Promoting Services Trade in ASEAN PAPER 6
Trade in Maritime, Air, Rail and Road
Transport Services

国際機関日本アセアンセンター

FEBRUARY2018

For inquiries, contact ASEAN-Japan Centre(ASEAN Promotion Centre on Trade, Investment and Tourism)
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Paper 6 / February 2018 / Trade in Maritime, Air, Rail and Road
Transport Services

Promoting Services Trade in ASEAN PAPER 6
Trade in Maritime, Air, Rail and Road
Transport Services

国際機関日本アセアンセンター

FEBRUARY

2018

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NOTES
The terms country and/or economy as used in this study also refer, as appropriate, to territories orareas; the designations employed and the presentation of the material do not imply the expressionof any opinion whatsoever on the part of the ASEAN-Japan Centre concerning the legal status of any
country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers orboundaries.

The following symbols have been used in the tables:• Two dots (..) indicate that data are not available or are not separately reported.
• A dash (-) indicates that the item is equal to zero or its value is negligible.
• Use of a dash (–) between dates representing years, e.g., 2015–2016, signifies the full period
involved, including the beginning and end years.
• Reference to “dollars” ($) means United States dollars, unless otherwise indicated.

There are seven papers in total. The other six papers cover professional services,
R&D services, telecommunication services, computer and related services, courier services,and tourism.

Prepared by Hikari Ishido (Chiba University, Japan) and Masataka Fujita (ASEAN-Japan
Centre). The authors wish to thank the staff members of the AJC and Richard Liang for theirresearch and statistical assistance, and the ASEAN Government officials who participated in
the third seminar for the Promotion of Services Trade in ASEAN, on 11–13 September 2017,
in Kuala Lumpur, Malaysia, for their comments. Errors and omissions are only those of theauthors and should not be attributed to their respective organizations.

PA PE R 6 T RA D E I N M A RI T I M E, A I R, R AIL AN D R OAD TR AN SPOR T SER VIC ESCONTENTS
I. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
II. Current state of transport services in member states . . . . . . . . . . . . . . . . . . . . . . . . . 3
III. Ascendancy of transport services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

1. Mode 1: International trade. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  21

2. Mode 3: Commercial presence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
IV. T
 rade agreements and regulations among and in

the ASEAN Member States. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

V. Impacts of liberalization and deregulation of transport

services on economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

1. General impacts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

2. Impact of China’s One Belt, One Road initiative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
3. Other social impacts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
VI. C
 onclusions and policy suggestions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
1. General policy suggestions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

2. Workable policy suggestions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  41
Annexes
Annex A. Fifty large foreign affiliates engaged in maritime,
air, rail and road transport services in ASEAN, 2015 . . . . . . . . . . . . . . . . . . . 46
Annex B. Fifty large ASEAN affiliates abroad engaged inmaritime, air, rail and road transport services, 2015 . . . . . . . . . . . . . . . . . . . 48
Annex C. Specific schedule of commitments for “maritime transportation”
under the AFAS (9th package, signed in November 2015)
by ASEAN Members. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Annex D. Specific schedule of commitments for “air transportation”
under the AFAS (9th package, signed in November 2015)
by ASEAN Members. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Annex E. S
 pecific schedule of commitments for “rail transportation”
under the AFAS (9th package, signed in November 2015)
by ASEAN Members. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Annex F. Specific schedule of commitments for “road transportation”
under the AFAS (9th package, signed in November 2015)
by ASEAN Members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  71
Annex G. Strategic goals for transport services by mode . . . . . . . . . . . . . . . . . . . . . . . . .  76
Annex H. Policy evaluation exercise: How transport services
and courier services attain the “multiple equilibria”. . . . . . . . . . . . . . . . . . . . 84

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I. INTRODUCTION
Transport – air, rail and road services – is an essential service sector, especially for manufacturing
activities in ASEAN. The General Agreement on Trade in Services (GATS) administered by the World
Trade Organization (WTO) lists1 the following 21 job categories under “Maritime transport services”,“Air transport services”, “Rail transport services” and “Road transport services”, which this paper
addresses. These four modes of transport are referred to in this paper as transport services. The WTO
list also includes 11B, Internal waterways transport; 11D, Space transport; 11G, Pipeline transport;
11H, Services auxiliary to all modes of transport; and 11I, Other transport services. These five are
not considered here except for storage and cargo handling services, to the extent to which they areincluded implicitly in transport services statistics. Among these transport services, air transport isa Priority Integration Sector under the ASEAN Economic Community.
11A Maritime Transport Services
11Aa
Passenger transportation
11Ab
Freight transportation
11Ac
Rental of vessels with crew
11Ad
Maintenance and repair of vessels
11Ae
Pushing and towing services
11Af
Supporting services for maritime transport
11C Air Transport Services
11Ca
Passenger transportation
11Cb
Freight transportation
11Cc
Rental of aircraft with crew
11Cd
Maintenance and repair of aircraft
11Ce
Supporting services for air transport
11E Rail Transport Services
11Ea
Passenger transportation
11Eb
Freight transportation
11Ec
Pushing and towing services
11Ed
Maintenance and repair of rail transport equipment
11Ee
Supporting services for rail transport services
11F Road Transport Services
11Fa
Passenger transportation
11Fb
Freight transportation
11Fc
Rental of commercial vehicles with operator
11Fd
Maintenance and repair of road transport equipment
11Fe
Supporting services for road transport services
Of the three sources of value added – i.e. provisions of (1) tangible products, (2) information and(3) amenities – transport services tend to fall under amenities. The provision of transport-related
services tends to grow with economic development. In the ASEAN region, which records consistently
vigorous economic advances and displays increasing physical connectivity, the role of transport
services is becoming larger year after year.

1

The title of the WTO document is “Services Sectoral Classification List” (MTN.GNS/W/120, released on 10 July
1991).

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2Figure 1 illustrates global value chain curves related to transport services. As shown, transport
services are part of logistics and distribution (the shaded part in the figure), linking suppliers andconsumers through transport facilities (i.e. maritime, air, rail and road facilities).

Figure 1. Value chains and transport services
High

Coverage of “transport
services” in the smile
curves (shaded area)

VALUE ADDEDInternal
Waterways
Transport
Servicesa

RailTransport
Servicesc

Low

R&D

DesignManufacturing /Services

Logistics

Maritime
Transport
Servicesa

Air
Transport
Servicesb

Road
Transport
Servicesd

Distribution

Aftersales

PRODUCTION (VALUE) CHAINS
Source: ASEAN-Japan Centre.
Note: For each type of transport services, includes passenger services, freight services and supporting services,pushing and towing (except air and road transport).
aIncludes rental of vessel with crew services and maintenance and repair of vessels services.
b
Includes rental of aircraft with crew services and maintenance and repair of aircraft services.
c
Includes maintenance and repair of rail transport equipment services.
d
Includes rental of commercial vehicles with operator services and maintenance and repair of road transport
equipment services.

PA PE R 6 T RA D E I N M A RI T I M E, A I R, R AIL AN D R OAD TR AN SPOR T SER VIC ES

3ASEAN’s Kuala Lumpur Transport Strategic Plan (ASEAN Transport Strategic Plan) 2016–2025
states: “(T)ransport has been recognized by the ASEAN Leaders as the very basis of the ASEAN
economic development and integration as it plays a crucial role in the movement of goods, services,
capital and people. It also provides great support in binding ASEAN’s economies closer together andin building the ASEAN Economic Community that is so vital for the future of ASEAN nations.”
With reductions in transport costs from the development of transport infrastructure and theefficiencies of transport systems, people and firms do not need to stay in one location. This makes it
possible for multiple cities to emerge, at distances from the capital area (annex H). When a population(or economic purchasing power) grows large enough, production and living costs eventually become
prohibitively high. This enhances the market potential of other locations and hence encourages the
emergence of new cities away from the capital area, fueled by greater mobility. ASEAN-wide policy
should be formulated with such a decentralized, multiple-equilibria scenario in view.2

II. CURRENT STATE OF TRANSPORT SERVICES IN
MEMBER STATESTable 1 shows logistics performance indices (LPIs) for the ASEAN member states and memorandum
countries in 2016. The indices measure the degree of smooth customs clearance, infrastructuraldevelopment, efficient international shipments, and logistics quality and competence, as well as
timeliness of shipments.
Overall, there is a significant degree of variation among the ASEAN member states’ LPI scores.
Singapore ranks the highest (fifth in the world). The rank of the Lao People’s Democratic Republic isthe lowest (152nd), and hence an important focus (see case study in box 1).
For the ASEAN member states to become more integrated in terms of transport services, ASEANwide policy arrangements are necessary. What is needed is a concerted policy effort to redress gaps
in logistics performance. Liberalization3 of trade in services would be one effective policy area on
which all the ASEAN member states could collaborate to narrow these logistical gaps.
Take, for instance, the case of maritime services. Trade liberalization in this sector offers exporters,
importers and goods distributors in a country a competitive and cost-efficient alternative to domesticcargo operators. Furthermore, in some ASEAN member states, foreign international marinetransporters can offer more efficient cargo transportation services than their domestic counterparts,
which tend to use older, poorly managed shipping fleets. Also, the fewer taxes currently imposed oninternational cargo transport operators in some countries enables those operators to offer services
at competitive prices. Thus, foreign international marine transport operators are likely to benefit
from the liberalization of policies such as the cabotage4 policy.

2

3

4

APEC Policy Support Unit (2015) indicates that, in the context of global value chains, transportation services for
procuring intermediate inputs make possible the geographic dispersion of value-creating operations.
There are some concerns in relation to the liberalization of trade in transport services. One is the dominance of
foreign suppliers, which might pose risks to national security (as transport services constitute an indispensable
part of any nation’s infrastructural base). Also, profitability gaps among suppliers of transport services might
widen. At the other extreme (i.e. monopoly of a domestic transport supplier), however, the affordability of transport
services tends to become somewhat marginalized. Liberalization is thus not always good; there should be abalance between the benefits and costs of liberalization.
Cabotage refers to transport of goods or passengers between two places in the same country by foreign suppliers(for more on the concept of cabotage, see section IV).

27

24

China

Korea. Republic of

Source: World Bank (http://lpi.worldbank.org/).

12

Japan

Memorandum

64

Viet nam

71

Philippines

5

113

Myanmar45

32

Malaysia

Thailand152

Lao People’s Democratic
Republic

Singapore

73

63

Cambodia

Indonesia

70

LPI rank

Brunei Darussalam

ASEAN members

Country

3.72

3.66

3.97

2.98

3.26

4.14

2.86

2.46

3.43

2.07

2.98

2.8

2.87

LPI score

3.45

3.32

3.85

2.75

3.11

4.18

2.61

2.43

3.17

1.85

2.69

2.62

2.78

Score

26

31

11

64

46

1

78

96

40

155

69

77

57

Rank

Customs

3.79

3.75

4.1

2.7

3.12

4.2

2.55

2.33

3.45

1.76

2.65

2.36

2.75

Score

20

23

11

70

46

6

82

105

33

155

73

99

66

Rank

Infrastructure

3.58

3.7

3.69

3.12

3.37

3.96

3.01

2.23

3.48

2.18

2.9

3.11

3

Score

27

12

13

50

38

5

60

144

32

148

71

52

62

Rank

International
shipments

Table 1. Logistics performance indices for the ASEAN member states and memorandum countries, 2016

3.69

3.62

3.99

2.88

3.14

4.09

2.7

2.36

3.34

2.1

3

2.6

2.57

Score

25

27

12

62

49

5

77

119

35

144

55

89

93

Rank

Logistics quality
and competence

4.03

3.9

4.21

3.5

3.56

4.4

3.35

2.85

3.65

2.68

3.46

3.3

3.19

Score

23

31

15

56

52

6

70

112

47

133

62

73

84

Rank

Timeliness4

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Industry characteristics for transport-related sub-sectors are provided here by country.

1. Maritime transport services
Brunei Darussalam. As a result of the trend towards larger vessel sizes, container terminals in the
country need to be expanded. The Ministry of Communication, which administers maritime transport
services, plans to implement the expansion through its Strategic Plan (2008–2017).5
Cambodia.6 The Ministry of Public Works and Transport has the following mission and functions:build, maintain and manage all transportation infrastructure, including bridges, ports andwaterways; establish regulations for the development of ports and waterways infrastructure;establish regulations and control transport by waterway; and participate and cooperate to establish
laws, regulations and diverse standards concerning the construction of transport infrastructure.
Indonesia.7 The country’s international marine transportation industry has been expanding rapidly,
driven by the rise in seaborne exports to countries such as China, Japan and the Republic of Korea
and by the growth in trade flows among ASEAN member states. Marine transportation services
have gained significance because of Indonesia’s archipelagic geography, which naturally leads toheavy reliance on maritime transport for both international and domestic trade. In addition, theGovernment’s growing emphasis on developing shipping and port services as well as liberalizing
and decentralizing the sector has been aiding growth in this industry. The Government has also
implemented new regulatory policies that are likely to help increase the participation of foreigncompanies and facilitate greater competition among the players. The Government’s determination
to enhance port infrastructure across Indonesia and connect essential links in the country is likely
to boost growth in marine transportation services. However, the international marine transportationindustry faces a huge challenge in making inter-island transportation services in the country
economical and efficient.
Indonesia’s marine transportation industry undertakes international, inter-island and transshipment
transportation services that cover shipping and port operations through cargo liners and tramptrade shipments. The country’s merchant fleet includes oil tankers, bulk carriers, container ships,
cargo ships, passenger ships and sailing ships. The Government has been actively encouraging
both foreign and domestic investors in the international marine transportation industry. Government
regulations have made possible significant opportunities for foreign shipping companies toparticipate in Indonesia’s shipping and marine transportation businesses, which consist of bothIndonesian- and foreign-flagged vessels.
Lao People’s Democratic Republic. Marine or waterway traffic is widely used. A 333 km navigationroute on the Mekong River between the country and China has been improved to accommodate a
100 ton load limit in the dry season and a 350 ton limit in the rainy season. There are 25 ports along
the Mekong River, 5 of which have standard logistics support systems; the others will be upgradedsoon. For sea transport, the Vung Ang Port in Viet Nam is being upgraded so as to increase shipment
services in the future. In 2014, goods exported from the Lao People’s Democratic Republic throughthat port amounted to 739,000 tons, a 40 per cent growth over 2013. Between 2012 and 2014, theLao Government received $9.1 million in profits from this port alone. The amount of goods moved bymarine transport is one third of the amount moved by road, but four times that moved by rail (table 2).

5
6

7

Downloadable at http://www.mincom.gov.bn/Resources/strategic%20plan%202008%20-%202017.pdf.
Information obtained from the website of Cambodia’s The Ministry of Public Works and Transport (https://www.
mpwt.gov.kh/about-ministry/mission-and-function.html?lang=en).
Information obtained from the website of Indonesia’s Ministry of Transportation (http://www.dephub.go.id/).

-

Amount of passenger traffic (1 000 passenger-km)

1 786
51 600

Amount of passenger traffic (1 000 passenger-km)

Source: Lao People’s Democratic Republic Ministry of Public Works and Transport.

27 600

Number of passengers (1 000)

695

Amount of goods traffic (1 000 ton-km)

Amount of goods (1 000 tons)

123
19 870-

Water transport

1.5
41 230

Number of passengers (1 000)

Rail transport

Amount of passenger traffic (1 000 passenger-km)

Number of passengers (1 000)

Amount of goods traffic (1 000 ton-km)

Amount of goods (1 000 tons)

Air transport

1 470 800

24 993

Amount of passenger traffic (1 000 passenger-km)

130 300

Number of passengers (1 000)

1 477

2000

Amount of goods traffic (1 000 ton-km)

Amount of goods (1,000 tons)

Land transport

Content

621

40 268

1 570

41 100--40 484155

41 3660.3

1 675 908

34 887259 000

2 592

2005

65 4852 053

69 710

1 088

420

12

73 842283

72 3450.7

2 555 992

38 272383 015

4 430

2010

Table 2. Transport services in Lao People’s Democratic Republic by mode, 2005–2015

48 890

1 811

70 000

993

500

12

72 108311

89 1340.4

2 113 416

37 617319 400

3 823

2011

71 8222 178

79 200

1 418

930

34

78 913463

86 0600.5

2 618 875

41 210362 500

4 548

2012

73 1422 707

82 180

1 586

850

32

72 325447

86 663

1.6

2 827 156

48 532388 300

5 007

2013

80 0962 968

94 700

1 668

1 200

38

83 199444

92 7001.4

2 979 525

48 959394 666

4 780

2014

86 0642 966

98 593

1 752

910

38

138 090

1 817

91 3041.1

3 205 017

59 106434 714

5 127

2015

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Malaysia.8 Malaysia’s location – near one of the world’s busiest shipping channels, the Strait ofMalacca – facilitates extensive connectivity to major shipping lines between the Middle East and East
Asia. Moreover, international marine transport forms a crucial part of the country’s international
trade, with 90 per cent of it conducted via waterways.
Malaysia’s shipping fleet includes tankers, liners, cargo vessels, ferries, dredgers, trawlers,tugboats and other vessels. These vessels are either used by ship owners for international marinetransport of cargo or chartered (rented) to shipping companies for the transport of third-party cargo.
International marine shipping is undertaken either with cargo liners or on a tramp basis. Whereas
cargo liners transport cargo from various shippers, tramp trade refers to the shipment of cargo only
for specific shippers. This type of shipment is mainly undertaken to carry energy resources, such as
petroleum and liquefied natural gas, that require special-purpose vessels.
Myanmar. The Department of Marine Administration and the Myanma Port Authority, both of which
are under the Ministry of Transport and Communications, administer maritime transport services.
The Department of Marine Administration has 21 functions, with these objectives: to ensure national
flagged ships conform to safety standards, safe practices and the standards of competence requiredof marine personnel; to promote the development of human resources, human resources planningand optimum utilization of human resources in the maritime sector; to improve the safety record of
Myanmar-registered vessels; and to improve performance on the specific obligations to save lives inships in distress at sea and to protect the marine environment.
The objectives of the Myanma Port Authority are to earn revenues for the State through the provisionof services (loading, unloading, storage of cargoes, receipt and delivery of transit cargoes, etc.) tovessels calling at all the ports of Myanmar. There are eight coastal ports, known as outports. To
cope with the growth in maritime trade volume after the adoption of a market-oriented economy,
the Government laid out a plan to develop two deep-sea commercial ports: Dawei (Italian-Thai
Development Co., Ltd.) and Kyaukpyu (CITIC Group, China).
Yangon Port is the premier port, the gateway for state exports and imports, and plays a vital role ineconomic development. It has two areas, Yangon Inner Harbour Area and Thilawa Area.
With the growth of maritime trade under the market-oriented policy allowing the participationof foreign and local private investment in the national economy, cargo throughput has increased
considerably since 1988, to reach the optimal capacity limit of Yangon Port. The Thilawa area,
located 16 km downstream, has been earmarked for expanding the port. For developing that port,
37 plots of waterfront land were allocated. These recent developments of commercial ports havebeen implemented by foreign investors on a build-own-transfer and joint-venture basis.
Philippines.9 The former cabotage policy, in effect for 50 years, allowed international marinetransport operators with foreign-flagged vessels (foreign international marine transporters) tomake port calls only at a single international port of entry. This restricted their operations to a few
international ports in the country. The cargo offloaded at these ports of entry was then transported
by domestic shipping companies to the destination port, for which those companies charged very
high fees. Such charges pushed up the cost of trade for exporters and importers as well as the costof distribution of goods countrywide. This restriction resulted in a marked preference for Philippinesbased international marine transporters (Philippines-flagged ships), which are not restricted to asingle port of entry.

8
9

Information obtained from the website of Malaysia’s Ministry of Transport (http://www.mot.gov.my/en).
Summary of information obtained from the website of the Philippines’ Department of Transportation (http://dotr.
gov.ph/).

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In 2015, then-President Benigno Aquino III signed a law amending the Philippines’ cabotage law,
Republic Act 10668, “An Act Allowing Foreign Vessels to Transport and Co-Load Foreign Cargoes for
Domestic Transshipment and for Other Purposes”. Its Implementing Rules and Regulations were
issued in 2016. Restrictions on port entry by foreign operators were largely alleviated.
Singapore.10 As an island nation, Singapore is highly dependent on its maritime sector for thedevelopment of international trade and access to global markets. In 2014, the country’s maritime
industry accounted for approximately 7 per cent of GDP, employing 3.1 per cent of the population(170,000 people). Singapore’s advanced port infrastructure and its position as a global transshipment
hub have both spurred growth in its international marine transport industry.
Singapore’s shipping fleet comprises tramp liners through oil tankers, bulk carriers, general cargoships, offshore supply ships and cargo liners, and container ships. It is used to transport cargo andpassengers. Some owners also charter their ships (through middlemen) to shipping companies,
which adopt either the cargo liner or the tramp trade business model for shipment of third-party
cargoes. This type of shipment is primarily undertaken to transport energy resources such as
petroleum and liquefied natural gas, which require special-purpose vessels.
Thailand.11 The Ministry of Transport released its Transport Investment Plan (2013–2020) in 2013.
Expenditure under the Plan on restructuring the transport infrastructure was set at B 2.27 trillion or
US$66.7 billion. About 55 new projects are likely to be completed by 2020, with major developments
in railway connectivity and water transport.
Thailand’s logistics cost (measured as a percentage of GDP) is 14.1 per cent. In the overall transport
cost of 7.3 per cent, maritime transport costs account for 1.5 per cent, and the share of cargo
in international seaborne trade that is carried by Thai-flagged vessels is approximately 10 per
cent. Most industrial and semi-industrial goods are carried by sea, to take advantage of the lower
transport costs for carrying large volumes that result from economies of scale.
Ports in Thailand play a vital role in serving both domestic cargo transportation on inland waterways
and coastal areas, and international maritime transport. The Port Authority of Thailand is responsible
for the supervision of five public ports, namely, Bangkok, Laem Chabang, Chiang Saen, Chiang
Khong and Ranong. There are also 192 private ports, piers and wharves scattered along major rivers
in the central region and along the coastlines of the eastern and southern regions.
In 2017 the Thai merchant fleet (seagoing vessels of 500 tons gross registered tonnage and up)
consists of 480 vessels, including 21 dry bulk carriers, 81 conventional vessels, 33 container ships,
24 refrigerated ships, and 315 oil and chemical tankers.
The main seaborne cargo in Thailand’s international trade consists of dry bulk cargo such as
agricultural products, iron ore, and rubber. In 2016, Thailand ranked 34th in the world in shipping
tonnage, up from its 21st ranking in international trade in 2015.
Viet Nam.12 International marine transport plays an instrumental role in Viet Nam’s international
trade, accounting for 90 per cent of import and export volumes. International trade is primarily
driven by major trading partners, such as the United States, China and Europe. Seaborne trade islargely concentrated in Haiphong Quang Ninh and Ho Chi Minh City. Most ports are underutilized
owing to excess port capacity and lack of cargo. Therefore, only a few major ports continue to grow

10
11

12

Summary of information obtained from the website of Singapore’s Ministry of Transport (https://www.mot.gov.sg/).
Information obtained from the website of Thailand’s Ministry of Transport (http://www.mot.go.th/about.html?dsfm_
lang=EN).
Information obtained from the website of Viet Nam’s Ministry of Transport (http://mt.gov.vn/en/Pages/default.
aspx).

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9significantly. Inferior port infrastructure, inefficient logistics and high fuel costs remain key concerns
for the industry.
International trade is set to increase as a result of the implementation of free trade agreementsthat Viet Nam has concluded. To develop Viet Nam as an important stop for international passenger
ship operators, the Government is seeking to construct an international passenger-ship port on thesouthern island of Phu Quoc. The port will receive passenger ships of 225,282 tons gross registeredtonnage (capable of carrying 4,000–6,000 passengers).
Big ports such as Hai Phong and Ho Chi Minh City are located far upstream on rivers, where limited
depth at the mouths makes the entry of large vessels difficult. The seaport network consists ofmostly small and medium-sized companies with inefficient distribution systems. A lack of goodquality vessels and managerial expertise has further limited the industry’s development. In addition,a poor warehousing system, inadequate demand and high fuel prices have led to increased costs forshipping companies.
In terms of international cooperation, Japan and Viet Nam signed a memorandum of understanding
on sea transport services in June 2017, for the purpose of Japan cooperating with Viet Nam informulating a new national technical standard for the design of port facilities and port management.13

2. Air transport services
Brunei Darussalam.14 In the last two decades, Brunei International Airport has expanded its
infrastructure, facilities and services to cater to growth in passenger and cargo throughput andaircraft movements. The operations of low-cost carriers in neighbouring airports have made a large
impact on air traffic in the country. To mitigate this impact, the Ministry continues to encourage lowcost carriers to operate at the airport.
Cambodia.15 The Ministry of Public Works and Transport has the following mission and functions:participate and cooperate in establishing laws, regulations and diverse standards concerning
the construction of transport infrastructure; implement other construction projects that theGovernment entrusts it with; and cooperate with the Secretariat of Civil Aviation concerning all
airport construction works.
Indonesia.16 The rules and regulations for safety, security and service for the aviation sector are
managed by the Directorate General of Civil Aviation. Of the airports, 269 adhere to the International
Civil Aviation Organization (ICAO) code and 26 are monitored by two State-owned enterprises (SOEs).
However, these measures and regulations have not been adequately developed to cope with theincreasing air traffic.
To improve the safety of air transportation, for example, the country has adopted a regulation that
establishes a semi-private corporation to manage air traffic services. In 2012, the president signed
Government Regulation No. 77/2012 on Indonesian Flight Navigation Service Organizer Bodies.
Under it, State-owned airport management authorities no longer manage air traffic controllers.

13

14

15

16

Based on the website of Japan’s Ministry of Land, Infrastructure, Transport and Tourism (http://www.mlit.go.jp/
page/kanbo01_hy_005586.html).
Information obtained from the website of Brunei Darussalam’s Ministry of Communications (http://www.mincom.
gov.bn/Resources/strategic%20plan%202008%20-%202017.pdf).
Summary of information obtained from the website of Cambodia’s Ministry of Public Works and Transport (https://www.mpwt.gov.kh/about-ministry/mission-and-function.html?lang=en).
Summary of information obtained from the website of Indonesia’s Ministry of Transportation (http://www.dephub.go.id/).

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The semi-private corporation, located in Jakarta, receives funding from the Ministry of Transportation.
Regulation UU No. 1/2009 stipulates that all Indonesian airline companies need to operate at least
10 aircraft.
Lao People’s Democratic Republic. The Ministry of Public Works and Transport administers airtransport services. The domestic air travel industry is small, but it has grown rapidly, particularly
since the late 2000s (table 2). Of the 12 airports, 4 are international: Wattay Airport, the largest, in
Vientiane; Luang Prabang Airport; Pakse Airport; and Savannakhet Airport. There are 12 air routes
for international flights (with one to Japan opening in the near future). An average of 650 flights areoffered daily by more than 60 airlines. Eight airlines operate international flights; they include two
Lao, one Chinese, three Thai, one Vietnamese, two Korean, and one Malaysian airline. Dramaticincreases in transport by air were observed in 2015 when the number of passengers rose four times
over that of the previous year.
Malaysia.17 The air transport industry facilitates trade and boosts tourism. In 2016, of the
42 commercial airports, 6 served as international airports. Currently, 8 scheduled and 18 nonscheduled domestic carriers, as well as 78 foreign carriers, operate in the market. In 2016, they
served 91.6 million passengers and carried approximately 873,434 tons of cargo. Malaysia plans
to convert the empty land around the country’s main airport into an aviation hub with air cargo,logistics and aerospace facilities.
The economic aspects of the air transport industry are regulated by the Malaysian Aviation
Commission and the technical aspects of the industry by the Department of Civil Aviation, bothof which are overseen by the Ministry of Transport. The Department is directly responsible for air
traffic management and regulation of the aviation industry. Malaysia Airports Holding, a separate
entity licensed by the Commission, is responsible for the management, development, operation andmaintenance of 39 international, domestic, and business and general use airports.
As of 2016, Malaysia had air service agreements with 105 countries, including 20 “open skies”
agreements. The country is also a party to ASEAN’s open skies agreement, which took effect in2015. Through this agreement, Malaysia is able to carry revenue traffic from its airports to any of the
72 international airports in the ASEAN region. The various open skies agreements and connectivity
to major countries in the world may turn Malaysia into a vital hub in the Asia-Pacific region.
Myanmar. The Department of Civil Aviation, in the Ministry of Transport and Communications,administers air transport services. Its mission is to ensure a safe, efficient, reliable and secure
civil aviation system in accordance with the Myanmar Aircraft Act, the Myanmar Aircraft Rules
and the obligations of both the Convention on International Civil Aviation and the Standards andRecommended Practices of the Annexes to the Convention. The Department has three mainfunctions: safety oversight, security oversight and economic oversight. It has a strategic plan
to further expand the aviation sector with four objectives: pursue the liberalization of economic
regulations in the aviation sector, strengthen air linkages, promote airline businesses and improve
infrastructure.
Currently 11 local licensed airlines and 29 international airlines operate in Myanmar. The country
has 69 airports: 3 international, 29 domestic and 37 for military, commercial freight and other uses.
The Government has approved the construction of Hanthawadi International as a build-own-transfer
project by a consortium of Changi Airport International and JGC Corporation. It is expected to becompleted in 2020.

