March 2022

Review of ASEAN Commitments inMaritime, Air, Rail and Road Transport Services
Under AFAS 10 and RCEP

Notes
The terms country and/or economy as used in this study also refer, as appropriate, to territories
or areas; the designations employed and the presentation of the material do not express 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 tables use the following symbols:• Two dots (..) indicate that data are not available or are not separately reported.
• A dash (-) indicates that the item equals zero or its value is negligible.
• Use of an en-dash (–) between dates representing years, e.g. , 2015–2016, signifies the fullperiod involved, including the beginning and end years.
• Reference to “dollars” ($) means United States dollars, unless otherwise indicated.

Prepared by Hikari Ishido (Chiba University, Japan), Mateus Silva Chang (Keio University, Japan)
and the ASEAN Japan Centre. The manuscript was edited by Tora Estep. Errors and omissions
are only those of the authors and should not be attributed to their respective organizations.

Contents
I. Introduction······························································································································································1
II. Logistics Performance Indices of ASEAN Member States·····················································4III. Ascendancy of Transport Services········································································································6
1. Mode 1: International trade····················································································································7
2. Mode 3: Commercial presence········································································································ 13
IV. T rade Agreements and Regulations among and in ASEAN Member States········· 16
V. I mpacts of Liberalization and Deregulation of Transport Services on

the Economy······················································································································································· 26
1. General impacts········································································································································ 26
2. Impact of China’s One Belt, One Road Initiative···································································· 28
3. Other social impacts······························································································································· 29

VI. Conclusions and Policy Suggestions································································································ 31
1. General policy suggestions················································································································· 31
2. Workable policy suggestions············································································································· 32
Annex A.
Specific Schedule of Commitments for “Maritime Transportation”

under AFAS (10th Package, Signed in November 2018) by ASEAN Members············ 36
Annex B.
Specific Schedule of Commitments for “Air Transportation” under

AFAS (10th Package, Signed in November 2018) by ASEAN Members··························· 69
Annex C.
Specific Schedule of Commitments for “Rail Transportation” under

AFAS (10th Package, Signed in November 2018) by ASEAN Members··························· 70
Annex D.
Specific Schedule of Commitments for “Road Transportation” under

AFAS (10th Package, Signed in November 2018) by ASEAN Members··························· 77
Annex E.

Strategic Goals for Transport Services by Mode············································································ 89
Annex F.
Policy Evaluation Exercise: How Transport Services and Courier

Services Attain the Multiple-Equilibria Situation in a Country and in the Region····1001I. Introduction
Transport—maritime, air, rail and road services—is an essential service sector, especiallyfor 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 “roadtransport services”, which this paper addresses. This paper refers to these four modes of transport
as transport services. The WTO list also includes 11B, internal waterways transport; 11D, spacetransport; 11G, pipeline transport; 11H, services auxiliary to all modes of transport; and 11I, othertransport services. This paper does not consider these five except for storage and cargo handlingservices, to the extent to which they are included implicitly in transport services statistics. Amongthese transport services, air transport is a 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

1

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

211Fc Rental of commercial vehicles with operator
Maintenanceandof
repairof roadtransport equipment
Of11Fdthe threesourcesvalue
added—i.e.,
provisions of (1) tangible products, (2)information
and(3)
amenities—transport
services
tend to fall under amenities. The
11Fe Supporting services for road transport services
provision of transport-related services tends to grow with economic development. In
the ASEAN region, which records consistently vigorous economic advances andOf the threesources ofvalue added—
i.e. , provisionsof (1)
products,(2) isinformation
displaysincreasing
physicalconnectivity,
the role
oftangible
transport
services
growingand(3)amenities—transport
services
tend
to
fall
under
amenities.
The
provisionoftransportyearly.
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
Figure1 illustrates global value chain curves related to transport services. As shown,transport services is growing yearly.

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

ASEAN’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

3

ASEAN’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 and in building the ASEAN Economic Community that is so vital for the future of ASEAN
nations” (ASEAN Secretariat, 2015).
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
enables multiple cities to emerge at distances from the capital area. When a population (oreconomic 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, fuelled by greater mobility. ASEAN-wide
policy should be formulated with such a decentralized, multiple-equilibria scenario in view2.

2

APEC Policy Support Unit (2015) indicates that, in the context of global value chains, transportation services for
procuring intermediate inputs enable the geographic dispersion of value-creating operations.

4II. Logistics Performance Indices of ASEAN
Member States
Table 1 shows logistics performance indices (LPIs) for ASEAN member states and memorandum
countries in 2016 and 2018 (the latest year available). The indices measure the degree of smoothcustoms clearance, infrastructural development, efficient international shipments, logistics quality
and competence and timeliness of shipments.
Overall, a significant degree of variation remains among ASEAN member states’ LPI scores. In
2018, Singapore ranked highest (seventh in the world), while Myanmar ranked lowest (137th in
the world). The Lao People’s Democratic Republic was the ASEAN member state with the biggest
improvement from 2016 to 2018, with an increase of 0.63 in the LPI score and a change fromASEAN’s lowest position (152nd) in 2016 to ASEAN’s antepenultimate position (82nd) in 2018.
Table 1 shows that Indonesia, Philippines, Thailand and Viet Nam also increased their LPI scores
between 2016 and 2018.

Table 1. Logistics performance indices for ASEAN member states and memorandum
countries
Country
ASEAN Members
Brunei Darussalam
Cambodia
Indonesia
Lao PDR
Malaysia
MyanmarPhilippines
Singapore
Thailand
Viet Nam
Memorandum
China
Japan
Korea, Republic ofLogistics
International
Quality andTimeliness
LPI
LPI
LPI
LPI Customs (2018) Infrastructure Shipments
Competence(2018)(2018)
Rank Score Rank Score(2018)(2018)(2016) (2016) (2018) (2018)
Score Rank Score Rank Score Rank Score Rank Score Rank
70
73
63
152
32
113
71
5
45
64

2.87
2.8
2.98
2.07
3.43
2.46
2.86
4.14
3.26
2.98

80
98
46
82
41
137
60
7
32
39

2.71
2.58
3.15
2.70
3.22
2.30
2.90
4.00
3.41
3.27

2.62
2.37
2.67
2.61
2.90
2.17
2.53
3.89
3.14
2.95

73
109
62
74
43
131
85
6
36
41

2.46
2.14
2.90
2.44
3.15
1.99
2.73
4.06
3.14
3.01

89
130
54
91
40
143
67
6
41
47

2.51
2.79
3.23
2.72
3.35
2.20
3.29
3.58
3.46
3.16

113
71
42
85
32
144
37
15
25
49

2.71
2.41
3.10
2.65
3.30
2.28
2.78
4.10
3.41
3.40

77
111
44
83
36
128
69
3
32
33

3.17
3.16
3.67
2.84
3.46
2.91
2.98
4.32
3.81
3.67

80
84
41
117
53
108
100
6
28
40

12
27
24

3.97
3.66
3.72

26
5
25

3.61
4.03
3.61

3.29
3.99
3.40

31
3
25

3.75
4.25
3.73

20
2
22

3.54
3.59
3.33

18
14
33

3.59
4.09
3.59

27
4
28

3.84
4.25
3.92

27
10
25

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

5

For ASEAN member states to become more integrated in terms of transport services, ASEAN-wide
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 domestic cargo operators. Furthermore, in some ASEAN member states, foreigninternational marine transporters can offer more efficient cargo transportation services than theirdomestic counterparts, which tend to use older, poorly managed shipping fleets. Also, lower taxes
currently imposed on international 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.

34The liberalization of trade in transport services poses some concerns. 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 otherextreme (i.e., monopoly of a domestic transport supplier), however, the affordability of transport services tends tobecome somewhat marginalized. Liberalization is thus not always good; the benefits and costs of liberalization
should be balanced.
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).

6

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 beconsidered as 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 (table2). Unlike other service 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 inpart 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 the value accordingly.

Table 2. 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)
Transport Services

Supply to the world (exports)

Total Services

Transport Services

Total Services

Mode of supply

Value

Share

Value

Share

Value

Share

Value

Share

Mode 1

74

a

57

308

30

50

a

56

302

30

Mode 2

9b

7

103

10

15c

16

101

10

Mode 3

47

36

565

55

25

28

554

55

Mode 4

0

0

51

5

0

0

50

5

ASEAN total

130

100

1,027

100

90

100

1,007

100

Source: AJC, based on own estimates, UNCTAD for total services and WTO for the mode shares of total services.
Note: For total services, each mode share as estimated by the WTO for the global supply is applied to ASEAN. The basic data
for estimates by mode is 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 3 and 4.
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 per cent) are obtained fromnational statistical offices from all countries except Brunei Darussalam, Lao PDR, Myanmar and Malaysia for which data are notavailable. These six countries’ share is applied to total travel expenditures of all 10 ASEAN countries available from World Bank’s
World Development indicators ($69.4 billion of outbound tourism and $115.2 billion of inbound tourism).

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 domestictransport in ASEAN. In contrast, the use of transport services abroad by ASEAN travellers (receipts
from the world through Mode 2) was estimated at some $9 billion in 2015.

7This 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
the imported products arrive from foreign countries. Export businesses use all available transport
services, be they foreign owned or domestically owned. As ASEAN’s trade has been growing
dynamically in both exports and imports, transport services trade is also expected to grow in both
directions.
However, ASEAN’s statistics on transport services as measured in the balance of payments do notnecessarily show such growth. Despite some years of oscillations, the transport services exports
and imports have not been rising as expected (tables 3 and 4). As indicated by the infrastructurecomponent of the World Bank’s LPIs (table 1), all ASEAN member states, except for Singapore,rank low compared with China and the Republic of Korea. Although considerable efforts havebeen made to build and ameliorate transport infrastructure to improve connectivity in ASEAN, ashortage of such infrastructure persists.
Exports. Transport services exports from ASEAN amounted to almost $74 billion in 2019, achieving
its highest level in the period analysed (table 3). Although the export value in 2019 had increased byalmost 53 per cent from the average level of 2005–2010, in 2020 a sharp decrease occurred, withthe value returning to a level like the 2016 one.
Table 3 also indicates that until 2019 most ASEAN countries increased their exports of transport
services. The exceptions were Thailand, Malaysia and Brunei Darussalam, which presented adecrease in their exports of transport services. Furthermore, the only sizeable increase occurredin Singapore.
As expected, Singapore is the biggest exporter of transport services in ASEAN, controlling a sharethat oscillates around 70 per cent of all ASEAN exports of transport services. With the impact of
the COVID-19 pandemic, Singapore’s share increased to 80 per cent, despite a decrease in thevalues, revealing the importance and resiliency of the transport services exports in this country.
The second and third largest exporters are Malaysia and Thailand, but the value of their exports
has declined over the years. Exports from Brunei Darussalam have also declined somewhat. In
contrast, the exports of the other countries increased gradually until 2019, the last year before
the COVID-19 pandemic. The value of Lao People’s Democratic Republic and Cambodia’s exports,
though among the smallest in ASEAN, more than tripled in the period.
The importance of transport services stands out especially for Brunei Darussalam, accounting for
more than half of all services exports. This is partly because the country strategically promotes
marine transport. 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 thatcounts marine transport among its strategic industries; nonetheless, its share in total exports
has been declining. Interestingly, despite the negative impact of the COVID-19 pandemic in thetransportation sector around the globe, the transport services exports share of five ASEAN
countries increased in 2020 (box 1).

8

Table 3. Exports of transport services and their share in total exports of services and of
total exports of goods and services, 2005–2020 (millions of dollars and per cent)Country

Annual average
2005–2010

Annual average
2011–2015

2016

2017

2018

2019

2020

361

313

309

263

237

122

Transport services exports
Brunei Darussalam403

Cambodia

217

327

414

500

597

671

387

Indonesia

2,625

3,406

3,245

3,089

3,119

3,372

2,060

Lao PDR

45

57

74

74

92

142

-

Malaysia

5,458

4,353

3,779

3,989

4,417

4,461

2,698

Myanmar

134

264

258

124

297

325

300

Philippines

1,143

1,586

1,723

2,210

2,347

2,459

1,414

Singapore

30,351

43,22337,53042,89353,17253,28044,757

Thailand

6,122

5,517

5,201

6,115

6,682

6,138

2,845

Viet Nam

1,957

2,154

2,297

2,320

2,857

2,820

-

ASEAN total

48,453

61,24954,83561,62473,84473,90554,583

Share in total exports of services
Brunei Darussalam

52.3

69.0

65.0

63.0

53.2

45.0

41.3

Cambodia

13.5

10.1

11.3

12.2

12.6

12.9

23.6

Indonesia

18.3

15.9

15.3

13.7

11.5

12.5

16.4

Lao PDR

12.9

8.5

9.7

10.7

10.7

14.2

-

Malaysia

19.3

11.7

11.7

12.1

12.6

12.8

14.6

Myanmar

38.3

10.5

7.5

3.7

7.3

5.7

8.0

Philippines

8.5

7.2

6.1

7.1

7.0

7.0

5.3

Singapore

39.2

33.0

27.2

28.2

29.6

28.8

28.3

Thailand

20.5

11.6

9.0

9.7

9.9

8.9

10.7

Viet Nam

31.3

22.4

12.0

12.4

13.3

12.0

-

ASEAN total

28.1

22.3

18.0

18.7

19.8

19.1

22.0

Share in total exports of goods and services
Brunei Darussalam

4.4

3.9

6.4

5.7

4.2

3.6

2.1

Cambodia

3.7

3.2

3.2

3.5

3.8

3.8

2.4

Indonesia

1.9

1.8

2.1

1.8

1.7

2.0

1.4

Lao PDR

3.1

1.8

1.6

1.5

1.7

2.4

-

Malaysia

2.6

1.8

1.8

1.8

1.8

1.9

1.3

Myanmar

38.3

2.1

1.8

0.8

1.6

1.5

1.7

Philippines

1.8

2.1

2.1

2.4

2.5

2.6

1.8

Singapore

7.9

8.5

8.6

8.9

9.9

10.3

9.7

Thailand

3.2

2.1

2.1

2.2

2.3

2.2

1.3

Viet Nam

3.2

1.6

1.3

1.1

1.2

1.1

-

ASEAN total

4.6

4.3

4.1

4.1

4.5

4.6

4.7

Source: AJC based on own data from UNCTAD and ASEANstats.

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 13 per centin Brunei Darussalam to 51 per cent in Cambodia, with an average of 30 per cent in 2019 (table4). This implies that ASEAN countries, other than the Lao People’s Democratic Republic, tend touse foreign services in transport businesses in importing. Although the import value oscillated
throughout the last decade, the trend is upward over the past decade, particularly for Lao People’s9

Democratic Republic, Myanmar and Singapore.
In the case of exports of transport services, the prevalence of Singapore as the largest importer isclear. However, member states such as Thailand, Indonesia, Malaysia and Viet Nam also importthis service in large quantities.

Table 4. I mports of transport services and their share in total imports of services and in
total imports of goods and services, 2005–2020 (millions of dollars and per cent)Country

Annual average
2005–2010

Annual average
2011–2015

2016

2017

2018

2019

2020

279

194

232

196

200

192

Transport services imports
Brunei Darussalam

370

Cambodia

485

914

1,179

1,282

1,290

1,436

1,120

Indonesia

9,422

11,050

8,282

9,195

10,794

9,928

6,167

Lao PDR

14

34

63

77

121

124

-

Malaysia

10,396

10,986

8,915

10,121

10,376

9,793

8,225

Myanmar

365

945

1,230

1,344

1,335

1,370

1,286

Philippines

2,803

3,370

3,941

4,464

4,651

4,404

3,395

Singapore

26,70937,76839,38145,29654,195

55,10544,326

Thailand

18,29818,613

13,685

14,971

16,443

16,113

15,493

Viet Nam

4,461

7,067

7,389

7,081

6,831

7,105

-

ASEAN total

73,322

91,02584,26094,063106,232

105,579

80,202

Share in total imports of services
Brunei Darussalam

27.5

13.3

13.0

20.8

14.3

13.0

18.9

Cambodia

55.6

53.7

53.4

52.5

48.6

51.4

64.3

Indonesia

37.0

35.6

30.0

31.6

33.0

29.6

29.9

Lao PDR

13.5

4.2

6.7

7.7

11.2

11.7

-

Malaysia

36.4

27.6

24.4

26.8

26.8

26.3

29.3

Myanmar

56.3

49.3

53.9

52.4

44.5

43.8

44.1

Philippines

30.7

20.6

18.0

19.2

20.0

18.3

22.0

Singapore

32.9

27.7

27.4

28.1

31.2

31.0

30.5

Thailand

48.1

43.6

34.6

36.1

34.5

33.2

39.2

Viet Nam

60.4

55.7

48.5

46.5

43.7

44.4

-

ASEAN total

38.1

31.9

28.9

29.8

31.2

30.6

31.5

Share in total imports of goods and services
Brunei Darussalam

10.4

5.1

4.9

6.0

3.9

3.4

3.7

Cambodia

7.3

7.7

8.8

8.5

7.2

7.1

6.3

Indonesia

7.2

5.6

5.5

5.5

5.5

5.5

4.4

Lao PDR

1.0

0.8

1.1

1.3

1.8

1.9

-

Malaysia

6.0

4.9

4.7

4.8

4.6

4.6

4.4

Myanmar

56.3

6.5

7.4

6.8

6.7

7.2

7.1

Philippines

4.2

4.2

3.8

3.9

3.7

3.5

3.7

Singapore

7.5

8.0

9.8

10.0

10.9

11.4

10.5

Thailand

9.6

7.1

6.3

6.3

6.2

6.4

7.2

Viet Nam

6.1

5.1

4.2

3.5

3.1

3.1

-

ASEAN total

7.3

6.5

6.6

6.6

6.7

6.9

7.3

Source: AJC based on own data from UNCTAD and ASEANstats.

10

Box 1. The impact of COVID-19 on transport services trade
The COVID-19 pandemic led to measures of social distancing and lockdown in many
countries, including ASEAN member states. The imposition of such strict measures aimed todecrease the movement of the population and consequently slow the spread of the virus. The
decrease of the movement of the population is already expected to adversely affect transport
services. Another expected result of adopting the aforementioned measures is an economic
slowdown. Disruptions in the global value chains, given the lack of components to be traded,
and/or disruptions in trade, given the closing of borders, are expected. Such events would
represent a decrease in the values of transport services trade. To grasp the real impact in thetransport services sector, we observe the trade data from tables 3 and 4 for year 2020. The
available exports data reveal a strong decline in the values of transport services of all ASEAN
member states. Interestingly, despite the negative impact of COVID-19 on the transportation
sector export values, for most ASEAN countries the share of transport services in total
services increased in 2020. As expected, the available transport services import values also
decreased without exceptions. However, once again the share of transport services in total
services increased. As a matter of fact, the share of transport services in total trade of goods
and services also increased, revealing the importance and resiliency of the transport services
sectors.

Although this paper considers four transport modes (maritime, air, rail and road), ASEAN countries
use different modes in trade, reflecting their geographic characteristics and accessibility to andavailability of transport infrastructure. Tables 5 and 6 provide data by transport mode. Observing
the share of each mode, we can conclude that in the case of exports air transport is more usedin most ASEAN member states. Only in Myanmar and Singapore is sea transport more frequently
used than air transport.
Interestingly, for the case of imports sea transport is more frequently used. Philippines reliedmore on air transport until 2016 and then switched to sea transport after a law was passed
allowing foreign vessels to transport and co-load foreign cargoes for domestic transhipment. Lao
People’s Democratic Republic relied more on other types of transport services, given that it lacks
access to the sea.

11

Table 5. E xports of transport services by transport mode in selected ASEAN countries,
2010-2020 (per cent)
2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Brunei Darussalam

100

100

100

100

100

100

100

100

100

100

100

Air transport

..

..

..

..

..

..

..

..

..

72

40

Sea transport

..

..

..

..

..

..

..

..

..

27

60

Other than sea and air

..

..

..

..

..

..

..

..

..

0

1

Postal and courier services

..

..

..

..

..

..

..

..

..

..

..

Cambodia

100

100

100

100

100

100

100

100

100

100

100

Air transport

83

83

84

89

86

87

88

88

88

87

76

Sea transport

10

9

11

9

10

11

11

11

10

10

18

Other than sea and air

8

8

5

2

4

2

1

1

2

3

6

Postal and courier services

0

0

..

..

..

..

..

0

0

0

0

Lao PDR

100

100

100

100

100

100

100

100

100

100

100

Air transport

12

22

76

87

79

83

82

85

90

84

..

Sea transport

0

0

0

0

0

0

0

0

0

0

..

Other than sea and air

80

69

16

7

14

17

18

15

10

16

..

Postal and courier services

9

9

8

6

7

0

0

0

0

0

..

Malaysia

100

100

100

100

100

100

100

100

100

100

100

Air transport

45

47

47

51

51

50

50

57

57

59

26

Sea transport

50

46

44

40

40

41

41

34

33

33

56

Other than sea and air

5

7

8

9

8

9

9

9

10

9

18

Postal and courier services

..

..

..

..

..

..

..

..

..

..

..

Myanmar

100

100

100

100

100

100

100

100

100

100

100

Air transport

..

..

..

25

51

42

47

25

23

31

24

Sea transport

..

..

..

74

24

37

49

65

59

50

64

Other than sea and air

..

..

..

0

24

20

3

9

18

18

11

Postal and courier services

..

..

0

1

1

1

1

1

0

0

1

Philippines

100

100

100

100

100

100

100

100

100

100

100

Air transport

98

99

98

99

99

99

98

76

76

76

64

Sea transport

2

1

2

1

1

0

2

23

24

24

36

Other than sea and air

..

..

..

..

0

..

0

0

0

0

0

Postal and courier services

0

0

0

0

0

0

1

0

0

1

0

Singapore

100

100

100

100

100

100

100

100

100

100

100

Air transport

..

16

16

14

14

13

16

16

14

13

5

Sea transport

..

83

83

85

85

86

83

82

84

85

94

Other than sea and air

..

0

0

0

0

0

1

1

0

0

0

Postal and courier services

..

1

1

1

1

1

1

1

1

1

1

Vietnam

100

100

100

100

100

100

100

100

100

100

100

Air transport

52

60

70

65

64

65

65

65

72

71

..

Sea transport

47

40

29

33

32

31

31

31

25

25

..

Other than sea and air

..

..

..

..

..

..

..

..

..

..

..

Postal and courier services

1

0

1

1

4

3

4

4

3

3

..

Source: AJC based on own data from UNCTAD.

