President's Newsletter

Key Developments

• United States Open to Negotiations with Thailand on GSP Cuts: Following last month’s announcement that the United States Government (USG) would revoke approximately one-third of Thailand’s trade privileges under the Generalized System of Preferences, the Thai Government announced that the USG was willing to enter into negotiations over the cuts. During a speech on the United States’ commitment to Asia at the Indo-Pacific Business Forum in Bangkok on November 4, U.S. Secretary of Commerce Wilbur Ross said, “there’s still time to renegotiate the underlying issue of workers’ rights” before the suspension takes effect in April 25, 2020. Thai Prime Minister Prayut Chan-o-cha said that he hoped the United States would reconsider the suspension. During a dialogue with Secretary Ross at the November 4 forum, he sought to assure the Commerce Secretary that the Thai government is ready to cooperate in suppressing human trafficking while supporting U.S. firms in Thailand. See more.
• Ban of Glyphosate, Paraquat, and Chlorpyrifos Takes Effect December 1, Despite U.S. Government Objections: A ban on the use of the herbicides paraquat and glyphosate and the pesticide chlorpyrifos will come into effect on December 1. The implementation of the ban comes after the National Hazardous Substances Committee reclassified the chemicals as Type 4 toxic substances, the highest designation under Thailand’s Hazardous Substance Act (HSA). According to the HSA, it is illegal to import, export, transfer, or possess chemicals classified as Type 4 substances. The efforts to reclassify the chemicals have drawn official protests from the U.S. Government. In a letter to Thailand Prime Minister Prayut Chan-ocha, Undersecretary Ted McKinney at the U.S. Department of Agriculture asked Thailand to “postpone action on glyphosate,” warning that it could adversely affect Thailand’s ability to import certain agricultural commodities, including soybeans and wheat. The Thai Government has thus far rejected the U.S. Government’s concerns, and Prime Minister Prayut has said that he would send officials to the U.S. Embassy in Bangkok to explain the reasoning behind the ban.
• e-Conomy Southeast Asia Report Highlights Digital Financial Services: This month, Google, Temasek, and Bain & Company released the e-Conomy SEA 2019 report, which focused mainly on the digital economy and e-commerce in the six largest ASEAN markets (Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam). The e-Conomy report notes payments, remittances, lending, investment, and insurance are major areas ripe for transformation in digital fintech. Digital payments themselves are expected to cross US$1 trillion in Southeast Asia by 2025. See the report here.
• Malaysia’s 2020 Budget Includes Focus on Rural Infrastructure Development: On October 11, the Malaysian Minister of Finance Lim Guan Eng presented the full-year 2020 budget, which unlike previous budgets emphasizes boosting infrastructure investment in the historically overlooked provinces of Sarawak and Sabah. The types of projects highlighted in the budget include infrastructure for water projects and flood mitigation, several large transportation-related projects, and continued implementation of the National Fiberisation & Connectivity Plan (NFCP) 2019-2023. Minister of Finance Lim Guan Eng noted that the Government will attempt to prioritize public-private partnerships when undertaking these projects, with the Government providing support for the construction of primary infrastructure and the private sector investing in critical business assets.
• Prime Minister Mahathir Announces New Measures to Boost the Digital Economy: On October 16, Malaysian Prime Minister Dr. Mahathir announced new initiatives to boost the digital economy during the 30th Multimedia Super Corridor (MSC) Implementation Council Meeting. These new initiatives are intended to keep Malaysia on the cutting edge of new technology and utilize technology for the government’s vision of shared prosperity. The implementation of these project will be overseen by the Malaysia Digital Economy Corporation (MDEC). Additionally, the government has proposed the formation of the National Digital Inclusion Council to assist in creating digital economy income opportunities. See more.
• Electricity Generating Authority of Thailand to Discuss Power Trading Agreements with Cambodia, Myanmar: To further Thailand’s goal to be an energy trading hub for Mainland Southeast Asia, the country’s Energy Minister Sontirat Sontijirawong has asked the Electricity Generating Authority of Thailand (EGAT) to discuss potential future power trading arrangements with energy authorities in Cambodia and Myanmar. Electricity trading to both countries could begin in 2023 after energy officials in Cambodia and Myanmar complete assessments of the needed power capacity, transmission lines, power tariffs, and how long the trading agreements will last. See more.
• Indonesia Enacts New Provisions to Enhance the National Film Industry: The Ministry of Education and Culture recently issued regulations aimed at growing and protecting the domestic film industry in Indonesia. Among these regulations, Regulation 34/2019, the Distribution, Screening, Export and Import of Films addresses the requirement and procedures surrounding film distributors, screening businesses, and imports. The new regulations require film distributors and film screening businesses to increase cooperation through the drafting of cooperation agreements that must be submitted to the Film Development Center. See more.
• Indonesia to Meet Social Media Firms as Government Eyes ‘Negative Content’ Fines: On November 5, Director of Information Applications for the Ministry of Communication and Information, Semuel Abrijani Pangerapan, stated that the Ministry is looking to issue new regulations regarding content regulation on digital platforms. The new regulations are aimed at removing “negative content” such as pornography, violence, and radicalism from digital platforms, specifically social media. Companies potentially face fines of up to US$36,000 for noncompliance. Director General Pangerapan noted that the fines could go into effect in 2021.
• TELMIN Ministers Approve Approach for ASEAN Cross Border Data Flows Mechanism: During the 19^th ASEAN Telecommunications and Information Technology Ministers’ Meeting (TELMIN), the Ministers approved the next steps in the development of the ASEAN Cross Border Data Flows Mechanism (CBDF). The CBDF will have a dual-track approach, including an ASEAN Certification and ASEAN Model Contractual Clauses. The goal is to align the ASEAN Cross Border Data Flows Mechanism with international standards such as the APEC Cross Border Privacy Rules (CBPR) and OECD standards, and to have the ASEAN CBDF be interoperable with other international data protection principles.