17

Information obtained from the website of Malaysia’s Ministry of Transport (http://www.mot.gov.my/en).

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11

Philippines.18 The air transportation and aviation industry has been growing steadily since 2005,
when low-cost carriers were introduced. Because the country is an archipelago of more than 7,100
islands, air travel is generally popular with customers (local and international) as it saves time aswell as costs, especially with the presence of low-cost carriers. The industry has been a key enablerof tourism and has aided the economic development of the country.
The air transportation industry is highly regulated, with two government bodies overseeing theindustry – the Civil Aviation Authority of the Philippines and the Civil Aeronautics Board. The Authority
is a public registry for aircraft and mostly manages the safety, security, technical and operational
aspects of the industry. The Board regulates the economic aspects of air transport, supervising andcontrolling cargo sales agents, air carriers, air-freight forwarders and general sales agents.
With strict regulations and a concentration of local airlines, the Government has initiated efforts to
attract international air carriers to help diversify the industry. In 2011, the Government introduced
a “pocket” open-skies policy, primarily targeting international carriers. The policy allowed foreign
aircraft to land at a select few international airports other than the country’s busiest, the Ninoy AquinoInternational Airport in Manila. These few airports were designated as secondary airports and offeredadditional frequency route rights. Furthermore, the Government allowed international carriers to
obtain route rights over and above the limit set for domestic carriers. The policy was implemented to
attract more tourists to the country and to reduce passenger traffic at the Manila airport.
In 2016, then-President Benigno Aquino III signed the ASEAN Multilateral Agreement in Air Services.
The signing of Protocols 5 and 6 allowed Philippine air carriers to fly an unlimited number of times
to and beyond the capital cities of other ASEAN nations, which will lead to better and more efficientconnectivity and translate to more competitive fares and services.19
Singapore.20 Air transportation has played a vital role in furthering the country’s objective of
becoming the transport hub of the Asia-Pacific region. Owing to its advantageous geographic
location and high-quality airport infrastructure, Singapore has become a prominent transportation
hub in Southeast Asia and a major stopover country on the flight routes that connect Europe andthe Middle East with the Pacific. During 2010–15, international air passenger traffic in Singapore
expanded at an annual rate of approximately 5.5 per cent, to reach 54.8 million passengers. As of
March 2016, over 100 airlines operated in Singapore, connecting to over 330 cities in 80 countries,
with about 6,800 scheduled services each week.
Singapore is a signatory to the ASEAN open skies agreement and various multilateral agreements
for international air transportation and air freight services, which aim to liberalize international airtransport for freight and passengers. These agreements have created a vibrant air transportation
market in Singapore and also helped consolidate the country’s position as a major transport hub in
the Asia-Pacific region.
Thailand.21 The air transportation industry has been developing rapidly, mainly owing to the country’s
status as a popular tourist destination. The country has received a high volume of international
passenger traffic over the last few years, which has significantly boosted the industry. The surge indomestic and international air travel has driven the emergence of several low-cost carriers. Intensecompetition among them has led to cheaper ticket prices and easier accessibility to travel.

18
19

20
21

Information obtained from the website of the Philippines’ Department of Transportation (http://dotr.gov.ph/).
Source: SunStar CEBU’s site (http://www.sunstar.com.ph/cebu/business/2016/02/10/pnoy-signs-asean-openskies-456560).
Information obtained from the website of Singapore’s Ministry of Transport (https://www.mot.gov.sg/).
Information obtained from the website of Thailand’s Ministry of Transport (http://www.mot.go.th/about.html?dsfm_
lang=EN).

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To develop the air transport industry, the Government has been investing in training personnel forthe aviation industry and expanding the country’s aircraft repair and maintenance sector. It has also
been promoting the manufacture, repair and conversion of aircraft, as well as the manufacture ofaircraft parts and equipment.
The Government has been proactively engaging in initiatives to promote the expansion of the airtransportation industry. In 2013, the Tourism Authority of Thailand began collaborating with Airportsof Thailand Pcl, which operates the country’s major airports, to boost the number of international
visitors to the country. Both organizations aim to do so through a variety of marketing, promotional,
research and human resource development activities. The planned promotional events include theorganization of joint seminars, research work, the exchange of information and feedback, and thepromotion of travel and tourism news. This agreement is expected to boost the aviation industry andattract more airlines, including scheduled and chartered flights, from both short- and long-haulmarkets.
Viet Nam.22 The air transportation industry has grown rapidly in the last few years due to the surge
in demand for air travel from both domestic and international passenger markets as well as thegrowth in cargo traffic volume. In 2015, the total market reached 31.1 million passengers and204,600 tons of cargo, up 1.8 times and 1.1 times, respectively, compared with 2013. This growth canbe largely attributed to factors such as Viet Nam’s favourable geographic location in the centre of the
Asia-Pacific region, underserved domestic routes resulting from poor rail and road infrastructure,and demand for better transport from the growing middle class. Flexible government policies andliberalization in the industry, a growing number of inbound tourists and robust expansion plans
signal strong growth prospects for the industry.
The Government has taken several steps to build and upgrade airport infrastructure. Under its
aviation master plan for 2020, a number of construction and upgrade projects were completed in2013, prioritizing locations with high population density and high annual volumes of passenger traffic.
In addition, under this plan the Civil Aviation Authority of Vietnam, which regulates the industry, has
proposed to build or upgrade 26 airports by 2020, which will require an investment of D 221 trillion.
In 2013, the ICAO set out recommendations for Viet Nam’s airline industry in the Asia-Pacific
Economic Co-operation (APEC) framework. They include lifting limitations on foreign capital in jointventure agreements and also on the number of joint ventures in aircraft-related services such as
repair and maintenance, and computer reservation systems.

3. Rail transport services
Brunei Darussalam. There are no rail transport services in the country.
Cambodia.23 The Ministry of Public Works and Transport has the following mission and functions:build, maintain and manage all the transportation infrastructure including railways; establish
regulations for the development of railways; establish regulations and control transport by railway;
participate and cooperate to establish laws, regulations and diverse standards concerning theconstruction of transport infrastructure; and realize other construction works that the Government
entrusts to it.

22

23

Information obtained from the website of Viet Nam’s Ministry of Transport (http://mt.gov.vn/en/Pages/default.
aspx).
Summary of information obtained from the website of Cambodia’s Ministry of Public Works and Transport (https://www.mpwt.gov.kh/about-ministry/mission-and-function.html?lang=en).

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13

Indonesia.24 Most railroads are used for the transportation of both passengers and freight. In 2014,
the rail industry transported 278 million passengers and 33 million tons of freight. Networks ofrailway cover four main regions including South Sumatra, West Sumatra, North Sumatra and Java –the most populous island in the world, where about 57 per cent of the 255 million Indonesians live.
The three railway operators are (1) Kereta Api Indonesia (KAI), which is owned by the Government; (2)Kereta Commuter Jabodetabek (KCJ), a subsidiary of KAI and hence also owned by the Government;and (3) Mass Rapid Transit Jakarta (MRTJ), a new urban railway operator, established and owned by
the Jakarta Provincial Government. In total, these three operators run an active track length of 5,162
km (KAI – 4,816 km, KCJ – 235 km, MRTJ – 111 km).
Lao People’s Democratic Republic. The Ministry of Public Works and Transport administers railtransport services. Trains run across borders. A 4 km railway runs between the Thanaleng Station andthe Lao–Thai Friendship Bridge 1. Another railway that runs 417 km between the Lao–China border(Borten) and Vientiane is under construction and will be completed by 2021 (for speeds of 90–120km/h for cargo and 160–200 km/h for passengers). The first surveys have been completed for a 350
km railway between Vientiane and Thakhek; a 500 km railway between Thakhek and Savannakhet–
Pakse, the border with Cambodia; and a 42 km railway between Pakse, Champasak and the Lao–
Thai border, Vangtao–Chongmek. In 2015, 38,440 domestic and international passengers used railtransport services, which is only 0.06 percent of the number of passengers using land transport(table 2).
Malaysia. The Land Public Transport Commission has the role of regulating and planning policy, andis responsible for rail transport services, including light rail transit (LRT), mass rapid transit (MRT)and high-speed railway, guided by the Land Public Transport Master Plan. Rail transport service isoperated by Keretapi Tanah Melayu Berhad over a total length of 2,262 km.
Two region-wide rail projects involve Malaysia: the Kuala Lumpur–Singapore high-speed rail project
and the Singapore–Kunming rail link (SKRL). The former is an alternate mode of public transport
connecting seven cities in Malaysia to Singapore along the coastal route. It will provide safe, efficientand optimal transportation and will be the solution for heavy congestion in these areas.
According to the Ministry of Transport, the latter railway project, the SKRL, running 6,618 km,
connects eight countries – Cambodia, the Lao People’s Democratic Republic, Malaysia, Myanmar,
China, Singapore, Thailand and Viet Nam. This project is expected to promote and enhance trade,
tourism and travel between the countries involved. Malaysia has been the permanent chairman of
the Special Working Group Meeting of the SKRL since 2007.
Myanmar. Myanma Railways, an SOE under the Ministry of Transport and Communications,administers all rail transport services. It has been restructured since September 2011, moving
towards more decentralized decision-making, more proactive forward planning and more focus onproviding good service to users through improved market responsiveness.
The rail network has a route length of 6,111 km, with 705 km of double-track line. Myanma Railways
transported 44,109 passengers and 1.7 million tons of freight in in 2016–2017. It also operates the
Yangon Circular Railway, a 48 km, 39-station loop system that connects Yangon’s downtown withsatellite towns and suburban areas.
Myanmar has implemented two railway projects with Japanese official development assistance(ODA) loans: one is a Yangon–Mandalay railway improvement project and the other is the Yangon
Circular Railway upgrading project.

24

Summary of information obtained from the website of Indonesia’s Ministry of Transportation (http://www.dephub.
go.id/).

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In June 2017, the Myanmar Investment Commission, a governmental body, announced prioritizedinvestment activities in 10 areas, including logistics industries; among the industries, passenger
and freight transport by railway is an important policy focus.25
Philippines.26 Railway is the least developed mode of transport, with routes mostly restricted to thelargest island of Luzon and heavily concentrated in Metro Manila. This limited rail coverage, witha total of 528 km in 2014, can be attributed to the country’s archipelagic nature, which makes it
relatively difficult to construct railway routes connecting the various island provinces. Furthermore,
frequent typhoons and other natural calamities render the maintenance and operation of railway
networks a challenge. The limited network and the people’s preference for other modes of transport
have restricted the use of railways. Filipinos prefer to use land transport such as jeepneys, tricycles
and buses for intra-island travel and ships and planes for inter-island travel.
The Department of Transportation and Communications is the executive branch that oversees
all transport activities and related agencies. It primarily awards contracts for rail operation andsanctions the extension and upgrading of railway networks. It also regulates fares, subsidizes rail
operations and supervises rail operators to ensure passenger safety and the smooth functioning ofrail networks.
The rail network includes the interregional railway system operated by the Philippines National
Railway and the urban rapid transit railway systems – the LRT and the MRT – operated only in
Metro Manila. The State-owned and operated national railway is the most extensive intra-island
railway on Luzon. It runs commuter services in Metro Manila and the Bicol Region (currently underrehabilitation). The LRT system, comprising two lines, is operated by the Light Rail Transit Authority,a Government-owned and controlled corporation. Also noteworthy are the public-private partnershiprail projects in the pipeline, e.g. LRT Line 6, a 19 km line along Aguinaldo Highway from Niyog,
Bacoor (the terminus of the LRT Line 1 Cavite Extension Project) to Dasmariñas City in Cavite.27
Singapore.28 Rail transportation includes MRT and LRT. The MRT is the rail network that connects
various parts of the city-state, whereas the LRT is a localized rail network connecting suburban
residential areas with key MRT stations.
Railway transportation systems require massive investments, and no private entity in Singapore isable to undertake such a huge project alone. Hence, the country’s rail transportation system wasinitiated and funded by the Government.
Planning and investing for new lines is undertaken by the Land Transport Authority (LTA), theGovernment agency in charge of all three land-based modes of public transport (taxis, buses andtrains). The LTA is the authority that calls for tenders to build new railway lines as well as monitorsand supervises the construction. Upon completion, the LTA assigns a company to operate the newrailway. Currently, there are only two railway operators, namely SMRT Trains Ltd., a subsidiary of
SMRT Corporation Ltd., and SBS Transit Ltd., which is listed on the Singapore Stock Exchange. As
for cross-border development of train services, Singapore and Malaysia aim to start high-speed rail
services between Singapore and Kuala Lumpur by 31 December 2026.29

25

26
27
28
29

Information obtained from the website for the Directorate of Investment and Company Administration (http://www.
dica.gov.mm/en/news/announcement-prioritized-investment-activities-myanmar-0). This announcement is basedon the April 2017 notification, in which the policy for “Supply and transport services” is prioritized.
Information obtained from the website of the Philippines’ Department of Transportation (http://dotr.gov.ph/).
Information obtained from the website of the Public-Private Partnership Center (http://ppp.gov.ph/?page_id=26075).
Information obtained from the website of Singapore’s Ministry of Transport (https://www.mot.gov.sg/).
Information obtained from Singapore’s Land Transport Authority (https://www.lta.gov.sg/content/ltaweb/en/
featured-projects/hsr.html).

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15

Thailand.30 The rail network consists primarily of main lines that radiate from Bangkok throughnorthern, north-eastern, eastern, and southern corridors, serving 47 of the country’s 76 provinces.
The Government has created infrastructure funds through which it can raise investments andreturn a steady yield to investors. The objective is to reduce Government spending on infrastructuredevelopment projects. The Government has invited private participation in fundraising. The Thai
Securities and Exchange Commission is the regulatory office managing the infrastructure funds. As
of September 2015, the Government had raised B 64 billion for the BTS Rail Mass Transit Growth
Infrastructure Fund, and Thailand had five infrastructure funds with total net assets of B 221 billion(US$6.6 billion).31 In July 2016, the Cabinet approved earmarking B 10 billion as seed money for the
B 100 billion Thailand Future Fund, which will invest in three road projects in its first stage.
In terms of international cooperation, Japan and Thailand signed a memorandum of understandingon rail services for development and safety in June 2017.32 The memorandum mentions cooperationon the development of a high-speed railway project linking Bangkok and Chiang Mai (some 660 km),together with cooperation on the development of other train service in Thailand.
Viet Nam.33 The railway network is in poor condition as a result of the major damages suffered during
wars and the shortage of subsequent investment for maintaining and upgrading the infrastructure.
Railways received just 2.5 per cent of all investments in transportation infrastructure during 2008–
11, while roads accounted for the majority share (85 per cent). The Government’s investments inrail infrastructure have primarily been spent on preventing the network from deteriorating further.
Furthermore, private investors are not keen on investing in railways because of the high associatedexpenses and long payback period. Hence, the sector relies considerably on ODA loans from othercountries and multinational development banks. This has led to significant delays in projects, given
the difficulties in conforming to the regulations set by donors for access to loans.
The railway network has not developed in tandem with other modes of transport, especially roads.
Therefore, there is significant potential for growth in the railway sector owing to its economic andsocial significance. The Government is working towards improving the railway network. The Ministryof Transport announced plans to begin a study focusing on improving the railway system, building
several new dual-track lines with a gauge of 1,435 mm along the existing 1,726 km north–south
railway line and adding new arterial routes and high-speed railways, a project set for commencementin 2020 and completion in 2030.
There are three railway operators: Vietnam Railway, Ho Chi Minh City Management Authority for
Urban Railways (MAUR) and Hanoi Metropolitan Rail Transport Project Board (HRB). Of the three,
only Vietnam Railway is operational, making it the sole supplier of railway-related services. It isan SOE, operating national passenger and freight railways, and will also be the operator of futurehigh-speed trains and the Hanoi Metro Line 1. The MAUR is responsible for the planning andimplementation of rail-based mass transit plans and will be the operator of the Ho Chi Minh Metro.
The HRB manages Hanoi Metro projects and will operate the Hanoi Metro Lines 2, 2A and 3.

30

31
32
33

Information obtained from the website of Thailand’s Ministry of Transport (http://www.mot.go.th/about.html?dsfm_
lang=EN).
Using the exchange rate of US$1 dollar = B 33.7 (average on 30 June 2015).
http://www.mlit.go.jp/page/kanbo01_hy_005598.html.
Information obtained from the website of Viet Nam’s Ministry of Transport (http://mt.gov.vn/en/Pages/default.
aspx).

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4. Road transport services
Brunei Darussalam. The public road system is still considered inadequate. The recent developmentof road transportation infrastructure has been positive, with increasing road length and an increasing
number of cars on the roads. Public-private partnerships have been implemented, and there is aneed to further promote this line of national policy.
Cambodia.34 The Ministry of Public Works and Transport has the following mission and functions:build, maintain and manage all transportation infrastructure including roads and bridges; establish
regulations for the development of the roads infrastructure; establish regulations and control
transport by road; participate and cooperate to establish laws, regulations and diverse standards
concerning the construction of transport infrastructure; and realize other construction works that
the Government entrusts to it.
Indonesia.35 Road congestion and air pollution problems caused by the growth in ownership andusage of private motorcycles and cars affect both big cities and small cities. One way to overcome
this challenge was for the Government to promote public transportation such as buses and trains
by providing subsidies and by encouraging more people to use public transport. Furthermore,
subsidies provided for public transport also helped vulnerable social groups to commute. These
groups include low-income earners, the disabled and the elderly.
In line with the policy on national transport, the Government (national or local) provides subsidies
by offering fares below market price for bus services that operate on socially sensitive routes (alsoknown as pioneer routes) in remote areas. The purpose of these pioneer routes is to facilitate
economic exchange between the deprived and the wealthy areas by linking them. Drawing ontransportation studies done in 2013, a fleet of 340 buses is being utilized to serve 128 pioneer routes
across 21 provinces.
The Bureau of Local Transport normally issues route permits for private bus operators so they canoperate legally within a given time period. The Government sets the ticket price for economy classaccording to the operating costs of the bus fleet. The ticket price for business class is determinedby market prices. In order to maximize profits, private operators typically overload buses, taking as
many passengers they can in any given moment, and offer only very low-quality services to thosepassengers. Furthermore, most of the buses owned by these private operators are old and not
maintained properly.
Lao People’s Democratic Republic. The Ministry of Public Works and Transport administers roadtransport services. There has been some development of transportation services in the border area(box 1).

34

35

Information obtained from the website of Cambodia’s Ministry of Public Works and Transport (https://www.mpwt.
gov.kh/about-ministry/mission-and-function.html?lang=en).
Information obtained from the website of Indonesia’s Ministry of Transportation (http://www.dephub.go.id/).

PA PE R 6 T RA D E I N M A RI T I M E, A I R, R AIL AN D R OAD TR AN SPOR T SER VIC ES

Box 1. T ransportation services in the border area of the Lao People’s Democratic
Republic
As a landlocked country, the Lao People’s Democratic Republic has put emphasis on physicalconnectivity. Improved connectivity within the country and with other countries has provided agreat deal of benefits for the economy, and FDI plays a role. The development of road transport
opens the way to dispersed economic activity: for example, the establishment of special economic
zones (SEZs) – such as the Pakse-Japan SME SEZ – is expected to further promote this dispersion
trend, especially outside the centre of the country. Honda motorcycles are now being exported to
Cambodia after the parts are imported from Thailand for assembly in the Lao People’s Democratic
Republic. Trucks move refined oil from Thailand to the Lao People’s Democratic Republic.
Transport services promote value chains of agricultural activities, which are subject to dispersing
forces because land cannot be concentrated in one location. The potential gains to the country
from transport service trade liberalization lie in the establishment of a value chain of harvesting,processing and exporting agro-based products. Shiitake mushrooms grown as a test in the country
by a Japanese firm make a good case for future promotion of agro-based products.
If road transport service is further liberalized for foreign suppliers, small-scale farmers in the
country would benefit economically. This would alleviate the typical situation in which small-scale
producers do not profit from trade liberalization as much as large-scale producers (Melitz 2003).
The Mekong River is not suitable for water transport because the part that runs through thecountry includes a large waterfall. Road transportation service therefore becomes all the more
important, which makes good connectivity with the rest of the ASEAN region critical.
As physical infrastructure already exists (in particular, highway 1), the promotion of “institutional
infrastructure” – namely, liberalization of trade in services in transport and other related service
sectors – is indispensable, to make possible greater flows of international goods and tourists
through the removal or reduction of border barriers.
Source: AJC, based on a field trip made in March 2017.

17

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There are 12 national roads, with a total length of 10,000 km. Eight roads were designated as ASEAN
highways, and six of those have already been approved. There are 1,764 bridges, with a total length of
52 km. There are eight bridges over the Mekong River, four linking to Thailand and one to Myanmar.
Two bridges over the Mekong are under construction. There are 119 routes for domestic transport
services and 67 routes for cross-border transport services.
According to the Ministry of Public Works and Transport, both the amount of goods and the numberof passengers transported by land nearly or more than doubled from 2005 to 2015 (table 2). The
volume of goods transported by land is larger than by any other mode.
Malaysia.36 Buses play an important role in the public transportation system. They provide urban
commute, intrastate and interstate connectivity. Given their importance in the public transportation
system, the Government tightly regulates the industry in terms of fares and licensing of bus operators.
Bus operators, which use three types of buses – stage, express and tourist buses – comprise bothprivate players and SOEs that operate on dedicated routes. The market for bus operators has
experienced intense competition because of the growing number of players, resulting in unfavourable
operating conditions. The increased number of bus operators has caused problems such as a dearthof skilled drivers and underutilization of bus capacity. As a result, bus operators have discontinued
services on less lucrative routes. The Government is therefore implementing several initiatives toreduce the overcapacity situation and develop the country’s bus services as a whole.
All bus operators are regulated by the Land Public Transport Commission. Bus operations in east
Malaysia, comprising Sabah and Sarawak, are regulated by the Commercial Vehicles Licensing
Board. These governmental entities perform various regulatory functions such as establishinglicensing policies for buses; reviewing, issuing and renewing bus operating licenses or suspending orcancelling licenses; and determining fares and other charges to be collected from bus passengers.
Myanmar. The Road Transport Administration Department, under the Ministry of Transport andCommunications, administers road transport services, with the main objective being road safety. The
Department’s responsibilities include vehicle inspection and registration, driving test administrationand issuance of driving licenses, issuance of traffic regulations and road safety measures for road
users, and levying of taxes and revenues for the State.
The Yangon Region Government also administers road transport services in the city of Yangon. Plans
to upgrade Yangon’s public transport networks are outlined in the Strategic Urban Development Planof Greater Yangon, published by the Japan International Cooperation Agency in partnership with the
Yangon Region Government and the Yangon City Development Committee. The Plan proposed a bus
rapid transit (BRT) system, and in February 2016, the BRT Lite service was officially opened, offering
service to 23 stops. In May 2016, the Government announced that the service had proved so popularthat 20 new buses were being added. The system is expected to expand the BRT to full operation,
comprising 100 buses covering 150 km of Yangon’s roads.
Whereas the Road Transport Administration Department and the Yangon Region Government
administer the road transport service, the Ministry of Construction takes charge of road construction.
One of the most important highway upgrades under way is the Yangon–Mandalay Expressway project.
Philippines.37 Road transportation services in the country involve a range of vehicles: public utility
buses (PUBs), taxis, public utility jeepneys, Asian utility vehicles, trucks and cars. The types of buses
available countrywide are PUBs, minibuses, tourist buses, company shuttles, schoolbuses andbuses for hire (also used as PUBs). Whereas schoolbuses are used to ferry schoolchildren, other36
37

Information obtained from the website of Malaysia’s Ministry of Transport (http://www.mot.gov.my/en).
Information obtained from the website of the Philippines’ Department of Transportation (http://dotr.gov.ph/).

PA PE R 6 T RA D E I N M A RI T I M E, A I R, R AIL AN D R OAD TR AN SPOR T SER VIC ES

19buses (PUBs, minibuses and those for hire) are mainly used for mass public transportation. PUBs
are further classified on the basis of the areas they serve, that is provincial, city-wide and regional(both inter- and intra-).
With a growing number of buses, terminals and transport routes across the country, the bus
transport industry is fairly developed. PUBs have become an integral part of the public transportsystem, mostly owing to their affordability and efficiency in accommodating more people than taxis
or jeepneys. Users find it economical to commute by PUBs countrywide. The fares of PUBs havenot been increased since 2008 owing to a decrease in ridership. Furthermore, the Government
is considering cutting fares for PUBs, following a ₧ 0.50 cut in fares for public utility jeepneys in
January 2016. In 2015, buses and jeepneys accounted for about 76 per cent of all public transport
trips in Manila. Transportation by PUBs is mainly along the main thoroughfare – Epifanio Delos
Santos Avenue – and centred in Manila, the capital city. Consequently, all PUBs are required to travel
to and from the Manila bus terminal. However, this has led to traffic congestion and has severely
affected the area in terms of delays in commuting, emission of greenhouse gases and ill health.
The transportation sector is regulated and governed by the Department of Transport andCommunication and its line agencies – the Land Transportation Franchising and Regulatory Boardand the Land Transportation Office. The two line agencies are responsible for managing andregulating public utility vehicles across the country. The Land Transportation Office issues licenses
to drivers and registers motor vehicles. The Board monitors compliance with franchises, rules andregulations, and policies. A noteworthy new development in road transport is regulation of transport
network vehicle services such as Grab and Uber.
Singapore.38 The bus industry, the main road transport service, comprises both public and private
bus services. Given the city-state’s land limitations and growing population, it is inevitable that alarge share of travel needs is met through public transportation. Compared with cars, buses are
more efficient carriers of commuters, with a higher number of passengers per unit road space.
A single-decker bus can carry 80 people.
The Ministry of Transport oversees the formulation of transport-related policies and facilitates
the development of the civil aviation and air transport sector, the maritime and ports sector, andthe land transport sector. The Land Transport Authority is a statutory board under the Ministry ofTransport, responsible for planning, operating and maintaining the land transport infrastructureand systems. The Public Transport Council is an independent body that works closely with publicagencies, e.g. the Authority and players in the public transport industry, to regulate bus services,bus service operators, ticket payment services, and fares for the bus and rapid transit system. The
Public Transport Council Act provides for the licensing of public bus services, bus service operatorsand ticket payment services, regulating fares for the bus, taxi and rapid transit system and related
matters.
Thailand.39 As a convenient mode of public transportation, buses have overtaken the inadequate andsluggish rail network as the preferred form of public transport, connecting cities with the smallest
villages.
The Department of Land Transport classifies buses into fixed-route buses (further classified by theirarea and the distance over which they provide services), non-fixed-route buses, and non-public buses.
These buses are operated by SOEs (Bangkok Mass Transit Authority and the Transportation Company)
and privately owned transport operators. Passenger buses can be classified into seven classes, the38
39

Summary of information obtained from the website of Singapore’s Ministry of Transport (https://www.mot.gov.sg/).
Information obtained from the website of Thailand’s Ministry of Transport (http://www.mot.go.th/about.html?dsfm_
lang=EN).

20

P R O M O T I N G S E R V I C E S T R A D E I N A S E A N – F E B R U A R Y 2 018

first four of which are most frequently used: Class 1, special-type bus with air-conditioning; Class 2,
bus with air-conditioning; Class 3, bus without air-conditioning; and Class 4, double-decker bus.
Another type of bus used in specific areas only is a “songtaew”, a low-cost pick-up truck with acovered rear area for passengers. There are two types of long-distance buses: buses operated by
the Transportation Company and private buses. Transportation Company buses have a terminal in
every province.
For long routes, double-decker buses are also used in a two-class scheme (economy prices and
VIP prices). These double-decker buses are mostly used for hire or reward service, as they offer
entertainment facilities such as TVs, tables and karaoke machines.
Viet Nam.40 Development of road infrastructure to accommodate rapid economic growth is a pressing
issue, especially in the Greater Mekong Sub-region. Inadequate road infrastructure has become aconstraint on doing business. Strategy and legislation related to road services and infrastructure is
the responsibility of the Directorate for Roads of Vietnam, under the administration of the Ministry ofTransport. In 2016, the Government approved a plan to expand the expressway network by 6,400 km
by 2030, revising a plan to expand it by 2,500 km in 2020.
To address road infrastructure development, the Government is embarking on the developmentof expressway road networks, particularly with financial and technical support from Japanese
official development assistance, the Asian Development Bank and other relevant organizations. The
Government can secure only 30 per cent of the total budget of $13 billion for the next five years,
according to projections by the Ministry of Transportation.