12

Table 6. Imports of transport services by transport mode in selected ASEAN countries,
2010-2020 (per cent)
2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Brunei Darussalam

100

100

100

100

100

100

100

100

100

100

100

Air transport

..

..

..

..

..

..

..

..

..

13

3

Sea transport

..

..

..

..

..

..

..

..

..

86

96

Other than sea and air

..

..

..

..

..

..

..

..

..

0

0

Postal and courier services

..

..

..

..

..

..

..

..

..

..

..

Cambodia

100

100

100

100

100

100

100

100

100

100

100

Air transport

16

17

17

17

16

16

17

19

22

22

15

Sea transport

82

82

82

82

82

83

81

80

76

76

81

Other than sea and air

2

1

1

2

2

1

2

1

2

2

4

Postal and courier services

0

0

..

..

..

..

..

0

0

0

0

Lao PDR

100

100

100

100

100

100

100

100

100

100

100

Air transport

54

47

25

21

12

12

0

9

10

13

..

Sea transport

0

0

0

0

0

0

0

0

6

0

..

Other than sea and air

20

29

66

68

78

88

100

91

84

86

..

Postal and courier services

26

24

9

12

10

0

0

0

0

0

..

Malaysia

100

100

100

100

100

100

100

100

100

100

100

Air transport

31

29

27

29

31

30

31

33

31

32

27

Sea transport

56

59

61

60

58

58

58

57

59

58

62

Other than sea and air

13

12

12

11

10

11

11

11

10

10

11

Postal and courier services

..

..

..

..

..

..

..

..

..

..

..

Myanmar

100

100

100

100

100

100

100

100

100

100

100

Air transport

..

..

..

2

7

9

8

2

3

5

3

Sea transport

..

..

..

98

92

90

86

97

96

93

96

Other than sea and air

..

..

..

0

1

1

5

0

1

1

1

Postal and courier services

..

..

0

0

0

0

0

0

1

0

0

Philippines

100

100

100

100

100

100

100

100

100

100

100

Air transport

98

97

96

98

99

99

100

22

21

25

13

1

Sea transport

2

3

4

1

1

Other than sea and air

..

..

..

..

0

Postal and courier services

0

0

0

0

0

0

78

79

75

87

0

0

0

0

0

0

0

0

0

0

0

Singapore

100

100

100

100

100

100

100

100

100

100

100

Air transport

..

22

19

19

18

19

20

21

20

18

14

Sea transport

..

75

78

78

79

78

78

77

80

80

84

Other than sea and air

..

2

2

2

2

2

1

1

0

1

1

Postal and courier services

..

1

1

1

1

1

1

1

1

1

1

Vietnam

100

100

100

100

100

100

100

100

100

100

100

Air transport

14

15

15

12

13

13

13

13

13

13

..

Sea transport

86

85

85

87

87

87

87

86

86

86

..

Other than sea and air

..

..

..

..

..

..

..

..

..

..

..

Postal and courier services

0

0

0

1

1

1

1

1

1

1

..

Source: AJC based on own data from UNCTAD.

13

2. Mode 3: Commercial presence
Provision of transport services requires massive investment in transport infrastructure. Therefore,both domestic and foreign investments and private and public investments are significant intransport infrastructure and services. According to UNCTAD’s survey, about 80 per cent of total
investment in transport infrastructure in Asia was financed through domestic funds, both private
and public (UNCTAD 2007, p. 101). The foreign share in infrastructure investment in transport wasless 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 in Singapore had a value of $35.7 billion in
2019. Singapore is also an investor in transport and storage services, investing $18.3 billion abroad
as of 2019.
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 the Netherlands; 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 and Evergreen Marine (Singapore) Pte. Ltd. The largest transport services
companies abroad owned by companies in ASEAN include Virgin Australia Holdings Ltd., owned bySingapore Airways, and Star Cruises Ltd. in Hong Kong, owned by CMY Capital (L) Ltd. in Malaysia.
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 a thousand foreign companies provide transport services with a sales value
estimated at $47 billion (table 7). ASEAN firms have established more than 450 firms abroad thatprovide transport services abroad, with a sales value of $25 billion (table 7). Singapore is by far
the largest supplier to the world and the largest host to foreign transport services companies.
Although Singapore’s outstanding performance in transport services reflects its uniquecharacteristics, large economies such as Thailand and Malaysia also host many foreign transport
services companies. In this respect, Indonesia, the largest economy in ASEAN, does not host as
many foreign transport services companies nor generate as many sales (table 7), when comparedwith the size of total outputs and value added of this industry (see section V).

14

Table 7. Estimated sales of transport services through foreign presence, 2015
(number and millions of dollars)
Receipts from abroad
Country

Number of foreign
entitiesa

Brunei Darussalam
Cambodia
Indonesia

Supply to the world

Estimated sales

Number of ASEAN
entities abroada

Estimated sales

1

8

0

-

8

97

0

-

132

867

25

24

Lao PDR

5

15

0

-

Malaysia

173

5,343

82

3,933

Myanmar

17

14

0

-

Philippines

106

1,456

15

589

Singapore

267

29,592305

19,604Thailand

186

8,392

24

472

Viet Nam

118

967

3

10

ASEAN Total

1,013

46,752454

24,632

Source: AJC, based on data from Toyo Keizai Shimposha, UNCTAD, Thomson Reuters and Orbis.

Notes: a Includes the affiliates whose sales cannot be estimated (23 for Indonesia, 12 for Malaysia, 1 for Myanmar, 1 for thePhilippines, 6 for Singapore, 4 for Thailand and 11 for Viet Nam for receipts from abroad; and 2 for Indonesia, 12 for
Malaysia, 2 for Philippines, 20 for Singapore and 1 for Thailand for supply to the world).

Regarding 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 U.S. transport services companies
and one twentieth those of European ones (table 8). This is because these Japanese companies
are engaged in small-scale services (such as transport of goods), whereas European and U.S.
companies are engaged in large-scale operations, including managing air and seaport facilities.
ASEAN companies, particularly those from Singapore, also engage in large operations. In termsof estimated sales, those of ASEAN rank second after those of Europe. Another interesting findingis that estimated sales in “other” developing countries are also large, despite the relatively small
number of companies in such countries. These countries are mainly those of flags of convenienceand tax havens (Bermuda, Panama and the like).

15

Table 8. F oreign affiliates in ASEAN and ASEAN affiliates abroad in transport services,by source/destination country(number and millions of dollars)
Foreign affiliates in ASEANCountry

Developed
economies

Estimated sales

ASEAN affiliates abroad
Number ofaffiliatese

Estimated sales

United States

73

2,380

1

..

Europe

218

3,979

32

3,038

Australia

14

1,398

18

5,019

Japan

323

208

11

102

Othersa

10

274

3

76

Subtotal

638

8,239

65

8,235

ASEAN

213

3,201

50

3,917

China

10

1,565

14

345

Korea, Rep. of

9

258

3

32

b

Developing
economies

Number ofaffiliatesd

India

7

0

20

823

Hong Kong (China)

22

514

6

2,422

United Arab Emirates

11

834

3

20

c

Others

22

3,259

19

1,812

Subtotal

294

9,631

115

9,371

Unspecified / Supernational

23

0

2

0

World

955

17,870182

17,606

Source: AJC, based on data from Toyo Keizai Shimposha, UNCTAD, Thomson Reuters and Orbis.
Notes:a
Foreign affiliates in ASEAN and ASEAN affiliates abroad include 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.
cForeign affiliates in ASEAN include those in Bahrain, Bermuda, the Cayman Islands, Kuwait, Panama, Seychelles, South Africa
and the 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).
dIncludes the affiliates whose sales cannot be estimated (4 for the United States; 14 for Europe; 1 for Australia; 26 for Japan;
11 for ASEAN and 0 for China, the Republic of Korea, India, Hong Kong (China), the United Arab Emirates and unspecified/supernational.)eIncludes 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 and 0 for the Republic of Korea, Hong Kong (China) and unspecified/supernational.)

ASEAN transport services companies also invest abroad, generating estimated sales of $8–9
billion in developed regions (mainly Australia and Europe, the two major host regions) anddeveloping economies. The importance of Asia, in particular ASEAN, for ASEAN transport services
companies reflects that not only are ASEAN firms becoming more competitive, but also that
regional infrastructure connectivity is expanding.

16

IV. Trade Agreements and Regulations among andin ASEAN Member States
The ASEAN Framework Agreement on Services (AFAS) is the main and most open trade
agreement concerning liberalization of trade in transport services.5 Another important trade
agreement for ASEAN is the Regional Comprehensive Economic Partnership (RCEP), which wassigned in 2020. Under this agreement, the combination of positive listing and negative listing isused. As Hoekman index calculation is possible only for positive listing (adopted by Cambodia, Lao
People’s Democratic Republic, Myanmar, Philippines, Thailand and Viet Nam), following are somecomparisons of AFAS and RCEP where possible.
Tables 9–13 show the Hoekman index,6 which measures the commitment to liberalization formaritime, air, rail and road transport services, respectively, under AFAS (10th package).7 While
information on air transport services is not publicly available (because the sector’s specificcommitments by country are separately negotiate 8), marine, rail and road are relatively open.
Following are some observations by country.

Brunei Darussalam. Under AFAS, maritime transport is rather open, reflecting the country’s
geographic location by the sea; rail transport is highly open and road transport is closed. Under
RCEP, negative listing is used.
Cambodia. Under AFAS, maritime, rail and road transport are highly open. Under RCEP, maritime,
air and rail transports are closed and road transport is fully open.
Indonesia. Under AFAS, the country has a rather open maritime policy, except for supporting-typeservices (a sensitive sector because of the labour-intensive nature of those services; domestic
employment can be an issue), and rail and road services are rather open. Under RCEP,
negative listing is used.
Lao People’s Democratic Republic. Under AFAS, the country has fully open maritime transport
services even though landlocked, reflecting its policy emphasis on connectivity to neighbouring
countries’ maritime services, and rail and road services are highly open. Under RCEP, maritime
transport is rather open (except for Mode 3); as for air services, supporting-type sectors alone

5

6

7

8

Under the ASEAN Trade in Services Agreement, which is based on negative listing (with relevant negotiations
still going on, for specifying the negative lists by ASEAN members), is a sequel policy effort building on AFAS.
Transportation services are much emphasized under the ASEAN Trade in Services Agreement because of theirimportance relative to global value chains.
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 accessor national treatment), as follows: first, assign the value 1 when the sector at issue is “fully liberalized”, 0.5 when“limited (but bound)” and 0 when “unbound” (government has not committed to liberalize) by subsector, by modeand by aspect (market access or national treatment); take the simple average for aggregation and then calculate
the average value by service sector and by country. The higher the figure, the more liberal the country’s services
trade commitments are to the free trade agreement members. Using the database constructed for this and forother purposes, the “Hoekman index” is derived for each of 155 subsectors. Then the simple average at the levelof the 11 sectors is calculated. The Hoekman index takes a value between 0 and 1, with 0 referring to the mostrestricted status and 1 being the most open situation.
Due to lack of publicly available latest information under AFAS, indexation for air transportation services is notpossible.
The Protocol to Implement the Eleventh Package of Commitments on Air Transport Services under the ASEAN
Framework Agreement on Services (AFAS) was signed in November 2019; there is, however, no publicly available
information indicating that it has come into effect (as of March 2022) .

17are open; rail transport is rather open especially in Modes 1 and 2 and road transport is closed.
Malaysia. Under AFAS, the country has a rather open policy in terms of passenger and freighttransportation; supporting-type services are closed, owing mainly to the labour-intensive
nature of those services and rail transport is closed while some road services are open. Under
RCEP, negative listing is used.
Myanmar. Under AFAS, maritime service is rather open, rail services are closed and some roadservices are open (while rental service is closed). Under RCEP, the maritime sector is alsorather open (except for pushing and towing services), and air transport is open for rental ofaircraft with crew and maintenance and repair of aircraft and supporting services.
Philippines. Under AFAS, maritime service is rather open and rail and road services in Modes 2
and 3 are rather open (yet Mode 1 is not committed due mainly to technical infeasibility). Under
RCEP, the commitments in maritime, rail and road services are rather like that under AFAS; asfor air service, passenger and freight transportation are closed, yet the other subsectors are
open.
Singapore. Under AFAS, 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, rail services are closed and some road services are open. Under RCEP, negative
listing is used.
Thailand. Under AFAS, the country has a highly open trade policy, reflecting its geopoliticalsituation as an important hub of the ASEAN region; rail and road services are partially open.
Under RCEP, the commitment is a bit lower than that under AFAS overall: Air transport iscommitted for supporting-type services only.
Viet Nam. Under AFAS, the country has an open trade policy in terms of maritime services, some
supporting sectors are closed, rail services are highly open and road services are partiallyopen. Under RCEP, the degree of openness is lower than that under AFAS overall: Air service iscommitted only for supporting-type services.

18

Table 9. Hoekman index of trade liberalization for maritime transport services, by
subsector and by mode, under AFAS 10th package (left figures) and RCEP (rightfigures)
11Aa

11Ab

11Ac

11Ad

11Ae

11Af

Country

Mode

Passenger
Freighttransportation transportation

Rental ofvesselswith crew

Maintenanceand repair ofvessels

Pushing andtowingservices

Supporting
services formaritimetransport

Brunei
Darussalam

Mode 1

1 | negative

1 |negative

1 | negative

1 | negative

1 | negative

1 | negative

Mode 2

1 | negative

1 |negative

1 | negative

1 | negative

1 | negative

1 | negative

Mode 30.75 | negative 0.75 |negative 0.75 | negative 0.75 | negative 0.75 | negative 0.75 | negative

Cambodia

Indonesia

Lao PDR

Malaysia

MyanmarPhilippines

Singapore

Thailand

Viet Nam

Mode 1

1|0

1|0

1|0

1|0

1|0

1|0

Mode 2

1|0

1|0

1|0

1|0

1|0

1|0

Mode 3

1|0

1|0

1|0

1|0

1|0

1|0

Mode 1

1 | negative

1 | negative

1 | negative

1 | negative

1 | negative

1 | negative

Mode 2

1 | negative

1 | negative

1 | negative

1 | negative

1 | negative

1 | negative

Mode 3

0.5 | negative

0.5 | negative

0.5 | negative

0.5 | negative

0.5 | negative

0.5 | negative

Mode 1

1|1

1|1

1|1

1|1

1|1

1|1

Mode 2

1|1

1|1

1|1

1|1

1|1

1|1

Mode 3

1|0

1|0

1|0

1|1

1|1

1|1

Mode 1

1 | negative

1 | negative

1 | negative

0 | negative

0 | negative

0 | negative

Mode 2

1 | negative

1 | negative

1 | negative

1 | negative

0 | negative

0 | negative

Mode 30.75 | negative 0.75 | negative

1 | negative

0.75 | negative

0 | negative

0 | negative

1|1

1|1

1|0

1|1

Mode 11|1

1|1Mode 2

1|1

1|1

1|1

1|1

1|0

1|1

Mode 30.75 | 0.75

0.75 | 0.75

0.75 | 10.75 | 0.75

0.75 | 0

0.5 | 0.75

Mode 1

1|1

1|1

1|1

0|0

0|1

0|0

Mode 2

1|1

1|1

1|1

0.75 | 11|1

1|0Mode 3

1|1

0.75 | 10.75 | 0.5

0.75 | 0.75

0.75 | 0.5

0.25 | 0Mode 1

1 | negative

1 | negative

1 | negative

0 | negative

1 | negative

1 | negative

1 | negative

Mode 2

1 | negative

1 | negative

1 | negative

1 | negative

1 | negative

Mode 3

0.5 | negative

0.5 | negative 0.75 | negative 0.75 | negative

1 | negative

0.75 | negative

Mode 1

1|1

1|1

1|0

1|1

1|0

1 | 0.5

Mode 2

1|1

1|1

1|0

1|1

1|1

1|1

Mode 30.75 | 0

0.5 | 00.75 | 00.75 | 0.75

0.75 | 00.75 | 0.75

Mode 1

1|0

1|0

1|0

1|0

0|0

1|0

Mode 2

1|1

1|1

1|0

1|0

0|0

1|0

Mode 30.75 | 0.75

0.75 | 0.75

0.75 | 00.75 | 00|00.25 | 0

Source: AJC’s calculation based on ASEAN member states’ specific commitment tables under AFAS (10th package). See annex A
for reproduction and categorization of the tables.

19

Table 10. H
 oekman index of trade liberalization for air transport services, by subsector
and by mode, under RCEP
11Ca

11Cb

11Cc

11Cd

Supporting
servicesfor air transport

Country

Mode

Passenger
transportation

Freighttransportation

Brunei
Darussalam

Mode1

negative

negative

negative

negative

negative

Mode2

negative

negative

negative

negative

negative

Cambodia

Indonesia

Lao PDR

Malaysia

MyanmarPhilippines

Singapore

Thailand

Viet Nam

Rental of aircraft Maintenance andwith crew
repair of aircraft

11Ce

Mode3

negative

negative

negative

negative

negative

Mode1

0

0

0

1

1

Mode2

0

0

0

1

1

Mode3

0

0

0

1

1

Mode1

negative

negative

negative

negative

negative

Mode2

negative

negative

negative

negative

negative

Mode3

negative

negative

negative

negative

negative

Mode1

0

0

0

1

1

Mode2

0

0

0

1

1

Mode3

0

0

0

0.75

1

Mode1

negative

negative

negative

negative

negative

Mode2

negative

negative

negative

negative

negative

Mode3

negative

negative

negative

negative

negative

Mode1

0

0

1

1

1

Mode2

0

0

1

1

1

Mode3

0

0

1

1

1

Mode1

0

0

1

1

0.5

Mode2

0

0

1

1

0.75

Mode3

0

0

0.75

1

0.75

Mode1

negative

negative

negative

negative

negative

Mode2

negative

negative

negative

negative

negative

Mode3

negative

negative

negative

negative

negative

Mode1

0

0

0

0

0

Mode2

0

0

0

1

1

Mode3

0

0

0

0.75

0.75

Mode1

0

0

0

1

0.75

Mode2

0

0

0

1

0.75

Mode3

0

0

0

0.75

0.75

Source: AJC’s calculation based on ASEAN member states’ specific commitment tables under RCEP.

Note: Points are given where the specific commitments are clearly indicated.

20

Table 11. Hoekman index of trade liberalization for rail transport services, by subsector
and by mode, under AFAS 10th package (left figures) and RCEP (right figures)
11Ea

11Eb

11Ec

11Ed

11Ee

Country

Mode

Passenger
transportation

Freighttransportation

Pushing andtowing services

Maintenanceand repair ofrail transport
equipment

Supporting
services forrail transport
services

Brunei
Darussalam

Mode1

1 | negative

1 | negative

1 | negative

1 | negative

1 | negative

Cambodia

Indonesia

Lao PDR

Malaysia

MyanmarPhilippines

Singapore

Thailand

Viet Nam

Mode2

1 | negative

1 | negative

1 | negative

1 | negative

1 | negative

Mode3

0.75 | negative

0.75 | negative

0.75 | negative

0.75 | negative

0.75 | negative

Mode1

1|0

1|0

1|0

1|0

1|0

Mode2

1|0

1|0

1|0

1|0

1|0

Mode3

1|0

1|0

1|0

1|0

1|0

Mode1

1 | negative

1 | negative

1 | negative

1 | negative

1 | negative

Mode2

1 | negative

1 | negative

1 | negative

1 | negative

1 | negative

Mode3

0.5 | negative

0.5 | negative

0.5 | negative

0.5 | negative

0.5 | negative

Mode1

1|1

1|1

1|1

1|1

1|0

Mode2

1|1

1|1

1|1

1|1

1|0

Mode3

1 | 0.75

1 | 0.75

1 | 0.75

1 | 0.75

1|0

Mode1

0 | negative

0 | negative

0 | negative

0 | negative

0 | negative

Mode2

0 | negative

0 | negative

0 | negative

0 | negative

0 | negative

Mode3

0 | negative

0 | negative

0 | negative

0 | negative

0 | negative

Mode1

0|0

0|0

0|0

1|0

0|0

Mode2

0|0

0|0

0|0

1|0

0|0

Mode3

0|0

0|0

0|0

0|0

0|0

Mode1

0|0

0|0

0|0

0|0

0|0

Mode2

1|1

1|1

1|0

1|1

1|0

Mode3

0.75 | 10.75 | 10.75 | 00.75 | 10.75 | 0

Mode1

0 | negative

0 | negative

0 | negative

0 | negative

0 | negative

Mode2

1 | negative

1 | negative

1 | negative

1 | negative

0 | negative

Mode3

0 | negative

0 | negative

0 | negative

1 | negative

0 | negative

Mode1

0|0

0|0

0|0

1|0

1|1

Mode2

0|0

0|0

0|0

1|1

1|1

Mode3

0|0

0|0

0|0

0.75 | 0.75

0.75 | 0.75

Mode1

1|0

1|0

1|0

1|0

1|0

Mode2

1|1

1|1

1|0

1|0

1|0

Mode3

0.75 | 01|00.75 | 00.75 | 00.75 | 0

Source: AJC’s calculation based on ASEAN member states’ specific commitment tables under AFAS (10th package). See annex C
for reproduction and categorization of the tables.