• Unofficial English Translation Available for New Government Regulation 71/2019 on Data Localization (Replacement of GR 82/2012):  On October 4, the revision to GR 82/2012 was signed. The new regulation, GR 71/2019 on Electronic System and Transaction Operations, replaces GR 82/2012 and came into force on October 10.  Key highlights include changes in categories for data storage, public Electronic System Operators (article 20), Private Electronic System Operators (article 21), Strategic Data (Public Electronic System Operators). There have also been key updates regarding breaches and the right to be forgotten.
• Halal Law Takes Effect in Indonesia as of October 17: On October 15, 2019, the Ministry of Religious Affairs Regulation on the Implementation of Halal Product Assurance was signed just two days before the law came into effect on October 17, 2019. The long-awaited law covers a wide range of fields including halal application procedures, examination agency registration, labeling, administrative sanctions, renewal mechanisms, and international cooperation. The law stipulates all applications for halal certification will be overseen by the halal agency, BPJPH. Some remain concerned about the readiness of the BPJPH to lead the certification process, since the responsibility has historically fallen to the top Muslim clerical agency, MUI. There is also concern over public awareness of the grace period for implementation, as well as fear of potential false charges.  Our members are also concerned about the requirement to use a non-halal logo or label affixed to the packaging, which will distinguish non-halal from halal-certified products.
• USABC Director Riley Smith Publishes Essay in National Bureau of Asian Research (NBR) on Developing ASEAN’s Liquefied Natural Gas (LNG) Markets: ASEAN's energy demand is set to quadruple by 2030, but obstacles to developing the region’s LNG markets risk hindering its ability to meet this rising demand. Smith’s essay, "Advancing Gas Market Reforms in the Indo-Pacific: Key Issues for Southeast Asia," examines three factors crucial to the development of LNG markets in Southeast Asia and proposes recommendations to overcome challenges to this development. See the essay in The National Bureau of Asian Research’s Special Report no. 81 here.

• 2019 Mission to ASEAN Telecommunications and IT Ministers Meeting (TELMIN): Empowering a skilled digital workforce, increasing regional connectivity, and understanding the impact of technology on jobs and productivity were central themes for this year’s meetings between the USABC delegation and the ASEAN Telecommunications and IT Ministers. The meetings took place in Vientiane, Laos from October 23-25 and included bilateral and plenary engagements. The mission reinforced USABC’s ongoing efforts to promote data governance conducive to growth and innovation in ASEAN. In August, USABC’s ICT Committee released a white paper, “Digital Data Governance in ASEAN: Key Elements for a Data-Driven Economy” (accessible here). This publication provides U.S. industry recommendations on digital data governance frameworks, in complement to the ASEAN Framework on Digital Data Governance.
• TELMIN-AEM roadshow (name change to AEM-ADGMIN) – The USABC has moved dates for the inaugural AEM-TELMIN Digital Economy Roadshow to the United States to early February, which will also be now called the AEM-ADGMIN, short for the ASEAN Digital Ministers Meeting (ADGMIN), to signal a renewed commitment to accelerate the development digital technologies and digital transformation. The roadshow will visit one city on the West Coast, one city in the middle of the country, and Washington, DC. Contact: Riley Smith (rsmith@usasean.org) or Mario Masaya (mmasaya@usasean.org).
• ASEAN Women’s Council in Washington, DC recipe book: The book contains recipes from the 10 countries of ASEAN. There are 30 recipes in total, including Singaporean Chicken Curry Puff, Malaysian Nasi Lemak, Thai Tom Yum Goong, Halo-Halo from the Philippines, and many others. The book – A Taste of ASEAN Cuisine, will be launched on November 22, retailing at $20, and all profits will go towards Doctors Without Borders, an NGO providing medical care in conflict zones and countries affected by endemic diseases. If you are interested in purchasing this cookbook and supporting its cause, please click here and fill out an order form. For any queries regarding ordering, please contact Hui Xin at (202) 257-2807 or via email at huixin@gmail.com.