III. ASCENDANCY OF TRANSPORT SERVICES
Transport services can be delivered through all four supply modes, in theory. In practice, however,delivery through Mode 2 (consumption abroad) and Mode 4 (movement of natural persons) islimited. The former is largely limited to foreign travellers who use domestic transport services attheir travel destinations. Delivery of transport services by the movement of professional people intransport services is unrealistic as delivery of such services requires immovable infrastructure. The
only possibility is that foreign drivers, pilots and crew members might work in transport services
owned by countries other than their own. Wages and benefits paid to them should be consideredas payment and receipts related to Mode 4; however, the amount is small and difficult to estimate.
Thus, in this paper, trade related to Mode 4 is assumed to be zero.
The bulk of transport services are delivered through Mode 1 (cross-border supply) and Mode 3(commercial presence). Adding to these two modes is the use of domestic transport services by
non-residents (Mode 2), which is part of travel expenditures by foreigners. Altogether, revenues
from travel services by ASEAN (imports) were estimated to be at least $130 billion in 2015, while
the supply of travel services to the world by ASEAN (exports) was estimated at $90 billion (table 3).
Unlike other services industries, the transport services industry uses the cross-border supply mode
more than the commercial presence mode. Less use of foreign services in transport is in part a
result of limited liberalization in transport services, which restricts investment in transport services
in ASEAN (see section IV). Limited availability of transport services by foreign companies lowers thevalue accordingly.

40

Summary of information from the online database SPEEDA.

PA PE R 6 T RA D E I N M A RI T I M E, A I R, R AIL AN D R OAD TR AN SPOR T SER VIC ES

21

Table 3. Estimated value and share of transport services supply in ASEAN,
by mode of supply, 2015 (Billions of dollars and per cent)Receipts from the world (imports)

Supply to the world (exports)

Transport services

Total services

Transport services

Total services

Mode of supply

Value

Share

Value

Share

Value

Share

Value

Share

Mode 1

a

74

57

308

30

a

50

56

302

30

Mode 2

9b

7

103

10

15c

16

101

10

Mode 3

47

d

36

565

55

25

d

28

554

55

Mode 4

0

0

51

5

0

0

50

5

Total

130

100

1 027

100

90

100

1 007

100

Source: AJC, based on own estimates, UNCTAD for total services and the WTO for the mode shares of total services.
Note: For total services, each mode share estimated by the WTO for the global supply is applied to ASEAN. The basic data for
estimates by mode are cross-border services (Mode 1) from UNCTAD; the WTO data on shares have been applied to the
UNCTAD data to calculate the value of each mode.
a
See tables 4 and 5.
b
Data on outbound domestic transport services in travel expenditures are not available.
c
Data on the share of domestic transport in total travel expenditures for inbound tourism (13%) are obtained from national statistical
offices from all countries except four (Brunei Darussalam, the Lao People's Democratic Republic, Mynamar and Malaysia), forwhich data are not available. The share of the six countries is applied to total travel expenditures of all 10 ASEAN countries
available from the World Bank's World Development Indicators ($69.4 billion for outbound tourism and $115.2 billion for inboundtourism).

The supply value of Mode 2, consumption of transport services abroad, was estimated at $15 billion
in 2015. These are essentially travel expenditures by non-residents for the use of domestic transport
in ASEAN. In contrast, the use of transport services abroad by ASEAN travellers (receipts from theworld through Mode 2) was estimated at some $9 billion in 2015.
This section focuses only on Mode 1 and Mode 3. The two modes are dealt with separately.

1. Mode 1: International trade
Trade in transport services in ASEAN reflects general economic transactions in which ASEAN
tends to use more foreign transport services (imports) than ASEAN transport services (exports).
Generally speaking, import businesses use more foreign services than ASEAN services because theimported products arrive from foreign countries. Export businesses use all transport services thatare available, be they foreign owned or domestically owned. As ASEAN’s trade has been growing
dynamically in both exports and imports, it is expected that transport services trade is also growing
in both directions.
However, ASEAN’s statistics on transport services as measured in the balance of payments do notnecessarily show such growth. Although transport services imports have been rising constantly, as
expected (table 5), exports of transport services have been stagnating (table 4) as a result of thepaucity of transport infrastructure and the low competitiveness of transport facilities. As indicatedby the infrastructure component of the World Bank’s LPIs (table 1), all ASEAN member states except
Singapore rank low compared with China and the Republic of Korea. Although considerable efforts
have been made to build and improve transport infrastructure to improve connectivity in ASEAN,
there has been an absolute shortage of such infrastructure.
Exports. Transport services exports from ASEAN amounted to about $50 billion in 2015, 8 per centlower than in the previous year (table 4). Although the export value in 2015 had increased by 43 per

22

P R O M O T I N G S E R V I C E S T R A D E I N A S E A N – F E B R U A R Y 2 018

cent from the average level of 2005–2010, it remained almost the same throughout the decade.
Furthermore, the only sizeable increases occurred in Singapore.
Indeed, that country controls three quarters of all ASEAN exports of transport services (table 4). The
second largest exporter is Malaysia, but the value of its exports has declined over the years. Exports
from Indonesia and Thailand have also declined somewhat. In contrast, those from the Philippines
and Brunei Darussalam have increased gradually. The value of Myanmar’s exports, though thesecond smallest in ASEAN, doubled in 2015, reflecting the opening of the country to international
businesses.
The importance of transport services stands out especially for Brunei Darussalam, accounting for
more than half of all services exports and rising over the years. This is partly because the country
strategically promotes marine transport in particular. Because of Singapore’s trade hub in ASEAN,
that country has the second largest share of transport services in total services exports. Indonesia is
another country that counts marine transport among its strategic industries; nonetheless, its sharein total exports has been declining.
Imports. For all ASEAN countries except the landlocked Lao People’s Democratic Republic, theshare of transport services in total services imports has been large, ranging from 14 per cent in
the Philippines to 57 per cent in Myanmar, with an average of 30 per cent in 2015 (table 5). Thisimplies that ASEAN countries, other than the Lao People’s Democratic Republic, tend to use foreign
services in transport businesses in importing. Although the import value declined in 2015, the trend
is upward over the past decade, particularly so for Myanmar and Singapore. The decline in imports
could also have been caused by the improvement of domestic transport infrastructure as well as byslowing import business.
Unlike exports of transport services, which dominate in Singapore, imports of transport services(foreign services) are more used in all member states. Therefore, although Singapore is also thelargest importer, member states such as Thailand, Indonesia, Malaysia and Viet Nam import thisservice in large quantities (table 5).
Although this paper looks at four transport modes (maritime, air, rail and road), ASEAN countries
use different modes in trade, reflecting their geographic characteristics as well as accessibility
to and availability of transport infrastructure. Data by transport mode are available for Cambodia,
Lao People’s Democratic Republic, Malaysia, Myanmar and the Philippines (tables 6 and 7). For
both exports and imports, air transport is the majority mode used by traders in Cambodia and in
the Philippines. Modes other than air are more frequently used in the Lao People’s Democratic
Republic. In Myanmar, air and other modes are almost equally used.

PA PE R 6 T RA D E I N M A RI T I M E, A I R, R AIL AN D R OAD TR AN SPOR T SER VIC ES

23

Table 4. Exports of transport services and its share in total exports of services and goods
and services, 2005–2015 (Millions of dollars and per cent)Country
Annual average 2005-2010
Transport services export
Brunei Darussalama
273
Cambodiab146
Indonesia
2 037
Lao People's
6
Democratic Republicc
Malaysia
4 415
Myanmar51
Philippines
935
Singapored
21 755Thailand
5 239
Viet Name
1 258
ASEAN total
34 858
Share in total exports of services
Brunei Darussalama
37.1bCambodia
9.6
Indonesia
17.1
Lao People's
1.7
Democratic Republicc
Malaysia
16.2
Myanmar15.3
Philippines
7.2
Singapored
28.9
Thailand18.2
eViet Nam
0
ASEAN total
15.1
Share in total exports of goods and services
Brunei Darussalama
3.1
Cambodiab3
Indonesia
1.6
Lao People's
0.4
Democratic Republic
Malaysiac
2.2
Myanmar
0.9
Philippines
2.1
Singapored
5.7
Thailand
2.9
Viet Name0ASEAN total
2.2

2011

2012

2013

2014

2015

329
194
1 989

340
208
1 976

350
222
1 962

363
236
1 948

394
229
1 935

11

14

18

6

7

3 455
88
1 238
33 0175 526
1 484
45 848

2 963
56
1 366
34 5345 601
1 338
47 058

2 963
23
1 430
36 7305 764
1 396
49 461

2 852
83
1 615
41 8965 343
1 425
54 342

2 215
177
1 652
37 9985 318
1 436
49 923

45.9
9.3
15.4

47.9
9.3
15

49.7
9.3
14.5

52
9.2
14.1

56.9
9.2
13.8

2

2.5

2.4

0.8

0.8

8.9
11.6
6.6
27.7
13.3
0
14.1

7.3
4.5
6.7
27.1
11.3
0
13.2

7
0.8
6.1
26.3
9.8
0
12.6

6.8
2.6
6.3
27.3
9.6
0
12.9

6.4
4.6
5.7
25.6
8.6
0
13.2

3.2
3.5
1.3

3.2
3.7
1.2

3.2
3.8
1.1

3.2
3.9
0.1

3.3
3.8
1

0.5

0.5

0.6

0.2

0.2

1.4
1
2.2
5.9
2.1
0
2.1

1.2
0.6
2
6.1
2
0
2

1.2
0.2
2.1
6.3
2
0
2

1.1
0.6
2.1
7
1.9
0
2

1.1
1.3
2.3
7.2
1.9
0
2.2

Source: AJC, based on data from the IMF, the WTO, and the Department of Statistics Malaysia.
Note: Transport services are defined to include both passenger and freight services.
a
As data are not available for passenger and freight services separately, the ratios of passenger and freight services together totransport services (which are available for other ASEAN Member States for respective years) are used to estimate the value oftransport services. For 2010, transport services data were not available. Therefore, the averages of 2009 and 2011 data were usedas estimates.
bData for 2015 were not available. Therefore, the averages of 2013 and 2014 were used for estimates.
cData from the IMF were used up to 2009. Data from the Department of Statistics Malaysia were used for 2010 onwards, converted
into U.S. dollars by using the IMF's annual exchange rate.
dData on passenger services are also included in “Other (including Postal and Courier).” Therefore the value of “Transport Services”
for Singapore is underestimated.
e
As data are not available for passenger and freight services separately, the ratios of passenger and freight services together totransport services (which are available for other ASEAN Member States for respective years) are used to estimate the value oftransport services. Data for transport services are based on BPM5. For 2015, transport services data were not available. Therefore,
the averages of 2013 and 2014 were used for estimates.

24

P R O M O T I N G S E R V I C E S T R A D E I N A S E A N – F E B R U A R Y 2 018

Table 5. Imports of transport services and its share in total imports of services and goods
and services, 2005–2015 (Millions of dollars and per cent)Country
Annual average 2005-2010
Transport services import
Brunei Darussalama
342
Cambodiab406
Indonesia
9 005
Lao People's Democratic
8
Republicc
9 071
Malaysiad
Myanmar351
Philippines
2 387
Singaporee
16 848Thailand16 307
Viet Namf
3 664
ASEAN total
54 723
Share in total imports of services
Brunei Darussalama
26.5
Cambodiab49.4
Indonesia
36.9
Lao People's Democratic
7.4
Republicc
33.1
Malaysiad
Myanmar56.4
Philippines
27.1
Singaporee
21.3
Thailand
44.6
Viet Namf
51.8
ASEAN total
35.4
Share in total imports of goods and services
Brunei Darussalama
10bCambodia
7.4
Indonesia
8.4
Lao People's Democratic
0.5
Republiccd
5.7
Malaysia
Myanmar
10.5
Philippines
4.4
Singaporee
5
Thailand
9.7
Viet Namf
5.5
ASEAN total
6.7

2011

2012

2013

2014

2015

397
441
10 318415451
10 693422
461
11 069445471
11 444477
466
11 819

11

9

3

3

4

10 022751
2 755
21 03020 2016 796
65 92411 011694
3 032
21 26220 9987 085
68 56511 115854
2 866
22 98920 5355 732
70 313

11 3691 340
3 234
29 91018 2866 036
76 501

9 118
1 387
3 229
32 11214 9355 988
73 547

27.5
44.6
37.5

27.9
43.5
37.7

27.5
42.6
37.8

28.2
41.7
37.9

29.4
42.1
38.1

3.2

2.7

0.5

0.6

0.7

26.1
22.4
17.8
43.8
57.3
28

25.4
47.5
21.3
16.2
46
58.6
32.7

24.6
39
17.6
15.6
43.3
41.5
29

25.1
59.1
15.5
18.8
40.4
41.6
30.9

22.8
56.8
13.7
20.8
35.1
38.6
29.8

9
7.1
7.5

8.8
7
7.4

8.4
6.9
7.2

8.4
6.8
7.1

8.5
6.9
6.9

0.4

0.3

0.1

0.1

0.1

4.8
3.9
4.3
7.9
6.2
5.1

5.1
7.6
3.8
4.2
7.7
6.1
5.8

5.1
7.3
3.7
4.4
7.5
4.2
5.5

5.2
9.5
3.7
5.7
7.2
4
5.8

4.9
8.6
3.6
7.1
6.5
3.5
5.7

Source: AJC, based on data from the IMF, the WTO, and the Department of Statistics Malaysia.
Note: Transport services are defined to include both passenger and freight services.
a As data are not available for passenger and freight services separately, the ratios of passenger and freight services together totransport services (which are available for other ASEAN Member States for respective years) are used to estimate the value oftransport services. For 2010, transport services data were not available. Therefore, the averages of 2009 and 2011 data were usedas estimates.
b Data for 2015 were not available. Therefore, the averages of 2013 and 2014 were used for estimates.
c Data for freight services are unavailable.
d Data from the IMF were used up to 2009. Data from the Department of Statistics Malaysia were used for 2010 onwards, converted
into U.S. dollars by using the IMF's annual exchange rate.
e Data on passenger services are also included in “Other (including Postal and Courier).” Therefore the value of “Transport Services”
for Singapore is underestimated.
f As data are not available for passenger and freight services separately, the ratios of passenger and freight services together totransport services (which are available for other ASEAN Member States for respective years) are used to estimate the value oftransport services. Data for transport services are based on BPM5. For 2015, transport services data were not available. Therefore,
the averages of 2013 and 2014 were used for estimates.

PA PE R 6 T RA D E I N M A RI T I M E, A I R, R AIL AN D R OAD TR AN SPOR T SER VIC ES

25

Table 6. Exports of transport services by transport mode in selected ASEAN countries,
2010–2016 (Per cent)Country
Cambodia
Air transport
Sea transport
Other than sea and air
Postal and courier services
Lao People’s Democratic Republic
Air transport
Other modes of transport
Postal and courier services
Malaysiaa
Air transport
Sea transport
Other than sea and air
Myanmar
Air transport
Sea transport
Other than sea and air
Postal and courier services
Philippines
Air transport
Sea transport
Postal and courier services

2010
100
76
9
4
10
100
14
74
13
100
57
44
1
..
..
..
..
..
100
96
2
1

2011
100
76
8
7
9
100
22
69
9
..
..
..
..
..
..
..
..
..
100
99
1
0

2012
100
79
10
5
6
100
26
65
8
..
..
..
..
..
..
..
..
..
100
98
2
0

2013
100
85
9
2
4
100
26
68
6
..
..
..
..
100
25
74
..
1
100
99
1
0

2014
100
81
10
3
6
100
11
82
7
..
..
..
..
100
51
24
24
1
100
99
1
0

2015
100
81
10
3
6
100
10
90
..
..
..
..
..
100
53
30
16
1
100
99
0
0

2016
100
78
10
2
6
..
..
..
..
..
..
..
..
..
..
..
..
..
100
97
3
1

Source: AJC based on statistics from the ITC, UNCTAD, the WTO trade in services database based on Eurostat, the IMF,
the Organisation for Economic Co-operation and Development and relevant national statistical authorities.
Note: Lists only those countries which have data.
a
Not necessarily throughout the period. Used only available years during this period.

Table 7. Imports of transport services by transport mode in selected ASEAN countries,
2010–2016 (Per cent)Country
Cambodia
Air transport
Sea transport
Other than sea and air
Postal and courier services
Lao People’s Democratic Republic
Air transport
Other modes of transport
Postal and courier services
Malaysiaa
Air transport
Sea transport
Other than sea and air
Myanmar
Air transport
Sea transport
Other than sea and air
Postal and courier services
Philippines
Air transport
Sea transport
Postal and courier services

2010
100
76
19
1
4
100
55
22
23
100
12
87
0
..
..
..
..
..
100
98
2
0

2011
100
81
17
1
1
100
47
29
24
..
..
..
..
..
..
..
..
..
100
97
3
0

2012
100
81
17
1
1
100
41
37
23
..
..
..
..
..
..
..
..
..
100
96
4
0

2013
100
80
17
2
1
100
16
55
29
..
..
..
..
100
2
98
..
0
100
98
1
0

2014
100
75
19
2
4
100
14
69
17
..
..
..
..
100
7
92
1
0
100
99
1
0

2015
100
78
19
1
4
100
22
78
0
..
..
..
..
100
9
90
1
0
100
99
1
0

2016
100
82
18
2
4
..
..
..
..
..
..
..
..
..
..
..
..
..
100
99
0
0

Source: AJC, based on statistics from the ITC, UNCTAD, the WTO trade in services database based on Eurostat, the IMF,
the Organisation for Economic Co-operation and Development (OECD) and relevant national statistical authorities.
Note: Lists only those countries which have data.
a
Not necessarily throughout the period. Used only available years during this period.

26

P R O M O T I N G S E R V I C E S T R A D E I N A S E A N – F E B R U A R Y 2 018

2. Mode 3: Commercial presence
Provision of transport services requires massive investment in transport infrastructure. Therefore, both
domestic and foreign investment, and both private and public investment are significant in transport
infrastructure and services. According to UNCTAD’s survey, about 80 per cent of total investment intransport infrastructure in Asia was financed through domestic funds, both private and public (UNCTAD
2007, p. 101). The foreign share in infrastructure investment in transport was less than one fifth.
In addition to bank lending and official development assistance, foreign funds include foreign direct
investment (FDI), which has become an important component of infrastructure finance. For example,
FDI stock in transport and storage services is largest in Singapore, with a value of $37 billion in 2012,accounting for more than one third of total inward FDI stock in the country. Similarly, Singapore is thelargest investor from ASEAN in the industry, investing $26 billion abroad as of 2012, or one third of its
total outward FDI stock.
Both inward FDI and outward FDI in transport services are concentrated in maritime transport,
followed by air transport. The major investors in transport services are DHL from Germany; Mitsui
OSK Lines, Nippon Yusen Kabushiki Kaisha, and Kintetsu World Express from Japan; TNT from theNetherlands; and Federal Express from the United States. The largest transport services companies
owned by foreigners include air or marine transporters such as Thai Airways International Pcl andEvergreen Marine (Singapore) Pte. Ltd. (annex A). The largest transport services companies abroad
owned by companies in ASEAN include Virgin Australia Holdings Ltd., owned by Singapore Airways,
and Star Cruises Ltd. in Hong Kong, owned by CMY Capital (L) Ltd. in Malaysia (annex B).
Through FDI foreign companies establish affiliates and provide transport services in ASEAN. Similarly,
ASEAN firms can provide transport services abroad through their FDI and commercial presence.
More than 1,000 foreign companies provide transport services with a sales value estimated at $47
billion (table 8). ASEAN firms have established more than 450 firms abroad that provide transport
services abroad, with a sales value of $25 billion (table 8). Singapore is by far the largest supplierto the world, and the largest host to foreign transport services companies. Although Singapore’s
outstanding performance in transport services reflects its unique characteristics, large economies
such as Thailand and Malaysia also host a large number of foreign transport services companies. In
this respect, Indonesia, the largest economy in ASEAN, does not host many foreign transport services
companies nor generate many sales (table 8), when compared with the size of total outputs and value
added of this industry (see section V).
With regard to the source country providing transport services in ASEAN, there are some interestingobservations: Japan has established the largest number of transport services companies in ASEAN,
but their sales are relatively low, only one tenth those of United States transport services companies
and one twentieth those of European ones (table 9). This is because these Japanese companies areengaged in small-scale services (such as transport of goods), whereas European and United Statescompanies are engaged in large-scale operations, including managing air and seaport facilities.
ASEAN companies, particularly those from Singapore, also engage in large operations. In terms of
estimated sales, those of ASEAN rank second after those of Europe. Another interesting finding is that
estimated sales in “other” developing countries are also large, despite the relatively small number ofcompanies in such countries. These countries are mainly those of flags of convenience and tax havens(Bermuda, Panama and the like).
ASEAN transport services companies also invest abroad, generating estimated sales of $7–8 billion inboth developing Asia and developed regions (mainly Australia and Europe), the two major host regions.
The importance of Asia, in particular ASEAN, for ASEAN transport services companies reflects thefacts that not only are ASEAN firms becoming more competitive, but also regional infrastructure
connectivity is expanding.

PA PE R 6 T RA D E I N M A RI T I M E, A I R, R AIL AN D R OAD TR AN SPOR T SER VIC ES

27

Table 8. Estimated sales of transport services through foreign presence, 2015
(Number and millions of dollars)Country
Brunei Darussalam
Cambodia
Indonesia
Lao People’s Democratic Republic
Malaysia
MyanmarPhilippines
Singapore
Thailand
Viet Nam
ASEAN total

Receipts from abroad
Number of
Estimated
foreign entitiesa
sales
1
8
8
97
132
867
5
15
173
5 343
17
14
106
1 456
267
29 592
186
8 392
118
967
1 013
46 752

Supply to the world
Number of ASEAN
Estimated
entities abroada
sales
0
0
25
24
0
82
3 933
0
15
589
305
19 604
24
472
3
10
454
24 632

Source: AJC, based on data from Toyo Keizai Shimposha, UNCTAD, Thomson Reuters and Orbis.
Note: For estimated sales, see the estimation procedure in the notes of annex A and annex B.
aIncludes the affiliates whose sales cannot be estimated (23 for Indonesia, 12 for Malaysia, 1 for Myanmar, 1 for the Philippines,
6 for Singapore, 4 for Thailand, 11 for Viet Nam for receipts from abroad; and 2 for Indonesia, 12 for Malaysia, 2 for Philippines,
20 for Singapore, 1 for Thailand for supply to the world).

Table 9. Foreign affiliates in ASEAN and ASEAN affiliates abroad in transport services,by source / destination country (Number and millions of dollars)Country
United States
EuropeAustralia
Developed
countries
Japan
Othersa
Subtotal
ASEANbChina
Korea, Republic ofDeveloping
India
countries
Hong Kong (China)
United Arab Emirates
Othersc
Subtotal
Unspeciﬁed / Supernational
World

Foreign affiliates in ASEAN
Estimated
Number ofsales
affiliatesd
73
2 380
218
3 979
14
1 398
323
208
10
274
638
8 239
213
3 201
10
1 565
9
258
7
0
22
514
11
834
22
3 259
294
9 631
23
0
955

17 870ASEAN affiliates abroad
Estimated
Number ofsales
affiliatese
1
..
32
3 038
18
5 019
11
102
3
76
65
8 235
50
3 917
14
345
3
32
20
823
6
2 422
3
20
19
1 812
115
9 371
2
0
182

17 606

Source: AJC, based on data from Toyo Keizai Shimposha, UNCTAD, Thomson Reuters and Orbis.
Note: For estimated sales, see the estimation procedure in the notes of annex A and annex B.
a
Foreign affiliates in ASEAN as well as ASEAN affiliates abroad includes Taiwan (China) and New Zealand only.
b
The number of foreign affiliates in ASEAN and ASEAN affiliates abroad should balance. However, either the destination or thesource country of some of these affiliates is not available. Therefore they do not match.
cForeign affiliates in ASEAN include those in Bahrain, Bermuda, the Cayman Islands, Kuwait, Panama, Seychelles, South Africa andthe Virgin Islands (British); ASEAN affiliates abroad include those in Bermuda, Brazil, Colombia, Egypt, Kenya, Mauritius, Mexico,
Nigeria, Pakistan, South Africa, Sri Lanka, Turkey and the Virgin Islands (British).
dIncludes the affiliates whose sales cannot be estimated (4 for the United States, 14 for Europe, 1 for Australia, 26 for Japan, 11 for
ASEAN, 0 for China, the Republic of Korea, India, Hong Kong (China), the United Arab Emirates and unspecified/supernational.)eIncludes the affiliates whose sales cannot be estimated (1 for the United States, 2 for Europe, 18 for Australia, 2 for Japan, 7 for
ASEAN, 4 for China, 6 for India, 0 for the Republic of Korea, Hong Kong (China) and unspecified/supernational.)

28

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IV. T RADE AGREEMENTS AND REGULATIONSAMONG AND IN THE ASEAN MEMBER STATESThe AFAS is the main and most open trade agreement concerning liberalization of trade in transport
services. The Hoekman Index,41 measuring the commitment to liberalization, for maritime, air, roadand rail transport services respectively, under the AFAS (9th package) is shown in tables 10–13. Air
transport is virtually closed, while marine, road, and rail are relatively open. Following are someobservations by country.
Brunei Darussalam. Reflecting the country’s geographic location by the sea, maritime transport israther open; air transport is closed except for supporting sub-sectors; rail transport is highly open;
road transport is closed.
Cambodia. Maritime transport is highly open; air transport is closed; rail transport is closed; roadtransport is highly open.
Indonesia. The country has a rather open maritime policy, except for supporting-type services (asensitive sector because of the labour-intensive nature of those services; domestic employment
can be an issue); air transport is closed except for supporting sub-sectors; rail and road services
are rather open.
Lao People’s Democratic Republic. Even though landlocked, the country has fully open maritime
transport services, reflecting its policy emphasis on connectivity to neighbouring countries’ maritime
services; air transport is closed except for supporting sub-sectors; rail and road services are highly
open.
Malaysia. The country has a rather open policy in terms of passenger and freight transportation;
supporting-type services are closed, owing mainly to the labour-intensive nature of those services;
air transport is closed except for supporting sub-sectors; rail services as well as some road services
are open.
Myanmar. The country has a rather open policy in terms of passenger and freight transportation;
supporting-type services, in contrast, are closed; air transport is closed except for supporting subsectors; rail services are closed; some road services are open (while supporting type services areclosed).
Philippines. The country has an open policy in terms of passenger and freight transportation;
supporting services tend to be closed, possibly for consideration for domestic employment; airtransport is closed except for supporting sub-sectors.

41

Hoekman (1995) proposes an indexation method for measuring the GATS-style degree of commitment in theservices sector. This method assigns values to each of eight cells (four modes and two aspects—market access(MA) or national treatment (NT)), as follows: first, assign the value 1 when the sector at issue is “fully liberalized”;
0.5 when “limited (but bound)”; 0 when unbound” (government has not committed to liberalize) by sub-sector, bymode and by aspect (market access or national treatment), and take the simple average for aggregation; thencalculate the average value by services sector and by country. The higher the figure, the more liberal the country’s
services trade commitments are to the FTA members. Using the database constructed for this as well as otherpurposes, the “Hoekman Index” is derived for each of 155 sub-sectors. Then the simple average at the level of the
11 sectors is calculated. The Hoekman Index takes a value between 0 and 1, with 0 referring to the most restricted
status, and 1 being the most open situation.

PA PE R 6 T RA D E I N M A RI T I M E, A I R, R AIL AN D R OAD TR AN SPOR T SER VIC ES

29

Singapore. As a port, the country has a highly open policy yet the rate of foreign equity participation
is limited, because domestic economic activities must focus on maritime services; air transport is
closed except for supporting sub-sectors; rail services are closed; some road services are open.
Thailand. The country has a highly open trade policy, reflecting its geopolitical situation as animportant hub of the ASEAN region; air transport is closed except for supporting sub-sectors; rail
and road services are partially open.
Viet Nam. The country has an open trade policy in terms of maritime services; some supporting
sectors are closed; air transport is closed except for supporting sub-sectors; rail services are highly
open; road services are partially open.

