EXPERIENCE IN LIBERALIZING THIS TYPE OF TRADE IN ASEAN

O. V. BIRYUKOVA

Candidate of Economic Sciences, National Research University-Higher School of Economics

Keywords: trade liberalization, economic integration, foreign direct investment, regional trade agreements

Trade in services is a relatively young segment of international foreign economic activity; in any case, it emerged much later than trade in goods. Significant progress in this sector has been achieved in the last two decades by the countries of Southeast Asia-members of the Association of Southeast Asian Nations (ASEAN). It is no exaggeration to say that today the ASEAN member States have become an example of a very successful model of liberalizing trade in services among developing countries. At the same time, the scope and depth of commitments for individual service sectors go beyond the commitments recorded by these countries in the World Trade Organization.

The liberalization of trade in services, which has been particularly intensive here since the 1990s, was, in fact, part of a larger process of broad economic integration in the region that unfolded at the same time. This process included the expansion of foreign direct investment (FDI) in the economies of ASEAN member States, the harmonization of rules and standards governing foreign trade, and the protection of intellectual property rights.

In these countries, the concept of giving special importance to regional trade agreements (RTAs) has been recognized. It was argued that they are best able to support the growth of mutually beneficial trade between countries and mutual investment. These agreements should provide for the reduction of cross-border barriers, simplification of foreign trade procedures and ensuring FDI, as well as mutually agreed efforts between countries to harmonize relevant legislation [1].

The practical implementation of the provisions of this concept, in essence, meant the liberalization of foreign trade in goods within the framework of ASEAN. The scale of this trade grew rapidly in the 1990s, but now there is a slight slowdown, since measures that give very quick returns have already exhausted their capabilities [2, p. 65, 70]. Therefore, the current challenge is to increase attention to further liberalizing trade not only in goods, but also in services. It is this type of trade that can now be considered the most important lever for expanding the production links of enterprises in the region. Transnational corporations (TNCs) in the region also need to purchase various services.

PLANS FOR CREATING AN ECONOMIC COMMUNITY

How is it practically planned to liberalize trade in services in the region in the foreseeable future? Great hopes are pinned here with the intention to create up to 2020. The ASEAN Economic Community-the decision to create such a community was made back in 2002. As a model, we decided to use the EU model, however, with a slightly different "supranational" regulation. Later, it was decided to accelerate integration and form an Economic Community by 2015. Regulation of trade in services is an important part of this integration project. Priority sectors are medical services, tourism, air transport, electronic services and logistics [3].

To implement this ambitious project, the ASEAN Economic Community Blueprint was developed in 2007. One of the main tasks outlined in this plan is the formation of a common market, which implies the free movement of goods, services, capital and labor [4].

However, the process of integrating the service sector is significantly complicated due to the extremely uneven level of development of this sector in the ASEAN member countries. For example, if in Indonesia the share of trade in services accounts for only

Figure 1. ASEAN participation in international trade in services.

Calculated from the UNCTAD stat data.

The article was prepared with the financial support of the Russian State Scientific Foundation, project N 14 - 32 - 01200.

Table 1

ASEAN countries in International Trade in services, 2012

Источник: ASEAN Statistical Yearbook, World Development Indicators.

Figure 2. Structure of ASEAN service exports.

Calculated from the UNCTAD stat data.

While Singapore, the undisputed leader in this indicator in the region, contributes 87% of GDP from trade in services (see Table 1).

The volume of trade in services of the ASEAN countries is growing steadily. If in 2003 the share of these countries in the world export of services was 4.25%, then in 2012 it was already 5.75%. Accordingly, the import data is as follows: in 2005 - 5.6%, and in 2012 - 6.6% (see chart 1). The structure of trade in ASEAN services is becoming more diversified: new types of services are beginning to crowd out "traditional" ones (transport and travel). For example, so-called other types of services predominate at the core of ASEAN service exports (see Figure 2). In 2012, this category accounted for 38.7% of total service exports, which significantly exceeded the share of travel and transport. However, despite these favorable changes, the share of other types of services continues to seriously lag behind the global average of 54% [5, p. 11].

The ratio of services exports to total exports of ASEAN countries is also lower than the global average (Table 2). The region's countries are unable to overcome the traditional gap in the share of services exports in total exports from the countries of Europe, North and Latin America.