21

Table 12. H oekman index of trade liberalization for road transport services, by subsector
and by mode, under AFAS 10th package (left figures) and RCEP (right figures)
11Fa

11Fb

11Fc

11Fd

11Fe

Country

Mode

Passenger
transportation

Freighttransportation

Rental ofcommercial
vehicles with
operator

Maintenanceand repair ofroad transport
equipment

Supporting
services forroad transport
services

Brunei
Darussalam

Mode1

0 | negative

0 | negative

0 | negative

0 | negative

0 | negative

Cambodia

Indonesia

Lao PDR

Malaysia

MyanmarPhilippines

Singapore

Thailand

Viet Nam

Mode2

0 | negative

0 | negative

0 | negative

0 | negative

0 | negative

Mode3

0 | negative

0 | negative

0 | negative

0 | negative

0 | negative

Mode1

1|1

1|1

1|1

1|1

1|1

Mode2

1|1

1|1

1|1

1|1

1|1

Mode3

1|1

1|1

1|1

1|1

1|1

Mode1

1 | negative

1 | negative

0 | negative

1 | negative

1 | negative

Mode2

1 | negative

1 | negative

0 | negative

1 | negative

1 | negative

Mode3

0.5 | negative

0.5 | negative

0 | negative

0.5 | negative

0.5 | negative

Mode1

1|0

1|1

1|0

1|0

1|0

Mode2

1|0

1|1

1|0

1|0

1|0

Mode3

0.75 | 00.75 | 0.75

0.75 | 0

1|0

1|0

Mode1

0 | negative

1 | negative

1 | negative

1 | negative

1 | negative

Mode2

1 | negative

1 | negative

1 | negative

1 | negative

1 | negative

Mode3

0.75 | negative

0.75 | negative

0 | negative

0.75 | negative

0.75 | negative

Mode1

1|0

1|0

0|0

1|0

1|0

Mode2

1|0

1|0

0|0

1|0

1|0

Mode3

0.75 | 00.75 | 00|00.75 | 00.75 | 0

Mode1

0|0

0|0

0 | 0.5

0|0

0|0

Mode2

1|1

1|1

1|1

1|1

1|1

Mode3

0.75 | 0.75

0.75 | 0.75

0.75 | 0.75

1|1

0.75 | 0.5

Mode1

0.5 | negative

0.5 | negative

0.5 | negative

1 | negative

1 | negative

Mode2

1 | negative

1 | negative

1 | negative

1 | negative

1 | negative

Mode3

1 | negative

1 | negative

1 | negative

1 | negative

1 | negative

Mode1

0|0

0|0

0|0

1|1

1|0

Mode2

1|0

1|1

1|1

1|1

1|0

Mode3

0.75 | 00.75 | 0.75

0.75 | 0.75

0.75 | 0.75

0.75 | 0

Mode1

0|0

1|0

0|0

1|0

0|0

Mode2

1|1

1|0

0|0

1|0

0|0

Mode3

1 | 0.75

0.75 | 00|00.75 | 00|0

Source: AJC’s calculation based on ASEAN member states’ specific commitment tables under AFAS (10th package).

22

Table 13 shows the maximum foreign ownership allowed in transport services under AFAS (10thpackage) and RCEP. Overall, some degree of convergence exists across ASEAN member statesin terms of the upper limit of foreign equity participation in transport services under the AFAS
10th package. Under AFAS, 70 per cent foreign equity upper bound is widespread in maritime, rail
and road services; as for air transport, no updated information is available. Under RCEP also a
70 per cent upper bound is common for maritime, rail and road transport services. Some of theupper bounds are lower under RCEP, possibly reflecting the rather conservative stance of ASEAN
members towards their dialogue partners.

Table 13. Maximum foreign ownership allowed in transport services under AFAS 10th
package (left figures) and RCEP (right figures)(per centage)
Country

Maritime transport

Air transport

Rail transport

Road transport

Brunei Darussalam

70 | negative- | negative70 | negative

not applied | negative

not applied | not applied- | not applied

Cambodia

not applied | not applied not applied | not appliedIndonesia

70 | negative- | negative70 | negative70 | negative

Lao PDR

not applied | not applied- | 51

not applied | not applied

100 | 100

Malaysia

70 | negative- | negative70 | negative70 | negative

Myanmar70 | 70- | not applied

not applied | not applied

70 | not applied

Philippines

70 | 70- | 40100 | not applied

100 | 51

Singapore70 | negative- | negative

not applied | negative

not applied | negative

Thailand70 | 50- | not applied

70 | not applied

70 | not applied

Viet Nam

70 | 100- | 100

70 | 49

70 | 51

Source: Specific commitment tables of each ASEAN member state under AFAS 10th package and RCEP.
Note: Ownership under partial commitments is also counted.

Table 14 shows the use of restrictions in each transport service under AFAS (10th package). The
four figures in the cell are for maritime transport | air transport | rail transport | road transport
services (from left to right).
Overall, maritime transport services tend to have fewer restrictions (more of “N”), presumably
because of the network-based and central role of maritime transport services for global value
chains.

23

Table 14. Use of restrictions in transport services under AFAS (10th package)
A or B or C
N = none/no= economic
limitationneeds test

D=
limitations
on the total
numberof natural
personsF=
E = measures
limitations
G=
U=
that restricton thegovernment Unbound (noor requireparticipation
approvalcommitment)
specific typeof foreignof legal entity
capitalBrunei Darussalam

30|-|25|0

0|-|0|00|-|0|0

1|-|0|06|-|5|00|-|0|0

1|-|0|30

Cambodia36|-|30|30

0|-|0|00|-|0|00|-|0|00|-|0|00|-|0|00|-|0|0Indonesia

24|-|20|16

0|-|0|06|-|5|4

11|-|10|8

6|-|5|40|-|0|00|-|0|6

Lao PDR36|-|30|27

0|-|0|00|-|0|00|-|0|30|-|0|20|-|0|00|-|0|0

Malaysia

19|-|0|22

0|-|0|0

3|-|0|3

3|-|0|3

3|-|0|40|-|0|014|-|30|4

Myanmar29|-|4|20

0|-|0|0

6|-|0|4

7|-|0|4

1|-|0|00|-|0|00|-|26|6

Philippines

23|-|15|16

0|-|0|00|-|0|0

1|-|0|04|-|5|4

2|-|0|07|-|10|10

Singapore27|-|10|27

0|-|0|00|-|0|00|-|0|0

3|-|0|0

4|-|0|02|-|20|3

Thailand29|-|10|190|-|0|0

5|-|2|5

7|-|2|5

5|-|2|50|-|0|04|-|18|6

Viet Nam24|-|26|140|-|0|02|-|0|0

5|-|4|2

5|-|4|20|-|0|0

7|-|0|14

Notes: The way commitments are recorded differs across ASEAN members, hence the diversity in the number of Ns (nolimitation); only those commitments defined under the GATS are counted; as for A, B and C (which all relate to economic
needs test) are jointly counted because they occur at the same time.
(-) Not available.
Source: Calculated from each country’s specific commitment table under AFAS (10th package).

Table 15 lists the use of restrictions in transport services under RCEP. As shown, no limitations forsome ASEAN members are notable (albeit smaller than under AFAS in number), while “Unbound”
is still dominant; the use of E (measures that restrict or require specific type of legal entity) andF (limitations on the participation of foreign capital) can be observed for some members. As
compared with AFAS (10th package), the number of restrictions A–G is larger under RCEP.

Table 15. Use of restrictions in transport services under RCEP
N = none/no A or B or C
limitation= economic
needs test

Brunei DarussalamD=limitations
on the total
numberof natural
persons

G=U=
E = measures F =that restrict limitations government Unbound (noapprovalcommitment)or requireon thespecific type participationof legal entity of foreign
capital

-

-

-

-

-

-

-

Cambodia

0|12|0|30

0|0|0|00|0|0|00|0|0|00|0|0|00|0|0|036|18|30|0

Indonesia

-

-

-

-

-

-

-

Lao PDR

24|11|20|5

0|0|4|00|0|0|00|0|0|10|1|0|1

0|0|4|0

12|18|6|24

Malaysia

-

-

-

-

-

-

-

Myanmar26|18|0|00|0|0|00|0|0|0

4|0|0|0

4|0|0|00|0|0|0

6|12|30|30

Philippines

23|13|12|16

0|0|0|2

1|0|0|0

2|4|0|0

3|0|0|3

2|1|0|2

8|12|18|9

Singapore

-

-

-

-

-

-

-

Thailand

19|6|8|110|0|0|00|0|0|20|0|0|0

2|2|2|30|0|0|0

15|22|20|16

Viet Nam

6|8|4|30|0|0|1

2|0|0|1

2|4|0|1

2|1|0|10|0|0|028|18|26|26

Notes: The way commitments are recorded differs across ASEAN members, hence the diversity in the number of Ns (nolimitation); only those commitments defined under the GATS are counted. The four figures in the cell are for maritime
transport | air transport | rail transport | road transport services (from left to right).
Source: Calculated from each country’s specific commitment table under RCEP.

24

The ASEAN Single Aviation Market (ASAM) (see box 2) is also expected to liberalize air travel
services from the first to the fifth freedom of the air among member states, allowing ASEAN
countries and airlines operating in the region to directly benefit from the global growth in air
travel and enhancing tourism, trade, investment and service flows among ASEAN member states.
Since 1 December 2008, restrictions on the third and fourth freedoms of the air between capitalcities 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. ASAM is supposed
to supersede existing unilateral, bilateral and multilateral air-transport-related agreements
among member states that are inconsistent with its provisions.
As another important ASEAN-wide agreement, 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 Liberalization of 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, higher-level freedom of the air has already been achieved:
The ninth freedom was achieved in 1997. Although 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 struggle to reach an agreement on a “win-win”(mutually beneficial) basis.

Box 2. Freedom of the air and ASEAN’s open skies agreement
Concerning air transport services, the International Civil Aviation Organization (ICAO) defines
the following 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 (also known 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 (also known 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 coming from 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 destined for 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).

25

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. ASEAN member states
have mostly 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 otherstates (also known 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 territoryof 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 a service that originates or terminates in the home country of the foreign carrier or (inconnection with the so-called seventh freedom of the air) outside the territory of the granting
state (also known 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 asa ninth freedom right or “stand-alone” cabotage).
ASAM, also known as the ASEAN open skies agreement/policy, emphasizes the key role of airtransport 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 endorsed
by ASEAN Transport Ministers. The creation of ASAM 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).

26

V. Impacts of Liberalization and Deregulation ofTransport Services on the Economy
Liberalization of trade in transport services can have a large impact on the ASEAN economy ingeneral (as discussed in the following section 1). Also, China’s One Belt One Road (or Belt andRoad) Initiative has a unique impact on the ASEAN region (hence a discussion in section 2); social
impacts are also considered (in section 3).

1. General impacts
Anderson and Wincoop (2014, pp. 691–692) report that trade costs worldwide 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 16 show, on average,
significant intermodal differences in transport time and costs in ASEAN. 9 The intermodal
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.

9

The information in table 16 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
associated with transport services.

27

Table 16. Average transport time and costs in ASEAN, by subsector, 2008–2009
Maritimetransport

Airtransport

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)

3.301

2.245

0

International transshipment time (hours)

14.97212.81313.224

Domestic transshipment cost ($)

190

690

0

International transshipment cost ($)

491

1,276

500

Source: Kumagai et al. (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.
According to Organisation for Economic Co-operation and Development’s (OECD’s) input-output
tables, ASEAN members provided $296.7 billion in outputs of infrastructure services in 2015,of which $107.8 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 that of the whole economy. Thus,
Indonesia is the largest, with $90.9 billion in output and $42.8 billion in value added, followed bySingapore and Thailand (table 17). The industry characteristics dictate the nature of economic
benefits: Transport services do not bring in large profits but can guarantee stable profits over
several years. Transport services account for only 5.6 per cent of total outputs in the ASEAN-wide
economy. The value added to output ratio in this services industry (0.36) is lower than the average
for all services industries (0.43).

Table 17. V alue added and output of transport servicesa compared with all industries,
2015 (millions of dollars and ratio)
Transportation and storage
Country

Value added

OutputRatio of value
added to output

All industries
Value added

OutputRatio of value
added to output

Brunei Darussalam

324

730

0.44

13,17422,921

0.57

Cambodia

855

1,612

0.53

16,98430,075

0.56

Indonesia

42,88490,9090.47

833,734

1,635,254

0.51

Malaysia

10,51232,422

0.32

292,523

763,255

0.38

Philippines

11,39722,7490.50

286,120555,126

0.52

Singapore

20,281

82,8690.24

275,238

770,936

0.36

Thailand

15,15745,6070.33

378,162

917,981

0.41

Viet Nam

6,453

19,8020.33

175,692

570,060

0.31

ASEAN total

107,863296,6990.36

2,271,628

5,265,607

0.43

Source: AJC, based on OECD Input-Output table database.
Note: The OECD database does not cover Lao PDR and Myanmar.
aRefers to transportation and storage.

As other industries in the economy require transport services, they are related to other industries
by a relatively high multiplier effect, as shown in figure 2. For example, Malaysia, Viet Nam,
Thailand and Brunei Darussalam exhibit a multiplier of about two. This means that one unit
increase of output in transport infrastructure brings in more than two units of output in otherPhilippines
11,39722,7490.50
Singapore
20,281
82,8690.24
Thailand
15,15745,6070.33
Viet Nam
6,453
19,8020.33
ASEAN total
107,863296,699
0.36
Source: AJC, based on OECD Input-Output table database.
28 The OECD database does not cover Lao PDR and Myanmar.
Note:a Refers to transportation and storage.

286,120275,238
378,162
175,692
2,271,628

555,126
770,936
917,981570,060
5,265,607

0.52
0.36
0.41
0.31
0.43

As other industries in the economy require transport services, they are related to otherindustries by a relatively high multiplier effect, as shown in figure 2. For example,
Malaysia, Viet Nam, Thailand and Brunei Darussalam exhibit a multiplier of about two.
industries.
This
means that one unit increase of output in transport infrastructure brings in morethan two units of output in other industries.
aFigure 2. Multiplierof transport
servicesin services
ASEAN,a 2015
Figureeffects
2. Multipliereffects oftransport
in ASEAN, 2015

Malaysia
Viet Nam
Thailand
Brunei DarussalamIndonesia
Singapore
Philippines
Cambodia
0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

Source:
AJC,based
based
OECD
input-output
table database.
Source: AJC,
onon
OECD
input-output
table database.
Note:
TheOECDOECD
databasenot cover
LaoandPDR
and Myanmar.
Note: The
database
doesdoesnot cover
Lao PDR
Myanmar.
aa Refers to transportation and storage.
Refers to transportation and storage.

The availability and affordability of other services (such as wholesale and retail services, which
requirephysical accessibility)
will alsoofincreasesignificantly
becauseof furtherand
trade
liberalization
Theavailability
and affordability
other services(such
as wholesaleretailservices,for transport services by foreign suppliers. Also, reductions in transport time and costs will bewhich require physical accessibility) will also increase significantly becauseof further
brought about by attracting world-class foreign suppliers of transport services.10

trade liberalization for transport services by foreign suppliers. Also, reductions intransport time and costs will be brought about by attracting world-class foreign

2. Impact of China’s One Belt, One
32 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
in transition. The initiative may help reduce transport costs, increase trade flows and open newmarkets for all countries involved, and promote the development of ASEAN member states. Table
18 lists the initiative’s projected infrastructure investments in connection with transport services.

10

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.

29

Table 18. O
 ne 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 andKalimantan ($6 billion); road and port infrastructure, Kalimantan ($1.1 billion)

Malaysia

Malaysia–China Kuantan Industrial Park, including deepwater container port, steel andaluminum 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); transportand logistics 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 South America Pledged investment to region ($250 billion); proposed transcontinental railway between
coasts of Brazil and Peru ($10 billion); highways and ports
EuropeUpgrade of Port of Piraeus, Greece ($260 million); Hungary–Serbia high-speed railway ($3billion); China–Spain cargo railway (12,875 km)

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

If the initiative is fully implemented, the expected benefits are likely to be broad based and to spanseveral areas and various countries and regions. Both ASEAN and non-ASEAN transport services
should benefit from this initiative.

3. Other social impacts
Congestion and environmental impacts might occur due to trade liberalization in transport
services. Under the concept of “sustainable transport”, ASEAN looks at the environmental aspect

30

of 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, which is a partner in several leading global
transport programmes in areas such as fuel economy, small particulate pollution andinfrastructure development through public-private partnerships, has a work programme aimed
at separating increased mobility from higher emissions.11. ASEAN member states could jointly
work on enabling sustainable transport, possibly through introducing low-carbon physicalinfrastructure development and implementing further liberalization of trade in transport services
for collaborating with efficient foreign suppliers of transport services.
Another anticipated social impact would be the emergence of a “straw effect”: larger capital areas
benefitting 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 transportand rail transport services smoothly at the subnational level, would also be needed.

11

United Nations Environment Programme’s site, http://www.unep.org/newyork/sustainable-transport.

31

VI. Conclusions and Policy Suggestions
This section makes general policy suggestions, based on the preceding empirical observationof trade in transport services and the degree of trade liberalization (in section 1); then a set of
workable policy suggestions are made in line with ASEAN’s existing policy frameworks.

1. General policy suggestions
ASEAN has been opening its services sector; however, it needs more services liberalization tofoster more positive economic impacts for 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. Thiscounterintuitive situation requires a remedy. In this respect, competition policy is important.
Each member state should be cautious about the down-side effects of liberalization, and all
policy recommendations should be made with due consideration. 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.
Second, transport services liberalization should contribute to reducing costs and barriers in
trading businesses and achieving higher economic efficiency directly12 and indirectly, in the formof promoting transport-related supporting services such as maintenance, repair and overhaul.
Third, given that transport services depend highly on geographic connectivity, AFAS should
be expanded to form the services liberalization part of RCEP. ASEAN-centred expansion andharmonization of free trade agreements will lead to the expansion of transport services networks
with ASEAN hubs.
As demonstrated previously, services firms in general have an important supporting function
for other business sectors. A narrowly defined benefit, most notably the surplus or deficit of
the services trade account, might not be the top priority, because even a services trade deficit
could attract manufacturing investment, thereby more than offsetting the negative figure of theservices trade account. Policymakers of ASEAN member states should bear this in mind clearly informulating policy on services trade liberalization under ASEAN-related free trade agreements.

12

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 and strengthen transportation safety. Among the agreements signed
were the Tenth Package of Commitments on Air Transport Services under AFAS and the Protocol to facilitate 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 Transport of 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 advance the Seamless
ASEAN Sky. All these agreements are expected to further promote ASEAN-wide liberalization of transportation
services.

32

2. Workable policy suggestions
The conventional input-output analysis lacks a spatial dimension in terms of the economic
impacts of reductions in transport costs. However, the geographic simulation model of theInstitute of Developing Economies (Kumagai et al. , 2013; Kumagai et al. , 2015) does have ageographic dimension: According to it, reduced transport costs would generally lead to a multipleequilibria situation, in which the positive economic impact of customs facilitation together withphysical infrastructure development can be spread across multiple countries in ASEAN (not justconcentrated in one or two).
When transport costs decrease 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 orareas. With this spatial impact in view, workable policy suggestions for promoting trade in services
should be geared towards a more integrated and decentralized ASEAN Economic Community. To
this end, spatial economic approaches could be utilized effectively.
Table 19 categorizes strategic goals for transport services in connection with promoting positive
factors conducive to multiple equilibria. Table 20 categorizes ASEAN-wide strategic goals fortransport services for mitigating negative factors that hinder multiple equilibria (for strategic goals
by transport mode, see annex E).

Table 19. Categorization of ASEAN-wide strategic goals for transport services to promote
positive factors conducive to multiple equilibria
ModeConsideration of global value
chainsConsideration of integrated
domestic markets

Maritime transport MT-1 Realize the ASEAN Single MT-3 Develop an efficient andShipping Market through the
integrated inland waterway
implementation of the agreed
transport network
strategies and measures
MT-2 Realize the roll-on/rolloff shipping network operationin ASEAN
MT-5 Formulate necessary
policy initiatives andrecommendations to develop
strategic maritime transport
logistics between ASEAN anddialogue partners
MT-6 Intensify regional
cooperation in improving
transport safety
MT-7 Strengthen ASEAN searchand rescue (SAR) cooperation
to ensure effective andcoordinated aeronautical andmaritime SAR operations in theregionMT-4 Enhance navigation
system and security measuresin line with international
standards

Consideration of knowledge
spillovers
No match33

Air transport

AT-1 Work towards a more
efficient and competitive
air transport market andstrengthen engagement with
dialogue partners, thereby
contributing to the economic
growth, competitiveness andshared prosperity of ASEAN,
while maintaining ASEAN
centrality

No match

No match

No match

LT-3 Enhance the use of“Intelligent Transport System”

AT-2 Advance safe skies in
ASEAN
AT-3 Enhance aviation security
in ASEAN in accordancewith ICAO Standards andRecommended Practices
AT-4 Enhance air traffic
management efficiency andcapacity through a seamless
ASEAN skyAT-5 Strengthen ASEAN SAR
cooperation to ensure effective
and coordinated aeronauticaland maritime SAR operations in
the region
Rail transport /Road transport

LT-1 Accomplish theimplementation of theSingapore–Kunming Rail Link
main lines and detailed designs
for the spur lines
LT-2 Completion of the ASEAN
Highway Network projectLT-6 Develop a database of
ASEAN land transport network

LT-4 Develop an effective
network of ASEAN dry ports
in accordance with existing
ASEAN initiatives such as theASEAN Highway Network andSingapore–Kunming Rail Link

LT-7 Intensify regional
cooperation in improving
transport safety

Source: AJC. See annex E for the full list of the goals.
Notes: MT denotes maritime transport, AT signifies air transport and LT signifies land transport. The figures indicate numberingof specific strategic goals.

Table 20. C ategorization of ASEAN-wide strategic goals for transport services for
mitigating negative factors hindering multiple equilibria
ModeConsideration of immobile
factors

Consideration ofConsideration of congestion
land rent and/or commuting

Maritime transport

No match

No match

No match

Air transport

No match

No match

No match

Rail transport

No match

No match

No match

Road transport

No match

No match

LT-5 Reduce 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

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

34

As specific policy targets under the ASEAN-wide strategic goals focus on establishing global value
chains, a need exists to formulate an ASEAN-wide policy that better considers integrated domestic
markets, knowledge spillovers (table 19), immobile factors, land rent and/or commuting andcongestion (table 20), all of which should be made as separate policy arrangements.
As hard infrastructure requires significant resources, international organizations, including theASEAN-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 19 and 20).
With a view to formulating concrete policy proposals for trade in transport services, the Third
Seminar on Promoting Services Trade in ASEAN Member States was held 11–13 September 2017
in Kuala Lumpur, Malaysia.13 The policy evaluation exercise in the seminar identified the following
points (for details of the exercise, see annex F): The “evaluation score” for national-level policy
formulation is the highest, followed by that at the neighbouring country-level (subregional level).
The score for ASEAN-wide policy formulation is the lowest. As a sector-specific observation,
the scores for rail transport services tend to be the lowest across the ASEAN member states.
Because infrastructural development for rail transport services takes time and costs a lot, policy
formulation—which is often complex—tends to be put off. All in all, the results indicate that a
serious need exists for consolidating ASEAN-wide policy coordination in terms of promoting tradein transport services (for concrete policy suggestions for each ASEAN member state, see annex E).
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 RCEP (signed in November 2020,
and to take effect accordingly), as ASEAN connectivity should expand across and beyond theASEAN region, to cover its dialogue partners (including Japan). As the outbreak of COVID-19 in2019 revealed the essentiality of transport services for ASEAN’s enhanced participation in global
value chains, regulatory efforts (through free trade agreements including AFAS and RCEP) andtechnological advancement (e.g. , more digitalization of transport-related facilities and services)
are needed for more seamless and traceable transport services.14 ASEAN member states andtheir dialogue partners including Japan could continue to work strenuously in this regard.