Mode 1Mode 2Mode 3Mode 1Mode 2Mode 3Mode 1Mode 2Mode 3Mode 1Mode 2Mode 3Mode 1Mode 2Mode 3Mode 1Mode 2Mode 3Mode 1Mode 2Mode 3Mode 1Mode 2Mode 3Mode 1Mode 2Mode 3Mode 1Mode 2Mode 3

Brunei
Darussalam

11Ac
Rental of vessels
with crew
1
1
0.75
1
1
1
0
0
0
1
1
1
1
1
1
1
1
1
1
1
1
1
1
0.5
1
1
0.75
1
1
0.5

11Ad
Maintenance andrepair of vessels
1
1
0.75
1
1
1
1
1
0.5
1
1
1
0
1
0.25
1
1
1
0
0.75
1
1
1
0.75
1
1
0.75
1
1
0.75

11Ae
Pushing andtowing services
0
0
0
1
1
1
0
0
0
1
1
1
0
0
0
1
1
1
0
1
0.75
1
1
1
1
1
0.5
0
0
0

11Af
Supporting services
for maritime transport
0
0
0
1
1
1
0
0
0
1
1
1
0
0
0
1
1
1
0
1
1
1
1
1
1
1
0.75
0
1
1

Source: AJC’s calculation based on the ASEAN member states’ specific commitment tables under the AFAS (9th package). See annex C for reproduction and categorization of the tables.

Viet Nam

ThailandSingapore

Philippines

Myanmar

Malaysia

Lao People’s Democratic
Republic

Indonesia

Cambodia

Mode

Country

11Ab
Freighttransportation
1
1
0.5
1
1
1
1
1
0.5
1
1
1
1
1
0.75
1
1
1
1
1
1
1
1
0.5
1
1
0.5
1
1
0.25

11Aa

Passenger
transportation
1
1
0.5
1
1
1
1
1
0.5
1
1
1
1
1
0.75
1
1
1
1
1
1
1
1
0.5
1
1
0.5
1
1
0.75

Table 10. Hoekman Index of trade liberalization for maritime transport services, by subsector and by mode, under AFAS 9th package

30

P R O M O T I N G S E R V I C E S T R A D E I N A S E A N – F E B R U A R Y 2 018

0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0

Mode 1Mode 2Mode 3Mode 1Mode 2Mode 3Mode 1Mode 2Mode 3Mode 1Mode 2Mode 3Mode 1Mode 2Mode 3Mode 1Mode 2Mode 3Mode 1Mode 2Mode 3Mode 1Mode 2Mode 3Mode 1Mode 2Mode 3Mode 1Mode 2Mode 3

Brunei
Darussalam

0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0

Freight transportation

11Cb (package 6)

11Cd (package 6)
Maintenance andrepair of vessels
1
1
0.25
1
1
0.5
1
1
0.5
1
1
0.5
1
1
0
1
1
0.5
1
1
1
1
1
0.25
1
1
0.75
1
1
1

11Cc (package 6)
Rental of vessels
with crew
1
1
0.25
1
1
0.5
0
0
0
0
0
0
1
1
0.5
1
1
0.5
1
1
1
0
0
1
1
1
0.25
1
1
1

Supporting services
for air transport
1
1
0
1
1
0
1
1
0.5
1
1
0.5
1
1
1
1
1
0.5
1
1
0
1
1
0.25
1
1
0.75
1
1
1

11Ce (package 6)

Source: AJC’s calculation based on the ASEAN member states’ specific commitment tables under the AFAS (9th package). See annex D for reproduction and categorization of the tables.

Viet Nam

ThailandSingapore

Philippines

Myanmar

Malaysia

Lao People’s Democratic
Republic

Indonesia

Cambodia

Passenger transportation

Mode

Country

11Ca (package 6)

Table 11. Hoekman Index of trade liberalization for air transport services, by subsector and by mode, under AFAS 9th package

PA PE R 6 T RA D E I N M A RI T I M E, A I R, R AIL AN D R OAD TR AN SPOR T SER VIC ES
31

1
1
0.75
1
1
1
1
1
0.5
1
1
1
1
1
0.75
0
0
0
0
1
0.75
0
0
0
0
0
0
1
1
0.75

Mode 1Mode 2Mode 3Mode 1Mode 2Mode 3Mode 1Mode 2Mode 3Mode 1Mode 2Mode 3Mode 1Mode 2Mode 3Mode 1Mode 2Mode 3Mode 1Mode 2Mode 3Mode 1Mode 2Mode 3Mode 1Mode 2Mode 3Mode 1Mode 2Mode 3

Brunei
Darussalam

1
1
0.75
1
1
1
1
1
0.5
1
1
1
1
1
0.75
0
0
0
0
1
0.75
0
0
0
0
0
0
1
1
1

Freight transportation

11Eb

11Ed
Maintenance and repair ofrail transport equipment
1
1
0.75
1
1
1
1
1
0.5
1
1
1
1
1
0.75
0
0
0
0
1
1
0
1
1
1
1
0.75
1
1
0.75

11Ec
Pushing and towing
services
1
1
0.75
1
1
1
1
1
0.5
1
1
1
1
1
0.75
0
0
0
0
0
0
0
1
0
0
0
0
1
1
1

11Ee
Supporting services forrail transport services
0
0
0
1
1
1
1
1
0.5
1
1
1
0
0
0
0
0
0
0
1
0.5
0
0
0
0
1
0.75
1
1
1

Source: AJC’s calculation based on the ASEAN member states’ specific commitment tables under the AFAS (9th package). See annex E for reproduction and categorization of the tables.

Viet Nam

ThailandSingapore

Philippines

Myanmar

Malaysia

Lao People’s
Democratic Republic

Indonesia

Cambodia

Passenger transportation

Mode

Country

11Ea

Table 12. Hoekman Index of trade liberalization for rail transport services, by subsector and by mode, under AFAS 9th package

32

P R O M O T I N G S E R V I C E S T R A D E I N A S E A N – F E B R U A R Y 2 018

0
0
0
1
1
1
1
1
0.5
0
0
0
0
0
0
1
1
1
0
1
0.5
0
0
0
0
1
0.75
0
1
0.75

Mode 1Mode 2Mode 3Mode 1Mode 2Mode 3Mode 1Mode 2Mode 3Mode 1Mode 2Mode 3Mode 1Mode 2Mode 3Mode 1Mode 2Mode 3Mode 1Mode 2Mode 3Mode 1Mode 2Mode 3Mode 1Mode 2Mode 3Mode 1Mode 2Mode 3

Brunei
Darussalam

0
0
0
1
1
1
1
1
0.5
1
1
0.75
1
1
0.75
1
1
1
0
1
0.5
0.75
1
1
0
1
0.75
1
1
0.75

Freight transportation

11Fb

11Fd
Maintenance and repair ofroad transport equipment
0
0
0
1
1
1
1
1
0.5
1
1
1
1
1
0.75
0
0
0
0
1
1
1
1
1
0
1
0.75
1
1
0.75

11Fc
Rental of commercial
vehicles with operator
0
0
0
1
1
1
0
0
0
1
1
0.75
0
0
0
0
0
0
0
1
0.5
0.5
1
1
0
1
0.75
0
0
0

11Fe
Supporting services forroad transport services
0
0
0
1
1
1
1
1
0.5
1
1
1
0
0
0
0
0
0
0
1
0.5
1
1
1
1
1
0.75
0
0
0

Source: AJC’s calculation based on the ASEAN member states’ specific commitment tables under the AFAS (9th package). See annex F for reproduction and categorization of the tables.

Viet Nam

ThailandSingapore

Philippines

Myanmar

Malaysia

Lao People’s
Democratic Republic

Indonesia

Cambodia

Passenger transportation

Mode

Country

11Fa

Table 13. Hoekman Index of trade liberalization for road transport services, by subsector and by mode, under AFAS 9th package

PA PE R 6 T RA D E I N M A RI T I M E, A I R, R AIL AN D R OAD TR AN SPOR T SER VIC ES
33

P R O M O T I N G S E R V I C E S T R A D E I N A S E A N – F E B R U A R Y 2 018

34

As shown in table 14, there is disparity across ASEAN member states in terms of the upper limit offoreign equity participation in transport services under the AFAS 9th package. Geographically smaller
countries (with smaller populations) and economically emerging countries generally tend to havehigher upper bounds.
The ASEAN Single Aviation Market (ASEAN-SAM) (see box 2) is expected to fully liberalize air travel
services among member states in the region, allowing ASEAN countries and airlines operating in
the region to directly benefit from the growth in air travel around the world, and also enhancing
tourism, trade, investment, and service flows among the ASEAN member states. Since 1 December
2008, restrictions on the third and fourth freedoms of the air between capital cities of member states
for air passenger services have been removed, and since 1 January 2009, full liberalization of air
freight services in the region has taken effect. On 1 January 2011, full liberalization of fifth freedom
traffic rights between all capital cities took effect.
Under the AFAS, however, air transport services are not committed in substantive part (passenger andfreight transport), as the sector’s liberalization is separately negotiated (because of its sensitivity),
unlike other modes of transport services.42
Protocol 2 of the “Unlimited Third, Fourth And Fifth Freedom Traffic Rights among All points with
International Airports in ASEAN” under the ASEAN Multilateral Agreement on the Full Liberalizationof Air Freight Services went into force on 23 November 2009. Protocol 2 of the unlimited fifth
freedom traffic rights between any ASEAN cities (also under the ASEAN Multilateral Agreement on
the Full Liberalization of Passenger Air Services) went into force on 1 July 2011. These two protocols
liberalized air freight and passenger transport, respectively, up to the fifth freedom only.
In the European Union, in contrast, the higher-level freedom of the air has already been achieved:
the ninth freedom was already achieved in 1997. Although the ASEAN member states have mostly
achieved the fifth freedom of the air, going beyond this level of freedom remains a rather challenging
policy agenda for ASEAN. This is mainly because of the diversity in the size of domestic markets
in ASEAN: larger member states possessing larger domestic air transport markets and smaller
member states with smaller domestic markets find it difficult to reach an agreement on a “win-win”(mutually beneficial) basis.

Table 14. Maximum foreign ownership allowed in transport services under
AFAS 9th package (Per cent)Country
Brunei Darussalam
Cambodia
Indonesia
Lao People’s
Democratic Republic
Malaysia
MyanmarPhilippines
Singapore
Thailand
Viet Nam

Maritime transport
51
100
49

Air transport
80
Not applied
49

Road transport
Not applied
100
70Rail transport
51
100
70

100

100

49

100

51
100
70
70
49
51

49
Not applied
40
51
Not applied
Not applied

70
100
40
100
49
51

51
Not applied40
Not applied
Not applied
51

Source: Specific commitment tables of each ASEAN member state under the AFAS 9th package.
Note: Ownership under partial commitments is also counted.

42

The Protocol to Implement the Ninth Package of Commitments on Air Transport Services under the ASEAN
Framework Agreement on Services (AFAS) was signed in November 2015; there is, however, no publicly available
information indicating that it has come into effect (as of October 2017) .

PA PE R 6 T RA D E I N M A RI T I M E, A I R, R AIL AN D R OAD TR AN SPOR T SER VIC ES

Box 2. B
 ox 2. Freedom of the air and ASEAN’s open skies agreement

Concerning air transport services, the International Civil Aviation Organization (ICAO) defines thefollowing nine freedoms of the air.
First freedom of the air: the right or privilege, in respect of scheduled international air services,
granted by one State to another State or States to fly across its territory without landing (alsoknown as a first freedom right).
Second freedom of the air: the right or privilege, in respect of scheduled international air services,
granted by one State to another State or States to land in its territory for non-traffic purposes (alsoknown as a second freedom right).
Third freedom of the air: the right or privilege, in respect of scheduled international air services,
granted by one State to another State to put down, in the territory of the first State, traffic comingfrom the home State of the carrier (also known as a third freedom right).
Fourth freedom of the air: the right or privilege, in respect of scheduled international air services,
granted by one State to another State to take on, in the territory of the first State, traffic destinedfor the home State of the carrier (also known as a fourth freedom right).
Fifth freedom of the air: the right or privilege, in respect of scheduled international air services,
granted by one State to another State to put down and to take on, in the territory of the first State,traffic coming from or destined to a third State (also known as a fifth freedom right).
The ICAO characterizes all “freedoms” beyond the fifth as “so-called” because only the first five
have been officially recognized as such by international treaty. The ASEAN member states havemostly achieved the fifth freedom of the air, but not beyond this level.
Sixth freedom of the air: the right or privilege, in respect of scheduled international air services,of transporting, via the home State of the carrier, traffic moving between two other States (alsoknown as a sixth freedom right).
Seventh freedom of the air: the right or privilege, in respect of scheduled international air
services, granted by one State to another State, of transporting traffic between the territory of the
granting State and any third State with no requirement to include on such operation any point in
the territory of the recipient State, i.e. the service need not connect to or be an extension of any
service to/from the home State of the carrier.
Eighth freedom of the air: the right or privilege, in respect of scheduled international air services,of transporting cabotage traffic between two points in the territory of the granting State on aservice which originates or terminates in the home country of the foreign carrier or (in connection
with the so-called seventh freedom of the air) outside the territory of the granting State (alsoknown as an eighth freedom right or “consecutive cabotage”).
Ninth freedom of the air: the right or privilege of transporting cabotage traffic of the granting
State on a service performed entirely within the territory of the granting State (also known as aninth freedom right or “stand-alone” cabotage).
The ASEAN Single Aviation Market (ASEAN-SAM), known as the ASEAN open skies agreement,emphasizes the key role of air transport services: it targets the development of a unified and single
aviation market among ASEAN members. The aviation policy was proposed by the ASEAN Air
Transport Working Group, which was supported by the ASEAN Senior Transport Officials Meeting,and it was endorsed by ASEAN Transport Ministers. The creation of the ASEAN-SAM was a key
component of the road map for the establishment of the ASEAN Economic Community.
Source: ICAO (http://www.icao.int/Pages/freedomsAir.aspx).

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36

V. IMPACTS OF LIBERALIZATION AND
DEREGULATION OF TRANSPORT SERVICES
ON ECONOMY
1. General impacts
According to Anderson and Wincoop (2014: 691–692), trade costs world-wide are estimated to beequivalent to a 170 per cent ad valorem tariff, counting transportation costs (21 per cent), policy
barriers including tariffs and non-tariff barriers (44 per cent), and wholesale and retail costs (55per cent) (1.7 = 1.21 * 1.44 * 1.55 – 1). Transport costs constitute a significant portion of trade costs.
The data on average transport time and costs for transport services in table 15 show that there
are, on average, significant intermodal differences in transport time and costs in ASEAN.43 Theintermodal difference in transport time and costs should be leveraged to bring in more benefits.
For example, an enhanced degree of connectivity between maritime and road services in ASEAN
would significantly reduce the costs to transport parts and components currently sent by (costly)
air transport. Expanding and improving the efficiency of transport infrastructure, coupled withappropriately liberalizing trade in transport services, would usher in beneficial economic impacts
on ASEAN’s transport system at large.

Table 15. Average transport time and costs in ASEAN, by sub-sector, 2008–2009
Maritime transport

Air transport

Road transport

Transport cost per distance ($/km)

0.24

45.2

1

Transport speed (km/hour)

14.7

800

38.5

Domestic transshipment time (hours)

3.3

2.2

0

International transshipment time (hours)

15

12.8

13.2

Domestic transshipment cost ($/20-foot container)

190

690

0

International transshipment cost ($/20-foot container)

491

1 276

500

Source: Kumagai, Isono, Gokan, Hayakawa, Tsubota and Souknilanh (2015).
Note: Figures are based on surveys undertaken during 2008-2009.

Once transport infrastructure is in place, transport services can be provided for a long period. In
2011, according to the OECD’s input-output tables, ASEAN members provided $201 billion in outputs
of infrastructure services in 2011, of which $74 billion was generated as value added. (These data
exclude the Lao People’s Democratic Republic and Myanmar, owing to the unavailability of data.)
For each ASEAN member country, the size of output and value added in this sector reflects thatof the whole economy. Thus, Indonesia is the largest, with $71 billion in output and $28 billion in

43

The information in the table is the ASEAN average; no comparator data are available. Judging from the logistics
performance indices (see table 1), some ASEAN member states could further reduce the time and costs associatedwith transport services.

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37

value added, followed by Thailand and Malaysia (table 16). The industry characteristics dictate thenature of economic benefits: transport services do not bring in large profits but can guarantee stableprofits over a number of years. Transport services account for only 4 per cent of total outputs in the
ASEAN-wide economy. The value added to output ratio in this services industry (0.37) is lower than
the average for all services industries (0.42).

Table 16. Value added and output of transport servicesa compared with all industries,
2011 (Millions of dollars and ratio)
Transport and storage
Country

Value added

All industries

OutputRatio of value
added tooutputValue added

OutputRatio of value
added tooutputBrunei Darussalam

345

482

0.72

16 69723 7090.70

Cambodia

809

1 720

0.47

12 04225 1450.48

Indonesia

28 24571 4650.40

815 181

1 606 973

0.51

Malaysia

9 031

33 507

0.27

280 687

829 419

0.34

Philippines

8 447

19 111

0.44

209 529429 792

0.49

Singapore

4 730

10 711

0.44

254 808

711 535

0.36

Thailand

18 78956 1600.33

343 407893 396

0.38

Viet Nam

3 680

7 484

0.49

126 630

332 7160.38

ASEAN total

74 077200 639

0.37

2 058 981

4 852 685

0.42

Source: OECD Input-Output table database (http://www.oecd.org/trade/input-outputtables.htm).
Note: The Lao People's Democratic Republic and Myanmar are not covered in the OECD database.
aRefers to transport and storage.

As transport services are required by other industries in the economy, they are related to otherindustries by a relatively high multiplier effect, as shown in figure 2. For example, the Philippines
exhibits a multiplier of more than two. This means that one unit increase of output in transport
infrastructure brings in more than two units of output in other industries. The current initiative of
the Philippine Government to improve infrastructure, including transport, under the “Build, Build,
Build” programme is thus beneficial for the whole economy (AJC 2017).
The availability and affordability of other services (such as wholesale and retail services, which requirephysical accessibility) will also increase significantly as a result of further trade liberalization fortransport services by foreign suppliers. Also, reductions in transport time and costs will be brought
about through attracting world-class foreign suppliers of transport services.44

44

Of course, as already noted, competition created through liberalizing trade in transport services might lead to thedominance of foreign suppliers while marginalizing domestic suppliers. This imbalance could put the national
security of the host country at a risk. Liberalization of trade in transport services should therefore be undertaken
within the acceptable range between ensuring national security and ensuring fair competition.

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38

Figure 2. Multiplier effects of transport services in ASEANa, 2011

Philippines
Malaysia
ThailandIndonesia
Singapore
Viet Nam
Cambodia
Brunei Darussalam
0

0,5

1

1,5

2

2,5

Source: AJC, based on OECD Input-Output table database.
Note: The Lao People's Democractic Republic and Myanmar are not covered in the OECD database.
aRefers to transport and storage.

2. Impact of China’s One Belt, One Road initiative
The One Belt, One Road Initiative is a recent development with potentially significant implications
for ASEAN (UNCTAD 2016). Launched in 2013 by China, this initiative aims to establish new trading
routes by further connecting China to parts of Asia, Europe, Africa and countries with economies intransition. The initiative may help reduce transport costs, increase trade flows and open new markets
for all countries involved, as well as promote the development of ASEAN member states. Table 17
lists the initiative’s projected infrastructure investments in connection with transport services.
If the initiative is fully implemented, the expected benefits are likely to be broad based and to span anumber of areas and various countries and regions. Both ASEAN and non-ASEAN transport services
should benefit from this initiative.

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Table 17. One Belt, One Road Initiative: projected infrastructure investments by China
connected with transport services in ASEANCountry

Projected infrastructure investment

ASEAN members
Indonesia

Jakarta–Bandung high-speed railway; coal mining and transport infrastructure,
Papua and Kalimantan ($6 billion); road and port infrastructure, Kalimantan ($1.1 billion)

Malaysia

Malaysia–China Kuantan Industrial Park, including deepwater container port, steel andaluminium plants and palm oil refinery ($3.4 billion)

MyanmarBangladesh–China–India–Myanmar transport network, including roads, railways, waterways
and airports; Kyaukphyu–Kunming oil and gas pipelines; Myanmar–Yunnan optical cableThailandKra Isthmus Canal ($28 billion); Kunming–Bangkok highway; railway between Nong Kahi,
Bangkok and proposed China–Lao People’s Democratic Republic railway

Viet Nam

Port upgrades, Haiphong; Lang Son–Hanoi highway

Memorandum
Bangladesh

Studies for Bangladesh–China–India–Myanmar corridor; deepwater port, Payra

Georgia

Deepwater port, Anaklia ($5 billion)

India

High-speed rail cooperation; industrial parks, Gujarat and Maharashtra

Kyrgyzstan

China–Kyrgyzstan–Uzbekistan highway; China–Uzbekistan railway ($2 billion); transport andlogistics cooperation

Lithuania

Encouraging investment in joint railway and port projects; China Merchants Group letter ofintent with port of Klaipeda

Pakistan

China–Pakistan economic corridor, roads and railway ($46 billion); Lahore–Karachi highway;
port upgrades, including airport, power plant and roads, Gwadar

Sri Lanka

Deepwater port in Hambantota ($600 million); China Merchants Holdings International
investment in Port of Colombo ($500 million)

Russian Federation

Kazan–Moscow high-speed railway; Siberian gas pipelines to supply China

Tajikistan

Central Asia–China gas pipeline; 500 kV power substation reconstruction, Tursunzoda;
Dushanbe–Chanak highway upgrades ($280 million)

Turkmenistan

Islamic Republic of Iran–Kazakhstan–Turkmenistan road and rail network

Uzbekistan

Uzbekistan–China gas pipeline

AfricaAgreement with African Union to help build railways, roads and airports; coastal road,
Nigeria ($13 billion); Nairobi–Mombasa railway, Kenya ($3.8 billion); Addis Ababa–Djibouti
railway ($4 billion)

Central and SouthAmerica

Pledged investment to region ($250 billion); proposed transcontinental railway between coastsof Brazil and Peru ($10 billion); highways and ports

EuropeUpgrade of Port of Piraeus, Greece ($260 million); Hungary–Serbia high-speed railway($3 billion); China–Spain cargo railway (12,875 km)

Source: Adapted from UNCTAD (2016), table 1.8.

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3. Other social impacts
Congestion and environmental impacts might occur as a result of trade liberalization in transport
services. Under the concept of “sustainable transport”, ASEAN looks at the environmental aspectof transport services development: the approach to increasing transport sustainability will focus
on formulating a regional policy framework to support sustainable transport, which includes
low-carbon modes of transport, energy efficiency and user-friendly transport initiatives, and theintegration of transport and land use planning. As the transport sector is a main contributor to
air pollution and climate emissions, ASEAN-wide policy coordination would be needed to ensuresustainable transport.
The United Nations Environment Programme (UNEP), which is a partner in several leading global
transport programmes in areas such as fuel economy, small particulate pollution and infrastructuredevelopment through public-private partnerships, has a work programme that is aimed at separating
increased mobility from higher emissions.45. ASEAN member states could jointly work on enablingsustainable transport, possibly through introducing low-carbon physical infrastructure development
as well as implementing further liberalization of trade in transport services for collaborating withefficient foreign suppliers of transport services.
Another anticipated social impact would be the emergence of a “straw effect” – larger capital areas
benefiting more than smaller rural areas or the areas between two larger city areas, in terms of
attracting companies, workers and visitors through the development of transportation services.
Enhancing physical connectivity at the national and provincial levels would be indispensable to avoid
this negative social impact. Enhancing intermodal connectivity, e.g. connecting air transport and railtransport services smoothly at the sub-national level, would also be needed.

VI. CONCLUSIONS AND POLICY SUGGESTIONS
1. General policy suggestions
ASEAN has been opening its services sector; however, it needs more services liberalization tobring about more positive economic impacts on member countries. Of course, liberalization does
not guarantee positive impacts. There is no automatic link. For example, in transport services
industries, in certain cases, liberalization will lead to monopoly or quasi-monopoly markets. Thiscounter-intuitive situation requires a remedy. In this respect, competition policy is of importance.
Each member state should be cautious about the down-side effects of liberalization, and all policy
recommendations should be made with due consideration to them. Having said this, some policy
recommendations can be drawn.
First, ASEAN member states should be committed to promoting overall services liberalization (aslong as national security is guaranteed), together with surrounding countries, especially China. Only
with transport services can countries and regions be connected.

45

UNEP’s site (http://www.unep.org/newyork/sustainable-transport).

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Second, transport services liberalization should contribute to reducing costs and barriers in tradingbusinesses and achieving higher economic efficiency directly46 as well as indirectly, in the form of
promoting transport-related supporting services such as maintenance, repair and overhaul.
Third, given that transport services depend highly on geographic connectivity, the AFAS should
be expanded to form the services liberalization part of the ongoing negotiations for the Regional
Comprehensive Economic Partnership (RCEP). ASEAN-centred expansion and harmonization offree trade agreements will lead to the expansion of transport services networks with ASEAN hubs.
As demonstrated above, services firms in general have an important supporting function for otherbusiness sectors. A narrowly defined benefit, most notably the surplus or deficit of the services tradeaccount, might not be the top priority, since even a services trade deficit could attract manufacturing
investment, thereby more than offsetting the negative figure of the services trade account. Policy
makers of the ASEAN member states should bear this in mind clearly in formulating policy onservices trade liberalization under ASEAN-related free trade agreements, most importantly theongoing RCEP proposal.

2. Workable policy suggestions
The conventional input-output analysis does not have a spatial dimension in terms of the economic
impacts of reductions in transport costs. However, the geographic simulation model of the Instituteof Developing Economies (Kumagai et al. 2013; Kumagai et al. 2015) does have a geographic
dimension: according to it, reduced transport costs would generally lead to a multiple-equilibria
situation, in which the positive economic impact of customs facilitation together with physicalinfrastructure development can be spread across multiple countries in ASEAN (not concentrated injust one or two).
When transport costs are reduced because of liberalization and competition, multiple agglomerations
emerge as producers and consumers can live in the same place or separate ones – or production
and consumption can take place in the same location or separate places in multiple cities or areas.
With this spatial impact in view, workable policy suggestions for promoting trade in services shouldbe geared towards a more integrated and decentralized ASEAN Economic Community. To this end,
spatial economic approaches could be utilized effectively.
Table 18 shows a categorization of strategic goals for transport services in connection with promoting
positive factors conducive to multiple equilibria. Table 19 shows a categorization of ASEAN-wide
strategic goals for transport services for mitigating negative factors that hinder multiple equilibria(for strategic goals by transport mode, see annex G).

46

As for recent developments in this connection, the Twenty-Third ASEAN Transport Ministers Meeting (held in
October 2017 in Singapore) released a joint statement that mentions the signing of agreements to promote andfacilitate intra-ASEAN transport services as well as strengthen transportation safety. Among the agreements
signed were the Tenth Package of Commitments on Air Transport Services under the AFAS and the Protocol tofacilitate its implementation to further liberalize ancillary services for air transport in the region. The Ministers
also lauded the conclusion of the ASEAN Framework Agreement on the Facilitation of Cross-Border Transportof Passengers by Road Vehicles and signed it to facilitate seamless cross-border mobility of passengers between
and among ASEAN Member States. Further, the Ministers adopted the ASEAN Air Traffic Management Master
Plan, which will enhance the safety, efficiency, and capacity of air traffic management in the region, and advancethe Seamless ASEAN Sky. All these agreements are expected to further promote ASEAN-wide liberalization oftransportation services.

LT-7 Intensify regional cooperationin improving transport safety

LT-4 Develop an effective network of ASEAN dry ports in accordance with existing ASEAN
initiatives such as the ASEAN Highway Network (AHN) and Singapore-Kunming Rail Link
(SKRL)

LT-3 Enhance the use of“Intelligent Transport System” (ITS)
LT-6 Develop a database of ASEAN
land transport network

No match

No match

No match

Consideration of knowledge
spillovers

LT-2 Completion of ASEAN Highway Network (AHN) projectLT-1 Accomplish the implementation of the Singapore-Kunming Rail Link (SKRL) mainlines and detailed designs for the spur lines

Source: AJC. See annex G for the full list of the goals.