Between 2005 and 2011, intraregional trade in services from ASEAN countries accounted for between 16.5% and 18% of total trade in the Association. In 2009, as a result of the financial and economic crisis, intraregional trade in services declined slightly, but then recovered again (see figure 3).

Summing up the interim results of the implementation of the plan for creating an Economic Community, it should be noted that, for example, with regard to the liberalization of medical services, all the countries of the Association have not managed to achieve significant results. At the same time, the situation in the banking and insurance sectors improved somewhat [6].

A major obstacle to the deepening integration of the ASEAN countries and, consequently, to the expansion of trade in services remains the insufficiently developed infrastructure in the region. In order to solve this problem, a Master Plan for the development of communication relations of the Association was developed and adopted, which provides for the construction of roads, modernization of ports, laying a gas pipeline, network

Table 2

Ratio of service exports to total exports of goods and services

Calculated from the UNCTAD stat data.

Figure 3. Intraregional trade in services in ASEAN (as a percentage of total trade).

Calculated based on the data from ASEAN stats 2012.

power transmission lines, fiber-optic cable networks, and other projects [7]. However, despite the fact that much attention has been paid to various infrastructure construction projects over the past decade, the volume of investment in them, primarily private, remains insufficient.

MECHANISM FOR LIBERALIZING TRADE IN SERVICES

The liberalization of trade in services in ASEAN is overseen by several cross-country organizations. The main one is the Coordinating Committee on Trade in Services, established in 1996 specifically to implement the ASEAN Framework Agreement on Services. Initially, the Committee was assigned the function of ensuring integration in seven priority sectors: air and sea transport, business services, construction, finance, telecommunications and tourism [8].

At the informal ASEAN Economic Ministers ' Meeting in 1999, the Committee's functions were significantly revised to regulate the integration of all service sectors, with the exception of air transport and finance. The Association's member countries have decided that if ministries control the service sectors, then these ministries, and not the ASEAN structures, should be responsible for liberalizing trade in services (by service sector). In 2001, the previously established working groups on tourism, maritime transport and telecommunications were placed under the control of the Committee. And in the same year, services related to industrial production, agriculture, fishing, forestry, mining and quarrying were excluded from its areas of competence. They were transferred to the ASEAN Common Institutions.

The Committee has 6 sectoral working groups: business services, construction, healthcare, logistics and transport services, telecommunications and IT services, and tourism. Currently, only 4 working groups - Business services, healthcare, logistics and transport services-work closely with the Committee. At the same time, each of the ASEAN countries is taking steps to integrate all types of these services. The Committee consists of specialists responsible for negotiating the liberalization of trade in services; they are also officials working in national departments - most often in the Ministries of Trade and / or Economy.

The next important body involved in service sector integration is the Investment Coordination Committee. It was established in 1998 to assist the Investment Council in all matters related to the implementation of the ASEAN Investment Area (AIA) Agreement. In 2001, the issues of economic integration of services related to industrial production, agriculture, fishing, forestry, mining and quarrying were transferred to the Investment Council, more specifically, to the Investment Coordination Committee, which is subordinate to the Council. In 2008, the ASEAN member States adopted the Comprehensive Investment Agreement, which brought together two agreements already in force since 1987-on the formation of the ASEAN Investment Zone and on the promotion and protection of ASEAN Investments. According to the new agreement, these service sectors should be liberalized for investment (unless there are other reservations regarding the national treatment, senior management or board of directors in these countries).

PREFERENTIAL LIBERALIZATION OF TRADE IN SERVICES: AN ASEAN APPROACH

Unlike many other inter-State groupings operating in the Asia-Pacific region (APAC), ASEAN has a very extensive organizational structure, although of a decentralized type. Due to this, the economic success of individual member countries can be considered to be largely a consequence of the activities of the entire Association within the framework of economic cooperation [9, pp. 226-261].

The Bangkok Declaration*, adopted at the 5th ASEAN Summit in 1995, called for immediate negotiations between States on the liberalization of trade in services. And such perego.* In December 1995, the 5th ASEAN Summit was held in the capital of Thailand. Its participants adopted the Bangkok Declaration, which emphasized the need to strengthen cooperation between the countries of the association in the political and economic fields, as well as accelerate the integration of East Asia.