13

14

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.
In this connection, “COVID-19 Recovery Guidelines for Resilient and Sustainable International Road
Freight Transport Connectivity in ASEAN” (downloadable at https://asean.org/book/covid-19-recoveryguidelines-for-resilient-and-sustainable-international-road-freight-transport-connectivity-inasean/#:~:text=%EE%80%80ASEAN%20Comprehensive%20Recovery%20Framework%EE%80%81%3A%20
implementation%20plan%20Developing%20Shock,and%20Strengthen%20the%20Resilience%20of%20
Back%20to%20), released in February 2021, lists the following best practices for coping with COVID-19 throughcollaboration in transport services:• Increase in digitalization to limit human contact and paperwork for cross-border trade facilitation• Management of cross-border management (including the change of drivers at borders and establishment of
COVID-19 guidelines for foreign drivers)• Implementation of quarantine measures to control the spread of the virus• Requirement for freight transport sites to comply with preventative measures (e.g., wearing of masks, washinghands and checking temperatures)• Flexible supply chain management• Strong leadership and commitment in governments• Cross-sectoral and multi-ministerial support and collaboration.

35

References
Anderson, J. E. and E. van Wincoop. (2004). “Trade Costs”. Journal of Economic Literature 42(3):
91–751.
APEC Policy Support Unit. (2015). “Services in Global Value Chains: Manufacturing-Related
Services”. Asia-Pacific Economic Cooperation, Singapore.
ASEAN Secretariat. (2015). Kuala Lumpur Transport Strategic Plan (ASEAN Transport StrategicPlan) 2016–2025 . Jakarta: ASEAN Secretariat.
Fujita, M., P. Krugman and A. Venables. (1999). The Spatial Economy: Cities, Regions andInternational Trade . Cambridge, Massachusetts: MIT Press.
Hoekman, B. (1995). “Assessing the General Agreement on Trade in Services”. World Bank
Discussion Paper No. 307, World Bank, Washington, DC.
Kumagai, S., K. Hayakawa, I. Isono, K. Souknilanh and K. Tsubota. (2013) “Geographical Simulation
Analysis for Logistics Enhancement in Asia”. Economic Modelling 34: 145–153.
Kumagai, S., I. Isono, T. Gokan, K. Hayakawa, K. Tsubota and K. Souknilanh. (2015). “GeographicalSimulation Analysis by IDE-GSM”. In China (Shanghai) Pilot Free Trade Zone and the Futureof Asia . Chiba, Japan and Shanghai: IDE-JETRO (Japan External Trade Organization) and
Shanghai Academy of Social Sciences.
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.
WTO (World Health Organization). (2013). “WHO Global Status Report on Road Safety 2013:
Supporting a Decade of Action”. Available at https://apps.who.int/iris/handle/10665/78256.
WTO (World Health Organization). (2015), “Global Status Report on Road Safety 2015”. Available athttps://apps.who.int/iris/handle/10665/189242.

36

Annex A.
Specific Schedule of Commitments for “Maritime
Transportation” under AFAS (10th Package,
Signed in November 2018) by ASEAN Members
Legend for this annex (and annexes B–D):(1) means Mode 1 (cross-border supply of services), (2) means Mode 2 (consumption abroad), (3)means Mode 3 (commercial presence) and (4) means Mode 4 (movement of natural persons).
CPC (Central Product Classification) is a service-related classification, MA means market accessand NT means national treatment.
“Horizontal section” means across-industry (hence the word “horizontal”) commitments common
to all the sectors, the text of which is separate from specific commitments (unique to the sector atissue).
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 numerical quotas
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 requirement ofan economic needs test
D: limitations on the total number of natural persons who may be employed in a particularservice sector or whom a service supplier may employ, and who are necessary for, anddirectly related to, the supply of a specific service in the form of numerical quotas or therequirement of an economic needs test
E: measures that restrict or require specific types of legal entity or joint venture through which a
service supplier may supply a service
F: 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 statesin the sector “transport services”. In addition to these six types of market-access restrictions, thefollowing restriction is observed:
G: Government approval requirement.
Source of these annexes: https://wtocenter.vn/chuyen-de/212-asean-framework-agreement-onservices-afas
Notes: * after a CPC code means the sector is part of the wider service sector elsewhere indicated.

37** after a CPC code means the sector is part of the wider service sector indicated by the
CPC code. Unbound* means unbound due to lack of technical feasibility

Brunei Darussalam
Sector or
Subsector

Limitation onMarket Access

A–H Classificationof MA

Limitation
on National
Treatment

A–H Classificationof NT(1) None.

(1) N(1) None(1) N(2) None.

(2) N(2) None(2) N(3) Foreign equity (3) F70
participation shallnot exceed 70%.

(3) None(3) N

Freighttransportation(CPC 7212)(1) None.

(1) N(1) None(1) N(2) None.

(2) N(2) None(2) N(3) a) T he supply of (3) EF51/U
international
maritimetransport,
excludingvessels for the
carriage andtransportationof energy
goods,
foreign equity
participation
shall notexceed 51%.
b) T he supply ofinternational
maritimetransport ofenergy goods:
unbound.

(3) None(3) N

Freighttransportation(CPC 7212)(excepttransportation of
bulk liquid andgases)(1) None.

(1) N(1) None(1) N(2) None.

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

A. Maritime
Transport
Services
Passenger
transportation(CPC 7211)(3) a) T he supply of (3) EF70/U
international
maritimetransport,
excludingvessels for the
carriage andtransportationof energy
goods,
foreign equity
participation
shall notexceed 70%.
b) T he supply ofinternational
maritimetransport ofenergy goods:
unbound.

Additional
Commitments
The following
services at theport are madeavailable tointernational
maritimetransport
suppliers on
reasonable
and nondiscriminatory
terms andconditions:
1. Pilotage
2. T owing andtug assistance
3. P rovisioning
and watering
4. G arbagecollecting
5. N avigationaids
6. S hore-based
operational
services essential
to ship operations
includingcommunications,water and
electricalsupplies
7. E
 mergency
repairfacilities
8. A
 nchorage,
berth andberthing
services

38

Limitation on Market
AccessA–H Classification of Limitation on National A–H Classification ofMA
TreatmentNT(1) None.

(1) N(1) None(1) N(2) None.

(2) N(2) None(2) N(3) Foreign equity
participation shallnot exceed 51%.

(3) F51(3) None(3) N

Rental of vessels withcrew (CPC 7213)(except related totankers)(1) None.

(1) N(1) None(1) N(2) None.

(2) N(2) None(2) N(3) Foreign equity
participation shallnot exceed 70%.

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

Pushing and towing
services (CPC 7214)(excluding tow
services of oil rigs)(1) None.

(1) N(1) None(1) N(2) None.

(2) N(2) None(2) N(3) Foreign equity
participation shallnot exceed 70%.

(3) F70(3) None

(3) N

(1) N

(1) None

(1) N

(2) N

(2) None

(2) N

(1) N
(2) N
(3) F51(1) None(2) None(3) None

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

Sector or Subsector
Rental of vessels withcrew (CPC 7213)

Maintenance and(1) None.
repair of vessels (CPC
(2) None.
8868**)(1) None(2) None(3) Foreign equity
participation shallnot exceed 51%.
Sector or Subsector
Maritime agency
services (CPC 7454*)

Limitation on Market
AccessA–H Classification of Limitation on National A–H Classification ofMA
TreatmentNT(1) None.

(1) N(1) None(1) N(2) None.

(2) N(2) None(2) N(3) Foreign equity
participation shallnot exceed 51%.

(3) F51(3) None

(3) N

(1) N

(1) None

(1) N

(2) N

(2) None(2) N(3) F70(3) None(3) N(1) None.
Maritime agency
services (CPC 7454*)(2) None.
(only applies to vessel
salvage and refloating (3) Foreign equity
participation shallservices [CPC 74540]
not exceed 70%.
and tugboat services(except for pilotage)

Cambodia
Sector or Subsector

Limitation on Market
AccessInternational(1) Nonetransport (freight and(2) Nonepassengers) (CPC
7211, 7212), excluding (3) Nonecabotage

A–H Classification of Limitation on National A–H Classification ofMA
TreatmentNT(1) N(1) None

(1) N

(2) N

(2) None

(2) N

(3) N

(3) None

(3) N

39

Limitation on Market
AccessSector or Subsector

A–H Classification of Limitation on National A–H Classification ofMA
TreatmentNT

Rental vessels with
(1) Nonecrew (CPC 7213)(2) None
Maintenance andrepair of vessels (CPC (3) None
8868**)(1) N(1) None

(1) N

(2) N

(2) None

(2) N

(3) N

(3) None(3) N

Pushing and towing(1) None
services (CPC 7214)(2) None
Supporting services
for maritime transport (3) None
(CPC 745**)(1) N(1) None

(1) N

(2) N

(2) None

(2) N

(3) N

(3) None(3) N

Indonesia
Sector or
Subsector

Limitation onMarket Access

A–H Classificationof MA

Limitation
on National
Treatment

A–H Classificationof NT

Additional
Commitments

TRANSPORT SERVICES(1) None(1) N
A. Maritime
Transport(2) None(2) N
Services(3) Joint venture(3) EF70
Internationalwith foreign
passenger
equitytransport
participation up
excludingto 70%
cabotage (pillar 1)(CPC 7211)(1) None(1) N(2) None(2) N(3) As indicated in
the horizontal
section15(3) DETInternational
freight transport
excludingcabotage (CPC7212), except
mining productsInternational
freight transport
excludingcabotage (CPC
7212)

15

(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) As indicated in
the horizontal
section(3) DET(3) J oint venture with (3) EF60
foreign equity
participation up
to 60% or owner’s
representative**

1. Pilotage;
2. Towing and tug
assistance;
3. Provisioning andwater supply;
4. Garbage
collection andballast waste
disposal;
5. Port captain’s
services;
6. Navigation aids;
7. Shore-based
operational
servicesessential toship operation,
includingcommunication,water and
electricalsupply;8. Emergency
repair facilities;
and
9. Anchorage
and berthing
services.

The Income Tax Law provides that non-resident taxpayers will be subject to withholding tax of 20% if they derive
the following income from Indonesian source: (1) interest, (2) royalties, (3) dividends and (4) fees from service
performed in Indonesia. The tax rate can be changed due to tax treaty. Land Acquisition Undang-Undang Pokok
Agraria (Land Law) No. 5 of 1960 stipulates that no foreigners (juridical and natural persons) are allowed to own
land. However, a joint venture enterprise could hold the right for land use (Hak Guna Usaha) and building rights(Hak Guna Bangunan), and they may rent/lease land and property. Any juridical and natural persons should meet
professional qualification requirements.

40

Sector or Subsector
Rental of vessels
with crew (CPC 7213)
excluding cabotage

Limitation on Market
AccessA–H Classification of Limitation on National A–H Classification ofMA
TreatmentNT(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Joint venturecompany withforeign equity
participation up to70%(3) EF70(3) Crew must be
Indonesian

(3) D

(1) N

(1) None

(1) N

(2) N

(2) None(2) N(3) EF51(3) As indicated in thehorizontal section(3) DET(1) N(1) None

(1) N

(2) N

(2) None(2) N(3) EF70(3) The joint venturecompany should
utilize minimum
40% local content
in its products andservices(3) E

Maintenance and(1) None.
repair of vessels (CPC
(2) None.
8868)(3) Joint venture withforeign equity
participation
up to 51% foreastern part ofJava and easternpart of Indonesia,
with vessels
classification 500
DWT and above.
For other area
and capacity,
as indicated in
the horizontal
commitment.
(1) None
Maintenance andrepair of vessels (CPC
(2) None8868)(3) Joint venture with
For vessels
foreign equity
classification 10,000
participation up to
GT and above and for70%
eastern part of Javaand eastern part ofIndonesia
Sector or Subsector
Pushing and towing
services for maritime
transport (CPC 7214)(excluding cabotage)

Limitation on Market
AccessA–H Classification of Limitation on National A–H Classification ofMA
TreatmentNT(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Joint venturecompany withforeign equity
participation up to70%(3) EF70(3) As indicated in thehorizontal section(3) DET41

Limitation on Market
AccessA–H Classification of Limitation on National A–H Classification ofMA
Treatment
NT

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 withforeign equity
participation up to49%(3) EF49(3) As indicated in thehorizontal section(3) DET

Vessel salvage andrefloating services(CPC 7454) (excluding
cabotage)
Only in Padang (WestSumatera), Ambon(Maluku), Ternate(North Maluku) andJayapura (Papua)
waters(1) None.

(1) N(1) None(1) N(2) None.

(2) N(2) None(2) N(3) As indicated in thehorizontal section(3) DET

Sector or Subsector(3) Aggregate foreign (3) F49
equity participationis permitted up
to 70% classified
as up to 49%
through foreign
direct investment
and the remaining
percentages
through othermechanism.

Lao People’s Democratic Republic
Sector or Subsector

Limitation on Market
AccessA–H Classification of Limitation on National A–H Classification ofMA
TreatmentNT

11. TRANSPORT SERVICES
A. Maritime Transport (1) None
Services(2) None
Passenger(3) Nonetransportation (CPC7211)
Freight transportation(CPC 7212)
Rental of vessels withcrew (CPC 7213)
Pushing and towing
services (CPC 7214)
Maintenance andrepair of vessels (CPC
8868)
Vessels salvage andrefloating services (notapplicable in harbour)(CPC 7454)(1) N(1) None

(1) N

(2) N

(2) None

(2) N

(3) N

(3) None

(3) N

42

Malaysia
Sector or
Subsector
A. Maritime
Transport
Services
International
maritimetransportation
services,
excludingcabotage(CPC 7211)

Limitation
on National
Treatment

A–H Classificationof NT

Limitation onMarket Access

A–H Classificationof MA(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) DEF51
representative
office, regional
office or locallyincorporated
joint-venturecorporation
with Malaysian
individuals or
Malaysiancontrolled
corporations
or both.
Aggregate
foreignshareholdingin the jointventurecorporation
shall notexceed 51%.
Malaysianregistered
vessels:
To registera vessel in
Malaysia,
the following
conditions
must be met:a) Owner ofthat vessel
must be a
Malaysiancitizen or
corporation
incorporated
in Malaysiab) Majority
shareholding
to be held byMalaysiansc) Majority ofthe boardof directors
to be
Malaysiansd) Principal
place ofbusinessto be in
Malaysia.

Additional
Commitments
The following
services at theport are madeavailable tointernational
maritimetransport
suppliers on
reasonable
and nondiscriminatory
terms andconditions:
1) Pilotage
2) T owing and tug
assistance3) P rovisioning,fuelling andwatering
4)Garbage
collection andballast waste
disposal5) P ort captain’s
services6) N avigation aids
7) S hore-based
operational
servicesessential toship operations,
includingcommunications,water and
electricalsupplies
8) E mergency repair
facilities.
9) A nchorage, berthand berthing
services43

Sector or
Subsector

Limitation onMarket Access

A–H Classificationof MA(1) None.
(1) N
International
maritime(2) None.
(2) Ntransportation(3) Only through a (3) DEF70
services,
representative
excluding
office, regional
cabotage
office or locally(CPC 7211)
incorporated
Only vessels
joint-venture
registered under
corporation
the Malaysianwith MalaysianInternational Ship
individuals or
Registry
Malaysiancontrolled
corporations
or both.
Aggregate
foreignshareholdingin the jointventurecorporation
shall notexceed 70%.

Limitation
on National
Treatment

A–H Classificationof NT(1) None(1) N(2) None(2) N(3) None(3) N

Additional
Commitments

44

Sector or
Subsector
International
maritimetransportation
services,
excludingcabotage(CPC 7212)

Limitation onMarket Access

A–H Classificationof MA(1) None(1) N(2) None(2) N(3) Only through a (3) DEF70
representative
office, regional
office or locallyincorporated
joint-venturecorporation
with Malaysian
individuals or
Malaysiancontrolled
corporations
or both.
Aggregate
foreignshareholdingin the jointventurecorporation
shall notexceed 70%.
Malaysianregistered
vessels:
To registera vessel in
Malaysia,
the following
conditions
must be met:a) Owner ofthat vessel
must be a
Malaysiancitizen or
corporation
incorporated
in Malaysiab) Majority
shareholding
to be held byMalaysiansc) Majority ofthe boardof directors
to be
Malaysiansd) Principal
place ofbusinessto be in
Malaysia.

Limitation
on National
Treatment(1) None

A–H Classification
of NT
(1) N

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

Additional
Commitments
The following
services at theport are madeavailable tointernational
maritimetransport
suppliers on
reasonable
and nondiscriminatory
terms andconditions:
1) Pilotage
2) T owing and tug
assistance3) P rovisioning,fueling andwatering
4) G arbage
collection andballast waste
disposal5) P ort captain’s
services6) N avigation aids
7) S hore-based
operational
servicesessential toship operations,
includingcommunications,water and
electricalsupplies
8) E mergency repair
facilities
9) A nchorage, berthand berthing
services.

45

Sector or Subsector

Limitation on Market
Access(1) None
Rental of cargovessels with crew for(2) Noneinternational shipping(3) None(CPC 7213)
Rental and leasing
services of all types ofself-propelled seagoingvessels with operator,
such as passenger
vessels (except pleasurebath), tankers, bulk dry
cargo vessels and cargoand freight vessels.
These are limited toservices of hiring of avessel with crew undercharter party terms forvoyage or period of time.
Maintenance andrepair vessels (CPC
8868**)(Limited tobusinesses related
to maintenance andrepair of oceangoingvessels at anchor
or alongside andmaintenance andrepair of local vessels)

Sector or Subsector
Classificationsocieties16(Except for statutory
services for Malaysia
flag vessels)

16

A–H Classification of Limitation on National A–H Classification ofMA
TreatmentNT(1) N(1) None

(1) N

(2) N

(2) None

(2) N

(3) N

(3) None(3) N(1) Unbound*(1) U(1) Unbound*(1) U(2) None(2) N(2) None(2) N(3) None(3) N(3) DEF70(3) Only through a
representative office,regional office or
locally incorporated
joint venturecorporation with
Malaysian individuals
or Malaysiancontrolled corporations
or both. Foreign
equity allowable up to
maximum of 70%.
Limitation on Market
AccessA–H Classification of Limitation on National A–H Classification ofMA
TreatmentNT(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N(3) DEF51(3) Only through a
representative office,regional office or
locally incorporated
joint-venturecorporation with
Malaysian individuals
or Malaysiancontrolled
corporations orboth. Aggregate
foreign shareholdingin the joint-venturecorporation shall not
exceed 51%.

Provision of rules on construction and safety of ships and issuance of certificate should be in accordance withspecified rules stated in domestic legislation.
Exclude survey and classification of Malaysian flag vessels which requires specific authorization by the relevant
authority.

46

Myanmar
Sector or
Subsector

Limitation
on National
Treatment

A–H Classificationof NT

Limitation onMarket Access

A–H Classificationof MA

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) DETInternational
freight transport(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) DET

Limitation onMarket Access

A–H Classificationof MA

Rental of cargovessels with crewfor international
shipping (CPC7213/72130)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N(3) None(3) DET

Maintenance andrepair of 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) DET

Pushing andtowing services(CPC 7214)(1) None.

(1) N(1) None(1) N(2) None.

(2) N(2) None(2) N(3) None(3) DET

Sector or
Subsector(3) EF70(3) Joint venturewith a Myanmar
citizen or
enterprise up
to 70% equity ispermitted.

Limitation
on National
Treatment

A–H Classificationof NT

Additional
Commitments
Subject tohorizontal
commitments

Subject tohorizontal
commitments

Additional
Commitments
Subject tohorizontal
commitments

Subject tohorizontal
commitments
Subject tohorizontal
commitments47

Sector or
Subsector
Supporting
services formaritimetransport

Limitation
on National
Treatment

A–H Classificationof NT

Limitation onMarket Access

A–H Classificationof MA(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N(3) None(3) DET(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N

Additional
Commitments
Subject tohorizontal
commitments

Vessel salvage
and refloating
services (CPC7454) (notapplicable inharbour limit)
Classificationsocieties(3) None(3) DETPort and waterway (1) None.
(1) N
operation services(2) None.
(2) N(excluding cargo(3) EF70(3) Joint venture
handling) (CPCwith a Myanmar
7451)
citizen or
enterprise up
to 70% equity ispermitted.

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

Navigation aid
services (CPC7453)(1) None.

(1) N(1) None(1) N(2) None.

(2) N(2) None(2) N(3) None(3) DET(3) EF70(3) Joint venturewith a Myanmar
citizen or
enterprise up
to 70% equity ispermitted.

Subject tohorizontal
commitments
Subject tohorizontal
commitments

Subject tohorizontal
commitments

48

Philippines
Sector or Subsector

Limitation onMarket Access

A–H Classification of Limitation on National
MA
Treatment

A–H Classificationof NT

TRANSPORT SERVICES
All subsectors

Sector or Subsector(3) EF40(3) No franchise,certificate, or
any other formof authorisation
for the operationof a public utility
shall be granted
except to citizensof the Philippines
or to corporations
or associationsorganised under
the Laws of thePhilippines at least
60% of whose
capital is owned bysuch citizens.
Limitations listed
in the horizontal
section shall also
apply.
Limitation on Market
AccessA–H Classification of Limitation on National A–H Classification ofMA
TreatmentNT

A. Maritime Transport Services
International transport (1) None
passenger, except(2) Nonecabotage transport,(3) Noneand governmentowned cargoes(1) N(1) None

(1) N

(2) N

(2) None

(2) N

(3) N

(3) None(3) N

International transport (1) None(freight), except(2) Nonecabotage transport(3) Noneand governmentowned cargoes(1) N(1) None

(1) N

(2) N

(2) None

(2) N

(3) N

(3) None(3) N

Maritime cargo freight (1) None.
(1) N
services by foreign(2) None.
(2) N
registered shipping(3) None except that
(3) F70
companies (CPC
up to 70% foreign
7212**)
equity participationis allowed.

(1) None(1) N(2) None(2) N(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) G
(3) Bareboat charteror lease contract
subject to approvalby the Maritime
Industry Authority(MARINA)(3) None

(3) N

49

Sector or Subsector
Maintenance ofvessels

Repair of vessels

Sector or Subsector
Pushing and towing
services (CPC 72140)

Limitation on Market
AccessA–H Classification of Limitation on National A–H Classification ofMA
TreatmentNT(1) Unbound due tolack of technicalfeasibility.

(1) U(1) Unbound due tolack of technicalfeasibility(1) U(2) EG(2) Any repairs,
conversion or
drydocking ofPhilippine-ownedor registered
vessels are
required to be done
at domestic repair
yards registeredwith MARINA.