Rail transport /Road transport

AT-5 Strengthen ASEAN Search and Rescue (SAR) cooperation to ensure effective andcoordinated aeronautical and maritime SAR operations in the region

AT-4 Enhance air traffic management efficiency and capacity through a seamless
ASEAN skyAT-3 Enhance Aviation Security in ASEAN in accordance to ICAO Standards andRecommended Practices (SARPs)

AT-2 Advance safe skies in ASEAN

AT-1 Work towards a more efficient and competitive air transport market and strengthen
engagement with Dialogue Partners, thereby contributing to the economic growth,competitiveness and shared prosperity of ASEAN, while maintaining ASEAN Centrality

MT-7 Strengthen ASEAN Search and Rescue (SAR) cooperation to ensure effective andcoordinated aeronautical and maritime SAR operations in the region

MT-6 Intensify regional cooperation in improving transport safety

No match

MT-2 Realize the roll-on roll-off (RO-RO) shipping network operation in ASEAN

Air transport

MT-4 Enhance navigation
system and security measures inline with international standards

MT-1 Realize the ASEAN Single Shipping Market through the implementation of
the agreed strategies and measures

Maritimetransport

MT-5 Formulate necessary policy initiatives and recommendations to develop strategic
maritime transport logistics between ASEAN and Dialogue Partners

MT-3 Develop an efficient andintegrated inland waterway
transport (IWT) network

Consideration of global value chains

Mode

Consideration of integrated
domestic markets

Table 18. Categorization of ASEAN-wide strategic goals for transport services for promoting positive factors conducive to multiple equilibria

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Table 19. Categorization of ASEAN-wide strategic goals for transport services
for mitigating negative factors hindering multiple equilibria
ModeConsideration of
immobile factors

Consideration of land rent
and/or commuting

Consideration of congestion

Maritime transport

No match

No match

No match

Air transport

No match

No match

No match

Rail transport

No match

No match

No match

No match

LT-5 Reduce the road fatalities by 50%
in ASEAN Member States by 2020 andwork towards further decreasing theforecast level of road fatalities in ASEAN
by 2030Road transport

No match

Source: AJC. See annex G for the full list of the goals.

As specific policy targets under the ASEAN-wide strategic goals focus on establishing global value
chains, there is a need to formulate an ASEAN-wide policy that better considers integrated domestic
markets, knowledge spillovers (table 18), immobile factors, land rent and/or commuting, andcongestion (table 19), all of which should be made as separate policy arrangements.
As hard infrastructure requires a large amount of resources, international organizations, including
the ASEAN-Japan Centre, could conceive a project to assess how multiple equilibria could develop
throughout ASEAN through the liberalization of trade in transport services combined with otherspatial economic factors (listed in tables 18 and 19).
With a view to formulating concrete policy proposals for trade in transport services, the Third Seminaron Promoting Services Trade in ASEAN Member States was held 11–13 September 2017 in Kuala
Lumpur, Malaysia.47 The policy evaluation exercise in the seminar identified the following points (fordetails of the exercise, see annex H): The “evaluation score” for national-level policy formulation is
the highest, followed by that at the neighbouring country-level (sub-regional level). The score for
ASEAN-wide policy formulation is the lowest. As a sector-specific observation, the scores for railtransport services tend to be the lowest across the ASEAN member states. Because infrastructuraldevelopment for rail transport services takes time and costs a lot, policy formulation – which tends
to be complex – tends to be put off All in all, the results indicate that there is a serious need forconsolidating ASEAN-wide policy coordination in terms of promoting trade in transport services (forconcrete policy suggestions for each ASEAN member state, see annex H).
Multiple equilibria, or multiple prospering cities, would become feasible in ASEAN when further
reduction of trade-related transport costs is achieved through concerted liberalization of tradein transport services. And this could be done in connection with the proposed RCEP, as ASEAN
connectivity should expand across and beyond the ASEAN region, to cover its dialogue partners(including Japan48).

47

48

The focus areas of the seminar, co-organized by the ASEAN-Japan Centre and the Malaysia External Trade
Development Corporation, were courier and transport services.
At the 10th Dialogue between Le Luong Minh, Secretary-General of ASEAN, and the Federation of JapaneseChambers of Commerce and Industry in ASEAN, the ASEAN Secretary-General referred to the importance ofintegrating services in ASEAN, including the liberalization of services under the AFAS. In a sense, the AFAS can be
the basis for the RCEP.

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REFERENCES
Anderson, James E. and Eric van Wincoop (2004), “Trade Costs”, Journal of Economic Literature, 42(3): 91–751.
ASEAN Secretariat (2015), Kuala Lumpur Transport Strategic Plan (ASEAN Transport StrategicPlan) 2016–2025, Jakarta: ASEAN Secretariat.
ASEAN and the World Bank (2015), “ASEAN Services Integration Report: A Joint Report by the ASEAN
Secretariat and the World Bank”, World Bank, Washington, DC.
AJC (ASEAN-Japan Centre) (2017), “Global Value Chains in ASEAN: The Philippines”, Paper 8, July.
APEC Policy Support Unit (2015), “Services in Global Value Chains: Manufacturing-Related Services”,
Asia-Pacific Economic Cooperation.
Fujita, Masahisa, Paul Krugman and Anthony Venables (1999), The Spatial Economy: Cities, Regions
and International Trade, Cambridge, Massachusetts: MIT Press.
Hoekman, Bernard (1995), “Assessing the General Agreement on Trade in Services”, World Bank
Discussion Paper No. 307, World Bank, Washington, DC.
Isono, Ikumo and Hikari Ishido (2015), “Service Liberalization in Lao P.D.R.”, IDE Discussion Paper
No. 559, Institute of Developing Economies, Chiba, Japan.
Kumagai, Satoru, Kazunobu Hayakawa, Ikumo Isono, Keola Souknilanh, and Kenmei Tsubota (2013),“Geographical Simulation Analysis for Logistics Enhancement in Asia”, Economic Modelling,
34: 145–153.
Kumagai, Satoru, Ikumo Isono, Toshitaka Gokan, Kazunobu Hayakawa, Kenmei Tsubota, and Keola
Souknilanh (2015), “Geographical Simulation Analysis by IDE-GSM” in China (Shanghai) Pilot
Free Trade Zone and the Future of Asia, Chiba, Japan and Shanghai: IDE-JETRO (Japan
External Trade Organization) and Shanghai Academy of Social Sciences.
Melitz, Marc J. (2003), “The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry
Productivity,” Econometrica, 71 (6): 1695–1725.
UNCTAD (United Nations Conference on Trade and Development) (2007), World Investment Report
2007: Transnational Corporations and the Infrastructure Challenge, New York and Geneva:
United Nations.
UNCTAD (United Nations Conference on Trade and Development) (2016), Review of Maritime
Transport 2016, New York and Geneva: United Nations.

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Annex A. Fifty large foreign affiliates engaged in transport services in ASEAN, 2015 (continued)
Name of foreign affiliates

Host country

Estimated sales($ million)

Name of parent firms

Home country

1

Thai Airways International Pcl

Thailand3 365

Investors (Non-US)

Supranational

2

Evergreen Marine (Singapore) Pte
LtdSingapore

2 146

Evergreen International SA

Panama3

STX OSV Holdings Ltd

Singapore

2 119

Och-Ziff Capital Management
Group LLC

United States

4

STX OSV Holdings Ltd

Singapore

2 069

Fincantieri Oil & Gas SpA

Italy

5

Clearlake Shipping Pte Ltd

Singapore

1 856

Clearlake Invest Ltd

Switzerland

6

BHP Billiton Freight Singapore
Pte Ltd

Singapore

1 813

BHP Billiton Plc

United Kingdom

7

Hutchison Port Holdings TrustSingaporea

1 544

Shareholders

Singaporea

8

UPS Asia Group Pte Ltd

Singapore

1 271

United Parcel Service Inc

United States

9

Yantai Raffles Shipyard Ltd

Singapore

1 242

China International Marine
Containers (Group )Co Ltd

China

10

MOL Bulk Carriers Pte Ltd

Singapore

845

Mitsui OSK Lines Ltd

Japan

11

AirAsia Bhd

Malaysia

815

Genesis Smaller Cos SICAVLuxembourg

12

Airports of Thailand Pcl

Thailand

793

Silchester International
Investors Ltd

United Kingdom

13

SembCorp Logistics Ltd

Singapore612

Toll Holdings Ltd

Australia

14

Labroy Marine Ltd

Singapore605

Dubai Drydocks World LLC

United ArabEmirates

15

Sony Supply Chain Solutions(Malaysia) Sdn Bhd

Malaysia

539

Sony Corp

Japan

16

Western Bulk Pte Ltd

Singapore

517

Kistefos Holding AS

Norway17

Jaya Holdings Ltd

Singaporea

478

Cathay Asset Management
Co LtdSingaporea

18

Tiger Energy Trading Pte Ltd

Singapore

431

PTT PclThailand

19

Tasco Bhd (International Air Freight
Division)

Malaysia409

Yusen Logistics Co, Ltd

Japan

20

Grindrod Shipping Pte Ltd

Singapore395

Grindrod Ltd

South Africa

21

Sats Airport Services Pte Ltd

Singapore

380

Barcelona Port Investments,
SL

Spain

22

Schenker Singapore (Pte) Ltd

Singapore

364

Deutsche Bahn AG

Germany23

APL Logistics Ltd

Singapore

344

Kintetsu World Express Inc

Japan

24

Nam Cheong Dockyard Sdn Bhd

Malaysia

322

Eagle Brand Holdings Ltd

China

25

Miclyn Express Offshore Ltd

Singapore

268

Champ III Fund

Australia

26

Aboitiz Transport System (ATSC)
Corp

Philippinesa

266

Negros Navigation Co Inc

Philippinesa

27

ST Logistics Pte Ltd

Singapore

262

Japan Post Holdings Co Ltd

Japan

28

Shell Tankers (Singapore) Pte Ltd

Singapore251

Royal Dutch Shell Plc

United Kingdom

29

Kuehne + Nagel Pte Ltd

Singapore

250

Kühne + Nagel International
AG

Switzerland

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Annex A. Fifty large foreign affiliates engaged in transport services in ASEAN, 2015 (concluded)
Name of foreign affiliates

Host country

Estimated sales($ million)

Name of parent firms

Home country

30

Skywest Airlines Ltd

Singapore

240

Virgin Australia Holdings Ltd

Australia

31

Jaya Holdings Ltd

Singaporea

239

Nautical Offshore Services

Singaporea

32

Skywest Airlines Ltd

Singapore238

Air New Zealand Ltd

New Zealand

33

Singapore Technologies Logistics
Pte Ltd

Singapore

230

Japan Post Holdings Co Ltd

Japan

34

Pan-United Marine Ltd

Singapore229

Dubai Drydocks World LLC

United ArabEmirates

35

Schneider Electric IT Logistics Asia
Pacific Pte Ltd

Singapore

225

Schneider Electric SE

France35

Yantai Raffles Shipyard Ltd

Singapore225

Sharp Vision Holdings Ltd

Hong Kong

37

Panalpina World Transport(Singapore) Pte Ltd

Singapore

223

Panalpina Welttransport(Holding) AG

Switzerland

38

Phoenix Tankers Pte Ltd

Singapore

222

Mitsui OSK Lines Ltd

Japan

39

Group Associated (C & L) Sdn Bhd

Malaysia

221

Daikin Industries Ltd

Japan

40

Siva Bulk Ltd

Singapore

217

Siva Industries & Holdings Ltd

India

41

Tejana Trading & Management
Services Sdn Bhd

Malaysia

209

Mitsui & Co Ltd

Japan

42

Skywest Airlines Ltd

Singapore

195

Virgin Australia Holdings Ltd

Australia

43

NYK Bulkship (Asia) Pte Ltd

Singapore

193

Nippon Yusen Kabushiki
KaishaJapan

44

Schenker Logistics (Malaysia) Sdn
Bhd

Malaysia

192

Deutsche Bahn AG

Germany

45

Transmile Group Bhd

Malaysia

181

Emerging Markets GrowthFund Inc

United States

45

Schenker (Thai) Ltd

Thailand181

Deutsche Bahn AG

Germany

47

United-Seino Transportation(Malaysia) Sdn Bhd

Malaysia

180

Seino Transportation Co, Ltd

Japan

47

Asia Atrantic Airlines

Thailand180

H.I.S. Co, Ltd

Japan

49

PTT Philippines Trading Corp

Philippines

179

PTT PclThailand50

Bollore Logistics Singapore Pte Ltd

Singapore

177

BolloreFranceSource: AJC, based on data from Toyo Keizai Shimposha, UNCTAD, Thomson Reuters and fDiMarkets.
Note:	These 50 firms are not necessarily the largest. They are provided for illustrative purposes. Sales are estimated in the following manner: Firstthe ratio of sales to size of foreign affiliates (investment value, capital size, employment size, etc.) is calculated for available foreign affiliates
in each ASEAN host economy; second, the ratio is applied to the affiliates whose size is available from the sources given; and third, someadjustment was made to eliminate unreasonable estimates by searching information on the affiliates in question. Nevertheless there are likely
to be some, sometimes large, errors, and readers should use these data with utmost caution.
a
Immediate investing country is different.

P R O M O T I N G S E R V I C E S T R A D E I N A S E A N – F E B R U A R Y 2 018

48

Annex B. Fifty large ASEAN affiliates abroad engaged in transport services, 2015 (continued)
Name of ASEAN affiliate abroad

Host country

Estimated sales($ million)

Name of ASEAN investing
company

ASEAN homecountry1

Virgin Australia Holdings Ltd

Australia

3 716

Singapore Airlines Ltd

Singapore

2

Star Cruises Ltd

Hong Kong

2 386

CMY Capital (L) Ltd

Malaysia3

Hutchison Port Holdings TrustSingaporea

1 544

Shareholders

Singaporea

4

Generale Mobiliare Interessenze
Azionarie SpA

Italy

818

Changi Airports International
Pte Ltd

Singapore

5

Genting Hong Kong Ltd

Bermuda691

Genting Malaysia Bhd

Malaysia

6

Braddell Ltd

United Kingdom

663

Comfortdelgro Corporation
Ltd

Singapore

7

Jaya Holdings Ltd

Singaporea

478

Cathay Asset Management
Co LtdSingaporea

8

Schenker Australia Pty Ltd

Australia

467

Schenker (Asia Pacific) Pte Ltd

Singapore9

Istanbul Sabiha Gökçen Uluslararasi
Havalimani Yatirim Yapim Ve IsletmeAnonim Sirketi

Turkey427

Malaysia Airports Holdings
Bhd

Malaysia

10

Expolanka Holdings Plc

Sri Lanka

410

SG Holdings Global Pte Ltd

Singapore

11

Blue Dart Express Ltd

India

363

DHL Express (Singapore)
Pte. LtdSingapore

12

PSA HNN

Belgium325

PSA Corp Ltd

Singapore

13

PSA Antwerp

Belgium

299

PSA International Pte Ltd

Singapore

14

Aboitiz Transport System (ATSC)
Corp

Philippinesa

266

Negros Navigation Co Inc

Philippinesa

15

Comfortdelgro Cabcharge Pty Ltd

Australia

254

Comfortdelgro Corporation
Ltd

Singapore

16

Jaya Holdings Ltd

Singaporea

239

Nautical Offshore Services

Singaporea

17

Localiza Rent A Car SA

Brazil232

Templeton Asset Management
Ltd

Singapore18

Malaysian Airline System Bhd

Australia

219

Malaysian Airline System Bhd

Malaysia

19

Sical Logistics Ltd

India

218

Investor Group

Singapore20

SPA Antwerp

Belgium

121

Port Authority of Singapore(PSA)

Singapore

21

Cardig Aero Services Tbk, Pt

Indonesia

119

Sats LtdSingapore

22

Fred Olsen Production ASA

Norway114

Yinson Holdings Bhd

Malaysia

23

Virgin Australia Airlines Pty Ltd

Australia

108

Singapore Airlines

Singapore

24

Myanmar MJets

Myanmar99

MJets

Thailand25

Cargo Community (Shanghai) Co.,
Ltd

China

96

Singapore Airlines

Singapore26

Cityfleet Networks Ltd

United Kingdom

87

Comfortdelgro Corporation
Ltd

Singapore27

ABG Shipyard Ltd

India

86

Investor Group

Singapore28

APL Logistics Europe BVNetherlands

81

APL Logistics Ltd

Singapore29

Keppel Philippines Marine Inc

Philippines

79

KS Investments Pte Ltd

SingaporePA PE R 6 T RA D E I N M A RI T I M E, A I R, R AIL AN D R OAD TR AN SPOR T SER VIC ES

49

Annex B. Fifty large ASEAN affiliates abroad engaged in transport services, 2015 (concluded)
Name of ASEAN affiliate abroad

Host country

Estimated sales($ million)

Name of ASEAN investing
company

ASEAN homecountry

30

Transmile Group Bhd

Malaysia

78

Kuok (Singapore )LtdSingapore30

Aircraft Maintenance Services
Australia Pty Ltd

Australia

78

Singapore Airlines

Singapore

32

PSA Sines - Terminais deContentores, SA

Portugal73

PSA International Pte Ltd

Singapore

32

PSA Sines - Terminais deContentores, SA

Portugal

73

PSA Europe Pte Ltd

Singapore

34

Sembawang Kimtrans (S )Pte Ltd

Singaporea

70

Toll Express (Asia) Pte Ltd

Singaporea

35--

Russia62

Neptune Orient Lines (NOL)

Singapore35

Eng Kong Holdings Ltd

Singaporea

62

NEK Container Group Pte Ltd

Singaporea

37

Jaya Holdings Ltd

Singaporea

61

Sime Darby Eastern Ltd

Singaporea

37

--

China

61

Regional Container Lines(RCL)

Thailand37

Jasa Angkasa Semesta Tbk Pt

Indonesia

61

Sats LtdSingapore40

Keppel Philippines Marine Inc

Philippines

55

KS Investments Pte Ltd

Singapore40

Skywest Ltd

Australia

55

CaptiveVision Capital Ltd

Singapore

42

GD Express Carrier Bhd

Malaysia

52

Singapore Post Ltd

Singapore

43

Citra Marga Nusaphala Persada
Tbk PT

Indonesia

51

Julius Baer & Co Ltd

Singapore

44

Star Alliance Services Gmbh

Germany

48

Singapore Airlines Ltd

Singapore

44

Star Alliance Services Gmbh

Germany

48

Thai Airways International PCL Thailand

44

Globelink WW India Pte Ltd

India

48

CWT Globelink Pte Ltd

Singapore

47

Freight Management Holdings Bhd

Malaysia

46

Singapore Enterprises Pte Ltd

Singapore48

Shinyei Shipping Co, Ltd

Japan

41

Singapore Post Ltd

Singapore48--

Viet Nam

41

Neptune Orient Lines (NOL)

Singapore

50

Nordic Tankers A/S

Denmark

40

Investor Group

Singapore50

YCH Logistics (Malaysia) Sdn Bhd

Malaysia40

YCH Group Pte Ltd

Singapore

Source: AJC, based on data from Toyo Keizai Shimposha, UNCTAD, Thomson Reuters and fDiMarkets.
Note:	These 51 firms are not necessarily the largest. They are provided for illustrative purposes. Sales are estimated in the following manner: First theratio of sales to size of ASEAN affiliates (investment value, capital size, employment size, etc.) is calculated for available ASEAN affiliates in each hosteconomy; second, the ratio is applied to the affiliates whose size is available from the sources given; and third, some adjustment was made to eliminate
unreasonable estimates by searching information on the affiliates in question. Nevertheless there are likely to be some, sometimes large, errors, andreaders should use these data with utmost caution.
a
Immediate investing country is different.

P R O M O T I N G S E R V I C E S T R A D E I N A S E A N – F E B R U A R Y 2 018

50

ANNEX C.
SPECIFIC SCHEDULE OF COMMITMENTS FOR“MARITIME TRANSPORTATION” BY ASEAN MEMBERS(9TH PACKAGE, SIGNED IN NOVEMBER 2015)
Legend for this annex:(1) means Mode 1 (cross-border supply of services); (2) means Mode 2 (consumption abroad);(3) means Mode 3 (commercial presence); (4) means Mode 4 (movement of natural persons).
The meaning of the alphabetical classification in the right hand column of each specificcommitment table is as follows.
N: none (no restriction)
U: unbound (no mention or no promise of liberalization)
A: limitations on the number of service suppliers whether in the form of numerical quotas,
monopolies, exclusive service suppliers or the requirements of an economic needs test;
B: limitations on the total value of service transactions or assets in the form of numericalquotas or the requirement of an economic needs test;
C: limitations on the total number of service operations or on the total quantity of service output
expressed in terms of designated numerical units in the form of quotas or the requirementof an economic needs test;49
D: limitations on the total number of natural persons that may be employed in a particularservice sector or that a service supplier may employ and who are necessary for, and directly
related to, the supply of a specific service in the form of numerical quotas or the requirementof an economic needs test;
E: measures which restrict or require specific types of legal entity or joint venture throughwhich a service supplier may supply a service; andF: limitations on the participation of foreign capital in terms of maximum percentage limit on
foreign shareholding or the total value of individual or aggregate foreign investment” (Part
III: Specific Commitments, Article XVI: Market Access, subparagraph 2).
Under AFAS, the restriction types A, B and C are actually not used by the ASEAN Member
States in the sector “Professional Services”. In addition to these six types of market-access
restrictions, the following two restrictions are observed.
G: Government approval requirement; and
H: Tax or fee payment requirement.

49

Subparagraph 2(c) does not cover measures of a Member which limit inputs for the supply of services.

PA PE R 6 T RA D E I N M A RI T I M E, A I R, R AIL AN D R OAD TR AN SPOR T SER VIC ES

51

Brunei Darussalam
Limitation on Market
AccessA-H
Limitation onclassification
National Treatment
of MA

A-H
Additionalclassification
Commitmentsof NT

A. Maritime Transport
Services
Passenger
transportation(CPC7211)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Foreign equity
participation shall not
exceed 51%(3) EF51(3) None, except
as indicated in thehorizontal section(3) N

Freight transportation(CPC7212)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) a) The supply of(3) EF51
international maritime
transport, excluding
vessels for the carriage
and transportation ofenergy goods, foreign
equity participation shallnot exceed 51%b) The supply ofinternational maritime
transport of energy
goods: unbound(3) None, except
as indicated in thehorizontal section(3) N(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Foreign equity
participation shall not
exceed 51%(3) EF51(3) None(3) N(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Foreign equity
participation shall not
exceed 51%(3)(3) None(3) N(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Foreign equity
participation shall not
exceed 51%.

(3) EF51(3) None(3) N

Sector or Subsector

Rental of Vessels with
Crew (CPC7213)

Maintenance andRepair of Vessels(CPC8868**)

Maritime Agency
Services CPC7454*

EF51

The following services
at the port are madeavailable to international
maritime transport
suppliers on reasonable
and non-discriminatory
terms and conditions:
1. Pilotage
2. Towing and the tug
assistance
3. Provisioning andwatering
4. Garbage collecting
5. Navigation aids
6. Shore-based
operational services
essential to ship
operations including
communications, waterand electrical supplies
7. Emergency repair
facilities
8. Anchorage, berth, andberthing services

P R O M O T I N G S E R V I C E S T R A D E I N A S E A N – F E B R U A R Y 2 018

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Cambodia
Limitation on Market
AccessA-H
Limitation onclassification
National Treatment
of MA

A-H
Additionalclassification
Commitmentsof NTInternationaltransport (Freight andpassengers) (CPC7211
and 7212), excluding
cabotage(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N(3) None(3) N

Rental Vessels withcrew (CPC 7213)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N(3) None(3) N(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N(3) None(3) N(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N(3) None(3) N(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N(3) None(3) N

Sector or Subsector

Maintenance and repairof vessels (CPC 8868**)
Pushing and towing
Services (CPC 7214)
Supporting services
for maritime transport(CPC 745**)

Where not otherwise
made available to theinternational maritime
transport suppliers
pursuant to Article XXVIII(c) (ii), no measures shallbe applied which denyreasonable and nondiscriminatory access tothe following services:
1. Towing and tug
assistance;
2. Provisioning, fuelling
and watering;
3. Garbage collecting andballast waste disposal;
4. Emergency repair
facilities;
5. Lightering and watertaxi services;
6. Ship agencies;
7. Custom brokers;
8. Stevedoring andterminal services;
9. Surveying andclassification services.

PA PE R 6 T RA D E I N M A RI T I M E, A I R, R AIL AN D R OAD TR AN SPOR T SER VIC ES

53

Indonesia
Limitation on Market
AccessA-H
Limitation onclassification
National Treatment
of MA

A-H
Additionalclassification
Commitmentsof NT

A. Maritime Transport
Services
International Passenger
Transport Excluding
Cabotage (pillar 1) (CPC7211)
International FreightTransport excluded
Cabotage (CPC 7212)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Joint venturewith foreign equity
participation up to 60
per cent or owner’s
representative**.

(3) EF60(3) As indicated in the
Horizontal Section(3) EF60

Maintenance and repairof Vessels (CPC 8868)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Joint venturewith foreign equity
participation up to 51%,
for Eastern part of Javaand eastern part ofIndonesia, with vessels
classification 500 DWTabove.
For other area andcapacity, as indicatedin the Horizontal
Commitment(3) EF51(3) As indicated in thehorizontal section(3) EF51

Pushing and Towing
Services for Maritime
Transport (CPC 7214)(Excluding Cabotage)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Joint venturecompany with foreign
equity participation up
to 51%(3) EF51(3) As indicated in the
Horizontal Section(3) EF51

Vessel Salvage andRefloating Services(CPC 7454)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Joint venturecompany with foreign
equity participation up
to 49%(3) EF49(3) As indicated in thehorizontal section(3) EF49

Sector or Subsector

The following services at
ports are made available
to international maritime
transport supplier on
reasonable and nondiscriminatory terms andconditions:
1. Pilotage;
2. Towing and tug
assistance;
3. Provisioning andwater supply;
4. Garbage collection
and ballast waste
disposal;
5. Port captain’s
services;
6. Navigation aids;
7. Shore-based
operational services
essential to ship
operation, including
communication, waterand electrical supply;
8. Emergency repair
facilities; and9. Anchorage andberthing services.

P R O M O T I N G S E R V I C E S T R A D E I N A S E A N – F E B R U A R Y 2 018

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Lao People’s Democratic Republic
Sector or Subsector
A. Maritime Transport
Services
Passenger
transportation (CPC7211)
Freight transportation(CPC 7212)
Rental of vessels withcrew (CPC 7213)
Pushing and towing
services (CPC 7214)
Maintenance and repairof vessels (CPC 8868)
Vessels salvage andre-floating services (notapplicable in harbor)(CPC 7454)

Limitation on Market
AccessA-H
Limitation onclassification
National Treatment
of MA

A-H
Additionalclassification
Commitmentsof NT(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N(3) None(3) N

Limitation on Market
AccessA-H
Limitation onclassification
National Treatment
of MA

A-H
Additionalclassification
Commitmentsof NT(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N

Malaysia
Sector or Subsector
A. Maritime Transport
Services
International maritime
transportation
services, excludes
cabotage(CPC 7211)(3) Only through a(3) EF51
representative office,regional office or locallyincorporated jointventure corporation with
Malaysian individuals or
Malaysian- controlled
corporations or bothand aggregate foreign
shareholding in the jointventure corporation shallnot exceed 51 per cent.
Malaysian registered
vessels
To register a vessel in
Malaysia, the following
conditions must be met:a) Owner of that vessel
must be a Malaysian
citizen or corporation
incorporated in Malaysia;b) Majority shareholding
to be held by Malaysians;c) Majority of the boardof directors to be
Malaysians; andd) Principal placeof business to be in
Malaysia.

The following services
at the port are madeavailable to international
maritime transport
suppliers on reasonable
and non-discriminatory
terms and conditions:
1) Pilotage2) Towing and tug
assistance3) Provisioning, fuelling
and watering4) Garbage collection andballast waste disposal
5) Port Captain’s services6) Navigation aids
7) Shore-based
operational services
essential to ship
operations, including
communications, waterand electrical supplies
8) Emergency repair
facilities
9) Anchorage, berth andberthing services

PA PE R 6 T RA D E I N M A RI T I M E, A I R, R AIL AN D R OAD TR AN SPOR T SER VIC ESInternational maritime
transportation
services, excludes
cabotage(CPC 7212)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N(3) Only through a(3) EF70
representative office,regional office or locallyincorporated jointventure corporation with
Malaysian individuals or
Malaysian- controlled
corporations or bothand aggregate foreign
shareholding in the jointventure corporation shallnot exceed 70 per cent.
Malaysian registered
vessels
To register a vessel in
Malaysia, the following
conditions must be met:a) Owner of that vessel
must be a Malaysian
citizen or corporation
incorporated in Malaysia;b) Majority shareholding
to be held by Malaysians;c) Majority of the boardof directors to be
Malaysians; andd) Principal placeof business to be in
Malaysia.

