Speeches

Distinguished ASEAN Directors-General of Customs

Deputy Secretary-General for ASEAN Economic Community, ASEAN Secretariat

Excellencies, Ladies and Gentlemen

1. I am very happy to join you this morning at the Opening Ceremony of the 31st ASEAN Directors-General of Customs meeting in Singapore. Once again, a very warm welcome to all our ASEAN friends who are visiting from abroad.

2. Over the past two years, the DG Customs meetings were convened virtually because of Covid-19.  But now that the Covid-19 situation is improving, and countries are progressively relaxing their measures, I am very glad we are now able to gather together in person. There is nothing quite like conducting business face-to-face, and I’m sure all of you have much to catch up on together.

3. The past two years has certainly been challenging for all of us. In the area of trade, Covid-19 caused painful supply chain disruptions. But within ASEAN, we’ve banded together to ensure the free flow of essential goods like medical supplies, medicines, and food products between our countries. Because of our close cooperation, ASEAN has managed to pull through the worst of the Covid-19 crisis together. All of you, our Customs authorities, had a key role to play in all of this, so I would like to say a big thank you to you for your close coordination these past two years.  

4. Looking ahead, the immediate outlook remains uncertain. Trade volumes in ASEAN have yet to recover to their pre-pandemic levels. Many companies are still facing supply chain disruptions due to Covid-19 restrictions in other countries. We all know that these disruptions have been further exacerbated following the war in Ukraine. The strains on energy and food supplies around the world are also felt in ASEAN countries, and this has led to rising prices. There are also now growing concerns about the outlook for growth in the near term.  

5. Despite these dark clouds over the horizon, the longer-term ASEAN growth story remains intact. Our region is still on track to become the world’s fourth largest economy by 2030, after the United States, China, and the European Union. With more than 60% of ASEAN’s population currently under 35 years old, this growth will be underpinned by a dynamic, young, and educated workforce, and a sizable emerging middle class.

6. So the longer-term story remains intact, but given the near-term challenges we face, we must redouble our efforts to cooperate and work together and to ensure that ASEAN remains an attractive destination for foreign investment. In fact, the economies of ASEAN are increasingly becoming more intertwined and inter-dependent. Today, it is common to hear of companies using different ASEAN countries to manufacture components before assembling them for global export, be it for smart phones or home appliances. ASEAN countries also heavily rely on each other for crucial resources and other goods like electrical machinery, mineral fuels and oils, and vehicle parts and accessories. So, to ensure continued growth and prosperity for the region, we must deepen our integration with each other, and also with the rest of the world. 

7. Much work has already been done on these two fronts when it comes to tariffs and trade rules. 

a. For example, over the past decade, we have deepened economic integration in ASEAN by eliminating tariffs on more than 98% of all product lines under the ASEAN Trade in Goods Agreement. We have also made moves to liberalise our trade in services and to facilitate investments. 

b. To deepen our links with the rest of the world, ASEAN also actively supported the Regional Comprehensive Economic Partnership (RCEP), which entered into force at the start of this year. RCEP is the largest trade agreement in the world, as we all know, and will help increase regional trade flows and deepen cross-border production linkages. 

8. To keep ASEAN competitive, efficient and secure customs clearances processes are important too. And this is where all of you come in. Such more efficient processes can minimise trade-related business cost and support important business operations like just-in-time manufacturing. All of us have long recognised the importance of this, and that is why we established the ASEAN Single Window, which has been in live operation since 2018. By standardising, digitising, and transmitting customs documentation for cargo clearance, the ASEAN Single Window removes the need for business to fill in large volumes of hardcopy documents and courier them to different customs authorities in ASEAN. Implementation of the ASEAN Single Window is ongoing, but it is an excellent example of how customs authorities in the region can work together to bring down the cost of trade between ASEAN countries. 

9. Today, I am very happy that ASEAN takes another important step forward with the launch of the Joint Action Plan on the ASEAN Authorised Economic Operator – Mutual Recognition Arrangement (or ASEAN AEO MRA). Under this arrangement, businesses which are successfully validated by any one ASEAN country will have reduced documentary and cargo inspections across all ASEAN countries. They will also enjoy additional benefits, including

a. A higher level of facilitation during customs clearance; 

b. Priority treatment if goods have been selected for inspection; and

c. Expedited clearance in the event of a trade disruption. 

10. The benefits are substantial – studies have shown that such arrangements can improve customs clearance efficiency by 30% or more. For businesses, it will mean higher cost savings. For ASEAN countries, it will mean more efficient trade with each other, so that we can remain competitive.  So, it is  an excellent initiative and I would like to congratulate all the Customs Directors-General and your teams on developing this Joint Action Plan, and I look forward to its speedy implementation.  

11. Beyond this, there are two other areas of customs collaboration which will be of tremendous benefit to ASEAN. 

a. First, deepening customs collaboration with ASEAN’s major trading partners. Although the ASEAN Single Window has streamlined customs and trade-related document processing within ASEAN, trade-related documents for goods exported outside of ASEAN remain in hardcopy. This is inefficient.  It is also unnecessary. If we can link up the ASEAN Single Window with key trading partners like the US, China, Japan, and South Korea, it will further lower trade-related costs for businesses and support the development of more interlinked supply chains from these countries to ASEAN.

b. Second, aligning our respective customs processes to common standards. One area that could benefit from this is e-commerce, which is a fast-growing industry in many ASEAN countries. Some countries have already simplified their customs processes and procedures to facilitate such e-commerce shipments, while others have not done so. Aligning our processes will reduce administrative costs and make our region more attractive for e-commerce. 

12. These two areas will involve a lot of close coordination and technical study. But I am confident that we will continue to make progress, through the strong spirit of collaboration and partnership that underpins everything we do in ASEAN.  

13. In conclusion, to realise the potential of ASEAN, we must work together to deepen our integration with one another and with the rest of the world. On both these fronts, Customs has an important role to play. Through important initiatives like the ASEAN Single Window and the ASEAN AEO MRA, we can lower trade-related costs for businesses and support the development of supply chains across ASEAN. 

14. On that note, I wish you all a fruitful 31st ASEAN Directors-General of Customs meeting in Singapore. Let us all do our part for a more integrated and prosperous future for ASEAN. Thank you very much.