(2) None(2) N(3) None.

(3) N(3) None(3) N(1) Unbound due tolack of technicalfeasibility.

(1) U

(1) U
 nbound due tolack of technicalfeasibility(1) U(2) EG(2) Any repairs,
conversion or
drydocking ofPhilippine-ownedor registered
vessels are
required to be done
at domestic repair
yards registeredwith MARINA.

(2) None(2) N(3) F70(3) None except thatup to 70% foreign
equity participationis allowed.

(3) None(3) N

Limitation on Market
AccessA–H Classification of Limitation on National A–H Classification ofMA
TreatmentNT(1) Unbound.*(1) U(1) Unbound*(1) U(2) None.

(2) N(2) None(2) N(3) None(3) N(3) Up to 40% foreign (3) F40
equity participationis allowed.
Supporting services(1) Unbound*for maritime transport(2) None(CPC 745**)(3) None
Container yard anddepot services(1) U(1) Unbound*

(1) U

(2) N

(2) None

(2) N

(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) F40(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

50

Sector or Subsector
Other supporting
services for watertransport(CPC 74590)

Limitation on Market
AccessA–H Classification of Limitation on National A–H Classification ofMA
TreatmentNT(1) Unbound.*(1) U(1) Unbound*(1) U(2) None.

(2) N(2) None(2) N(3) None(3) N(3) Up to 40% foreign (3) F40
equity participationis allowed.

Classification societies (1) None.

(1) N(1) None(1) N(2) None.

(2) N(2) None(2) N(3) Unbound, except
up to 40% foreign
equity is allowed.

(3) U/F40(3) Unbound(3) U(1) None(1) N(2) None(2) N

Vessel and salvage(1) None.
(1) N
refloating services(2) None.
(2) N
provided in oceans and(3) Up to 70% foreign (3) F70
seas
equity participation(CPC 745**)is allowed.

(3) Subject to issuance (3) EGof permits andsupervision by
the Philippine
Coast Guard forthe salvage ofvessels and marine
salvage operation,
respectively, within
the maritime
jurisdiction of thePhilippines51

Singapore
Sector or
Subsector

Limitation onMarket Access

A–H Classificationof MA

Limitation
on National
Treatment

A–H Classificationof NT

Additional
Commitments

TRANSPORT SERVICES
A. Maritime Transport Services(1) None(1) N
International
maritime(2) None(2) N
passenger andfreight transport, (3) None, except on (3) G
the registration
excludingof Singapore
cabotageflag ships astransport
specified in(CPC 7211**, CPC
the Merchant
7212**)
Shipping Act(1) None(1) N(2) None(2) N(3) None, except on (3) G
the registrationof Singapore
flag ships as
specified in
the MerchantShipping Act

In accordancewith the decisions
made by the WTO
Negotiating Groupon Maritime
Transport
Services, where
the following
services are nototherwise coveredby the obligation
enshrined in (ii)of subparagraph(c) of Article XXVIIIof the General
Agreement on
Trade in Services
in Annex 1B to the
WTO Agreement,
they are madeto international
maritimetransport
operators on
reasonable
and nondiscriminatory
terms andconditions:- Pilotage- Towing and tug
assistance- Provisioning,fueling andwatering- Garbage
collection andballast waste
disposal- Port captain’s
services- Navigation aids
- Emergency
repair facilities- Anchorage- Other shorebased
operational
servicesessential toship operations,
includingcommunications,water and
electricalsupplies.

52

Sector or
Subsector

Limitation
on National
Treatment

A–H Classificationof NT

Limitation onMarket Access

A–H Classificationof MA

Rental of vessels
with crew (CPC7213)

(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Foreign equity (3) F70
allowable up toa maximum of70%(3) None(3) N

Maintenance andrepair of vessels(CPC 8868 **)(1) Unbound*(1) U(1) Unbound*(1) U(2) None(2) N(2) None(2) N(3) Foreign equity (3) F70
allowable up toa maximum of70%(3) None(3) N

International
towage(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(1) None(2) None(3) None

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

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

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

Sector or Subsector

Limitation on Market
AccessA–H Classification of Limitation on National A–H Classification ofMA
Treatment
NT

Maritime auxiliary(1) None
service: Classification(2) Nonesocieties,17 except for
statutory services for (3) None
Singapore flag ships(1) N(1) None

(1) N

(2) N

(2) None

(2) N

(3) N

(3) None(3) N

Vessel salvage and(1) None
refloating services (not(2) Noneapplicable in harbour)(3) Foreign equity(CPC 7454)
allowable up to a
maximum of 70%(1) N(1) None

(1) N

(2) N

(2) None(2) N(3) F70(3) None

(3) N

17

Additional
Commitments

Provision of rules on the construction and safety of ships and issuance of classification certificate in accordancewith the specified rules. Excludes survey and classification of Singapore flag vessels, which requires specificauthorization by the relevant authority.

53

Thailand
Sector or
Subsector

Limitation onMarket Access

A–H Classificationof MA

Limitation
on National
Treatment

A–H Classificationof NT

Additional
Commitments

TRANSPORT SERVICES
A. Maritime Transport Services(a) Passenger
transportation(CPC 7211
excludingcabotagetransport:
as definedat the end of
the Thailand
tables, 3.1)

18(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3a) Unbound(3b) None(3) U/N(3) A s indicated(3a) Uin 3.3 of the(3b) E
horizontal
sectiona) U nbound forestablishmentof juridical
person forthe purposeof operating afleet under thenational flagof Thailandb) O ther formsof commercial
presence forthe supply ofinternational
maritimetransport
services
except branch
offices: As
indicated in
the horizontal
sectionThe following
services at theport provided
by government
enterprises are
made available
to international
maritime transport
suppliers on
reasonable andnon- discriminatory
terms andconditions:
1. Pilotage18
2. T owing and tug
assistance
3. P rovisioning,fueling andwatering
4. G arbagecollecting andballast waste
disposal
5. P ort captain’s
service
6. N avigation aids
7. S hore-based
operational
servicesessential toship operations,water and
electricalsupplies
8. E mergency
repair facilities
9. A
 nchorage,
berth andberthing
services.
10. I nlandtransports
services(internal
waterways
transport
services, railtransport
services androad transport
services)

A Thai captain of a Thai ship that sails regularly in a certain compulsory pilotage area may be permitted to pilot
the ship in the area.

54

Sector or
Subsector

Limitation onMarket Access(a) Passenger(1) None.
transportation(2) None.
(excluding(3) As indicatedcabotagein 3.1 of thetransport:
horizontal
as defined
sectionat the end of(foreign equity
the Thailand
participationtables, 3.1):
must notInternational
exceed 70% of
sea cruises
the registered(cruise carrier
capital andwith more thanshall only
200,000 DWToperatecapacity)through joint(CPC Version
venture with
1.1: part ofa juridical
65119)
person of Thai
This subclassnationality).
does notincludetransportationof passengers
on coastalroute between
domestic ports.

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) DEF70(3) None(3) N

Additional
Commitments55

Sector or Subsector

Limitation on Market
AccessA–H Classification of Limitation on National A–H Classification ofMA
TreatmentNT(1) None.
(1) N(b) Freighttransportation(2) None.
(2) N(CPC 7212(3) DEF49
excluding cabotage (3) As indicatedin 3.3 of thetransport: as
horizontal section
defined at the end(a. Foreign equityof the Thailand
participation must
tables, 3.1)
not exceed 49%of the registeredcapital and b. The
number of foreign
shareholders mustbe less than half ofthe total numberof shareholdersof the company
concerned.)a) Unbound forestablishment ofjuridical person
for the purposeof operating afleet under thenational flag ofThailandb) Other formsof commercial
presence forthe supply ofinternational
maritimetransport
services (asdefined at theend of theThailand tables,3.2) except
branch offices:
As indicated in
the horizontal
section(1) None.

(1) N(2) None.

(2) N(3a) U(3a) Unbound.
(3b) N one other than (3b) ET- S hareholders ofThai maritime
transport
companies withownership ofThai flag vessels
may be granted
exemption or
reduced rates
of incometax leviable
on dividends
paid by suchcompanies-E xporters orimporters ofgoods shippedfrom or to
Thailand by
Thai flag vessel
may be entitledto special
deduction of not
more than 50%of the freightvalues or otherexpenses paidin the ordinary
courses ofcarriage of such
goods from their
net income forthe purposes ofcalculation ofincome tax.

56

Sector or Subsector

Limitation on Market
Access(1) None(b) Freighttransportation(2) None(excluding cabotage(3) As indicated in 3.1
transport: asof the horizontal
defined at the end
sectionof the Thailand
tables, 3.1):
Transoceanic watertransport servicesof refrigerated
freight byrefrigerator vessels(CPC Version 1.1:
part of 65121)

A–H Classification of Limitation on National A–H Classification ofMA
TreatmentNT(1) N(1) None

(1) N

(2) N

(2) None(2) N(3) DEF70(3) None(3) NThis subclassdoes not include
coastal andtransoceanic watertransportation ofchemical, liquidgas, any form ofgasses or any formof liquids cf. 65122(c) R ental of non-Thaiflag vessels withcrew (CPC 7213)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) As indicated in 3.1of the horizontal
section(3) DEF70(3) None(3) N(d) Maintenance andrepair of 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 3.1of the horizontal
section(3) DEF70(3) None

(3) N

57

Sector or Subsector

Limitation on Market
Access(e) International towing (1) None
(CPC 7214)(2) None

A–H Classification of Limitation on National A–H Classification ofMA
TreatmentNT(1) N(1) None

(1) N

(2) N

(2) None(2) N(3a) Unbound(3b) None(3a) U(3b) N(1) N(1) None

(1) N

(2) N

(2) None(2) N(3) DEF70(3) None(3) N(3) As indicated in 3.3 (3) DEF49
of the horizontal
sectiona) Unbound forestablishment ofjuridical person
for the purposeof operating afleet under thenational flag ofThailandb) Other formsof commercial
presence forthe supply ofinternational
towing service(as defined at
the end of theThailand tables,3.2) except
branch office:As indicated in
the horizontal
section(1) None
Towing andpushing services on(2) Nonetransoceanic waters(CPC Version 1.1: part (3) As indicated in 3.1of the horizontalof 65140) (excluding
sectioncabotage transport:
as defined at the endof the Thailand tables,
3.1)
Sector or Subsector

Limitation on Market
Access(f) Supporting services (1) None
for maritime(2) Nonetransport(3) As indicated in 3.3- Shore receptionof the horizontal
facilities
section(collection ofwaste/oily waterfrom ships)- Port captain’s
services attachedto specific foreign
vessels- Classificationsocieties- Vessel salvage
and refloating
services—not
applicable inharbour.

A–H Classification of Limitation on National A–H Classification ofMA
TreatmentNT(1) N(1) None

(1) N

(2) N

(2) None(2) N(3) DEF49(3) None

(3) N

58

Sector or Subsector

Limitation on Market
Access(1) None- Vessels salvage
and refloating(2) None
services (CPC 1.1(3) As indicated in 3.1
67630)of the horizontal
This subclass does notsectioninclude- 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 and othermarine searchand rescue
services:- - Police
services, cf.
91260- - Marine fireboat
services, cf.
91260- - Other publicorder and safety
affairs related
services, cf.
91290
Sector or Subsector

Limitation on Market
AccessCustom clearance(1) Unbound.
services (as defined at(2) None.
the end of the Thailand(3) As indicated in 3.3
tables, 3.5)of the horizontal
section:A customs broker
must be natural
person of Thainationality andmust obtain alicense fromthe Customs
Department.

A–H Classification of Limitation on National A–H Classification ofMA
TreatmentNT(1) N(1) None

(1) N

(2) N

(2) None(2) N(3) DEF70(3) None(3) N

A–H Classification of Limitation on National A–H Classification ofMA
TreatmentNT(1) U(1) Unbound.

(1) U

(2) N

(2) None.

(2) N(3) DEF49(3) A customs broker
must be natural
person of Thainationality andmust obtain alicense fromthe Customs
Department.

(3) DG59

Sector or Subsector

Limitation on Market
AccessLimitation on National
Treatment

I. HORIZONTAL COMMITMENTS
3) For 3.3, legal entity which
ALL SECTORS INCLUDED IN 3) Commercial presenceis owned or controlled by
THIS SCHEDULE
in sectors or subsectors
foreigner(s) must meetin this schedule is
the requirements aspermitted only throughstipulated by laws andlimited liability company
regulations regarding
which is registered inforeign investment.
Thailand or the othertype of legal entity asF or 3.1 and 3.2, priorspecified in the sectorto obtaining a license
specific commitments
or certificate, legalof which the company
entity which is owned oris incorporated andcontrolled by foreigner(s)registered, pursuant tomust meet the criteria
Thai laws and regulations
required by relevant
and will have to meet one
authorities.
of the following conditionIn establishing its
as indicated in the sectorcommercial presence,
specific commitments:
a legal entity which is
3.1 Foreign equity
owned or controlled byparticipation must notforeigner(s) must apply forexceed 70 per cent ofa certificate of businessthe registered capital
operation pursuant to aand shall only operate
treaty or obligation underthrough joint venture
section XI of the Foreign
with a juridical person
Business Act; Ministerialof Thai national; orRegulation Prescribing
Rules and procedures
3.2 Foreign equity
Pertaining to theparticipation must not
Application for a Foreign
exceed 51 per cent of
Business certificate B.E.
the registered capital
2546 (2003).
and shall only operate
through joint-venture
According to article XIV
with a juridical person
and XIV bis of GATS,of Thai national; orservice supplier isrequired to comply with
3.3 a. Foreign equity
section V of the Foreign
participation must
Business Act.
not exceed 49
per cent of theF or legal entity
registered capital;
incorporated pursuant
andto Thai laws andb. The number
regulations with foreignof foreign
equity participation notshareholders must
exceeding 49 per cent of
be less than half ofthe registered capital:
the total number of
None

Additional Commitments

60

Sector or Subsector

Limitation on Market
AccessLimitation on National
Treatment

Additional Commitments

shareholders of the company Unbound for the measuresconcerned.
pertaining to subsidies or
privileges, minimum capitalrequirements, acquisition
and usage of land, taxation
measures, and nationality
requirement.
3) T he board of directors,3) Acquisition and usage
including administrativeof land: according to theand executive position orLand Code of Thailand,
alike in the legal entity
foreign nationals or
must be of Thai nationaldomestic companies
and have permanent
which are deemed
domicile in Thailand.
foreigners are not allowed
The person or theto purchase or own land
representative of thein Thailand. However, theyjuridical person who apply
may lease land and own
for a license must be ofbuildings.
Thai national.
For 3.1 and 3.2, a naturalF or 3.1 and 3.2 a natural
person or juridical person
person or a juridicalof another member
person who receivethat acquires or gains
other special privileges
ownership of land, shallor incentives from Thaibe deemed ineligible
authorities other than
to exercise rights andthose provided under
privileges under this
this agreement may notagreement
claim benefits under thisagreement.

Notes (Thailand):
1. Where road, rail, inland waterways and related auxiliary services are not otherwise fully
covered in this schedule, a multimodal transport operator shall have the ability to rent or lease
trucks, railway carriages or barges and related equipment, for the purpose of inland forwardingof cargoes, or have access to and use of these forms of multimodal activities on reasonable andnon-discriminatory terms and conditions for the purpose of carrying out multimodal transport
operations.
2. “Reasonable and non-discriminatory terms and conditions” means, for the purpose ofmultimodal transport operations, the ability of multimodal transport operator to arrange forthe conveyance of its merchandise on a timely basis, including priority over other merchandisethat enters the port at a later date.
3. Definitions:3.1	“Cabotage”: For the purpose of this schedule means the transportation or towage ofpassengers or goods between a port or place located in Thai waters and another port orplace located in Thai waters.
3.2	“Other forms of commercial presence for the supply of international maritime transport
services”: For the purpose of this schedule means the ability for international maritime
transport service suppliers of other members to undertake locally the following:(a) M arketing and sales of maritime transport services through direct contact withcustomers, from quotation to invoicing, these services being those operated or offeredby the service supplier itself

61(b) T he procurement, on their own account of any transport and related services,
necessary for the supply of the integrated service(c) T he preparation of documentation concerning transport documents, customer
documents or other documents related to the origin and character of the goods
transported(d) The setting up of any business arrangements (including participation in the stockof a company) and the appointment of personnel recruited locally with any locallyestablished shipping agency: As indicated in the horizontal section.
3.3	“Multimodal transport operator” means the person on whose behalf the bill of lading/multimodal transport document, or any other document evidencing a contract ofmultimodal carriage of goods, is issued and who is responsible for the carriage of goods
pursuant to the contract of carriage.
3.4	“Freight forwarding services” means the activity consisting of organizing and monitoring
shipment operations on behalf of shippers, through the procurement of transport andrelated services, preparation of documentation and provision of business information.
3.5	“Customs clearance services” means activities consisting of carrying out on behalf ofanother party customs formalities concerning the import, export or through transport ofcargoes, whether this service is the main activities of the service supplier or a usual
3.6	“Maritime cargo handling services” means activities exercised by stevedore companies,
including terminal operators, but not including the direct activities of dockers when thisworkforce is organised independently of the stevedoring or terminal operator companies.
The activities include the organisation and supervision of- The loading/discharging of cargo to/from a ship
- The lashing/unlashing of cargo- The reception/delivery and safekeeping of cargoes before shipment or after discharge.
3.7	“Maritime agency services” means activities consisting of representing as an agent, thebusiness interests of one or more shipping lines, for the following purposes:- Marketing and sales of maritime transport and related services, from quotation to
invoicing, and issuing of bill of lading of the shipping lines; procurement and resale ofthe necessary related services, preparation of documentation and provision of businessinformation- Acting on behalf of the shipping lines organizing the call of a ship or taking over cargoes
when required.

62

Viet Nam
Sector or
Subsector
A. Maritime
Transport
Services
Passenger
transportation
less cabotage(CPC 7211)

19

20

Limitation
on National
Treatment

A–H Classificationof NT

Limitation onMarket Access

A–H Classificationof MA(1) None.

(1) N(1) None(1) N(2) None.

(2) N(2) None(2) N(3) None(3) N(3) DEF49(3) a) E stablishmentof registeredcompanies forthe purposeof operating afleet under thenational flag ofViet Nam:
Foreign service
suppliers are
permitted toestablish joint
ventures withforeign capital
contribution notexceeding 49%
of total legal
capital. Foreignseafarers may bepermitted to workin ships under
the national flagof Viet Nam (orregistered in VietNam) owned byjoint ventures inViet Nam but notexceeding 1/3 oftotal employeesof the ships.
The masteror first chief
executive must
be a Vietnamese
citizen.
b) O ther formsof commercial
presence forthe supply ofinternational
maritimetransport
services:20

Additional
Commitments
The following services
at the port are
made available tointernational maritime
transport suppliers on
reasonable and nondiscriminatory terms
and conditions:
1. Pilotage
2. Towing and tug
assistance3. Provisioning,fueling andwatering
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,
includingcommunications,water and
electrical supplies
8. Emergency repair
facilities
9. Anchorage, berthand berthing
services
10. Access tomaritime agency
services.19

With respect to the access to and use of maritime agency services mentioned in the Additional Commitments
column, where road, rail, inland waterways, coastal and inland shipping and related auxiliary services are
not otherwise fully covered in the schedule, a multimodal transport operator shall have the ability to access
Vietnamese maritime agency services suppliers to rent, hire or charter trucks, railway carriages or barges andrelated equipment, for the purpose of onward forwarding of international cargoes carried by sea.
“Other forms of commercial presence for the supply of international maritime transport services” means theability for foreign shipping companies to undertake locally activities that are related to the cargoes carriedby them and necessary for the supply of the integrated transport service to their customers, within which theinternational maritime transport constitutes a substantial element and is supplied by the concerned foreign
shipping company.

63J anuary 2012,
foreign shipping
companies canestablish 100%
foreign-invested
enterprises.
Since 11January 2007,
foreign-invested
enterprises are
only permitted
to carry out
activities from (1)to (5) as indicatedbelow:
1. M arketing andsales maritime
transport
services
through directcontact withcustomers,from quotation
to invoicing
2. A cting on
behalf of the
cargo owners
3. P rovisionof required
business
information
4. P reparation of
documentation
concerningtransport
documents
includingcustoms
documents,
or otherdocuments
related to theorigin andcharacter ofthe goods
transported
5. P rovisionof maritime
transport
services
includingcabotage
services byVietnamese
flagged vessels
for the supply
of integrated
transport
services.
S ince 11 January
2012, activities
from (6) to (7)shall be allowed.

64

6. A cting on
behalf of thecompany,organising thecall of the shipor taking overcargoes whenrequired
7. N egotiate andsign contracts
for road, rail
and inland
waterways
transportation
related tocargoestransported by
the company.
T he number ofjoint ventures byforeign shipping
companies will
be limited to fivecompanies since
11 January 2007.
Three additional
companies
will be allowed
every two years
thereafter. Since
11 January 2012,no limitation on
the number ofjoint ventures.
Sector or
Subsector
Freighttransportation
less cabotage(CPC 7212)

Limitation
on National
Treatment

A–H Classificationof NT

Limitation onMarket Access

A–H Classificationof MA(1) None.

(1) N(1) None(1) N(2) None.

(2) N(2) None(2) N(3) (text notprovided)(3) N(3) DEF70(3) a) E stablishmentof registeredcompanies forthe purposeof operating afleet under thenational flag ofViet Nam:
Foreign service
suppliers are
permitted toestablish joint
ventures withforeign capital
contribution notexceeding 70% of
total legal capital.
Foreign seafarers
may be permitted
to work on
ships under thenational flag of

Additional
Commitments
The following services
at the port are
made available tointernational maritime
transport suppliers on
reasonable and nondiscriminatory terms
and conditions:
1. Pilotage
2. Towing and tug
assistance3. Provisioning,fuelling andwatering
4. Garbage collecting
and ballast waste
disposal
5. Port captain’s/
harbour master’s
services
6. Navigation aids65V iet Nam (orregistered in VietNam) owned byjoint ventures inViet Nam but notexceeding 1/3 oftotal employeesof the ships.
The masteror first chief
executive mustbe Vietnamese
citizen.
b) O ther formsof commercial
presence forthe supply ofinternational
maritimetransport
services:21
Since 11January 2007,
foreign shipping
companies canestablish joint
ventures with
51% foreign
ownership., Since
11 January 2012,
foreign shipping
companies canestablish 100%
foreign-invested
enterprises. Since
11 January 2007,
foreign- invested
enterprises are
only permitted tocarry out activities
from (1) to (5) as
indicated below:
1. M
 arketing andsales maritime
transport
services throughdirect contact
with customers,from quotation
to invoicing

21

22

7. Shore-based
operational
services essential
to ship operations,
includingcommunications,water and
electrical supplies
8. Emergency
repair facilities
9. Anchorage, berthand berthing
services
10. Access tomaritime agency
services.22“Other forms of commercial presence for the supply of international maritime transport services” means theability for foreign shipping companies to undertake locally activities that are related to the cargoes carriedby them and necessary for the supply of the integrated transport service to their customers, within which theinternational maritime transport constitutes a substantial element and is supplied by the concerned foreign
shipping company.
With respect to the access to and use of maritime agency services mentioned in the Additional Commitments
column, where road, rail, inland waterways, coastal and inland shipping and related auxiliary services are
not otherwise fully covered in the schedule, a multimodal transport operator shall have the ability to access
Vietnamese maritime agency services suppliers to rent, hire or charter trucks, railway carriages or barges andrelated equipment, for the purpose of onward forwarding of international cargoes carried by sea.

