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

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Despite tariff reductions, the region’s competitive focus rema<strong>in</strong>s on export<strong>in</strong>g to major<br />

<strong>in</strong>dustrialized countries.<br />

Healthcare services<br />

Intra-<strong>ASEAN</strong> trade of hardwood plywood and floor<strong>in</strong>g is small compared with exports to<br />

non-<strong>ASEAN</strong> markets; tariff reductions coupled with other trade facilitation measures<br />

may encourage more <strong>in</strong>tra-regional trade, but the region’s hardwood plywood and<br />

floor<strong>in</strong>g production is heavily weighted toward exports to Europe, Japan, and the United<br />

States. Over the past five years, Ch<strong>in</strong>a has become a formidable competitor to <strong>ASEAN</strong> <strong>in</strong><br />

global markets, despite its own wood scarcity. Other significant challenges fac<strong>in</strong>g<br />

<strong>ASEAN</strong> hardwood plywood and floor<strong>in</strong>g producers <strong>in</strong> major markets are product<br />

standards (such as formaldehyde emissions limits) and procurement policies requir<strong>in</strong>g<br />

assurances of legal sourc<strong>in</strong>g.<br />

Growth of private healthcare firms <strong>in</strong> the <strong>ASEAN</strong> market has generated <strong>in</strong>creased trade<br />

and <strong>in</strong>vestment <strong>in</strong> healthcare services.<br />

Malaysia, S<strong>in</strong>gapore, and Thailand are the largest exporters of healthcare services,<br />

treat<strong>in</strong>g the largest number of foreign patients with<strong>in</strong> their borders. Private healthcare<br />

firms from these countries have promoted their services <strong>in</strong> neighbor<strong>in</strong>g countries and<br />

expanded their presence by <strong>in</strong>vest<strong>in</strong>g throughout the region to meet grow<strong>in</strong>g regional<br />

demand. Additionally, as these healthcare firms have grown, they have attracted<br />

<strong>in</strong>creas<strong>in</strong>g <strong>in</strong>vestment from <strong>in</strong>vestors outside of the <strong>ASEAN</strong> region.<br />

In response to ris<strong>in</strong>g regional trade and <strong>in</strong>vestment <strong>in</strong> the healthcare services <strong>in</strong>dustry,<br />

member governments and the <strong>ASEAN</strong> Secretariat have launched efforts to support<br />

cont<strong>in</strong>ued growth.<br />

Motor vehicle parts<br />

Governments of <strong>ASEAN</strong> member countries are encourag<strong>in</strong>g <strong>in</strong>vestment <strong>in</strong>, and<br />

promot<strong>in</strong>g exports of, healthcare services through programs that simplify procedures for<br />

the movement of foreign patients across borders and liberalize <strong>in</strong>vestment barriers.<br />

Similarly, the <strong>ASEAN</strong> Secretariat has facilitated regional healthcare <strong>in</strong>vestment through<br />

recent negotiations under the <strong>ASEAN</strong> Framework Agreement on Services, and <strong>in</strong>itiated<br />

efforts to conclude mutual recognition agreements <strong>in</strong> certa<strong>in</strong> medical professions.<br />

<strong>ASEAN</strong> has been successful at meet<strong>in</strong>g critical Roadmap targets and facilitat<strong>in</strong>g regional<br />

<strong>in</strong>tegration with<strong>in</strong> the automotive sector. Despite these achievements, the regional<br />

automotive <strong>in</strong>dustry and market have yet to fully <strong>in</strong>tegrate.<br />

<strong>ASEAN</strong> has elim<strong>in</strong>ated duties or reduced nontariff measures for six members (Brunei,<br />

Indonesia, Malaysia, Philipp<strong>in</strong>es, S<strong>in</strong>gapore, and Thailand) and implemented the <strong>ASEAN</strong><br />

Industrial Cooperation Scheme (AICO); these <strong>in</strong>itiatives have enhanced regional<br />

<strong>in</strong>tegration, export competitiveness, and <strong>in</strong>bound <strong>in</strong>vestment. Auto and parts<br />

manufacturers, <strong>in</strong> particular Japanese firms, have used the AICO system s<strong>in</strong>ce the 1990s<br />

to develop an <strong>in</strong>tegrated production system <strong>in</strong> the region. <strong>ASEAN</strong>, however, has a history<br />

of national government <strong>in</strong>tervention <strong>in</strong> support of local automotive <strong>in</strong>dustries through<br />

such measures as national car policies and local-content requirements that have protected<br />

local <strong>in</strong>dustries and encouraged the development of small-country markets. In addition,<br />

xvii

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