The thieves were carried out: in the same year, the ASEAN member countries developed a draft of actions that identified ways to liberalize this trade, which was based on the ASEAN Framework Agreement on Services (AFAS) signed in Bangkok.

While most regional trade agreements in Southeast Asia provide for the liberalization of the service sector on the basis of "negative lists" (in which the signatory countries indicate sectors that are not subject to the general rules of free trade zones; accordingly, all other sectors are supposed to be liberalized), ASEAN adheres to international rules that recommend the use of "positive lists".". This means that liberalisation is carried out only in the service sectors indicated by the partner countries. For each specific service sector included in the positive list, an exhaustive list of market access restrictions and national treatment should be recorded.

The current commitments of ASEAN to its member countries reflect the long-standing regime in the service sector, which means that they do not go beyond freezing obligations in certain industries in some cases.

The implementation of the liberalization of trade in services, in accordance with the Framework Agreement between the ASEAN member Countries mentioned above, took place in 5 stages, and at each stage quite difficult and lengthy negotiations were held. The first round of negotiations took place from 1996 to 1998, the second from 1999 to 2001, the third from 2002 to 2004, the fourth from 2005 to 2007, and the fifth from 2007 to 2009. Several more rounds of negotiations on the liberalization of trade in services are planned to be held before 2015. As a result of these discussions, agreements were reached on liberalization in 65 service sectors (according to the W/120/11 classification applied in the WTO). During the fifth round, the ASEAN member countries lifted all restrictions on trade in services, making some exceptions for reasons of maintaining public safety. Moreover, each country determined these exceptions individually.

The fifth round of negotiations ended with the signing of the so-called Seventh package of commitments under the Framework Agreement. As a result of all five rounds of negotiations, the program for liberalizing trade in services in the region was fully implemented.

LIBERALIZATION MECHANISM-MUTUAL RECOGNITION AGREEMENTS

The 7th ASEAN Leaders ' Summit, held in Bandar Seri Begawan, agreed on a timetable for the start of negotiations on mutual recognition agreements. Such agreements are necessary to facilitate the movement of professional service providers across the territories of the Association's member countries. The ASEAN Services Coordination Committee has formed an interim expert group on mutual recognition agreements. This expert group was included in the Working Group on Business Services in July 2003. Later, in March 2004, the Coordinating Committee established a Working Group on Health. In the future, the ASEAN member states were able to sign important agreements and mutual recognition agreements for the liberalization of trade in services: engineering services (2005); medical services (2006); architecture (2007); geodetic qualifications (2007); accounting services (2009); tourism workers (2012 G.); and others.

These agreements allow service providers to obtain certificates and register in their own country. However, in accordance with the principle of reciprocity, such certificates are recognized in any other signatory state.

ASEAN AND REGIONAL TRADE AGREEMENTS: REGULATING TRADE IN SERVICES

Since 2000, Asia-Pacific countries have been using participation in regional agreements (RTAs) regulating trade in services with third countries as a trade policy tool. The number of trade agreements involving ASEAN member States is growing every year. And there are a number of reasons for this.

One of them is that almost all Southeast Asian countries have recently been looking for ways to address the issues of liberalizing trade in services, primarily at the regional level. Under such trade agreements, it is relatively easy to negotiate the liberalization of trade in services on individual terms that are favorable to the signatory countries.

A second reason for the rapid growth of such agreements regulating trade in services in the Asia-Pacific region was the recognition by States of the need to expand the export opportunities of service producers. The overall favorable economic situation in the region objectively contributes to the expansion of these opportunities. Even in the crisis year of 2009, when the rest of the world was experiencing a downturn, the Asia-Pacific region, including the countries of East and South-East Asia, grew by 7.7% compared to 2008 [10]. However, despite the well-deserved status of the most successful export-oriented growth region, the service sector here still requires significant development.

Finally, for ASEAN member countries, the conclusion of regional trade agreements contributes to further economic growth, as well as its restructuring. States usually conclude such agreements, including in order to consolidate the achieved results of economic reforms. The leaders of these countries often use RTAs for internal political pressure on the opposition. This strategy partially neutralizes the resistance to reforms [11].