66

2. A cting on behalfof the cargoowners
3. P rovisionof required
business
information
4. P reparation of
documentation
concerningtransport
documents,
includingcustoms
documents,
or otherdocuments
related to theorigin andcharacter ofthe goods
transported
5. P rovisionof maritime
transport
services
includingcabotage
services byVietnamese
flagged vessels
for the supply
of integrated
transport
services.
S ince 11 January
2012, activities
from (6) to (7)shall be allowed:
6. A cting on behalfof the company,
organising thecall of the shipor taking overcargoes whenrequired
7. N egotiate andsign contracts
for road, rail
and inland
waterways
transportation
related tocargoestransported by
the company.
T he number ofjoint ventures byforeign shipping
companies will
be limited to fivecompanies since
11 January 2007.
Three additional67c ompanies will beallowed every two
years thereafter.
Since 11 January
2012, no limitationon the number ofjoint ventures.
Sector or Subsector
Rental of vessels withcrew (CPC 7213)

Limitation on Market
AccessA–H Classification of Limitation on National A–H Classification ofMA
TreatmentNT(1) None.

(1) N(1) None(1) N(2) None.

(2) N(2) None(2) N(3) None, except as
indicated in themarket accesscolumn

(3) N

(1) N

(1) None

(1) N

(2) N

(2) None(2) N(3) EF70(3) None(3) N(3) None, except joint (3) EF70
venture with theforeign capital
contribution notexceeding 70%
shall be permitted.
Maintenance and(1) None.
repair of vessels (CPC
(2) None.
8868*)(3) Commercial
presence may bein the form of joint
venture. Maximum
share of foreign
equity in the joint
venture company
allowable up to
70%.

68

Limitation on Market
AccessA–H Classification of Limitation on National A–H Classification ofMA
Treatment
NT

Supporting Services
for Maritime
Transport
Customs clearance
services23(1) Unbound.*(1) U(1) Unbound*(1) U(2) None.

(2) N(2) None(2) N(3) None, except that (3) E
since 11 January
2007 joint ventureswith foreign capital
contribution notexceeding 51% canbe established.
After five years,
joint ventures canbe establishedwith no foreign
ownership
limitation.

(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) Commercial
presence may bein the form of joint
venture. Maximum
share of foreign
equity in the joint
venture company
is allowable up to49%.

(3) EF49(3) Unbound(3) U

Limitation on Market
AccessA–H Classification of Limitation on National A–H Classification ofMA
TreatmentNT(1) None.

(1) N(1) None(1) N(2) None.

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

Sector or Subsector

Sector or Subsector
Container station anddepot services24(3) None, except that (3) EF51
since 11 January
2007 joint ventureswith foreign capital
contribution notexceeding 51% can beestablished. Since 11
January 2014, none.

23

24“Customs clearance services” (alternatively “customs house brokers’ services”) means activities consistingin carrying out on behalf of another party customs formalities related to import, export or through transportof cargoes, whether this service is the main activity of the service provider or a usual complement of its main
activity.
“Container station and depot services” means activities consisting in storing containers, whether in port areas orinland, with a view to their stuffing/stripping, repairing and making them available for shipments.

69

Annex B.
Specific Schedule of Commitments for “AirTransportation” under AFAS (10th Package,
Signed in November 2018) by ASEAN Members
Note: Commitments are not listed as part of the main AFAS commitment tables; nor have theycome into force. This is because the 10th package for air transportation has been negotiatedseparately from the other sectors in a rather confidential manner. Therefore this paper does
not reproduce the specific commitment tables as an annex.

70Annex C.
Specific Schedule of Commitments for “RailTransportation” under AFAS (10th Package,
Signed in November 2018) by ASEAN Members
Brunei Darussalam
Limitation on Market
AccessA-H Classification of Limitation on National A-H Classification ofMA
TreatmentNT(1) None.

(1) N(1) None(1) N(2) None.

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

(3) N

(1) N

(1) None

(1) N

(2) N

(2) None(2) N(3) Foreign equity(3) F70
participation should
not exceed 70%.

(3) None(3) N(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Foreign equity(3) F70
participation should
not exceed 70%.

(3) None(3) N

Maintenance and(1) None.
(1) N
repair of rail transport(2) None.
(2) N
equipment(3) Foreign equity(3) F70(CPC 8868)
participation should
not exceed 70%.

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

Sector or Subsector
E. Rail Transport
Services
Passenger
transportation (CPC7111)(3) Foreign equity(3) F70
participation should
not exceed 70%.

Freight transportation (1) None.
(CPC 7112)(2) None.

Pushing and towing
services (CPC 7113)

Sector or Subsector
Supporting services
for rail transport
services(CPC 743)

Limitation on Market
AccessA–H Classification of Limitation on National A–H Classification ofMA
TreatmentNT(1) None.

(1) N(1) None(1) N(2) None.

(2) N(2) None(2) N(3) None(3) N(3) Foreign equity(3) F70
participation should
not exceed 70%.

71

Cambodia
E. Rail Transport Services
Limitation on Market
AccessA–H Classification of Limitation on National A–H Classification ofMA
TreatmentNT(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 (1) None
(CPC 7112), excluding(2) Nonecabotage(3) None(1) N(1) None

(1) N

(2) N

(2) None

(2) N

(3) N

(3) None(3) N

Pushing and towing
services (CPC 7113)(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 Classification of Limitation on National A–H Classification ofMA
Treatment
NT

Sector or Subsector
Passenger
transportation (CPC7111), excluding
cabotage

Sector or Subsector

Maintenance and(1) None
repair of rail transport(2) Noneequipment (CPC
(3) None
8868**)(1) N(1) None

(1) N

(2) N

(2) None

(2) N

(3) N

(3) None(3) N

Supporting services
for rail transport
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
AccessA–H Classification of Limitation on National A–H Classification ofMA
Treatment
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)EF49(3) a) Commercial
presence isonly possible
by establishingjoint venturecompany.
b) Maximum shareof foreign equity
participation(FEP) in the joint
venture railway
company could
be 49%(3) As indicated in thehorizontal Section(3) DET

Passenger
Transportation(CPC7111)
limited to Interurban
Passenger
Transportation (CPC71111)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Joint venturecompany withforeign equity
participation up to70%(3) EF70(3) Shall not operateon the existing
railways(3) E

Indonesia
Sector or Subsector

72Sector or Subsector

Limitation on Market
AccessFreight transportation (1) None.
(CPC 7112)(2) None.

A-H Classification of Limitation on National A–H Classification ofMA
TreatmentNT(1) N(1) None

(1) N

(2) N

(2) None(2) N(3) As indicated in thehorizontal section(3) DET(3) EF49(3) a) Commercial
presence isonly possible byestablishing joint
venture companyb) Maximum shareof foreign equity
participation in
the joint venture
railway company
could be 49%.
Freight transportation (1) None
(CPC 7112), limited(2) Noneto transportation offrozen or refrigerated (3) Joint venturecompany withgoods (CPC 71121)
foreign equity
participation up to
70%

(1) N

(1) None

(1) N

(2) N

(2) None(2) N(3) EF70(3) As indicated in thehorizontal section(3) DET

Pushing and towing
services (CPC 7113)(1) None(1) N(1) None(1) N

Supporting services
for rail transport
services (CPC 743)

(2) None(2) N(2) None(2) N(3) Joint venturecompany withforeign equity
participation up to70%(3) EF70(3) As indicated in thehorizontal section(3) DET

Limitation on Market
AccessA–H Classification of Limitation on National A–H Classification ofMA
Treatment
NT

Sector or Subsector

Maintenance and(1) None.
(1) N
repair of rail transport(2) None.
(2) N
equipment(3) EF49(3) a. Commercial(CPC 8868)
presence isonly possible
by establishingjoint venturecompany.
b. Maximum shareof foreign equity
participation in
the joint venturecompany is 49%.
c. Maximum shareof foreign equity
participationis allowed up
to 51% if thejoint venture isestablished with
PT. INKA (stateowned company).

(1) None(1) N(2) None(2) N(3) As indicated in thehorizontal section(3) DET73

Lao People’s Democratic Republic
Limitation on Market
AccessA–H Classification of Limitation on National A–H Classification ofMA
Treatment
NT

E. Rail Transport
Services(1) None(1) N(1) None(1) N

Passenger
transportation (CPC7111)(2) None(2) N(2) None(2) N(3) None(3) N(3) None(3) N

Limitation on Market
AccessA–H Classification of Limitation on National A–H Classification ofMA
TreatmentNT(1) None.

(1) N(1) None(1) N(2) None.

(2) N(2) None(2) N(3) F51(3) None(3) N(1) None(1) N(2) None(2) N(3) None(3) N

Sector or Subsector

Freight transportation(CPC 7112)
Pushing and towing
services (CPC 7113)
Maintenance andrepair of rail transport
equipment (CPC
8868**)
Supporting services
for rail transport
services (CPC 743)

Malaysia
Sector or Subsector
E. Rail Transport
Services

Maintenance and(3) Aggregate foreign
repair of rail transport
equity shall notequipment (CPC
exceed 51%.
88688**)(1) None(1) N
Maintenance andrepair of rail transport(2) None(2) N
equipment(3) DEF70
(3)

O
nly
througha(CPC 88688**)
locally incorporated
For greater certainty,
joint venture
exclude maintenancewith Malaysian
and repair operationsindividuals or
under the purview of
MalaysianTechnology Depository
controlled
Agency (TDA)
corporations or
Malaysia.
both. Aggregate
foreignshareholding shallnot exceed 70%.
Sector or Subsector

Limitation on Market
AccessSupporting services(1) Nonefor rail transport (CPC
(2) None743)(3) UnboundCovering left-luggage
services

A–H Classification of Limitation on National A–H Classification ofMA
TreatmentNT(1) N(1) None

(1) N

(2) N

(2) None

(2) N

(3) U

(3) Unbound

(3) U

74

Myanmar
Sector or
Subsector

Limitation
on National
Treatment

A–H Classificationof NT

Limitation onMarket Access

A–H Classificationof MA

E. Rail Transport
Services(1) None(1) N(1) None(1) N

Maintenanceand repair ofrail transport
equipment (CPC
8868**)(2) None(2) N(2) None(2) N(3) Unbound(3) U(3) Unbound(3) U

Additional
Commitments
Subject tohorizontal
commitments

Philippines
Sector or Subsector

Limitation on Market
AccessA–H Classification of Limitation on National A–H Classification ofMA
Treatment
NT

E. Rail Transport Services
a. Passenger(1) Unbound.*(1) U
transportation (CPC
(2) None.
(2) N
7111)
(3) Up to 40% foreign (3) F40
b. Freight
equity participationtransportation (CPC
is allowed.
7112)
e. Supporting services(CPC 743)
Railroad, street
railway, traction
railway(1) Unbound*(1) U(2) None(2) N(3) None

(3) N

(1) U
c. Pushing and towing (1) Unbound.*services(2) None.
(2) N
Towing services(3) Up to 70% foreign (3) F70
for defective
equity participation
trains provided
is allowed.
by designatedmaintenanceprovider (CPC
71130**)(1) Unbound*(1) U(2) None(2) N(3) None(3) N

Supporting services
for rail transport
services (CPC 743):
Sale and/or reloadingof tickets/cards (CPCver. 1.1, part of 67400)
d. Maintenanceand repair ofrail transport
equipment (CPC
8868**)(1) Unbound.*(1) U(1) Unbound*(1) U(2) None.

(2) N(2) None(2) N(3) Up to 100% foreign (3) F100
equity participationis allowed.

(3) None(3) N(1) Unbound.*(1) U(1) Unbound*(1) U(2) None.

(2) N(2) None(2) N(3) None(3) N(3) Up to 100% foreign (3) F100
equity participationis allowed.

75

Singapore
Sector or Subsector

Limitation on Market
AccessA–H Classification of Limitation on National A–H Classification ofMA
Treatment
NT

E. Rail Transport Services
Passenger
transportation (CPC7111)(1) Unbound(1) U(1) Unbound(1) U(2) None(2) N(2) None(2) N(3) Unbound(3) U(3) Unbound(3) U

Freight transportation (1) Unbound(CPC 7112)(2) None(1) U(1) Unbound

(1) U

(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) 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
AccessA–H Classification of Limitation on National A–H Classification ofMA
Treatment
NT

Pushing and towing
services (CPC 7113)

Maintenance andrepair of urban
and suburban railtransport equipment(CPC 8868 **)Thailand
Sector or Subsector

E. Rail Transport Services(1) None(d) Maintenanceand repair of(2) Nonerail transport
equipment on a fee (3) As indicated in 3.1of the horizontal
or contract basis
section(CPC 8868)(1) N(1) None

(1) N

(2) N

(2) None(2) N(3) DEF70(3) None(3) N(e) Supporting services (1) Nonefor rail transport(2) None
services:- Security services (3) As indicated in 3.3of the horizontal
at railway station
section(1) N(1) None

(1) N

(2) N

(2) None(2) N(3) DEF49(3) None(3) N- Railway car(1) Nonecleaning services(2) Noneunder the service
contract of railway (3) As indicated in 3.1of the horizontal
authority
section(1) N(1) None

(1) N

(2) N

(2) None(2) N(3) DEF70(3) None

(3) N

76

Viet Nam
Sector or Subsector
E. Rail Transport
Services
Passenger
transportation (CPC7111)

Limitation on Market
AccessA–H Classification of Limitation on National A–H Classification ofMA
TreatmentNT(1) None.

(1) N(1) None(1) N(2) None.

(2) N(2) None(2) N(3) None(3) N(3) EF70(3) Unbound, except
foreign suppliers are
permitted to provide
freight transport
services throughthe establishmentof joint ventureswith Vietnamese
partners inwhich the capital
contribution of theforeign side does notexceed 70% of thetotal legal capital.

Freight transportation (1) None
(CPC 7112)(2) None(1) N(1) None

(1) N

(2) N

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

Limitation on Market
AccessA–H Classification of Limitation on National A–H Classification ofMA
TreatmentNT(1) None.

(1) N(1) None(1) N(2) None.

(2) N(2) None(2) N(3) None, except as
indicated in themarket accesscolumn(3) N

Maintenance and(1) None.
(1) N
repair of rail transport(2) None.
(2) N
equipment (CPC 8868)(3) EF70(3) F oreign service
suppliers are
permitted toprovide services
only through theestablishment ofjoint ventures with
Vietnamese partners
in which the capital
contribution offoreign side does notexceed 70% of total
legal capital.

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

Supporting services
for rail transport
services (CPC 743)

Sector or Subsector
Pushing and towing
services (CPC 7113)(3) None, except that (3) EF70
joint ventures withforeign capital
contribution notexceeding 70% canbe established.

(1) None.

(1) N(1) None(1) N(2) None.

(2) N(2) None(2) N(3) None, except as
indicated in themarket accesscolumn(3) N(3) None, except that (3) EF70
joint ventures withforeign capital
contribution notexceeding 70% canbe established.

77

Annex D.
Specific Schedule of Commitments for “RoadTransportation” under AFAS (10th Package,
Signed in November 2018) by ASEAN Members
Brunei Darussalam
No listing

Cambodia
F. Road Transport Services
Sector or Subsector
Passenger
transportation (CPC7121, CPC 7122)
Freight transportation(CPC 7123)
Rental of commercial
vehicles with operator(CPC 7124)
Maintenance andrepair of roadtransport equipment(CPC 6112, CPC 8867)
Supporting services
for road transport
services (CPC 744)

Limitation on Market
AccessA–H Classification of Limitation on National A–H Classification ofMA
TreatmentNT(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N(3) None

(3) N

78

Indonesia
Sector or Subsector

Limitation on Market
AccessA–H Classification of Limitation on National A–H Classification ofMA
TreatmentNT

F. Road Transport Services
Passenger
transportation byhuman- or animaldrawn vehicles (CPC71224)(1) None.

(1) N(1) None(1) N(2) None.

(2) N(2) None(2) N(3) Maximum shareof foreign equity
participation in
the joint venturecompany is 70%.

(3) EF70(3) As indicated in thehorizontal section
In suburbs of theisland of Sulawesi,
Moluccas andPapua(3) DET(1) N(1) None

(1) N

(2) N

(2) None(2) N(3) EF49(3) As indicated in thehorizontal section(3) DET

Freight transportation (1) None.
by human- or animal(2) None.
drawn vehicle (CPC(3) Maximum share
71236)
of foreign equity
participation 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) DET

Supporting services
for road transportterminal (CPC 744)

(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Joint venturecompany withforeign equity
participation up to49%(3) EF49(3) As indicated in thehorizontal section(3) DET

Freight transportation (1) None
(CPC 7123)(2) None(3) Joint venturecompany withforeign equity
participation up to
49%

79

Sector or Subsector

Limitation on Market
AccessParking services (CPC (1) None.
74430)(2) None.

Maintenance andrepair of roadtransport equipment(CPC 8867)

A–H Classification of Limitation on National A–H Classification ofMA
TreatmentNT(1) N(1) None

(1) N

(2) N

(2) None(2) N(3) Maximum shareof foreign equity
participation in
the joint venturecompany is 70%.

(3) EF70(3) As indicated in the (3) DET
horizontal section
Only in suburbs in
Sulawesi, Moluccas
and Papua(1) None.

(1) N(1) None(1) N(2) None.

(2) N(2) None(2) N(3) As indicated in thehorizontal section(3) DET(3) EF49(3) a. Commercial
presence isonly possible
by establishingjoint venturecompany.
b. Maximum shareof foreign equity
participation in
the joint venturecompany is 49%.

Lao People’s Democratic Republic
Limitation on Market
AccessA–H Classification of Limitation on National A–H Classification ofMA
TreatmentNT(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N(3) None, but driver
has to be Lao(3) E

Freight transportation (1) None.
(CPC 7123)(2) None.

(1) N(1) None

(1) N

(2) N

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

Sector or Subsector
F. Road Transport
Services
Passenger
transportation
proposed- taxi (CPC71221)(3) EF100/49(3) Foreign equity
participation is100% for domestictransportation.
For cross-bordertransportation joint
venture with local
service provider(s)is required, withforeign equity
limited to 49%.
Rental of commercial (1) None.
(1) N
vehicles with operator(2) None.
(2) N(CPC 7124 )(3) EF70(3) Joint venturewith Lao services
providers is
required. Foreign
equity participation
is limited to 70%.

80

Limitation on Market
AccessA–H Classification of Limitation on National A–H Classification ofMA
Treatment
NT

Maintenance andrepair of roadtransport equipment(CPC 6112, CPC 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

Supporting services
for road transport
services (CPC 744)
- Bus station service- Parking service(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 Classification of Limitation on National A–H Classification ofMA
Treatment
NT

Sector or Subsector

Malaysia
Sector or Subsector(1) NoneF. Supporting
services for(2) Nonemaritime transport(3) None
Vessel salvage andrefloating services (notapplicable in harbour)(CPC 74540)(1) N(1) None

(1) N

(2) N

(2) None

(2) N

(3) N

(3) None(3) N(Vessel salvage
services provided on
ocean and seas. Suchservices consist of
recovering distressedand sunk vessels
and their cargoes,including the raisingof sunken vessels, therighting of capsized
vessels and therefloating of stranded
vessels.)
Sector or Subsector
Passenger
transportation (CPC7111)

Limitation on Market
AccessA–H Classification of Limitation on National A–H Classification ofMA
TreatmentNT(1) None.

(1) N(1) None(1) N(2) None.

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

(3) N

(1) N

(1) None

(1) N

(2) N

(2) None(2) N(3) Foreign equity(3) F70
participation should
not exceed 70%.

(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) Foreign equity(3) F70
participation should
not exceed 70%.

Freight transportation (1) None.
(CPC 7112)(2) None.

Pushing or towing
services (CPC 7113)(3) Foreign equity(3) F70
participation should
not exceed 70%.

81

Sector or Subsector
F. Road Transport
Services

Limitation on Market
AccessA–H Classification of Limitation on National A–H Classification ofMA
TreatmentNT(1) None.

(1) N(1) None(1) N(2) None.
(2) N
Freight transportation (3) Foreign equity shall (3) F70(CPC 7123)
not exceed 70%.
Covering private
carriers (Class C
Licence)(2) None(2) N(3) None(3) N

Passenger
transportation byhuman- or animaldrawn vehicles(1) Unbound due tolack of technicalfeasibility.

(1) U(1) Unbound due tolack of technicalfeasibility(1) U(2) None.

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

(3) N

(1) N

(1) None

(1) N

(2) N

(2) None

(2) N

(3) U

(3) Unbound(3) U(3) DEF70(3) Only through a
locally incorporated
joint venturewith Malaysian
individuals or
Malaysiancontrolled
corporations orboth. Aggregate
foreignshareholding shallnot exceed 70%.
Rental of commercial (1) Nonevehicles with operator(2) None(CPC 71240)(3) Unbound82

Limitation on Market
AccessA–H Classification of Limitation on National A–H Classification ofMA
Treatment
NT

Maintenance andrepair services notelsewhere classifiedof trailers and semitrailers on a fee orcontract basis (CPC
88670*)(1) None.

(1) N(1) None(1) N(2) None.

(2) N(2) None(2) N(3) DEF70(3) Only through a
locally incorporated
joint venturewith Malaysian
individuals or
Malaysian-controlled
corporations or both.
Aggregate foreign
shareholding shall not
exceed 70%.

(3) None(3) N

Private services
provided by carparks, parking lots
and parking garages,
whether roofed or not(CPC 74430)(1) None.

(1) N(1) None(1) N(2) None.