55

The following services
at the port are madeavailable to international
maritime transport
suppliers on reasonable
and non-discriminatory
terms and conditions:
1) Pilotage2) Towing and tug
assistance3) Provisioning, fuelling
and watering4) Garbage collection andballast waste disposal
5) Port Captain’s services6) Navigation aids
7) Shore-based
operational services
essential to ship
operations, including
communications, waterand electrical supplies
8) Emergency repair
facilities
9) Anchorage, berth andberthing services

Rental of cargo(1) Nonevessels with crew for(2) Noneinternational shipping(3) None(CPC 7213)
Rental and leasing
services of all typesof self-propelled
seagoing vessels
with operator, suchas passenger vessels(except pleasure bath),tankers, bulk dry cargovessels, cargo andfreight vessels.)* These are limited toservices of hiring of avessel with crew undercharter party terms
for voyage or periodof time.

(1) N(1) None

(1) N

(2) N

(2) None

(2) N

(3) N

(3) None(3) N

Maintenance andrepair vessels (CPC
8868**)(these are limited tobusinesses related
to maintenance andrepair of ocean goingvessels at anchor
or alongside andmaintenance andrepair of local vessels)(1) Unbound*(1) U(1) Unbound*(1) U(2) None(2) N(2) None(2) N(3) Only through a
representative office,regional office or locallyincorporated joint
venture corporation with
Malaysian individuals
or Malaysian controlled
corporations or both.
Foreign equity allowable
up to maximum of 51
per cent.

(3) EF51(3) Unbound(3) UP R O M O T I N G S E R V I C E S T R A D E I N A S E A N – F E B R U A R Y 2 018

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Myanmar
Limitation on Market
AccessA-H
Limitation onclassification
National Treatment
of MA

A-H
Additionalclassification
Commitmentsof NT

A. Maritime Transport
Services
International passenger
transport (excluding
cabotage)(CPC 7211)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N(3) None(3) N

International freighttransport (excluding
cabotage)(CPC 7212)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N(3) None.

(3) N

Rental of cargovessels with crew forinternational shipping(CPC 7213/72130)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N(3) None(3) N

Maintenance and repairof Vessels (CPC 8868**)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N(3) None(3) N(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Joint Venture witha Myanmar Citizen or
enterprise up to 70%
equity is permitted.

(3) EF70(3) None(3) N

Sector or Sub-sector

Pushing and towing
services (CPC 7214)

Subject to Horizontal
Commitments

Subject to Horizontal
Commitments
Subject to Horizontal
Commitments

PA PE R 6 T RA D E I N M A RI T I M E, A I R, R AIL AN D R OAD TR AN SPOR T SER VIC ES

Philippines
Limitation on Market
AccessA-H
Limitation onclassification
National Treatment
of MA

A-H
Additionalclassification
Commitmentsof NTInternational transportpassenger, except
cabotage transport,
and government own
cargoes.

(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N(3) None(3) N

International transport(freight),except
cabotage transportand government own
cargoes(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N(3) None(3) N

Maritime cargo freight
services by foreign
registered shipping
companies (CPC7212**)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None. Except that up
to 70% foreign equity
participation is allowed(3) N,EF70(3) None(3) N

Leasing/Rental ofvessel without crew(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Bareboat charteror lease contract
subject to approval by
the Maritime Industry
Authority (MARINA)(3) G(3) None(3) N(1) Unbound due to lackof technical feasibility

(1) U

(1) U

(2) Any repairs,
conversion or
drydocking ofPhilippine-owned orregistered vessels are
required to be done
at domestic repair
yards registered with
the Maritime Industry
Authority (MARINA)(3) N(1) Unbound due
to lack of technicalfeasibility

Sector or Subsector

Maintenance of vessels(2) G(2) None

(2) N
(3) N

(3) None(3) None
Repair of vessels(1) Unbound due to lackof technical feasibility(1) U(2) Any repairs,
conversion or
drydocking ofPhilippine-owned orregistered vessels are
required to be done
at domestic repair
yards registered with
the Maritime Industry
Authority (MARINA)(3) EF70(2) G(1) Unbound due
to lack of technicalfeasibility(2) None

(1) U
(2) N
(3) N

(3) None(3) None except that up
to 70% foreign equity
participation is allowedPushing and towing
services (CPC 72140)(1) Unbound*(1) U(1) Unbound*(1) U(2) None(2) N(2) None(2) N(3) Up to 40% foreign
equity participation isallowed.

(3) EF40(3) None

(3) N

57

P R O M O T I N G S E R V I C E S T R A D E I N A S E A N – F E B R U A R Y 2 018

58

Supporting services formaritime transport(CPC 745**)
Container yard anddepot services(1) Unbound*(1) U(1) Unbound*(1) U(2) None(2) N(2) None(2) N(3) None(3) N(3) None(3) N

Port and waterway
operation services (CPC
74510)(1) Unbound*(1) U(1) Unbound*(1) U(2) None(2) N(2) None(2) N(3) Up to 40% foreign
equity participation isallowed.

(3) EF40(3) None(3) N

Maritime agency
services (CPC 7454)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N(3) None(3) N

Other supporting
services for watertransport(CPC 74590)(1) Unbound*(1) U(1) Unbound*(1) U(2) None(2) N(2) None(2) N(3) Up to 40% foreign
equity participation isallowed.

(3) EF40(3) None(3) N

Classification societies(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Unbound, except up
to 40 per cent foreign
equity is allowed(3) U(3) Unbound(3)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Up to 70% foreign
equity participation isallowed(3) EF70(3) Subject to(3) G
issuance of permits
and supervision by
the Philippine Coast
Guard for the salvageof vessels and marine
salvage operation,
respectively, within themaritime jurisdictionof the Philippines

Vessel and salvage
refloating services
provided in oceans andseas(CPC 745**)UPA PE R 6 T RA D E I N M A RI T I M E, A I R, R AIL AN D R OAD TR AN SPOR T SER VIC ES

59

Singapore
Limitation onMarket Access

A-H
Limitation onclassification
National Treatment
of MA

A-H
classification Additional Commitmentsof NTInternational Maritime
Passenger and FreightTransport excluding
cabotage transport(CPC 7211 ** and CPC
7212 **)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None, except on (3) N
the registration ofSingapore flag ships
as specified in the
Merchant ShippingAct(3) None, except on
the registration ofSingapore flag ships
as specified in the
Merchant Shipping
Act

(3) N

Rental of vessels withcrew (CPC 7213)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Foreign equity
allowable up to a
maximum of 70%(3) EF70(3) None

(3) N

(1) U

(1) Unbound*

(1) U

(2) N

(2) None(2) N(3) Foreign equity
allowable up to a
maximum of 70%(3) EF70(3) None(3) N(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N(3) None(3) N

Maritime Auxiliary
Service: Classificationsocieties5, except for
statutory services for
Singapore flag ships(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N(3) None(3) N

Vessels salvage andre-floating services (notapplicable in harbour)(CPC 7454)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Foreign equity
allowable up to a
maximum of 70%(3) EF70(3) None(3) N

Sector or Subsector

Maintenance and repair (1) Unbound*of vessels (CPC 8868 **) (2) None

International Towage

In accordance with thedecisions made at the
WTO Negotiating Group on
Maritime Transport Services,where the following services
are not otherwise coveredby the obligation enshrinedin (ii) of sub-paragraph(c) of Article XXVIII of theGeneral Agreement on Tradein Services in Annex 1B to
the WTO Agreement, they
are made to international
maritime transport
operators on
reasonable and non
discriminatory
terms and conditions:- pilotage;- towing and tug assistance;- provisioning, fuelling andwatering;- garbage collection andballast waste disposal;- port captain’s services;- navigation aids;- emergency repair facilities;- anchorage; and- other shore-based
operational services
essential to ship
operations, including
communications, waterand electrical supplies.

P R O M O T I N G S E R V I C E S T R A D E I N A S E A N – F E B R U A R Y 2 018

60

Thailand
Limitation on Market
AccessA-H
Limitation onclassification
National Treatment
of MA

A-H
Additionalclassification
Commitmentsof NT(a) Passenger
transportation (CPC 7211
excluding cabotagetransport: as defined
below - 3.1)

(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) As indicated in
3.3 of the horizontal
sectiona) Unbound forestablishment ofJuridical Person
for the purpose ofoperating a fleet under
the national flag ofThailandb) Other forms ofcommercial presence
for the supply ofinternational maritime
transport services
except branch offices:
As indicated in thehorizontal section(3) U(3) a) Unboundb) None(3) U & N(a) Passenger
transportation (excluding
cabotage transport: as
defined below - 3.1):
International sea cruises(cruise carrier withmore than 200,000 DWTcapacity)(CPC Version 1.1: part of
65119)
This subclass does notinclude transportation ofpassengers on coastalroute between domestic
port(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) As indicated in
3.1 of the horizontal
section(3) N(3) None(3) N

Sector or Subsector

The following services
at the port provided
by the government
enterprises are
made available tointernational maritime
transport suppliers on
reasonable and nondiscriminatory terms
and conditions:
1. Pilotage1
2. Towing and tug
assistance
3. Provisioning, fuelling
and watering
4. Garbage collecting
and ballast waste
disposal
5. Port captain’s
service
6. Navigation aids
7. Shore-based
operational services
essential to ship
operations, water andelectrical supplies
8. Emergency
repair facilities 9.
Anchorage, berth andberthing services
10. Inland transports
services (internal
waterways transport
services, rail transport
services and roadtransport services)PA PE R 6 T RA D E I N M A RI T I M E, A I R, R AIL AN D R OAD TR AN SPOR T SER VIC ES(b) Freight transportation(CPC 7212 excluding
cabotage transport: as
defined below - 3.1)

(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) As indicated in
3.3 of the horizontal
sectiona) Unbound forestablishment ofJuridical Person
for the purpose ofoperating a fleet under
the national flag ofThailandb) Other forms ofcommercial presence
for the supply ofinternational maritime
transport services (asdefined below- 3.2)
except branch offices:
As indicated in thehorizontal section(3) U(3) a) Unbound(3) Ub) None other than:- Shareholders of Thai
maritime transportcompanies withownership of Thai
flag vessels may be
granted exemption
or reduced rates ofincome tax leviable
on dividends paid bysuch companies- Exporters orimporters of goods
shipped from orto Thailand by
Thai flag vessel
may be entitled to
special deductionof not more than
50 per cent of thefreight values orother expenses
paid in the ordinary
courses of carriage
of such goods fromtheir net income
for the purposesof calculation ofincome tax(b) Freight transportation(excluding cabotagetransport: as defined
below - 3.1):
Transoceanic watertransport services ofrefrigerated freight byrefrigerator vessels(CPC Version 1.1: part of
65121)
This subclass does notinclude coastal andtransoceanic watertransportation of chemical,
liquid gas, any form ofgages or any form ofliquids cf. 65122(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) As indicated in
3.1 of the horizontal
section(3) N(3) None(3) N(c) Rental of non-Thai flag
vessels with crew (CPC7213)

(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) As indicated in
3.1 of the horizontal
section(3) N(3) None(3) N(d) Maintenance and repairof vessels exceeding
100,000 DWT (Part of CPC
8868)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) As indicated in
3.1 of the horizontal
section(3) N(3) None

(3) N

61

P R O M O T I N G S E R V I C E S T R A D E I N A S E A N – F E B R U A R Y 2 018

62(e) International towing(CPC 7214)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) As indicated in(3) U
3.3 of the horizontal
sectiona) Unbound forestablishment ofjuridical person for the
purpose of operating afleet under the national
flag of Thailandb) Other forms ofcommercial presence
for the supply ofinternational towing
service (as defined
below - 3.2) except
branch office: As
indicated in thehorizontal section(3)a) Unboundb) None(3) U & N

Towing and pushing
services on transoceanic
waters (CPC Version 1.1:
part of 65140) (excluding
cabotage transport: as
defined below - 3.1)

(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) As indicated in
3.1 of the horizontal
section(3) N(3) None(3) N(f) Supporting Services formaritime transport- Shore reception facilities(collection of waste/oily
water from ships)- Port captain’s services
attached to specificforeign vessels- Classification Societies- Vessels salvage andrefloating services – notapplicable in harbour(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) As indicated in
3.3 of the horizontal
section(3) N(3) None(3) N- Vessels salvage andrefloating services (CPC
1.1 67630)
This subclass does notinclude:- towing services supplied
to distressed vessels:- on coastal waters or on
open sea, cf. 65140- on inland waters, cf.
65240- lifeboat services, marine
fireboat services andother marine search andrescue services:- police services, cf.
91260- marine fireboat services,cf. 91260- other public order andsafety affairs related
services, cf. 91290(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) As indicated in
3.1 of the horizontal
section(3) N(3) None(3) N

PA PE R 6 T RA D E I N M A RI T I M E, A I R, R AIL AN D R OAD TR AN SPOR T SER VIC ES

Custom clearance services (1) Unbound(as indicated below-3.5)(2) None(1) U(1) Unbound

(1) U

(2) N

(2) None(2) N(3) A customs broker
must be natural
person of Thainationality and mustobtain a licensefrom the Customs
Department(3) D(3) As indicated in(3) D
3.3 of the horizontal
sectionA customs broker must
be natural person ofThai nationality andmust obtain a licensefrom the Customs
Department

63

P R O M O T I N G S E R V I C E S T R A D E I N A S E A N – F E B R U A R Y 2 018

64

Viet Nam
Sector or Subsector

Limitation on Market Access

A. Maritime Transport
Services
Passenger
Transportation lessCabotage (CPC 7211)(1) None

Freight transportation
less cabotage (CPC7212)(1) None

Rental of vessels withcrew (CPC 7213)(1) None(2) None(3) a) Establishment of registered companies for the purpose of operating a fleet under the national flag of Viet Nam:foreign service suppliers are permitted to establish joint- ventures with foreign capital contribution not exceeding
49% of total legal capital. Foreign seafarers may be permitted to work in ships under the national flag of Viet Nam(or registered in Viet Nam) owned by joint- ventures in Viet Nam but not exceeding 1/3 of total employees of theships. The Master or first chief executive must be Vietnamese citizen.
b) Other forms of commercial presence for the supply of international maritime transport services24:
Since 11 January 2007, foreign shipping companies can establish joint ventures with 51% foreign ownership.
Since 11 January 2012, foreign shipping companies can establish 100% foreign-invested enterprises.
Since 11 January 2007, foreign- invested enterprises are only permitted to carry out activities from (1) to (5)as indicated below:
1. Marketing and sales maritime transport services through direct contact with customers, from quotation to
invoicing;
2. Acting on behalf of the cargo owners;
3. Provision of required business information;
4. Preparation of documentation concerning transport documents including customs documents, or otherdocuments related to the origin and character of the goods transported; and5. Provision of maritime transport services including cabotage services by Vietnamese flagged vessels for the supply
of integrated transport services. Since 11 January 2012, activities from (6) to (7) shall be allowed.
6. Acting on behalf of the company, organising the call of the ship or taking over cargoes when required;
7. Negotiate and sign contracts for road, rail, inland waterways transportation related to cargoes transported by
the company. The number of joint ventures by foreign shipping companies will be limited to 5 companies since
11 January 2007. Three additional companies will be allowed every two years thereafter. Since 11 January 2012,no limitation on the number of joint ventures.
(2) None(3) a) Establishment of registered companies for the purpose of operating a fleet under the national flag of Viet Nam:foreign service suppliers are permitted to establish joint- ventures with foreign capital contribution not exceeding
70% of total legal capital. Foreign seafarers may be permitted to work in ships under the national flag of Viet Nam(or registered in Viet Nam) owned by joint- ventures in Viet Nam but not exceeding 1/3 of total employees of theships. The Master or first chief executive must be Vietnamese citizen.
b) Other forms of commercial presence for the supply of international maritime transport services26:
Since 11 January 2007, foreign shipping companies can establish joint ventures with 51% foreign ownership.
Since 11 January 2012, foreign shipping companies can establish 100% foreign-invested enterprises.
Since 11 January 2007, foreign- invested enterprises are only permitted to carry out activities from (1) to (5) as
indicated below:
1. Marketing and sales maritime transport services through direct contact with customers, from quotation to
invoicing;
2. Acting on behalf of the cargo owners;
3. Provision of required business information;
4. Preparation of documentation concerning transport documents including customs documents, or otherdocuments related to the origin and character of the goods transported; and5. Provision of maritime transport services including cabotage services by Vietnamese flagged vessels for the supply
of integrated transport services. Since 11 January 2012, activities from (6) to (7) shall be allowed.
6. Acting on behalf of the company, organizing the call of the ship or taking over cargoes when required;
7. Negotiate and sign contracts for road, rail, inland waterways transportation related to cargoes transported by thecompany. The number of joint ventures by foreign shipping companies will be limited to 5 companies since
11 January 2007. Three additional companies will be allowed every two years thereafter. Since 11 January 2012,no limitation on the number of joint ventures.
(2) None(3) None, except joint venture with the foreign capital contribution not exceeding 70% shall be permitted

Maintenance and repairof vessels (CPC 8868*)(1) None(2) None(3) Commercial presence may be in the form of joint venture. Maximum share of foreign equity in the joint venturecompany allowable up to 70%

PA PE R 6 T RA D E I N M A RI T I M E, A I R, R AIL AN D R OAD TR AN SPOR T SER VIC ES

A-H classificationof MA

Limitation on National
Treatment

A-H classification
of NT

(1) N

(1) None

(1) N

(2) N

(2) None(2) N(3) EF49(3) None

(3) N

(1) N

(1) None

(1) N

(2) N

(2) None(2) N(3) EF70

(3)

(3)

(1) N

(1) None

(1) N

(2) N

(2) None(2) N(3) N,EF70(3) None, except as indicated in
the market access column

(3) N

(1) N

(1) None

(1) N

(2) N

(2) None(2) N(3) EF70(3) None

(3) N

65

Additional Commitments
The following services at the port are made available tointernational maritime transport suppliers on reasonable
and non-discriminatory terms and conditions:
1. Pilotage;
2. Towing and tug assistance;
3. Provisioning, fuelling and watering
4. Garbage collecting and ballast waste disposal;
5. Port Captain’s/Harbour Master’s services;
6. Navigation aids;
7. Shore-based operational services essential to ship
operations, including communications, water andelectrical supplies;
8. Emergency repair facilities;
9. Anchorage, berth and berthing services;
10. Access to maritime agency services.23

The following services at the port are made available tointernational maritime transport suppliers on reasonable
and non-discriminatory terms and conditions:
1. Pilotage;
2. Towing and tug assistance;
3. Provisioning, fuelling and watering
4. Garbage collecting and ballast waste disposal;
5. Port Captain’s/Harbour Master’s services;
6. Navigation aids;
7. Shore-based operational services essential to ship
operations, including communications, water andelectrical supplies;
8. Emergency repair facilities;
9. Anchorage, berth and berthing services;
10. Access to maritime agency services.25

66

P R O M O T I N G S E R V I C E S T R A D E I N A S E A N – F E B R U A R Y 2 018

ANNEX D.
SPECIFIC SCHEDULE OF COMMITMENTS FOR“AIR TRANSPORTATION” BY ASEAN MEMBERS(9TH PACKAGE, SIGNED IN NOVEMBER 2015)(Note: Commitments are not listed as part of the main AFAS commitment tables; nor have they comeinto force. This is because the 9th package for Air Transportation has been negotiated separatelyfrom the other sectors in a rather confidential manner. Therefore this paper does not reproduce thespecific commitment tables as an annex.)

ANNEX E.
SPECIFIC SCHEDULE OF COMMITMENTS FOR“RAIL TRANSPORTATION” BY ASEAN MEMBERS(9TH PACKAGE, SIGNED IN NOVEMBER 2015)
Brunei Darussalam
A-H
Limitation on
Limitation on Market Access classification
National Treatment
of MA

A-H
Additionalclassification
Commitmentsof NT

E. Rail Transport Services
Passenger transportation(CPC 7111)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Foreign equity
participation should notexceed 51%(3) EF51(3) None(3) N

Freight transportation(CPC 7112)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Foreign equity
participation should notexceed 51%(3) EF51(3) None(3) N(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Foreign equity
participation should notexceed 51%(3) EF51(3) None(3) N(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Foreign equity
participation should notexceed 51%(3) EF51(3) None(3) N

Sector or Subsector

Pushing and towing services(CPC 7113)

Maintenance and repair ofrail transport equipment(CPC 8868)

PA PE R 6 T RA D E I N M A RI T I M E, A I R, R AIL AN D R OAD TR AN SPOR T SER VIC ES

67

Cambodia
Sector or Subsector

Limitation on Market Access

A-H
Limitation
classification on Nationalof MA
Treatment

A-H classificationof NT

Passenger Transportation(CPC 7111);
Exclude cabotage(1) None(1) N(1) None(1) None(2) None(2) N(2) None(2) None(3) None(3) N(3) None(3) None

Freight Transportation(CPC 7112);
Exclude cabotage(1) None(1) N(1) None(1) None(2) None(2) N(2) None(2) None(3) None(3) N(3) None(3) None

Pushing and towing Services(CPC 7113)(1) None(1) N(1) None(1) None(2) None(2) N(2) None(2) None(3) None(3) N(3) None(3) None

Maintenance and repair ofRail transport equipment(CPC 8868**)(1) None(1) N(1) None(1) None(2) None(2) N(2) None(2) None(3) None(3) N(3) None(3) None

Supporting Services for railtransport services(1) None(1) N(1) None(1) None(2) None(2) N(2) None(2) None(3) None(3) N(3) None(3) None

Sector or Subsector

Limitation on Market Access

A-H
Limitation onclassification
National Treatment
of MA

A-H
Additionalclassification
Commitmentsof NT

E. Rail Transport Services
Passenger Transportation(CPC7111)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) a) Commercial presence is (3) EF49
only possible by establishingjoint venture companyb) Maximum share of foreign
equity participation (FEP)
in the joint venture railway
company could be 49%(3) As indicated in thehorizontal Section(3) E

Passenger Transportation(CPC7111)
limited to Interurban
Passenger Transportation(CPC 71111)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Joint venture company
with foreign equity
participation up to 51%(3) EF51(3) Shall not operateon the existing
railways(3) A

Freight Transportation(CPC 7112)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) a) Commercial presence is (3) EF49
only possible by establishingjoint venture companyb) Maximum share of foreign
equity participation (FEP)
in the joint venture railway
company could be 49%(3) As indicated in thehorizontal Section(3) E(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Joint venture company
with foreign equity
participation up to 70%(3) EF70(3) As indicated in the
Horizontal Section(3) E

Additional
Commitments

Indonesia

Freight Transportation(CPC 7112)
limited to Transportation of
Frozen or Refrigerated Goods(CPC 71121)

68

Pushing and Towing Services(CPC 7113)
Supporting Services for RailTransport Services (CPC 743)

P R O M O T I N G S E R V I C E S T R A D E I N A S E A N – F E B R U A R Y 2 018(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Joint venture company
with foreign equity
participation up to 51%(3) EF51(3) As indicated in thehorizontal Section(3) E(1) None(1) N(2) None(2) N(3) As indicated in thehorizontal section(3) E

Maintenance and repair of rail (1) None
(1) N
transport equipment(2) None(2) N(CPC 8868)(3) a. Commercial presence is (3) EF51
only possible by establishingjoint venture company
b. Maximum share of foreign
equity participation (FEP) in
the joint venture company
is 49%
c. Maximum share of foreign
equity participation (FEP)
is allowed up to 51% if thejoint venture is establishedwith PT. INKA (state owned
company)

Lao People’s Democratic Republic
Sector or Subsector

Limitation on Market Access

A-H
Limitation onclassification
National Treatment
of MA

A-H
Additionalclassification
Commitmentsof NT

E. Rail Transport Services
Passenger transportation(CPC 7111)
Freight transportation (CPC7112)
Pushing and towing services(CPC 7113)
Maintenance and repair ofrail transport equipment(CPC 8868**)
Supporting services for railtransport services(CPC 743)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N(3) None(3) N

Limitation on Market Access

A-H
Limitation onclassification
National Treatment
of MA

A-H
Additionalclassification
Commitmentsof NT

E. Rail Transport Services(1) None
Maintenance and repair of rail (2) Nonetransport equipment(3) Aggregate foreign equity(CPC 88688**)shall not exceed 51 per cent(1) N(1) None

(1) N

(2) N

(2) None(2) N(3) EF51(3) None(3) N

Passenger transportation(CPC 7111)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Foreign equity
participation should notexceed 70%(3) EF70(3) None(3) N

Malaysia
Sector or Subsector

PA PE R 6 T RA D E I N M A RI T I M E, A I R, R AIL AN D R OAD TR AN SPOR T SER VIC ES

Freight transportation (CPC7112)

Pushing or towing services(CPC 7113)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Foreign equity
participation should notexceed 70%.

(3) EF70(3) None(3) N(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Foreign equity
participation should notexceed 70%.

(3) EF70(3) None

(3) N

69

Philippines
Sector or Subsector

Limitation on Market Access

A-H
Limitation onclassification
National Treatment
of MA

A-H
Additionalclassification
Commitmentsof NT

a. Passenger transportation(CPC 7111)
b. Freight transportation (CPC7112)
e. Supporting services (CPC743)
Railroad, street railway,
traction railway(1) Unbound*(1) U(1) Unbound*(1) U(2) None(2) N(2) None(2) N(3) Up to 40% foreign equity
participation is allowed.

(3) EF40(3) None.

(3) N

d. Maintenance and repairof rail transport equipment(CPC 8868**)(1) Unbound*(1) U(1) Unbound*(1) U(2) None(2) N(2) None(2) N(3) None(3) N(3) None(3) N

Sector or Subsector

Limitation on Market Access

A-H
Limitation onclassification
National Treatment
of MA

A-H
Additionalclassification
Commitmentsof NT

Pushing and towing services(CPC 7113)(1) Unbound*(1) U(1) Unbound*(1) U(2) None(2) N(2) None(2) N(3) Unbound(3) U(3) Unbound(3) U(1) Unbound*(1) U(1) Unbound*(1) U(2) None(2) N(2) None(2) N(3) None(3) N(3) None(3) N

Limitation on Market Access

A-H
Limitation onclassification
National Treatment
of MA

A-H
Additionalclassification
Commitments
of NT

(1) N

(1) None

(1) N

(2) N

(2) None(2) N(3) EF70(3) None(3) N

Singapore

Maintenance and repair ofurban and suburban railtransport equipment(CPC 8868 **)Thailand
Sector or Subsector(d) Maintenance and repair of (1) Nonerail transport equipment on a (2) Nonefee or contract basis(3) As indicated in 3.1 of the(CPC 8868)
horizontal section

70

P R O M O T I N G S E R V I C E S T R A D E I N A S E A N – F E B R U A R Y 2 018(e) Supporting services forrail transport services:- Security services at railway
station(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) As indicated in 3.3 of thehorizontal section(3) EF70(3) None(3) N- Railway car cleaning
services under the service
contract of railway authority(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) As indicated in 3.1 of thehorizontal section(3) EF70(3) None(3) N

Viet Nam
Sector or Subsector

Limitation on Market Access

A-H
Limitation onclassification
National Treatment
of MA

A-H
Additionalclassification
Commitmentsof NT

E. Rail Transport Services
Passenger transportation(CPC 7111)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Unbound except: Foreign(3) EF51
suppliers are permitted toprovide freight transport
services through theestablishment of joint
ventures with Vietnamese
partners in which the capital
contribution of foreign side
not exceeding 51% of the total
legal capital.

(3) None(3) N

Freight transportation (CPC7112)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N(3) None(3) N(1) None.

(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None, except that joint
ventures with foreign capital
contribution not exceeding
51% can be established.

(3) N(3) None, except
as indicated in themarket accesscolumn(3) N

Maintenance and repair ofrail transport equipment(CPC 8868)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Foreign service suppliers
are permitted to provide
services only through theestablishment of joint
ventures with Vietnamese
partners in which the capital
contribution of foreign side
not exceeding 51% of total
legal capital.

(3) EF51(3) None(3) N

Supporting services for railtransport services (CPC 743)

(1) None.

(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None, except that joint
ventures with foreign capital
contribution not exceeding
51% can be established.