Some researchers believe that all the Asean-centric structures that have emerged since the early 1990s-"ASEAN+1", "ASEAN+3" - are not quite correctly classified as regionally integrated. And this is reasonable:

Table 3

Free Trade Area (FTA) agreements involving ASEAN countries

Compiled by the author.

after all, it is generally accepted that trade liberalization should apply only to members of the grouping [12, p. 449-478]. In this case, it applies only to the" full members " of ASEAN, but not to the States that have joined the Association. In the East Asia region, a different approach is used: being a member of one or several regional structures, many states also conclude free trade agreements with several dozen partners that are not part of this association (see Table 3). However, this approach calls into question the real economic efficiency of these associations [13, p. 254 - 270].

One of the first agreements on trade in services with a "non-Asean" country was the Free Trade Area (FTA) agreement signed between ASEAN and China in the "ASEAN + 1" format in January 2007. It is based on the ASEAN Comprehensive Economic Cooperation Framework Agreement of 2002.In 2010, ASEAN signed an investment agreement with China aimed at creating a transparent mutual investment space and liberalizing the investment climate of the Association's member countries.

In November of the same year, an Agreement on Trade in Services was signed to expand economic cooperation between ASEAN and the Republic of Korea. In 2009, the ASEAN-Australia and New Zealand Free Trade Agreement (AANZFTA) was signed. It entered into force in 2010 for Australia, New Zealand, and 7 ASEAN countries (Brunei, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam). Later, the Agreement included an additional chapter regulating the movement of individuals, as well as appendices on trade in financial and telecommunications services. Countries have developed two separate lists of obligations, the first of which describes specific obligations, and the second describes the conditions of movement of individuals.

This agreement is comprehensive and comprehensive in nature and is the only deep economic integration agreement that the Association has signed with dialogue partner countries. It covers goods, services, investments, as well as conditions for the mobility of individuals. The goals of the agreement under consideration are: liberalizing trade in goods and services; stimulating mutual investment opportunities based on creating a favorable investment climate; developing a framework for cooperation to strengthen, diversify and expand trade, investment and economic ties between the parties; providing special and differentiated treatment to ASEAN countries, primarily Indochina states [14, p.36].

In terms of business services, education, tourism, construction and transport, all of these Countries apply a more liberal trade regime than that imposed by their WTO accession obligations. Thus, service providers from any other country participating in the Agreement should be provided with treatment no less favorable than that provided to national service providers in similar circumstances [15].

The creation of a free trade area (FTA), which was mentioned above, simplifies the movement of entrepreneurs across the border.-

companies that participate in trade or invest within ASEAN. This simplification is primarily the result of establishing more transparent procedures for processing immigration forms and other documents. The FTA, in particular, significantly expands the opportunities for New Zealand investors and provides a more reliable regime for investing in all ASEAN member countries through investment protection obligations [16].

In December 2012, ASEAN and India concluded negotiations on trade in services and investment. The two agreements - on trade in services and investment-between the two countries are based on the Framework Agreement for Integrated Economic Cooperation signed between ASEAN and India in 2003. It is planned that these two agreements will improve the conditions for the functioning of the already existing free trade zone between the countries.

On November 22, 2012, ASEAN opened negotiations with Australia, China, Japan, New Zealand and the Republic of Korea to conclude a Regional Comprehensive Economic Partnership Agreement, which aims to create a more liberal trade and investment regime in the region. This association is also open to other countries participating in free trade zones with ASEAN [17, p. 103].

* * *

Traditionally, researchers have focused on the European model of liberalizing trade in services, while models developed and implemented in Asian countries are not considered as examples of successful trade policies. This is largely due to the relatively low share of this group of countries in international trade in services.

Meanwhile, the experience of forming a regional services market with the participation of developing countries in Southeast Asia is unique, as it is based on the coordinated work of several mechanisms: trade liberalization at the regional level in ASEAN; parallel trade liberalization at the multilateral level. Plus, the Association actively participates in regional trade agreements covering trade in services and aimed at expanding the export opportunities of national service providers.

The structure and content of the ASEAN agreements on trade in services and investment cooperation vary widely by service sector. The task of ASEAN member States is to work together to create conditions for ensuring the free movement of services in all member States and to implement a coordinated policy on liberalizing trade in services with respect to third countries. The formation of a common market will bring significant economic benefits to all ASEAN member States, which will extend not only to the trade sector, but also improve the investment regime, as well as help solve acute employment issues for the region.

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