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

Sector or Subsector(3) DEF70(3) None, except
only through a
representative
office, regional
office or locallyincorporated jointventure corporation
with Malaysian
individuals or
Malaysiancontrolled
corporations orboth. Aggregate
foreignshareholding in
the joint venturecorporation shallnot exceed 70%.

Myanmar
Sector or
Subsector

Limitation onMarket Access

A–H Classificationof MA

Limitation
on National
Treatment

A–H Classificationof NT

F. Road Transport (1) None
Services(2) None
Passenger(3) Nonetransportation(excluding
cabotage)(1) N(1) None

(1) N

(2) N

(2) None

(2) N

(3) N

(3) None(3) DET

Freighttransportation(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) DET

Additional
Commitments
Subject tohorizontal
commitments

Subject tohorizontal
commitments83

Sector or
Subsector

Limitation
on National
Treatment

A–H Classificationof NT

Limitation onMarket Access

A–H Classificationof MA(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N(3) None(3) DET

Supporting(1) None
services for road(2) Nonetransport services(3) None(CPC 744)(1) N(1) None

(1) N

(2) N

(2) None

(2) N

(3) N

(3) None(3) DET

Maintenanceand repair ofroad transport
equipment(CPC 6112, CPC
8867)

Additional
Commitments
Subject tohorizontal
commitments

Subject tohorizontal
commitments

Philippines
Sector or Subsector

Limitation on Market
AccessA–H Classification of Limitation on National A–H Classification ofMA
TreatmentNT

F. Road Transport Services(1) Unbound.*(1) U
a. Passenger
transportation (CPC
(2) None.
(2) N
7121, CPC 7122)(3) Up to 40% foreign (3) F40
b. Freight
equity participationtransportation (CPC
is allowed.
7123)
c. Rental ofcommercial vehicles
with operator (CPC7124)(1) Unbound*(1) U(2) None(2) N(3) None(3) N

Passenger
transportation (CPC7121)
Airport limousinetransportation withdriver and ancillary toa hotel (i.e. , operated
and owned by the hotel
for the benefit of its
guests/clients but notfor hire) (CPC 71214**)(1) Unbound.*(1) U(1) Unbound*(1) U(2) None.

(2) N(2) None(2) N(3) None(3) N(1) Unbound*(1) U(2) None(2) N(3) None(3) N(3) Up to 100% foreign (3) F100
equity participationis allowed.

(1) U
Freight transportation (1) Unbound.*(CPC 7123)(2) None.
(2) N
Transportation of(3) Up to 100% foreign (3) F100
refrigerated goods inequity participation
specialty refrigerated
is allowed.
trucks operated bybusiness owners
for exclusive use
in the course of
their business (CPC
71231**)

84

Limitation on Market
AccessA–H Classification of Limitation on National A–H Classification ofMA
TreatmentNT(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 (1) Unbound.*(1) U
maintenance services(2) None.
(2) N
limited to vehicle
(3)

U
p
to
70%
foreign(3) F70
laundry and car-wash
equity participation
services (CPC 6112**)is allowed.

(1) Unbound*(1) U(2) None(2) N(3) None(3) N

e. Supporting services (1) Unbound.*(1) U
for road transport(2) None.
(2) N
services(3) Up to 70% foreign (3) F70
Parking services (CPC
equity participation
7443
is allowed.

(1) Unbound*(1) U(2) None(2) N(3) None(3) N

Sector or Subsectord. Maintenanceand repair ofroad transport
equipment (CPC
8867)

85

Singapore
Sector or Subsector

Limitation on Market
AccessA–H Classification of Limitation on National A–H Classification ofMA
TreatmentNT

F. Road Transport Services(1) Unbound*•R ental services ofcars with operators(2) None(CPC 71222)(3) None• Rental services ofbuses and coacheswith operators (CPC71223)• Rental servicesof commercial
freight vehicles with
operators (CPC71240)(1) U(1) None

(1) N

(2) N

(2) None

(2) N

(3) N

(3) None(3) N(1) Unbound*• Freight (road)transportation of(2) Nonea) Refrigerated
goods (CPC 71231) (3) Noneb) Liquids or gasses(CPC 71232)c) Containerized
freight (CPC
71233)d) Furniture(CPC71234)(1) U(1) None

(1) N

(2) N

(2) None

(2) N

(3) N

(3) None(3) N(1) None• Maintenance andrepair services of(2) None
motor vehicles (CPC
(3) None
61120)• Maintenance andrepair servicesof parts of motor
vehicles (CPC 88 **)(1) N(1) None

(1) N

(2) N

(2) None

(2) N

(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

86

Thailand
Sector or Subsector

Limitation on Market
AccessA–H Classification of Limitation on National A–H Classification ofMA
TreatmentNT

F. Road Transport Services: Other non-scheduled passenger transportation(1) Unbound.
(1) U(a) Passenger
transportation:(2) None.
(2) N- Rental services of(3) As indicated in 3.3 (3) DEF49
passenger carsof the horizontal
with operator
section and not(CPC 71222)
less than half of the- Rental services
board of directorsof buses andof the company
coaches withmust have Thai
operator (CPC
nationality.
71223)(1) Unbound(1) U(2) None(2) N(3) None(3) N(b) Freight(1) Unbound.*(1) U
transportation(2) None.
(2) N
only for frozen(3) DEF49(3)
As
indicatedin
3.3
or refrigeratedof the horizontal
goods, bulk liquids
section and notor gasses andless than half of thecontainerisedboard of directors
freightof the company(CPC 71231–71233)
must have Thainationality.

(1) Unbound(1) U(2) None(2) N(3) None(3) N

Road transport
services of freight byhuman- or animaldrawn vehicles (CPC
Version 1.1: 64334)(1) Unbound*(1) U(1) Unbound*(1) U(2) None(2) N(2) None(2) N(3) As indicated in 3.1of the horizontal
section(3) DEF70(3) None

(3) N

87

Limitation on Market
AccessA–H Classification of Limitation on National A–H Classification ofMA
TreatmentNT(d) Maintenanceand repair ofroad transport
equipment:
Automobile
emergency roadservices(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) As indicated in 3.3of the horizontal
section(3) DEF49(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 3.1of the horizontal
section(3) DEF70(3) None(3) N(e) Supporting services (1) Nonefor road transport(2) None
services:(3) As indicated in 3.3
Parking servicesof the horizontal(CPC 7443)
section(1) N(1) None

(1) N

(2) N

(2) None(2) N(3) DEF49(3) None(3) N(1) None
Parking services
for motor vehicles,(2) None
motorcycles and(3) As indicated in 3.1
bicycles provided byof the horizontal
car parks, parking lots
sectionand parking garages,
whether roofed or not(part of CPC Version
1.1: 67530)(1) N(1) None

(1) N

(2) N

(2) None(2) N(3) DEF70(3) None(3) N

Sector or Subsector

88Viet Nam
Limitation on Market
AccessA–H Classification of Limitation on National A–H Classification ofNT
Treatment
NT

F. Road Transport
Services(1) Unbound.

(1) U(1) Unbound.

(1) U

Passenger
transportation (CPC7121, CPC 7122)(2) None.

(2) N(2) None(2) N(3) S ince 11 January(3) N
2007, foreign service
suppliers are
permitted to provide
passenger and freighttransport services
through businesscooperation contracts
or joint ventures withthe capital contributionof the foreign side notexceeding 49%. Since
11 January 20140,
subject to the needsof the market, joint
ventures with foreign
capital contribution notexceeding 51% may beestablished to provide
freight transport
services.
100% of joint venture’s
drivers shall beVietnamese citizens.

(3) None

(3) N

(1) N

(1) None

(1) N

(2) N

(2) None

(2) N

(3) N
 one, except as
indicated in themarket accesscolumn(3) N

Sector or Subsector

Freight transportation (1) None.
(CPC 7123)(2) None.

(3) F oreign service(3) EF70
suppliers are
permitted to provide
freight transport
services only throughthe establishment ofjoint ventures with
Vietnamese partners
in which the capital
contribution of theforeign side notexceeding 70% of total
legal capital. 100% of
joint venture’s drivers
shall be Vietnamese
citizens.
Sector or Subsector
Maintenance andrepair of roadtransport equipment(CPC 6112, CPC 8867)

Limitation on Market
AccessA–H Classification of Limitation on National A–H Classification ofMA
TreatmentNT(1) None.

(1) N(1) None(1) N(2) None.

(2) N(2) None(2) N(3) None, except as
indicated in themarket accesscolumn(3) N(3) None, except that (3) EF51
joint ventures withforeign capital
contribution notexceeding 51% canbe established.

89Annex E.
Strategic Goals for Transport Services 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, regional maritime transport
cooperation and effective implementation of the International Maritime Organization 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 post-2015 is thedevelopment of strategic maritime logistic corridors. The specific goals and actions for maritime
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 indicators on port efficiency, e.g., cargohandling and ship turnaround time		MT-1.1.1	Monitor and, when necessary, review the key performance indicators to
improve efficiency of ASEAN ports

MT-1.2	Conduct a pilot project on the operationalization of the ASEAN Single ShippingMarket including in-depth cost and benefit 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 fornear coastal voyages issued by ASEAN member states		MT-1.3.1 	Adopt the mechanism to mutually recognize the certificates ofcompetency for near coastal voyages issued by ASEAN member states

MT-1.4 	Enhance the implementation of electronic data interchange in ASEAN ports		MT-1.4.1 	Support and enhance electronic data interchange in ASEAN and study
the possibility for harmonizationMT-1.5 	Establish a national coordinating body, where applicable, to oversee the port andland transport infrastructure development that will work on a national masterplan for port and land transport development for better port access		

MT-1.5.1 	Include projects to improve accessibility of ASEAN’s ports into relevant
master plans developed 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 theircapacities

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

90

		

MT-1.8.2 Develop cruise tourist attractions and cruise and onshore itinerary		

MT-1.8.3 Improve cruise infrastructure		MT-1.8.4 	Enhance quality of cruise tourism through training and education
programmes and better 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 roll-on/roll-off (RO-RO) shipping network operation in ASEAN
MT-2.1	Conduct dialogue among concerned ASEAN member states for the preparation of
RO-RO routes operation		MT-2.1.1 	Improve institutional arrangements (e.g., customs, immigration andquarantine; road administrations) to enable smooth operationalizationof the RO-RO route		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 network
MT-3.1	Conduct a study and formulate a regional plan for developing inland waterway
transport in ASEAN
		

MT-3.1.1 	Complete the Development Study for Inland Improvement project inThailand and the CLMV countries [Cambodia, Lao People’s Democratic
Republic, Myanmar and Viet Nam]

MT-3.2 Further improve linkage among countries in the Mekong region		MT-3.2.1 Conduct relevant research and workshops

MT-3.3 	Implement the suggestions/projects proposed by the aforementioned
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 ratification of International Maritime Organization Conventions by
ASEAN member states		

MT-4.1.2 	Develop guidelines for ASEAN member states on maritime navigational
and passenger safety		MT-4.1.3 	I m p r o v e p o r t s e c u r i t y i n A S E A N m e m b e r s t a t e s t h r o u g himplementation of programmes of the Port Security Group

MT-4.2 Development of vessel traffic services (VTS) operators’ capacity		MT-4.2.1 	Establish ASEAN regional training centres for VTS operators

91

		

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 best practices on the improvement of the quality and efficiencyof the safety, health and environmental management for selected ports		MT-4.3.2	Improve the quality and efficiency of the safety, health andenvironmental 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 research 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 the 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 the ASEAN-China Maritime Transport Agreement		MT-5.3.2 	Explore the possibilities of concluding maritime transport agreementswith other ASEAN dialogue partners

MT-6 Intensify regional cooperation in improving transport safety
MT-6.1 Review existing statistics, policies and programmes at regional and national levels
		MT-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 levels

MT-7 	Strengthen ASEAN search and rescue (SAR) cooperation to ensure effective andcoordinated aeronautical and maritime SAR operations in the region
MT-7.1 Improve capacity and capability on SAR
		MT-7.1.1 Develop ASEAN SAR standard operating procedures		

MT-7.1.2	Familiarize ASEAN member states with ASEAN SAR standard operatingprocedures		

MT-7.1.3 Improve skill and knowledge of SAR personnel

Air transport (AT)To achieve the air transport goal, it is important for ASEAN member states to work towards
advancing safer and more secure skies in ASEAN, enhancing air traffic management efficiency
and capacity through a seamless ASEAN sky and fostering greater connectivity, including theconclusion of aviation agreements with dialogue partners.
In this context and accounting for the status of air transport measures, ASEAN member

92

states need to undertake continued discussion on the way forward and identify concrete steps
to establish ASAM. Efforts in some areas such as full ratification and implementation of the
Roadmap for Integration of Air Travel Sector agreements and the Multilateral Agreement for the
Full Liberalization of Passenger Air Services under ASAM need to be redoubled. Air connectivity
expansion with the European Union, Japan, India and the Republic of Korea should be pursued andenhanced. Other initiatives under the ASAM Roadmap, such as air traffic management and aviation
safety and security cooperation need to be strengthened. In this regard, the specific goals andactions 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
engagement with dialogue partners, thereby contributing to the economic growth,competitiveness and shared prosperity of ASEAN, while maintaining ASEAN centrality
AT-1.1	Review the Multilateral Agreement on Air Services, the ASEAN Multilateral
Agreement on the Full Liberalization of Air Freight Services, the Multilateral
Agreement for the Full Liberalization of Passenger Air Services and theirrespective protocols and implementation, and discuss further liberalization of
key economic elements, where necessary, under the 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 tobe phased inAT-1.3 	Continue to engage dialogue partners and other partners to conclude more liberaland mutually beneficial air transport agreements, including third, fourth and fifth
freedom traffic rights
		AT-1.3.1 	Conclude and expand exchange of fifth freedom traffic rights with China
through conclusion of protocols

		AT-1.3.2 	Conclude a comprehensive air transport agreement with the European
Union

		

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 the Republic of Korea

		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 the 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)

93

		

AT-2.1.3

Implement ASEAN Foreign Operator Safety Assessment initiative

AT-2.2	Establish a mechanism to facilitate mutual recognition of approvals, certificatesand licences		

AT-2.2.1	Conclude a framework agreement to support future mutual recognitionof approvals, certificates and licences		

AT-2.2.2	Establish procedures to achieve mutual recognition for air operator
certification, aircraft airworthiness (approved maintenance organization
certification), and flight crew/engineer licensing		AT-2.2.3	Identify other areas such as approved training organization andestablish procedures to achieve mutual recognition

AT-3	Enhance aviation security in ASEAN in accordance with ICAO Standards and Recommended
Practices (SARPs)
AT-3.1

Promote capacity building and align aviation security measures with ICAO SARPs

		

AT-3.1.1		AT-3.1.2	Leverage existing capacity-building mechanisms such as those offeredby the ICAO Asia and Pacific Regional Office and other mechanisms topromote capacity building with a view towards increasing compliancewith ICAO SARPs

		

AT-3.1.3	Develop practical, harmonized and cost-effective measures in key areasof 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
compliance with ICAO SARPs

AT-4

Conduct the Points of Contact network exercise on a yearly basis

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 Planin accordance with ICAO’s Asia Pacific Seamless ATM Plan and the Global Air
Navigation Plan’s Aviation System Block Upgrade Framework		AT-4.2.1

Adopt the ASEAN ATM Master Plan

		AT-4.2.2

Implement the ASEAN ATM 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 analyse air traffic
flows in support of the ASEAN ATM Masterplan

94

		

AT-4.4.1	Establish capability to provide annual ASEAN air traffic baseline tosupport air traffic flow analysis

AT-5	Strengthen ASEAN SAR cooperation to ensure effective and coordinated aeronautical andmaritime SAR operations in the regionAT-5.1

Improve capacity and capability on SAR

		AT-5.1.1

Develop the ASEAN SAR standard operating procedures		

AT-5.1.2 	Familiarize ASEAN member states with ASEAN SAR standard operatingprocedures		

AT-5.1.3

Improve skill and knowledge of SAR personnel

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 (WHO, 2015) 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 no data are
available).25 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 undertakea collective effort to reduce the risk of road crashes, especially among vulnerable road users.
Considering the aforementioned, the specific goals and actions for land transport for the period of
2016–2025 are
LT-1 	Accomplish the implementation of the Singapore–Kunming Rail Link (SKRL) main lines anddetailed 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 (129km)

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 People’s Democratic Republic: Vientiane–Thakhaek–Mu Gia (466km)

		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

25

Figures are updated from the original one based on the 2013 World Health Organization Global Status Report on
Road Safety (WHO, 2013).

95

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 People’s Democratic Republic: Savannakhet–Laobao (220 km)

		LT-1.3.5 	Malaysia: Double track construction of Gemas–Johor Bahru section (197km)

		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 (174 km)

		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 (167 km)

		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 (45 km)

		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 and Hai Van tunnel and Khe
Net tunnel)		LT-1.3.17 	Track gauge conversion works between Lao Kao Border Station (VietNam) and Ha Khau Border Station (China)

LT-1.4Develop implementation framework for seamless operation of SKRL		

LT-1.4.1 	Identify and collect data for seamless operations of SKRL		

LT-1.4.2

LT-1.5
		LT-2

Adopt the implementation framework for seamless operation of SKRL

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
possibleCompletion of ASEAN Highway Network projectLT-2.1

Upgrade “below Class III” roads on transit transport routes (TTRs)

96

		

LT-2.1.1 	Lao People’s Democratic Republic: AH12 Nateuy–Oudomxai–Luang
Prabang–Vientiane (293 of 682 km)

		LT-2.1.2 	Lao People’s Democratic Republic: 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-2.2Upgrade other “below Class III” roads		LT-2.2.1

		LT-2.2.2 	Lao People’s Democratic Republic: AH131 Thakhek–Na Phao (96 km of
146 km)		LT-2.2.3 	Lao People’s Democratic Republic: 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

Lao People’s Democratic Republic: AH 13 Oudomxai–Pakbeng (133 km)

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-borderfacilities (Cambodia Part)		

LT-2.3.3 	Cambodia: AH1 four-lane expansion, Thlea Ma’am Battambang andSerei Sophorn–Poipet City, including Pursat bypass (157.5 km)

		LT-2.3.4 	Cambodia: AH1 four-lane expansion, Prek Kdam–Thlea Ma’am (135.4km), including two bypasses		LT-2.3.5

		LT-2.3.6 	Cambodia: AH11 four-lane expansion, Phnom Penh–Skun district (75km), including two bypasses

Cambodia: AH1 four-lane expansion, Phnom Penh–Prek Kdam (30 km)

97

		

LT-2.3.7 	Cambodia: AH1 four-lane expansion, (National Road 1) Phnom Penh–
Kdei Ta Koy (4 km)

		LT-2.3.8 	Cambodia: AH1 four-lane expansion, (National Road 1) Kdey Ta Koy–
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 	C ambodia: AH11 four-lane expansion, (National Road 4) Kampong
Speu–Sihanoukville Province (166 km)

		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 People’s Democratic Republic: AH11 four-lane highway project
Vientiane–Ban Hay section (63 km)

		LT-2.3.14	Lao People’s Democratic Republic: AH12 four-lane highway projectfrom Vientiane–Phon Hong section (73 km)

		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–KhunTan (48 km)

		LT-2.3.18	Thailand: AH16 new alignment road project, Kalasin–Ban Na Kai (80km)

		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 (70km)

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
		LT-2.6

Complete stocktaking of the ASEAN Highway Network (AHN) inventory data
LT-2.5.1

Update on AHN inventory data

Improve the quality of transportation on TTRs		

LT-2.6.1 	Compile technical standards, manuals and best practices of roadpaving for large-sized vehicle transportation

		LT-2.6.2 	Promote the enforcement of vehicle weight regulations, including
establishing a regional platform for discussion

LT-2.7 	Complete the installation of common road signs and the route numbering systemon all TTRs		

LT-2.7.1 	Indonesia: AH 25 Dumai–Pekanbaru–Jambi–Palembang–Lampung–
Bakauheni		LT-2.7.2

Indonesia: AH 25 Dumai–Medan–Banda Aceh

98

		

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 People’s Democratic Republic: 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,
designing ITS architecture, determining standards for ASEAN anddeveloping implementation and monitoring mechanism		LT-3.1.2 	Formulate the national ITS policy and master plans for ASEAN
members states addressing policy, standards, ITS development,
operation and maintenance and monitoring mechanism		LT-3.1.3 	Implement the ITS Master Plan for ASEAN and the national ITS policy
and master plans

LT-3.2
		

Implement ITS capacity-building programmes
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 AHN and SKRL
LT-4.1 	Conduct study and formulate regional network plan for the development of dryport		

LT-4.1.1	Formulate a regional network planLT-4.2 	Finalize the list of dry ports in ASEAN and identify key measures to improve theeffectiveness of the agreed ASEAN dry port network		LT-4.2.1

Identify feasible list of dry ports in ASEAN

		

LT-4.2.2 	Adopt the list of dry ports in ASEAN and agree on the key measures toimprove the effectiveness of the network		LT-4.2.3

Implement the agreed key measures

LT-5 	Reduce road fatalities by 50 per cent in ASEAN member states by 202026 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 five strategicpillars (Road Safety Management, Safer Roads and Mobility, Safer Vehicles, Safer
Road Users and Post Crash Response) of the United Nations Decade of Action for26

Achievement by 2020 is not yet verified as of this writing.

99Road Safety		LT-5.1.1 	Develop guidelines for improving the standard procedure for reporting
road crashes based on United Nations standards		LT-5.1.2 	Adopt data collection template on road crashes in accordance with
global standards		LT-5.1.3 	Share knowledge and experiences on the implementation of safer
roads and mobility pillar

		LT-5.1.4 	Exchange of information, experiences and best practices regarding theimplementation of safety standard of all vehicles on the road		LT-5.1.5 	Sharing of knowledge and best practices on road safety, which include
awareness, education and law enforcement programmes		LT-5.1.6

LT-5.2		Compile best practices on post-crash responses

Strengthen institutional capacity for enhanced cooperation in road safety
LT-5.2.1

Convene seminars/workshops/training programmes on road safety

LT-5.3 	Continued improvement of road safety policy and programmes to further enhanceroad safety in the ASEAN region		LT-5.3.1 	Reduce road traffic injuries and fatalities by another 25 per cent from2021 to 2030

LT-5.4 	Harmonize safety regulation with the United Nations regulation based on accident
analysis in ASEAN and work towards mutual recognition to improve safety		
LT-6

LT-5.4.1

Conduct study on existing measures and policies regarding road safety

Develop a database of the ASEAN land transport networkLT-6.1 	Develop a map of ASEAN land transport network, including all relevant
information on AHN, SKRL and dry ports

		
LT-7

LT-6.1.1

Publish a map of the ASEAN land transport network

Intensify regional cooperation in improving transport safety
LT-7.1		LT-7.2
		

Review existing statistics, policies and programmes at regional and national levels
LT-7.1.1

Gap analysis

Identify training needs to further improve transport safety in the region
LT-7.2.1

Conduct training on transport safety at regional and national levels

100

Annex F.
PolicyEvaluation Exercise: How Transport
Annex F. Policy Evaluation Exercise: How Transport Services and Courier
ServicesandCourier Services
theandMultipleServices Attainthe Multiple-Equilibria
SituationAttainin a Country
in the Region27
Annex F. Policy Situation
Evaluation Exercise:
How Transport
Servicesand Courier
Equilibria
in a Country
andin theRegion27
Services
Attainthe Multiple-Equilibria
Situation
in a Country
and in the
RegionFigure F1
shows
how agglomeration(concentration)
emergeswiththe 27reductionof transport and courier services costs.