(3) N(3) None, except
as indicated in themarket accesscolumn(3) N

Pushing and towing services(CPC 7113)

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ANNEX F.
SPECIFIC SCHEDULE OF COMMITMENTS FOR“ROAD TRANSPORTATION” BY ASEAN MEMBERS(9TH PACKAGE, SIGNED IN NOVEMBER 2015)
Cambodia
Sector or Subsector
Passenger transportation (CPC 7121 + 7122)
Freight transportation (CPC 7123)
Rental of commercial vehicles with operator (CPC7124)
Maintenance and repair of road transport equipment(CPC 6112+8867)
Supporting services for road transport services (CPC744)

Limitation
on Market
AccessA-H
Limitation
classification on Nationalof MA
Treatment

A-H
Additionalclassification
Commitmentsof NT(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N(3) None(3) N

Indonesia
A-H
Limitation on National
Limitation on Market Access classification
Treatment
of MA

A-H
Additionalclassification
Commitmentsof NT

Passenger transportation
by man-or animal-drawn
vehicles (CPC 71224)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Maximum share offoreign equity participation(FEP) in the joint venturecompany is 70 %(3) EF70(3) As indicated in the
Horizontal Section
In suburbs of the islandof Sulawesi, Moluccas,
and Papua.

(3) E

Freight Transportation (CPC7123)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Joint venture company
with foreign equity
participation up to 49%(3) EF49(3) As indicated in thehorizontal Section(3) E

Freight Transportation by(1) Noneman or animal drawn vehicle (2) None
(CPC 71236)(3) Maximum share offoreign equity participation(FEP) in the joint venturecompany is 70 %(1) N

(1) None

(1) N

(2) N

(2) None(2) N(3) EF70(3) As indicated in thehorizontal Section(3) E

Supporting Services forRoad Transport Terminal(CPC 744)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Joint venture company
with foreign equity
participation up to 49%(3) EF49(3) As indicated in thehorizontal Section(3) E

Sector or Subsector

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Parking Services (CPC74430)

Maintenance and repair ofroad transport equipment(CPC 8867)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Maximum share offoreign equity participation(FEP) in the joint venturecompany is 70 %(3) EF70(3) As indicated in the
Horizontal Section
Only in suburbs in
Sulawesi, Moluccas and
Papua

(3) E

(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) a. Commercial presence
is only possible byestablishing joint venturecompanyb. Maximum share of reign
equity participation (FEP) in
the joint venture company
is 49%(3) EF49(3) As indicated in thehorizontal Section(3) E

Lao People’s Democratic Republic
Sector or Subsector

Limitation on Market Access

A-H
Limitation on Nationalclassification
Treatment
of MA

A-H
Additionalclassification
Commitmentsof NT

F. Road Transport
Services
Freight transportation(CPC 7123)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Foreign equity participation is100% for domestic transportation
For Cross border transportation:
joint venture with local service
provider(s) is required, withforeign equity limited to 49%(3) EF49(3) None(3) N

Rental of commercial
vehicles with operator( CPC 7124 )Supporting services forroad transport services( CPC 744)

(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Joint venture with LAO
services providers is required.
Foreign equity participation islimited to 70%.

(3) EF70(3) None(3) N

Maintenance andrepair of road transport
equipment(CPC 6112+8867)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N(3) None(3) N(4) Unbound, except as indicatedin the Horizontal Section(4) N(4) Unbound, except
as indicated in the
Horizontal Section(4) N

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Malaysia
Limitation on Market
AccessA-H
Limitation
classification
on NationalofTreatment
MA

A-H
Additionalclassification
Commitmentsof NT

F. Road transport services FreightTransportation
Covering private carriers (Class C Licence)(CPC 7123)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Foreign equity shallnot exceed 70 per cent.

(3) F70(3) None(3) N

Maintenance and repair services notelsewhere classified of trailers and semi
trailers on a fee or contract basis(CPC 88670*)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Foreign equity shallnot exceed 51 per cent(3) F51(3) None(3) N

Private services provided by car parks,
parking lots and parking garages, whether
or not roofed(CPC 74430)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Foreign equity shallnot exceed 51 per cent(3) F51(3) None(3) N

Sector or Subsector

Myanmar
Limitation
on Market
AccessA-H
Limitation
classification on Nationalof MA
Treatment

A-H
Additionalclassification
Commitmentsof NT

F. Road Transport Services
Passenger transportation (excluding
Cabotage)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N(3) None(3) N

Freight transportation (excluding Cabotage)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N(3) None(3) N

Sector or Sub-sector

Subject to Horizontal
Commitments
Subject to Horizontal
Commitments

Philippines
Sector or Subsector

Limitation on Market Access

A-H
Limitation
classification on Nationalof MA
Treatment

A-H
Additionalclassification
Commitmentsof NT

a. Passenger transportation(CPC 7121+ CPC 7122)
b. Freight transportation(CPC 7123)
c. Rental of commercial vehicles
with operator(CPC 7124)(1) Unbound*(1) U(1) Unbound*(1) U(2) None(2) N(2) None(2) N(3) Up to 40% foreign equity
participation is allowed.

(3) F40(3) None(3) N

d. Maintenance and repair of roadtransport equipment (CPC 8867)(1) Unbound*(1) U(1) Unbound*(1) U(2) None(2) N(2) None(2) N(3) None(3) N(3) None(3) N

Routine cleaning and maintenance (1) Unbound*services limited to vehicle laundry (2) Noneand car-wash services(3) Up to 70% foreign equity(CPC 6112**)
participation is allowed(1) U(1) Unbound*

(1) U

(2) N

(2) None(2) N(3) EF70(3) None(3) Ne. Supporting services for roadtransport services
Parking services (CPC 7443)(1) Unbound*(1) U(1) Unbound*(1) U(2) None(2) N(2) None(2) N(3) Up to 70 per cent foreign
equity participation is allowed.

(3) EF70(3) None,
except(3) N

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Singapore
Limitation
on Market
AccessA-H
Limitation
classification on Nationalof MA
Treatment

A-H
Additionalclassification
Commitmentsof NT

- Rental services of cars with operators(CPC 71222)- Rental services of buses and coaches with operators(CPC 71223)
- Rental services of commercial freight vehicles with
operators(CPC 71240)(1) Unbound*(1) U(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N(3) None(3) N

Freight (Road) transportation of:a) refrigerated goods (CPC 71231)b) liquids or gases (CPC 71232)c) containerized freight (CPC 71233)d) furniture (CPC 71234)(1) Unbound*(1) U(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N(3) None(3) N- Maintenance and repair services of motor vehicles(CPC 61120)- Maintenance and repair services of parts of motor
vehicles(CPC 88 **)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N(3) None(3) N

Parking services (CPC 74430)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N(3) None(3) N

Sector or Subsector

Thailand

Sector or Subsector

Limitation on Market Access

A-H
Limitation
classification on Nationalof MA
Treatment

A-H
Additionalclassification
Commitmentsof NT(a) Passenger transportation:- Rental services of passenger
cars with operator (CPC 71222)- Rental services of buses andcoaches with operator (CPC71223)(1) Unbound(1) U(1) Unbound(1) U(2) None(2) N(2) None(2) N(3) As indicated in 3.3 of thehorizontal section and not lessthan half of the board of directorsof the company must have Thainationality(3) F70(3) None(3) N(b) Freight transportation only forfrozen or refrigerated goods, bulk
liquids or gases and containerised
freight(CPC 71231 to 71233)(1) Unbound(1) U(1) Unbound(1) U(2) None(2) N(2) None(2) N(3) As indicated in 3.3 of thehorizontal section
Not less than half of the board of
directors of the company musthave Thai nationality(3) F70(3) None(3) N(d) Maintenance and repair of road (1) Nonetransport equipment:(2) NoneAutomobile emergency road(3) As indicated in 3.3 of theservices
horizontal section(1) N(1) None

(1) N

(2) N

(2) None(2) N(3) F70(3) None(3) NCar valeting services(part of CPC Version 1.1: 87141)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) As indicated in 3.1 of thehorizontal section(3) F70(3) None(3) N(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) As indicated in 3.3 of thehorizontal section(3) F70(3) None(3) N(e) Supporting services for roadtransport services:
Parking services (CPC 7443)

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Parking services for motor
vehicles, motorcycles and bicycles
provided by car parks, parking
lots and parking garages, whether
or not roofed (part of CPC Version
1.1: 67530)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) As indicated in 3.1 of thehorizontal section(3) F70(3) None

(3) N

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Viet Nam
Sector or Subsector

Limitation on Market Access

A-H
Limitation
classification on Nationalof MA
Treatment

A-H
Additionalclassification
Commitmentsof NT

F. Road Transport
Services
Passenger
transportation (CPC7121+7122)(1) Unbound.

(1) U(1) Unbound.

(1) U(2) None(2) N(2) None(2) N(3) Since 11 January 2007, foreign service
suppliers are permitted to provide
passenger and freight transport services
through business cooperation contracts or
joint- ventures with the capital contributionof foreign side not exceeding 49%. Since
11 January 2014, subject to the needs ofthe market, joint- ventures with foreign
capital contribution not exceeding 51% may
be established to provide freight transport
services.
100% of joint-venture’s drivers shall beVietnamese citizen.

(3) EF49(3) None(3) N

Freight transportation(CPC 7123)(1) None.

(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Foreign service suppliers are permitted(3) EF70
to provide freight transport services only
through the establishment of joint ventureswith Vietnamese partners in which thecapital contribution of foreign side notexceeding 70% of total legal capital. 100% of
joint-venture’s drivers shall be Vietnamese
citizen.

(3) None,
except as
indicated in
the market
accesscolumn(3) N(1) None.

(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None, except that joint ventures withforeign capital contribution not exceeding
51% can be established.

(3) EF51(3) None,
except as
indicated in
the market
accesscolumn(3) N

Maintenance andrepair of road transport
equipment (CPC 6112
+ 8867)

Sources:
http://myservices.miti.gov.my/widget/web/guest/protocol/-/56_INSTANCE_cxTW8VKZiDDDFor Brunei Darussalam, http://www.miti.gov.my/miti/resources/AFAS_9_Consolidated_Schedule_-_BD_SOC_(CCS_78).pdf
For Cambodia, http://www.miti.gov.my/miti/resources/AFAS_9_Consolidated_Schedule_-_CA_HC_(AFAS__5).pdf
For Indonesia, http://www.miti.gov.my/miti/resources/AFAS_9_Consolidated_Schedule_-_ID_SOC_(CCS_78).pdf
For Lao People’s Democratic Republic, http://www.miti.gov.my/miti/resources/AFAS_9_Consolidated_Schedule_-_LA_SOC_(CCS_78).pdf
For Malaysia, http://www.miti.gov.my/miti/resources/AFAS_9_Consolidated_Schedule_-_MY_SOC_(CCS_78).pdf
For Myanmar, http://www.miti.gov.my/miti/resources/AFAS_9_Consolidated_Schedule_-_MM_SOC_(20140312).pdf
For Philippines, http://www.miti.gov.my/miti/resources/AFAS_9_Consolidated_Schedule_-_PH_SOC_(21Aug2015).pdf
For Thailand http://myservices.miti.gov.my/documents/10180/f0c1be7c-124f-47bf-b4f9-2fd6300ab7d1
For Singapore, http://www.miti.gov.my/miti/resources/AFAS_9_Consolidated_Schedule_-_SG_SOC_(20130509).pdf
For Viet Nam, http://www.miti.gov.my/miti/resources/AFAS_9_Consolidated_Schedule_-_VN_SOC_(20150911).pdf

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ANNEX G. STRATEGIC GOALS FOR TRANSPORTSERVICES BY MODE
Maritime transport (MT)As about 80 per cent of global merchandise trade by volume is carried by sea and handled by ports
worldwide, ASEAN Member States continue to commit to strengthening maritime connectivity
through the establishment of the ASEAN Single Shipping Market (ASSM), regional maritime
transport cooperation and effective implementation of the International Maritime Organization (IMO)
conventions towards realizing an integrated, efficient and competitive maritime transport including
fostering a culture of maritime safety within ASEAN. Another new initiative to be pursued post2015 is the development of strategic maritime logistic corridors. The specific goals and actions formaritime transport for 2016-2025 are as follows:
MT-1 Realize the ASEAN Single Shipping Market through the implementation of the agreed
strategies and measures
MT-1.1 Develop and monitor Key Performance Indicator (KPI) on port efficiency e.g. cargo handlingand ship turnaround timeMT-1.1.1 Monitor and, when necessary, review the KPIs to improve efficiency of ASEAN ports
MT-1.2 Conduct a pilot project on the operationalization of ASSM including in-depth cost andbenefit studies
MT-1.2.1 Complete and adopt the recommendations of the pilot projectMT-1.3 Identify a mechanism to mutually recognize the certificates of competency for Near
Coastal Voyages (NCV) issued by ASEAN Member States
MT-1.3.1 Adopt the mechanism to mutually recognize the certificates of competency for NCV
issued by ASEAN Member States
MT-1.4 Enhance the implementation of Electronic Data Interchange (EDI) in ASEAN ports
MT-1.4.1 Support and enhance EDI in ASEAN, and study the possibility for harmonizationMT-1.5 Establish a national coordinating body, where applicable, to oversee the port and landtransport infrastructure development which will work on a national master plan forport and land transport development for better port accessMT-1.5.1 Include projects to improve accessibility of ASEAN’s ports into relevant master plansdeveloped by ASEAN Member States
MT-1.6 Enhance the capacity of the 47 designated ports
MT-1.6.1 Review designated ports and implement projects to enhance their capacities
MT-1.7 Improve reliability of technical standards of ASEAN ports
MT-1.7.1 Exchange information on technical standards through seminars
MT-1.8 Establish cruise corridors
MT-1.8.1 Develop cruise promotion polices and institutional policies
MT-1.8.2 Develop cruise tourist attractions and cruise and onshore itineraryMT-1.8.3 Improve cruise infrastructureMT-1.8.4 Enhance quality of cruise tourism through training and education programs andbetter coordination with tourism agencies
MT-1.8.5 Establish data collation and common methodology of cruise
MT-1.8.6 Conduct cruise marketing promotion
MT-2 Realize the RO-RO shipping network operation in ASEAN
MT-2.1 Conduct dialogue among the concerned ASEAN Member States for the preparation of
RO-RO routes operation
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MT-2.1.2 Improve port infrastructure and facilities at the implementing countries to increase
efficiency in serving the RO-RO routes
MT-2.2 Operationalization of RO-RO shipping network operation in ASEAN MT-2.2.1 Facilitate
trade and tourist movements among the concerned countries
MT-2.2.2 Initial run of the ASEAN-RO RO
MT-3 Develop an efficient and integrated inland waterway transport (IWT) network
MT-3.1 Conduct a study and formulate a regional plan for developing IWT in ASEAN
MT-3.1.1 Complete the Development Study for Inland Improvement project in Thailand and
CLMV Countries
MT-3.2 Further improve linkage among countries in the Mekong region
MT-3.2.1 Conduct relevant researches and workshops
MT-3.3 Implement the suggestions/projects proposed by the above Development Study
MT-3.3.1 Implement the priority infrastructure improvement projects
MT-4 Enhance navigation system and security measures in line with international standards
MT-4.1 Strengthen human resource base for port and shipping operations including navigation
safety and maritime security
MT-4.1.1 Convene regional workshops / seminars to support implementation or ratificationof IMO Conventions by ASEAN Member States
MT-4.1.2 Develop Guidelines for ASEAN Member States on maritime navigational andpassenger safety
MT-4.1.3 Improve port security in ASEAN Member States through implementation ofprograms of the Port Security Group
MT-4.2 Development of VTS operators capacity
MT-4.2.1 Establish ASEAN regional training centers for VTS operators
MT-4.2.2 Conduct trainings for VTS operators
MT-4.3 Improve the quality and efficiency of the Safety, Health and Environmental management
for selected ports
MT-4.3.1 Compile the Best Practices on the improvement of the quality and efficiency of the
Safety, Health and Environmental management for selected ports
MT-4.3.2 Improve the quality and efficiency of the Safety, Health and Environmental
management for selected ports
MT-5 Formulate necessary policy initiatives and recommendations to develop strategic maritime
transport logistics between ASEAN and Dialogue Partners
MT-5.1 Conduct development studies and collaborative practical researches to develop strategic
maritime transport logistics between ASEAN and Dialogue Partners
MT-5.1.1 Conduct studies with ASEAN Dialogue Partners on maritime transport logistics
MT-5.2 Promote the development of port technology through Port Technology Group
MT-5.2.1 Compile guidelines to develop port technology
MT-5.3 Continue to engage Dialogue Partners and other partners to conclude maritime transport
agreements
MT-5.3.1 Implement ASEAN-China Maritime Transport Agreement
MT-5.3.2 Explore the possibilities of concluding maritime transport agreements with other
ASEAN Dialogue Partners
MT-6 Intensify regional cooperation in improving transport safety
MT-6.1 Review existing statistics, policies and programs at regional and national levelMT-6.1.1 Gap Analysis
MT-6.2 Identify training needs to further improve transport safety in the region
MT-6.2.1 Conduct training on transport safety at regional and national level
MT-7 Strengthen ASEAN Search and Rescue (SAR) cooperation to ensure effective and coordinatedaeronautical and maritime SAR operations in the region

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MT-7.1 Improve capacity and capability on SAR
MT-7.1.1 Develop the ASEAN SAR Standard Operating ProceduresMT-7.1.2 Familiarize ASEAN Member States with ASEAN SAR Standard Operating ProceduresMT-7.1.3 Improve skill and knowledge of SAR Personnel

Air transport (AT)In order to achieve the air transport goal, it is significant for ASEAN Member States to work towards
advancing safer and more secure skies in ASEAN, enhancing air traffic management efficiency andcapacity through a seamless ASEAN sky, and fostering greater connectivity, including the conclusionof aviation agreements with dialogue partners.
In this context and taking into account the status of air transport measures, ASEAN Member Statesneed to undertake continued discussion on the way forward and identify concrete steps to establish
the ASAM. Efforts in some areas such as full ratification and implementation of the Roadmap for
Integration of Air Travel Sector (RIATS) agreements and the Multilateral Agreement for the Full
Liberalization of Passenger Air Services (MAFLPAS) under the ASEAN Single Aviation Market (ASAM)
need to be redoubled. Air connectivity expansion with the EU, Japan, India and the Republic of Korea
should be pursued and enhanced. Other initiatives under the ASAM Roadmap, such as air traffic
management and aviation safety and security co-operation need to be strengthened. In this regard,
the specific goals and actions for the air transport sector for the period 2016–2025 are as follows:
AT-1 Work towards a more efficient and competitive air transport market and strengthen engagementwith Dialogue Partners, thereby contributing to the economic growth, competitiveness andshared prosperity of ASEAN, while maintaining ASEAN Centrality
AT-1.1 Review the Multilateral Agreement on Air Services (MAAS), the ASEAN Multilateral
Agreement on the Full Liberalization of Air Freight Services (MAFLAFS), the Multilateral
Agreement for the Full Liberalization of Passenger Air Services (MAFLPAS), and theirrespective protocols and implementation as well as discuss further liberalization of key
economic elements, where necessary, under the ASEAN Single Aviation Market (ASAM)
Implementation Framework
AT-1.1.1 Complete the review
AT-1.1.2 Establish the mechanism, where necessary, to implement the agreed
recommendations of the review
AT-1.1.3 Implement the approved recommendations
AT-1.2 Pursue further liberalization of air transport ancillary services
AT-1.2.1 Conclude the packages of commitments covering all 13 subsectors to be phased-in
AT-1.3 Continue to engage Dialogue Partners and other partners to conclude more liberal andmutually beneficial air transport agreements, including 3rd, 4th and 5th freedom trafficrightsAT-1.3.1 Conclude and expand exchange of 5th freedom traffic rights with China throughconclusion of protocols
AT-1.3.2 Conclude a Comprehensive Air Transport Agreement with the EU
AT-1.3.3 Conclude Air Transport Agreement with India
AT-1.3.4 Conclude Air Transport Agreement with Japan
AT-1.3.5 Conclude Air Transport Agreement with ROK
AT-1.3.6 Consider concluding Air Transport Agreements with other partners
AT-2 Advance safe skies in ASEAN
AT-2.1 Continue with initiatives to improve regulatory capability and safety standards
AT-2.1.1 Continue with implementation of ASEAN Aviation Regulatory Monitoring System
AT-2.1.2 Establish a framework to share (foreign operators) ramp inspection information
among ASEAN Member States (i.e., ASEAN Foreign Operator Safety Assessment)

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AT-2.1.3 Implement ASEAN Foreign Operator Safety Assessment initiative
AT-2.2 Establish a mechanism to facilitate mutual recognition of approvals, certificates andlicenses
AT-2.2.1 Conclude a framework agreement to support future mutual recognition of approvals,
certificates and licenses
AT-2.2.2 Establish procedures to achieve mutual recognition for air operator certification,
aircraft airworthiness (approved maintenance organization certification), andflight crew / engineer licensing
AT-2.2.3 Identify other areas such as approved trainings organization and establish proceduresto achieve mutual recognition
AT-3 Enhance Aviation Security in ASEAN in accordance to ICAO Standards and Recommended
Practices (SARPs)
AT-3.1 Promote capacity building and align aviation security measures with ICAO Standards andRecommended Practices
AT-3.1.1 Conduct the Points of Contact (POC) network exercise on yearly basis
AT-3.1.2 Leverage existing capacity building mechanisms such as those offered by the ICAO
Asia and Pacific Regional Office, as well as other mechanisms to promote capacity
building with a view towards increasing compliance with ICAO SARPs
AT-3.1.3 Develop practical, harmonized and cost effective measures in key areas of aviation
security such as in screening technologies and processes for liquids, aerosols
and gels, passenger pre-board screening and air cargo and supply chain security
AT-3.1.4 Share information on latest trends on aviation security
AT-3.1.5 Conduct ASEAN Joint Assessment on Aviation Security to work towards compliancewith ICAO SARPs
AT-4 Enhance air traffic management efficiency and capacity through a seamless ASEAN sky
AT-4.1 Continue to support ICAO’s efforts and implementation plan for air traffic management in
the Asia Pacific Region
AT-4.1.1 Support ICAO’s efforts and implementation plan for air traffic management in the
Asia Pacific Region
AT-4.2 Develop and implement the ASEAN Air Traffic Management (ATM) Master Plan in accordancewith ICAO’s Asia Pacific Seamless ATM Plan and the Global Air Navigation Plan’s
ASBU Framework
AT-4.2.1 Adopt the ASEAN Air Traffic Management Master Plan
AT-4.2.2 Implement the ASEAN Air Traffic Management Master Plan
AT-4.2.3 Develop and implement performance measurement framework
AT-4.3 Exchange information on ASEAN air navigation infrastructure and services
AT-4.3.1 Establish database and information sharing system of ASEAN air navigation
infrastructure and services
AT-4.4 Strengthen the region’s modelling and simulation capability to analyses air traffic flows in
support of the ASEAN ATM Masterplan
AT-4.4.1 Establish capability to provide annual ASEAN air traffic baseline to support air traffic
flow analysis
AT-5 Strengthen ASEAN Search and Rescue (SAR) cooperation to ensure effective and coordinatedaeronautical and maritime SAR operations in the region.
AT-5.1 Improve capacity and capability on SAR
AT-5.1.1 Develop the ASEAN SAR Standard Operating ProceduresAT-5.1.2 Familiarize ASEAN Member States with ASEAN SAR Standard Operating ProceduresAT-5.1.3 Improve skill and knowledge of SAR Personnel

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Land transport (LT)Recognizing that transport infrastructure is a key determinant of performance in the transport
sector, ASEAN Member States shall continue to achieve land transport infrastructure (road andrailway) integration and intermodal interconnectivity, with principal airports, ports, and inland
waterway and ferry links. ASEAN Member States shall also promote concerted and coordinatedefforts at the policy and operation levels to develop ASEAN land transport trade corridors.
With regard to road safety, the 2015 World Health Organization Global Status Report on Road Safety
states that each year 1.25 million people are killed on the roads, of which 45,189 are from ASEAN
Member States (excluding Brunei Darussalam for which there are no data). This major threat to
public health and development around the globe and the rapid growth of motorization in the region
underscores the need for ASEAN Member States to undertake a collective effort to reduce the riskof road crashes, especially among vulnerable road users.
Considering the above, the specific goals and actions for land transport for the period of 2016–2025 are
LT-1 Accomplish the implementation of the SKRL main lines and detailed designs for the spur lines
LT-1.1 Complete construction of the missing link sections of SKRL main lines
LT-1.1.1 Cambodia: Phnom Penh-Tra Peang Sre (Cambodia/Viet Nam border) (255 km)
LT-1.1.2 Viet Nam: Loc Ninh (Cambodia/Viet Nam border)-Ho Chi Minh City (129 km)
LT-1.2 Complete the Feasibility Study and/or detailed designs for the spur lines of SKRL
LT-1.2.1 Viet Nam: Mu Gia - Tan Ap - Vung Ang (119 km)
LT-1.2.2 Lao P.D.R.: Vientiane - Thakhaek - Mu Gia (466 km)
LT-1.2.3 Myanmar: Dawei-Htiki/Ban Phu Nam Ron
LT-1.2.4 Thailand: Htiki/Ban Phu Nam Ron - KanchanaburiLT-1.3 Complete supplementary upgradation work in ASEAN Member States to support SKRL
LT-1.3.1 Cambodia: Bat Deoung - Sisophon (306 km)
LT-1.3.2 Cambodia: Track reconstruction Bat Deoung to km 9 (22.6 km)
LT-1.3.3 Cambodia: Track reconstruction of Phnom Penh to Green Trade Warehouse (6 km)
LT-1.3.4 Lao P.D.R.: Savannakhet - Laobao (220 km)
LT-1.3.5 Malaysia: Double track construction of Gemas-Johor Bahru section (197 km)
LT-1.3.6 Thailand: Double track construction of northeastern line, Mab Kabao - Thanon Jira
Junction (132 km)
LT-1.3.7 Thailand: Double track construction of northeastern line, Thanon Jira Junction Khon Kae (185 km)
LT-1.3.8 Thailand: Double track construction of northeastern line, Khon Kae - Nong Khai (174km)
LT-1.3.9 Thailand: Double track construction of southern line, Nakhon Phathom - Huahin(165 km)LT-1.3.10 Thailand: Double track construction of southern line, Huahin - Prachuab Khiri
Khan (90 km)
LT-1.3.11 Thailand: Double track construction of southern line, Prachuab Khiri Khan Chumphon (167 km)
LT-1.3.12 Thailand: Double track construction of southern line, Chumphon - Surat Thani (167km)
LT-1.3.13 Thailand: Double track construction of southern line, Surat Thani - Hat Yai (295 km)
LT-1.3.14 Thailand: Double track construction of southern line, Hat Yai - Padang Besar (45km)
LT-1.3.15 Viet Nam: Ha Noi - Lao Cai (connected to China)
LT-1.3.16 Viet Nam: Ha Noi - Ho Chi Minh City (Ha Noi - Vinh section 319 km, Nha Trang - Ho
Chi Minh City section 412 km, Hai Van tunnel and Khe Net tunnel)

