pricing for palm oil would create
disincentives for foreign companies seeking to enter Vietnam’s palm oil processing and
related food products industries. 67
Trade Facilitation, Logistics Services, and E-commerce
E-commerce is an important commercial element in the palm oil trade, particularly in
reference to the palm oil exchange in Malaysia. Bursa Malaysia Derivatives (BMD) is
one component of Bursa Malaysia (previously known as the Kuala Lumpur Stock
Exchange); it maintains most widely cited contract pricing information for palm oil and is
a spot price source. Palm oil futures and options are also traded on the BMD. 68 In
addition, the palm oil industry has expanded its exchange reach with palm oil futures
recently beginning to be traded in Indonesia and the United States: this development is
increasing the opportunities for more global traders to participate in the palm oil trade
and facilitating palm oil consumption vis-à-vis other vegetable oils worldwide. 69
The Commission found little evidence that trade facilitation issues and logistics services
strongly impacted ASEAN regional integration, export competitiveness, and inbound
investment in the palm oil industry. 70
67 Industry representative, interview by USITC staff, Washington, D.C., February 18, 2010; USITC,
hearing transcript, February 3, 2010, 47 (testimony of Murray Hiebert, U.S. Chamber of Commerce).
68 According to some Malaysian industry representatives, all trading is done electronically. Industry
representatives, interview by USITC staff, Kuala Lumpur, Malaysia, March 12, 2010.
69 The Star Online, “El Nino May Lift CPO Futures Prices,” March 10, 2010.
70 One industry representative in Thailand offered the observation that transportation of crude palm oil
between the mills and the refineries, for which tanker trucks are used, is not an issue. Industry representative,
interview by USITC staff, Bangkok, Thailand, March 17, 2010. Trade facilitation and logistics services are
discussed in chap. 2 as they relate to the ASEAN economy as a whole.
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