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LT-1.3.17 Track gauge conversion works between Lao Kao Border Station (Viet Nam) and Ha
Khau Border Station (China)
LT-1.4 Develop implementation framework for seamless operation of SKRL
LT-1.4.1 Identify and collect data for seamless operations of SKRL
LT-1.4.2 Adopt the Implementation Framework for seamless operation of SKRL
LT-1.5 Conduct study on the possibility of extending the SKRL to Surabaya, Indonesia
LT-1.5.1 Develop an Action Plan on the Implementation of the Project, where possible
LT-2 Completion of ASEAN Highway Network projectLT-2.1 Upgrade “below Class III” roads on Transit Transport Routes (TTRs)
LT-2.1.1 Lao P.D.R.: AH12 Nateuy - Oudomxai - Luang Prabang - Vientiane (293 of 682 km)
LT-2.1.2 Lao P.D.R.: AH15 Banlao - Nam Phao (98 km of 132 km)
LT-2.1.3 Myanmar: AH1 Tamu - Mandalay - Meiktila - Yangon - Bago - Payagyi - Thaton Myawadi (229 of 1,656 km)
LT-2.1.4 Myanmar: AH2 Meiktila - Loilem - Kyaing Tong - Tachilek (307 of 807 km)
LT-2.1.5 Indonesia: AH150 Pontianak - Entikong (273.28 km)
LT-2.2 Upgrade other “below Class III” roads
LT-2.2.1 Lao P.D.R.: AH 13 Oudomxai - Pakbeng (133 km)
LT-2.2.2 Lao P.D.R.: AH131 Thakhek - Na Phao (96 km of 146 km)
LT-2.2.3 Lao P.D.R.: AH 132 Phia Fay - Phoukeua/Bo Y (109 of 221 km)
LT-2.2.4 Myanmar: AH111 Thibaw-Loilem (223 of 239 km)
LT-2.2.5 Myanmar: AH112 Mawlamyaing - Ye - Mahwal Taung (44.06 km)
LT-2.2.6 Myanmar: AH112 Dawei - Myeik (145 km)
LT-2.2.7 Myanmar: AH112 Myeik - Tanintharyi (64 km)
LT-2.2.8 Myanmar: AH112 Tanintharyi - Bokepyin (156 km)
LT-2.2.9 Myanmar: AH112 Bokepyin - Kau Thaung (87.94 km)
LT-2.2.10 Myanmar: AH112 Lanya - Khlongloi (60 km)
LT-2.2.11 Myanmar: AH123 Myittar - Thai Border (85 km)
LT-2.2.12 Myanmar: AH123 Dawei - Myittar (56 km)
LT-2.2.13 Viet Nam: AH13 Dien Bien - Tay Trang (18 km) LT-2.2.14 Viet Nam: AH132 Bo Y Kon Tum (73 km)
LT-2.3 Upgrade “Class II or III” sections with high traffic volume
LT-2.3.1 Cambodia: AH1 Battambang-Serei Sophorn (84.74 km) into four lanes, including:one bypass in Battambang (23.1 km) and one bypass in Serei Sophorn (13.4 km)
LT-2.3.2 Cambodia: AH1 Poipet - Aranyaprathet New Road with Cross - Border Facilities(Cambodia Part)
LT-2.3.3 Cambodia: AH1 four lane expansion, Thlea Ma’am Battambang and Serei Sophorn Poipet City including Pursat bypass (157.5 km)
LT-2.3.4 Cambodia: AH1 four lane expansion, Prek Kdam - Thlea Ma’am (135.4 km) including
2 bypasses
LT-2.3.5 Cambodia: AH1 four lane expansion, Phnom Penh - Prek Kdam (30 km)
LT-2.3.6 Cambodia: AH11 four lane expansion, Phnom Penh - Skun district (75 km) including
2 bypasses
LT-2.3.7 Cambodia: AH1 four lane expansion, (National Road 1) Phnom Penh-Kdei Ta Koy (4km)
LT-2.3.8 Cambodia: AH1 four lane expansion, (National Road 1) Kdey Ta Koy to Bavet(Cambodia - Viet Nam border) (161 km)
LT-2.3.9 Cambodia: AH11 four lane expansion, (National Road 4) Phnom Penh - Kampong
Speu Province (60 km)
LT-2.3.10 Cambodia: AH11 four lane expansion, (National Road 4) Kampong Speu Sihanoukville Province (166 km)

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LT-2.3.11 Cambodia: AH123 Sre Ambel - Cham Yeam/Hatlek (Cambodia - Thailand) (161 km)
LT-2.3.12 Indonesia: AH150 Tayan-Sanggau - Entikong Border (300.34 km)
LT-2.3.13 Lao P.D.R.: AH11 four lane highway project Vientiane - Ban Hay section (63 km)
LT-2.3.14 Lao P.D.R.: AH12 four lane highway project from Vientiane - Phon Hong section (73km)
LT-2.3.15 Thailand: AH1 four lane highway widening project Tak Mae Sot (52 km)
LT-2.3.16 Thailand: AH1 second Thailand-Myanmar Friendship Bridge crossing Moei/
Thaungyin River and approaching roads (21.4 km)
LT-2.3.17 Thailand: AH3 four lane highway widening project, Chiang Rai - Khun Tan (48 km)
LT-2.3.18 Thailand: AH16 New alignment road project, Kalasin - Ban Na Kai (80 km)
LT-2.3.19 Thailand: AH19 Motorway Pattaya - Map Ta Phut project (32 km)
LT-2.3.20 Thailand: AH123 four lane highway widening project, Trat-Hat Lek (70 km)
LT-2.4 Build the highway between Kanchanaburi and Dawei
LT-2.4.1 Myanmar: Dawei/Htiki - Ban Phu Nam Ron (141 km)
LT-2.4.2 Thailand: Htiki/Ban Phu Nam Ron - Kanchanaburi (78 km)
LT-2.5 Complete stocktaking of AHN inventory data
LT-2.5.1 Update on AHN inventory data
LT-2.6 Improve the quality of transportation on TTRs
LT-2.6.1 Compile technical standards, manuals and best practices of road paving for largesized vehicle transportation
LT-2.6.2 Promote the enforcement of vehicle weight regulations including establish a regional
platform for discussion
LT-2.7 Complete the installation of common road signs and the route numbering system on all
TTRs
LT-2.7.1 Indonesia: AH 25 Dumai - Pekanbaru - Jambi - Palembang - Lampung - BakauheniLT-2.7.2 Indonesia: AH 25 Dumai - Medan - Banda Aceh
LT-2.7.3 Indonesia: AH2 Semarang - Cikampek - Jakarta - Merak
LT-2.7.4 Indonesia: AH 2 Gilimanuk - Tabanan - Denpasar - Tuban
LT-2.7.5 Indonesia: AH2 Semarang - Surabaya - Banyuwangi
LT-2.7.6 Indonesia: AH150 Pontianak - Sosok - Tayan - Entikong
LT-2.7.7 Lao P.D.R.: AH11 and AH12
LT-2.7.8 Malaysia: AH2 Bukit Kayuhitam - Butterworth - Kuala Lumpur - Seremban - Senai
Utara
LT-2.7.9 Malaysia: AH150 Sematan - Kuching - Sibu - Miri - Kota Kinabalu - Sandakan Lahad Datu - Tawau
LT-3 Enhance the use of “Intelligent Transport System” (ITS)
LT-3.1 Formulate and Implement the “ITS Master Plan”
LT-3.1.1 Formulate the “ITS Master Plan for ASEAN”, addressing the goals, design of ITS
architecture, determination of standards for ASEAN and developing implementationand monitoring mechanism
LT-3.1.2 Formulate the national ITS policy and master plans for AMSs addressing thepolicy, standards, ITS development, operation & maintenance, and monitoringmechanismLT-3.1.3 Implement the “ITS Master Plan for ASEAN” and the national ITS policy and masterplans
LT-3.2 Implement the ITS Capacity Building Programs
LT-3.2.1 Identify and conduct necessary seminars and trainings on ITS
LT-4 Develop an effective network of ASEAN dry ports in accordance with existing ASEAN initiatives
such as the ASEAN Highway Network (AHN) and Singapore-Kunming Rail Link (SKRL)
LT-4.1 Conduct study and formulate regional network plan for the development of dry port

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LT-4.1.1 Formulate a Regional network planLT-4.2 Finalize the list of dry port in ASEAN and identify key measures to improve the effectivenessof the agreed ASEAN dry port networkLT-4.2.1 Identify feasible list of dry ports in ASEAN
LT-4.2.2 Adopt the list of dry port in ASEAN and agree on the key measures to improve theeffectiveness of the networkLT-4.2.3 Implement the agreed key measures
LT-5 Reduce the road fatalities by 50% in ASEAN Member States by 2020 and work towards further
decreasing the forecast level of road fatalities in ASEAN by 2030
LT-5.1 Align and implement road safety initiatives in accordance with the 5 strategic pillars (Road
Safety Management, Safer Roads and Mobility, Safer Vehicles, Safer Road Users & Post
Crash Response) of UN’s Decade of Action for Road Safety
LT-5.1.1 Develop guidelines for improving the standard procedure for reporting road crashes
based on UN standards
LT-5.1.2 Adopt data collection template on road crashes in accordance to global standards
LT-5.1.3 Share knowledge and experiences on the implementation of safer roads and mobility
pillarLT-5.1.4 Exchange of information, experiences and best practices with regard to theimplementation of safety standard of all vehicles on the roadLT-5.1.5 Sharing of knowledge and best practices on road safety, which include awareness,
education and law enforcement programs
LT-5.1.6 Compile best practices on post-crash responses
LT-5.2 Strengthen institutional capacity for enhanced cooperation in road safety
LT-5.2.1 Convene seminars/workshops/training programs on road safety
LT-5.3 Continued improvement of road safety policy and program to further enhance the roadsafety in ASEAN region
LT-5.3.1 Reduce road traffic injuries and fatalities by another 25% from 2021 to 2030
LT-5.4 Harmonize safety regulation with the UN regulation based on accident analysis in ASEAN
and work towards mutual recognition to improve safety
LT-5.4.1 Conduct study on existing measures and policies regarding the road safety
LT-6 Develop a database of ASEAN land transport networkLT-6.1 Develop a map of ASEAN land transport network including all relevant information on the
AHN, SKRL, and dry ports
LT-6.1.1 Publish a map of ASEAN land transport network
LT-7 Intensify regional cooperation in improving transport safety
LT-7.1 Review existing statistics, policies and programs at regional and national levelLT-7.1.1 Gap analysis
LT-7.2 Identify training needs to further improve transport safety in the region
LT-7.2.1 Conduct training on transport safety at regional and national level

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ANNEX H.
POLICY EVALUATION EXERCISE: HOW
TRANSPORT SERVICES AND COURIER SERVICESATTAIN A “MULTIPLE EQUILIBRIA” SITUATION IN
A COUNTRY AND IN THE REGION
Figure H1 shows how agglomeration (concentration) emerges with the reduction of transport andcourier services costs.

Figure H1. Basic spatial economic mechanism of agglomeration(under low transport and courier services costs)

Agglomeration ofworkers/consumers

BACKWARD
LINKAGE

Agglomeration of
specialized firms

Increase inreal income

FORWARD
LINKAGE

Supply of variety ofgoods and services

Source: Adapted from Fujita, Krugman and Venables (1999).

(1) Under high transport and courier services costs
When transport costs (costs associated with transporting people and goods) for the transfer goods
and services are prohibitively high, all the production has to take place locally (as shown in figureH2), generating decentralized economic activities (this is a two-equilibrium situation). In ASEAN,
before full-fledged marketization in the latter part of the 20th century, multiple cities and multiple
small villages co-existed as “major cities”.

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Figure H2. Multiple small cities and villages(2) Under middle transport and courier services costs
When transport costs are reduced from the high stage, the equilibrium tends towards agglomerationin one location (as illustrated in figure H3), in a single-equilibrium situation. In the process, the“centre” prospers economically (i.e. production and consumption increase significantly); at the sametime, though, the costs of production and living also increase significantly. This is what is happening
in most of the capital cities of the ASEAN member states.

Figure H3. One capital and multiple small cities and villages(3) Under low transport and courier services costs
When transport costs are further reduced, the two- or multi-equilibrium situation is again realized,
this time with affordable transport and courier costs and hence no need to live in the expensive capitalarea (figure H5). This is what the ASEAN member states should aim for, with further liberalization ofvarious forms of transport services. In connection with this multiple-equilibria situation, figure H4shows the spatial economic interaction of locations and “market potential”, which is the potential
usefulness of particular locations for production activities as well as for living. The usefulness
increases when transport and courier costs are low enough.

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86

Figure H4. Spatial economic interaction of locations and market potential
Higher real income because of reduction
in transport and courier services costs

Market Potential
Moderately close to the capital:“another capital” emerges here
Close tothe capital

Far away from the capital

Distance fromthe capital

Capital of
the country

This should happen
across countries

Lower real income because of hightransport and courier services costs

Source: Adapted from Fujita, Krugman and Venables (1999).
Note: Higher real income with a reduction of transport and courier costs leads to a rise in the market potentialof other locations and hence the emergence of other “capitals” away from the capital.

Figure H5. Multiple capitals among cities and villages

At this stage, when economic integration is taking place, the multi-equilibrium situation can beextended to the region (ASEAN), sub-region (i.e. Mekong) or neighbouring countries (e.g. Thailand
and the Lao People’s Democratic Republic). As illustrated in figure H6, multiple capitals among
cities and villages spread beyond a single country to the neighbouring countries, the sub-region andthe region.

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Figure H6. ASEAN-level “multiple equilibria” situation

Note: Smaller ovals indicate neighbouring-country-level transport networks.
Large oval indicates an ASEAN-level transport network.

The seminar participants worked on a policy evaluation exercise that examined how transport
services and courier services attain the “multiple equilibria” situation. The exercises, however
subjective, provide an analysis, looking at the status quo of accessibility to “capitals” within the
country, in neighbouring countries, and in the ASEAN region as well as policy evaluation for realizing
a multiple-equilibria situation. The results are shown in tables H1–H3.
These results show that the average score is getting lower (less agreeable) in descending order at
the in-country level (6.7), neighbouring-country level (5.8) and ASEAN level (5.35). There is a clear
need to consider coordination at the ASEAN level to achieve region-wide economic impacts.
Tables H4 and H5 show the evaluation for realization of a multiple-equilibria situation at the nationaland ASEAN levels, respectively. At both levels, in regard to infrastructural development for railtransport services, which takes time and costs a lot, policy formulation tends to be ignored. All in all,the results indicate that there is a serious need for consolidating ASEAN-wide policy coordination interms of promoting trade in transport services.

8

5

10

10

10

10

9

8

8.8

Indonesia

Lao P.D.R.

Malaysia

MyanmarPhilippines

Singapore

Thailand

Viet Nam

Averagecommuter rail like MRT/LRT

8

Cambodiaa10

Brunei
Darussalam

Country

1.
Publictransportation
services to the“capital” exist
nation-wide

8.4

6

9

10

8

10

10

6

7

8

10

2.
Publictransportation
services orown carsfor commuting
to the “capital”
exist nationwide

In-country Level
Scale: 1 (least agreeable)–10 (most agreeable)

7.8

6

9

8

8

10

9

4

7

8

9

3.
Publictransportation
services orown carsfor commuting
to the “capital”
is affordable

Table H1. Evaluation of accessibility to “capitals”

5.2

7

6

n.a.

6

3

5

3

7

5

4.5

4.
[Maritime]
Fully developed
to enable
multipleequilibria
situation

5.7

6

8

n.a.

7

4

7

4

8

6

1

5.
[Air]
Fully developed
to enable
multipleequilibria
situation

5.7

5

8

10 a

6

5

6

1

8

4

8

6.
[Rail]
Fully developed
to enable
multipleequilibria
situation

7.4

6

9

10

7

7

8

6

8

5

8

7.
[Public road]
Fully developed
to enable
multipleequilibria
situation

5.7

7

7

10

5

3

9

1

6

5

4

6.2

6

9

10

5

5

6

6

8

5

2

9.
Policies for
multiple-city
development
and transport
services
development
are wellcoordinatedAverage of (1)–(10):8.
Interconnection
among different
transport services
is smooth

6.7

5.9

5

5

9

5

3

6

5

8

5

8

10.
Policies for
multiple-city
development
and promoting
trade intransport
servicesare wellcoordinated

65.1

62

79

67

67

60

76

41

75

59

64.5

Total score[/100 ]88

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8

9

8

4

10

3

10

10

7

8

7.7

Brunei
Darussalam

Cambodia

Indonesia

Lao P.D.R.

Malaysia

MyanmarPhilippines

Singapore

Thailand

Viet Nam

AverageCountry

1.
Publictransportation
services to the“capital” exist
nation-wide

7.4

5

8

10

8

3

9

5

7

9

10

2.
Publictransportation
services orown cars forcommuting to
the “capital”
exist nationwide

Neighbouring-country Level
Scale: 1 (least agreeable)–10 (most agreeable)

6.5

6

7

8

8

3

8

4

7

9

5

3.
Publictransportation
services orown cars forcommuting to
the “capital” isaffordable

Table H2. Evaluation of accessibility to “capitals”

5.4

7

5

8

5

3

7

2

7

8

2

4.
[Maritime]
Fully developed
to enable
multipleequilibria
situation

6.8

6

8

10

7

5

7

3

8

9

5

5.
[Air] Fully
developed
to enable
multipleequilibria
situation

3.6

5

5

6

1

1

6

2

1

8

1

6.
[Rail] Fully
developed
to enable
multipleequilibria
situation

5.5

6

8

8

1

4

8

6

1

8

5

7.
[Public road]
Fully developed
to enable
multipleequilibria
situation

4.9

7

6

8

5

1

9

1

1

7

4

5.2

6

6

6

5

1

5

4

8

7

4

9.
Policies for
multiple-city
development
and transport
services
development
are wellcoordinatedAverage of (1)–(10):8.
Interconnection
among different
transport services
is smooth

5.8

5

5

5

6

5

3

5

4

8

7

2

10.
Policies for
multiple-city
development
and promoting
trade intransport
servicesare wellcoordinated

58

61

65

80

55

27

74

35

56

81

46

Total score[ /100 ]PA PE R 6 T RA D E I N M A RI T I M E, A I R, R AIL AN D R OAD TR AN SPOR T SER VIC ES
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8

4

10

1

10

10

6

7

Indonesia

Lao P.D.R.

Malaysia

MyanmarPhilippines

Singapore

Thailand

Viet Nam

6.7

9

Cambodia

Average2

Brunei
Darussalam

Country

1.
Publictransportation
services to the“capital” exist
nation-wide

6.5

5

7

10

8

3

9

4

7

9

3

2.
Publictransportation
services orown cars forcommuting to
the “capital”
exist nationwide

ASEAN Level
Scale: 1 (least agreeable)–10 (most agreeable)

6.2

6

6

8

8

2

8

3

7

9

5

3.
Publictransportation
services orown cars forcommuting to
the “capital” isaffordable

Table H3. Evaluation of accessibility to “capitals”

5

6

5

6

5

3

7

1

6

9

2

4.
[Maritime]
Fully developed
to enable
multipleequilibria
situation

6.4

6

8

8

7

5

7

2

8

9

4

5.
[Air] Fully
developed
to enable
multipleequilibria
situation

3.4

5

5

5

1

1

6

1

1

8

1

6.
[Rail] Fully
developed
to enable
multipleequilibria
situation

4.7

6

7

6

1

2

8

5

1

9

2

7.
[Public road]
Fully developed
to enable
multipleequilibria
situation

4.4

7

4

6

5

1

9

1

1

8

2

5.1

6

6

6

5

1

5

4

8

8

2

9.
Policies for
multiple-city
development
and transport
services
development
are wellcoordinatedAverage of (1)–(10):8.
Interconnection
among different
transport services
is smooth

5.4

5.1

5

5

6

5

4

5

3

8

8

2

10.
Policies for
multiple-city
development
and promoting
trade intransport
servicesare wellcoordinated

53.5

59

59

71

55

23

74

28

55

86

25

Total score[ /100 ]90

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Table H4. Evaluation for realization of a “multiple equilibria” situation: National level
Scale: 1 (least agreeable)–10 (most agreeable)
Country

1.
Trade in maritime
transport services

2.
Trade in air transport
services

3.
Trade in rail transport
services

4.
Trade in roadtransport services

Total score[ /40 ]

Brunei Darussalam

5

6

1

8

20

Cambodia

5

6

4

7

22

Indonesia

8

8

8

8

32

Lao P.D.R.

3

4

1

7

15

Malaysia

9

9

7

9

34

Myanmar

7

7

2

5

21

Philippines

9

8

7

9

33

Singapore

10

10

8

9

37

Thailand

7

8

8

9

32

Viet Nam

6

6

5

6

23

6.9

7.2

5.1

7.7

26.9

Average of (1)–(4):6.7

Average

Table H5. Evaluation for realization of a “multiple equilibria” situation: ASEAN wide
Scale: 1 (least agreeable)–10 (most agreeable)
Country

1.
Trade in maritime
transport services

2.
Trade in air transport
services

3.
Trade in rail transport
services

4.
Trade in roadtransport services

Total score[ /40 ]

Brunei Darussalam

5

6

1

5

23

Cambodia

7

9

9

9

43

Indonesia

8

8

8

8

40

Lao P.D.R.

3

4

1

7

19

Malaysia

7

9

7

9

41

Myanmar

0

0

3

0

3

Philippines

9

9

7

7

41

Singapore

6

7

5

4

30

Thailand

8

8

6

8

36

Viet Nam

6

6

5

6

29

5.9

6.6

5.2

6.3

30.5

Average of (1)–(4):6.0

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Tables H6–H9 show the results of policy evaluation for maritime, air, rail and road transport services.
Table H6. Policy evaluation: Trade in maritime transport services
Country

Further Policy Options (in-country level / neighbour-country level / ASEAN level)

Brunei Darussalam..
[in-country level] Need introduction of policies to facilitate and nurture investments inmaritime transports both from foreign country and local investment.

Cambodia[neighbouring-country level] Need more coordination with our neighbouring countries forbetter maritime transport services connection.
[ASEAN-wide] Need more policy coordination and cooperation in designing and building
ASEAN Maritime Transport Network.

Indonesia

Lao P.D.R.

Malaysia

Myanmar

Policy between central and local government/cross border cooperation/maximize ASEAN
Forum[in-country level] It is very difficult to improve water transport due to a lot of rocks along theriver. So, first of all, we need to promote how to use this service safely.
[neighbouring-country level] It’s just small volume, because people prefer to use landtransport services.
..
[in-country level] There is Myanmar maritime policy which covers in implementation ofnational, sub-regional and international transport network.
[neighbouring-country level] There is no maritime policy in neighbouring country level.
[ASEAN-wide] There is no ASEAN-level maritime transport services policy.

Philippines

Singapore[in-country level] Liberalization of foreign ownership to increase industry players andpromote competition.
[neighbouring-country & ASEAN-wide] Maximize use of ASEAN RORO by increasing volumeof trade[neighbouring-country level] Increase frequency of ferry services between Singapore andneighbouring areas (e.g. with Indonesian islands south of Singapore and with Johor State,
Malaysia)[ASEAN-wide] Improve trade facilitation by harmonizing customs clearance procedures.
[in-country level] Increase capacity and improve capability and quality of maritime transport
services to ensure sufficient, timely and affordable services which meet international
standards.

Thailand[neighbouring-country level] Promote quality and reliable maritime transport services toconnect major ports among neighbouring countries.
[ASEAN-wide] Promote quality and reliable maritime transport services to connect major
ports among neighbouring countries with effective facilitating measures at such ports.
Promote joint venture and FDI (supported by appropriate promotional schemes) among
ASEAN operators and partners to provide efficient maritime transport services, subject tonational laws and regulations of the respective ASEAN Member countries.
- Restructuring maritime transport toward the main direction of transport sector including
bulk cargo, super-long-cargo, super-weight transport.
- Continue to support agriculture and rural areas; Increase market share of maritime
transport, container transport on main corridors transport.

Viet Nam- Improve the quality of maritime transport in direction of capacity building to raisecompetition, development of modern transport vehicles with reasonable structure,
appropriate with provided condition.
- Prioritize the development of container fleet; Enhance handling capacity, warehouseservice especially for container cargo.

Source: 	Survey results at the Third Seminar on Promoting Services Trade in ASEAN Member States was held 11–13 September 2017
in Kuala Lumpur, Malaysia.
Note: Original memorandum style (as reported in the survey) is retained.

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Table H7. Policy evaluation: Trade in air transport services
Country

Further Policy Options (in-country level / neighbour-country level / ASEAN level)

Brunei Darussalam..
[in-country level] Cambodia needs more investment in air transport services including building and expanding
airport and providing efficient logistic services to both passengers and cargos.

Cambodia[neighbouring-country level] Need more cooperation with neighbouring countries in terms of sharing flightinformation and flight connection and improving other air transport related services.
[ASEAN-wide] Need to improve networking and coordination ASEAN wide in terms of sharing flight information,
air safety and anti-terrorism.

Indonesia

Policy for security, safety, licenses for Maintenance Repair and Operation (MRO)/Policy for security, safety/policy
for security, safety.
[in-country level] The ticket price must be improved.

Lao P.D.R.

[neighbouring-country level] The airplane must be upgraded.
[ASEAN-wide] The main airport capacity should be expanded.

Malaysia

Efficient custom clearance and cargos management to reduce the time

Myanmar..

Philippines..

Singapore[neighbouring-country level] Increase the number of flights and timeslots between Singapore and non-capitalcities.
[ASEAN-wide] Go for full open skies agreement (e.g. 7th Freedom).

Thailand..

Viet Nam- Restructure air transport to become popular and convenient type of transport, undertake passengers
transportation on international mid- and long-range routes.
- Consider as key means of transport to important economic zones, remote area or island.
- Create a favourable and competitive environment for the operation of the airlines.
- Improve the competitive capacity of Vietnamese airlines bymodernizing fleets, expand air routes.
- Enhance quality and quantity of services, absolutely ensure security and safety of aviation.

Source: Survey results at the Third Seminar on Promoting Services Trade in ASEAN Member States was held 11–13 September 2017
in Kuala Lumpur, Malaysia.
Note: Original memorandum style (as reported in the survey) is retained.

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Table H8. Policy evaluation: trade in rail transport services
Country

Further Policy Options (in-country level / neighbour-country level / ASEAN level)

Brunei Darussalam..
[in-country level] Cambodia needs to pay more attention to the improvement of railroads, expanding railroad tocover the whole country to facilitate the movement of people (foreign and local tourist) and goods.

Cambodia[neighbouring-country level] There should be more coordination and cooperation with neighbouring countries inconnecting the railroads for better connectivity.
[ASEAN-wide] The initiative of Singapore-Kunming Railways Networks should be accomplished as soon as
possible. Other initiatives to link ASEAN by railroads should also be considered.

Indonesia

Policy for R&D/sharing knowledge/policy for sharing knowledge and R&D[in-country level] No services because it’s still under construction

Lao P.D.R.

[neighbouring-country level] Human resource must be upgraded to ensure the service of new railways (LaoChina)

Malaysia

Create last-mile link from cargo hub to port. Create spur line from main trunk.

Myanmar..

Philippines..
[in-country level] Improve reliability of commuter rail systems (e.g. MRT & LRT systems)

Singapore[neighbouring-country level] Invest in high-speed rail connectivity[ASEAN-wide]Invest in high-speed rail connectivity.

Thailand..
-D eveloping railways in the direction of modernization, rational capacity,
fuel saving and efficiency.

Viet Nam-R educing fees, rail transport costs, improving the quality of transport services to compete with other types oftransport.
-R estructuring railway transport in direction of developing large and medium-sized cargo on long or medium
journeys; medium-distance passenger transport and public transport in major cities.

Source: 	Survey results at the Third Seminar on Promoting Services Trade in ASEAN Member States was held 11–13 September 2017
in Kuala Lumpur, Malaysia.
Note: Original memorandum style (as reported in the survey) is retained.

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Table H9. Policy evaluation: trade in road transport services
Country

Further Policy Options (in-country level / neighbour-country level / ASEAN level)

Brunei Darussalam..
[in-country level] Road transport needs more investment, expand and widen countrywide. Build new roads,
maintenance and safety of the roads should be a priority.

Cambodia[neighbouring-country level] Need more coordination and cooperation with neighbouring countries for betterroad network connection.[ASEAN-wide] ASEAN cooperation on roads transport should work harder and be
more practical to reflect the needs of individual Members and the needs of ASEAN connectivity as a whole.

Indonesia

Policy for R&D/sharing knowledge/policy for sharing knowledge and R&D[in-country level] Need to issue some transport legislation to manage its service

Lao P.D.R.

[neighbouring-country level] Need to build Inland Container Depot (ICD) along bordering crossing point fortransshipment[ASEAN-wide] -Both truck and bus including drivers should be upgraded- Infrastructure, such as road capacity and lanes of road, must expanded

Malaysia

Create hub for distribution of cargos from all over the country

Myanmar..

Philippines..
[in-country level] Explore autonomous driving solutions and improve ride-sharing applications.

Singapore[neighbouring-country level] Improve capacity for customs clearance at road CIQ facilities (Causeway andSecond Link). Mutual recognition of commercial vehicles to facilitate cross-boarder trade.
[ASEAN-wide] Improve rural-urban road connectivity in ASEAN. Improve driving conditions at night with lighting
solutions.
Road transport of Thailand. Thailand has road infrastructure and transport service covering the wholecountry. It can support the transport of passengers and goods across the country and effectively connects withneighbouring countries.

ThailandThe ASEAN regional transport system requires substantial cooperation from ASEAN Member States to facilitate
the movement of passengers and cargo across the region. Focus on enhancing ASEAN’s competitiveness as a
global leader.
Thailand Shipping The transport operator has developed a service model. And the investment of multinational
companies specializing in transportation. The competition is higher. More diversified forms of service Modern
technology is used to improve management.
-R estructuring means of transport in favour of public transportation development, high quality facilities;
protective and friendly to the environment.

Viet Nam- Taking advantage of road transport capacity focusing on short and average distance transportation.
-A pplying high technologies to the transportation business, enhancing quality of transportation services inaccordance with reducing costs and encouraging medium and large transport enterprises establishment.

Source: 	Survey results at the Third Seminar on Promoting Services Trade in ASEAN Member States was held 11–13 September 2017
in Kuala Lumpur, Malaysia.
Note: Original memorandum style (as reported in the survey) is retained.

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www://asean.or.jp