Figure F1 shows how agglomeration (concentration) emerges with the reduction of transport andFigure F1 shows how agglomeration (concentration) emerges with the reduction
courier services costs.

of transport and courier services costs.
Figure F1. Basic spatial economic mechanism of agglomeration(under low transport and courier services costs)
Figure F1. Basic spatial economic mechanism of agglomeration

Figure F1. Basic spatial economic mechanism of agglomeration
low transportand courier
services
costs)(under(under
low transportand courier
services
costs)
Agglomerationofworkers/consumers

Agglomeration ofworkers/consumers

Backward
Backward
linkagelinkage

Increase in real

Agglomeration of

Increase in real
incomeincomeAgglomeration
specialized offirms
specialized firms

Forwardlinkage

Forwardlinkage

Supply of variety ofSupply of variety ofand services
goodsgoods
and services

Source:Adaptedfrom Fujita
et al.
(1999).
Source:Adapted
from
Fujitaet al.
Source:Adapted
from
Fujitaet(1999).
al. (1999).

(1)
high
transport
andcourier
services(1)
Undertransport
andandcourier
services
costs costs costs(1)UnderUnderhighhightransport
courier
services

When transport costs (costs associated with transporting people and goods) for

When transport costs (costs associated with transporting people and goods) for

the transferof goods
and services
arewithprohibitivelyhigh,
all productionWhentransport
costs (costs
associatedtransporting
peopleand goods) mustfor thetake
transfer of
the transfer
of(as
goods
andinservices
areprohibitivelyhigh,
all production
must takegoods
services
areshown
prohibitively
high, allF2),
production
must takeplace locally economic(as shown in figure
placeand
locally
figuregenerating
decentralized
place
locally
shown
in figureF2),
generating
decentralized
economic
F2),
generating
economic
activities(thisInis ASEAN,
a two-equilibrium
situation). In
ASEAN,
activities(thisdecentralizedis(asa two-equilibrium
situation).
beforefull-fledged
activities
(this
is
a
two-equilibrium
situation).
In
ASEAN,
beforefull-fledged
beforefull-fledged
in ofthethelatterpartcentury,of the 20th
century,cities
multipleand multiple
marketizationin marketization
the latter part
20th
multiple
andcities
multiplesmallvillages
co-existed“majorcities”.
marketizationin theaslatterpartof
the 20th century, multiple cities and multiple
small
villages
co-existed
as “major
cities”.

small villages co-existed as “major cities”.

Figure F2. Multiple small cities and villages

The exercise also contains the exercise for courier services, which another paper in this series covers. Courier
The exercise
alsoservices
contains
exercisefor courier
services,which
another
servicesand transport
were thecombinedin the discussionof policy
implications
at theThird Seminar on
PromotingServices
Tradein ASEAN
in September
2017 inand
Kualatransport
Lumpur. Therefore,these
two services industries
paper
in thisseriescovers.
Courier
services
serviceswere
are considered together here.
combinedin the discussion of policy implications at the Third Seminar on
27

27

27

The exercise also contains the exercise for courier services, which anotherPromoting Services Trade in ASEAN in September 2017 in Kuala Lumpur.
paper in thisseriescovers.industries
Courier services
and transport
services were
Therefore,these
two services
are considered
together here.

combined in the discussion of policy
110 implications at the Third Seminar on
Promoting Services Trade in ASEAN in September 2017 in Kuala Lumpur.

101

(2)
transport
andandcourier
services
costs costs(2) Under
Undermiddle
middletransport
courier
services(2)
Under
middletransport
andcourier
services
costs the equilibrium tends
When transport costs are reduced from the high stage,

Whentransport
costs arereducedfrom highthehighstage,figure
the equilibrium
tends
towards
agglomerationone
location
illustrated
F3),tends
in atowards
singleWhen transport
costs are in
reducedfrom the(asstage, theinequilibrium
towards
agglomeration
oneillustrated
locationin(asillustrated
in figureF3), insituation.
a singleagglomerationin one location(asfigureF3), in prospers
a single-equilibriumIn
equilibrium
situation.
Inintheprocess,
the“centre”
economically(i.e.,
equilibrium
situation.
Intheprocess,
the“centre”
prospers
economically(i.e.,
theprocess,
the“centre”
prospers
economically(i.e.,
production
andconsumption
increaseproduction and consumption increase significantly); at the same time, though,significantly);and
thesame time, though,thesignificantly);
costs of production
livingtime,
production
consumption
increaseat theandsame
though,thecosts of at
production
and living
also
increase significantly.
Thisalso
is increasewhat
issignificantly.
is what is happening
in mostof thecapital cities
of ASEAN member
states.
thecosts ofThis
livingalso
significantly.
happening
inproduction
most of theandcapitalcitiesof increase
ASEAN member
states.This is what ishappening in most of the capital cities of ASEAN member states.
Figure F3. One capital and multiple small cities and villages(3) Under low transport and courier services costs(3)
lowandandcourier
services
Whentransport
costs
decrease
further,thetwoorcosts
multiple-equilibrium
situation(3) Under
Under
lowtransporttransport
courier
services
costs

When
the twoor multiple-equilibrium
situationis againtransportrealized,costs
this decreasetime withfurther,affordable
transport
and courier costs and
hence
is
again
realized,
this
time
with
affordable
transport
andcourier
costs
and
no
need
to livecostsin theexpensive
capitalareaF4). This issituation
what ASEAN
Whentransport
decrease
further,
the twoor (figure
multiple-equilibrium
ishence
again
no
need
to
live
in
the
expensive
capitalarea(figure
F4).
This
is
what
ASEAN
realized,
this
time
with
affordable
transport
andcourier
costs
and
hence
no
need
to
live
in
member states should aim for, with further liberalization of various formstheofmemberstatesshouldaim
withfurtherliberalization
ofsituation,
variousformsof
expensive capitalarea(figureF4). for,This iswhatthis
ASEAN
memberstates should
aim for, withfurthertransport
services.
In
connection
withmultiple-equilibria
figureF5liberalizationof various
formsof transport
connection with thismultiple-equilibria
transportIn
connection
withservices.
this multiple-equilibria
situation,
figure F5
showstheservices.
spatialeconomicinteractionof Inlocationsand “market
potential”,
situation,
figureF5shows
thespatialeconomicinteractionoflocationsand“marketpotential”,
shows isthe
economicinteractionof locations“market potential”,
which
thespatial
potential
usefulnessof particularlocations andfor production
activities
which is the potential usefulness of particular locations for production activities and for living.
which
the potential
usefulnessof particularlocationsforcourier
production
andforisliving.
Usefulness
increases
whenandcostsactivities
are low
Usefulness
increases
when transportand couriercoststransport
are low enough.
andfor living. Usefulness increases when transport and courier costs are low
enough.
enough.
Figure F4. Multiple capitals among cities and villages

111
111

102

Figure F5. Spatial economic interaction of locations and market potential
Higher real income because of reduction inMarketPotential
transport
and courier
services costs
FigureFigure
F5.
Spatialeconomicinteractionoflocationsandandmarketpotential
F5. Spatial economic interaction of locations
marketpotential
Higher real
income close
becauseof capital:
reduction inModerately
to theMarket Potential
transport“anotherand courier
services
costs
capital” emerges here
Close to the capital

Close to the capital

Moderately close to the capital:
Far away“another capital” emerges
here from the capital●●

Capital of
the ●country
Capital ofthecountry

Far away from the capital
Distance from the capital●This should happen across countries
This should happen across countries
Source: Adapted from Fujita et al. (1999).

Distance from the capital
Lower real income becauseof high transport andcourier services costs
Lower real income becauseof high transport andcourier services costs

Higherreal etincomewith a reduction of transport and courier costs leads to a rise in the market
Source:Note:
Adaptedfrom Fujitaal. (1999).
Note: Hpotentialigher real income
witha reduction
transport
courier costs
a rise in theaway
marketpotentialof other locationsof otherlocationsandof hence
theandemergenceof leads
otherto“capitals”
fromthe capital.
Source:Fujitaof etal. “capitals”(1999). away from the capital.
andAdapted
hence the fromemergenceotherNote: Higher real income with a reduction of transport and courier costs leads to a rise in the market
At ofthiseconomic
integration
is takingplace,
the multiplepotential
other stage,
locationswhen
and hencethe emergenceof other “capitals”
away fromthe capital.
At thisequilibrium
stage, when situation
economic integration
is takingtoplace,the multiple-equilibrium
situation
can becan be extended
the region(ASEAN), subregion(i.e.,
extendedtotheregion(ASEAN),
subregion(
i.e.
,
Mekong)orneighbouring
countries(e.g.
,
ThailandMekong)neighbouring(e.g.,
Thailandand thethe multipleLao People’s
At thisstage, orwhen
economic countries
integration
is takingplace,and theLao
People’s
Democratic
Republic).
FigureF6
illustrates
multiple
capitalsamong cities
Democratic
Republic).
F6 toillustrates
multiple
capitalsamong cities
equilibrium
situation
can beFigure
extended
the region(ASEAN),
subregion(i.e., andand villages spread beyond a single country to the neighbouring countries, the subregion and thevillages
beyondcountries
a single (e.g.,country
to the neighbouring
Mekong)or spreadneighbouring
Thailandand the Lao countries,
People’s theregion.

subregionand the region.
Democratic
Republic).
Figure F6 illustrates multiple capitals among cities andvillages spread beyond a single country to the neighbouring countries, theFigure F6. ASEAN-level multiple-equilibria situation
subregionand the region.
Figure F6. ASEAN-level multiple-equilibria situation
Figure F6. ASEAN-level multiple-equilibria situation

Note: SNote:maller ovals
indicateneighbouring-country-leveltransport networks. Largeoval indicatesan ASEAN-leveltransport
Smallerovals
indicate neighbouring-country-leveltransport
networks.
Large oval
network.

indicates an ASEAN-level transport network.
Note: Smaller ovals indicate neighbouring-country-level transport networks. Large oval
The seminar participants worked on a policy evaluation exercise that examined how transport
indicates an
ASEAN-leveltransport
network.
112
servicesandcourier services
attainthe 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
112 ASEAN region and policy evaluation for realizing a
multiple-equilibria situation. Tables F1–F3 show the results.

103

These results show that the average score at the bottom of each table gets lower (less agreeable)
in descending order at the in-country level (6.7), neighbouring-country level (5.8) and ASEAN level(5.35). Considering coordination at the ASEAN level to achieve region-wide economic impacts isclearly needed.

Table F1. Evaluation of accessibility to “capitals”
In-country level
Scale: 1 (least agreeable)–10 (most agreeable)
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
PublicPublicPublic[Maritime] [Air] Fully[Rail] Fully [Public
Interconnection Policies for Policies fortransportation transportation transportation Fully
developed to developed to road] Fully among different multiple-city multiple-city
services to the services orservices ordeveloped to enable the enable the developed to transport
development development
Total
capital exist own cars for own cars for enable the multiplemultipleenable the services isand transport andscore
Country nation-wide commuting commuting to multipleequilibria
equilibria
multiplesmoothservices
promotingto the capital the capital is equilibria
situation
situationequilibria
development trade in[/100 ]
exist nation- affordable
situation
situation
are welltransport
wide
coordinated services
are wellcoordinatedBrunei
Darussalam

10

10

9

4.5

1

8

8

4

2

8

64.5

Cambodia

8

8

8

5

6

4

5

5

5

5

59

Indonesia

8

7

7

7

8

8

8

6

8

8

75

Lao PDR

5

6

4

3

4

1

6

1

6

5

41

Malaysia

10

10

9

5

7

6

8

9

6

6

76

Myanmar

10

10

10

3

4

5

7

3

5

3

60

Philippines

10

8

8

6

7

6

7

5

5

5

67

Singapore

10

10

8

n.a.

n.a.

10a

10

10

10

9

67

Thailand

9

9

9

6

8

8

9

7

9

5

79

Viet Nam

8

6

6

7

6

5

6

7

6

5

62

Average

8.8

8.4

7.8

5.2

5.7

5.7

7.4

5.7

6.2

5.9

65.1

a

commuter rail like mass rail transit/light rail transit

Average of (1)–(10):

6.7

104

Table F2. Evaluation of accessibility to “capitals”
Neighbouring-country level
Scale: 1 (least agreeable)–10 (most agreeable)
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
PublicPublicPublic[Maritime] [Air] Fully[Rail] Fully [Public
Interconnection Policies for Policies fortransportation transportation transportation Fully
developed to developed to road] Fully among different multiple-city multiple-city
services to the services orservices ordeveloped to enable the enable the developed to transport
development development
Total
capital exist own cars for own cars for enable the multiplemultipleenable the services isand transport andscore
Country nation-wide commuting commuting to multipleequilibria
equilibria
multiplesmoothservices
promotingto the capital the capital is equilibria
situation
situationequilibria
development trade in[ /100 ]exist nation- affordable
situation
situation
are welltransport
wide
coordinated services
are wellcoordinatedBrunei
Darussalam

8

10

5

2

5

1

5

4

4

2

46

Cambodia

9

9

9

8

9

8

8

7

7

7

81

Indonesia

8

7

7

7

8

1

1

1

8

8

56

Lao PDR

4

5

4

2

3

2

6

1

4

4

35

Malaysia

10

9

8

7

7

6

8

9

5

5

74

Myanmar

3

3

3

3

5

1

4

1

1

3

27

Philippines

10

8

8

5

7

1

1

5

5

5

55

Singapore

10

10

8

8

10

6

8

8

6

6

80

Thailand

7

8

7

5

8

5

8

6

6

5

65

Viet Nam

8

5

6

7

6

5

6

7

6

5

61

Average

7.7

7.4

6.5

5.4

6.8

3.6

5.5

4.9

5.2

5

58

Average of (1)–(10):

5.8

105

Table F3. Evaluation of accessibility to “capitals”
ASEAN level
Scale: 1 (least agreeable)–10 (most agreeable)
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
PublicPublicPublic[Maritime] [Air] Fully[Rail] Fully [Public
Interconnection Policies for Policies fortransportation transportation transportation Fully
developed to developed to road] Fully among different multiple-city multiple-city
services to the services orservices ordeveloped to enable the enable the developed to transport
development development
Total
capital exist own cars for own cars for enable the multiplemultipleenable the services isand transport andscore
Country nation-wide commuting commuting to multipleequilibria
equilibria
multiplesmoothservices
promotingto the capital the capital is equilibria
situation
situationequilibria
development trade in[ /100 ]exist nation- affordable
situation
situation
are welltransport
wide
coordinated services
are wellcoordinatedBrunei
Darussalam

2

3

5

2

4

1

2

2

2

2

25

Cambodia

9

9

9

9

9

8

9

8

8

8

86

Indonesia

8

7

7

6

8

1

1

1

8

8

55

Lao PDR

4

4

3

1

2

1

5

1

4

3

28

Malaysia

10

9

8

7

7

6

8

9

5

5

74

Myanmar

1

3

2

3

5

1

2

1

1

4

23

Philippines

10

8

8

5

7

1

1

5

5

5

55

Singapore

10

10

8

6

8

5

6

6

6

6

71

Thailand

6

7

6

5

8

5

7

4

6

5

59

Viet Nam

7

5

6

6

6

5

6

7

6

5

59

Average

6.7

6.5

6.2

5

6.4

3.4

4.7

4.4

5.1

5.1

53.5

Average of (1)–(10):

5.4

106

Tables F4 and F5 show the evaluation of realizing 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 inall, the results indicate a serious need for consolidating ASEAN-wide policy coordination in terms
of promoting trade in transport services.

Table F4. Evaluation of realizing a multiple-equilibria situation: National level
Scale: 1 (least agreeable)–10 (most agreeable)
Country

1.
Trade in maritime
transport services

2.
Trade in airtransport services

3.
Trade in railtransport services

4.
Trade in roadtransport services

Total score

Brunei Darussalam

5

6

1

8

20

Cambodia

5

6

4

7

22

Indonesia

8

8

8

8

32

Lao PDR

3

4

1

7

15

Malaysia

9

9

7

9

34

Myanmar

7

7

2

5

21

[ /40 ]

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

Average

6.9

7.2

5.1

7.7

26.9

Average of (1)–(4):6.7Table F5. Evaluation of realizing a multiple-equilibria situation: ASEAN-wide
Scale: 1 (least agreeable)–10 (most agreeable)
Country

1.
Trade in maritime
transport services

2.
Trade in airtransport services

3.
Trade in railtransport services

4.
Trade in roadtransport services

Total score

Brunei Darussalam

5

6

1

5

23

Cambodia

7

9

9

9

43

Indonesia

8

8

8

8

40

Lao PDR

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

[ /40 ]

Viet Nam

6

6

5

6

29

Average

5.9

6.6

5.2

6.3

30.5

Average of (1)–(4):

6.0

107

Tables F6–F9 show the results of policy evaluation for maritime, air, rail and road transport
services.

Table F6. Policy evaluation: Trade in maritime transport services (participant remarks)
Further policy options(in-country level/neighbour-country level/ASEAN level)

Country
Brunei Darussalam..

Cambodia[in-country level] Need introduction of policies to facilitate and nurture investments in maritime
transports both from foreign country and local investment.
[neighbouring-country level] Need more coordination with our neighbouring countries for better
maritime transport services connection.
[ASEAN-wide] Need more policy coordination and cooperation in designing and building ASEAN
Maritime Transport Network.

Indonesia

Policy between central and local government/cross-border cooperation/maximize ASEAN Forum

Lao PDR[in-country level] It is very difficult to improve water transport due to a lot of rocks along the river.
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 land transport
services.

Malaysia..

Myanmar[in-country level] There is Myanmar maritime policy that covers implementation of national,
subregional 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[in-country level] Liberalization of foreign ownership to increase industry players and promotecompetition.
[neighbouring-country and ASEAN-wide] Maximize use of ASEAN RO-RO by increasing volume oftrade.

Singapore[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.

Thailand[in-country level] Increase capacity and improve capability and quality of maritime transport
services to ensure sufficient, timely and affordable services that meet international standards.
[neighbouring-country level] Promote quality and reliable maritime transport services to connect
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 andpartners to provide efficient maritime transport services, subject to national laws and regulationsof the respective ASEAN member countries.

Viet Nam- 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.
- Improve the quality of maritime transport in direction of capacity building to raise competition,
development of modern transport vehicles with reasonable structure, appropriate with provided
condition.
- Prioritize the development of container fleet; enhance handling capacity, warehouse service
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.

108

Table F7. Policy evaluation: Trade in air transport services (participant remarks)
Further policy options(in-country level/neighbour-country level/ASEAN level)
Brunei Darussalam..

Cambodia[in-country level] Cambodia needs more investment in air transport services including building
and expanding airports and providing efficient logistic services to both passengers and cargos.
[neighbouring-country level] Need more cooperation with neighbouring countries in termsof sharing flight information 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 antiterrorism.

Indonesia

Policy for security, safety, licences for maintenance repair and operation (MRO)/policy for security,
safety/policy for security, safety.

Lao PDR[in-country level] The ticket price must be improved.
[neighbouring-country level] Airplanes 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 andnon-capital cities.
[ASEAN-wide] Go for full open skies agreement (e.g. , seventh freedom).

Thailand..

Viet Nam- Restructure air transport to become popular and convenient type of transport, undertake
passenger 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 airline operations.
- Improve the competitive capacity of Vietnamese airlines by modernizing fleets, expanding airroutes.
- Enhance quality and quantity of services, absolutely ensure security and safety of aviation.

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.

109

Table F8. Policy evaluation: Trade in rail transport services (participant remarks)
Further policy options needed(in-country level/neighbour-country level/ASEAN level)

Country
Brunei Darussalam..

Cambodia[in-country level] Cambodia needs to pay more attention to the improvement of railroads,
expanding railroads to cover the whole country to facilitate the movement of people (foreign andlocal tourist) and goods.
[neighbouring-country level] There should be more coordination and cooperation withneighbouring countries in connecting the railroads for better connectivity.
[ASEAN-wide] The initiative of Singapore-Kunming Railways Networks should be accomplished assoon as possible. Other initiatives to link ASEAN by railroads should also be considered.

Indonesia

Policy for R&D [research and development]/sharing knowledge/policy for sharing knowledge andR&D.

Lao PDR[in-country level] No services because it’s still under construction.
[neighbouring-country level] Human resource must be upgraded to ensure the service of new
railways (Lao-China).

Malaysia

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

Myanmar..

Philippines..

Singapore[in-country level] Improve reliability of commuter rail systems (e.g. , MRT [mass rail transit] andLRT [light rail transit] systems).
[neighbouring-country level] Invest in high-speed rail connectivity.
[ASEAN-wide] Invest in high-speed rail connectivity.

Thailand..

Viet Nam- Developing railways in the direction of modernization, rational capacity, fuel saving andefficiency.
- Reducing fees, rail transport costs, improving the quality of transport services to compete withother types of transport.
- Restructuring railway transport in direction of developing large and medium-sized cargo on longor 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.

110

Table F9. Policy evaluation: Trade in road transport services (participant remarks)
Further policy options needed(in-country level/neighbour-country level/ASEAN level)

Country
Brunei Darussalam..

Cambodia[in-country level] Road transport needs more investment to expand and widen countrywide. Build
new roads; maintenance and safety of the roads should be a priority.
[neighbouring-country level] Need more coordination and cooperation with neighbouring
countries for better road network connection.
[ASEAN-wide] ASEAN cooperation on roads transport should work harder and be more practicalto reflect the needs of individual members and the needs of ASEAN connectivity as a whole.

Indonesia

Policy for R&D [research and development]/sharing knowledge/policy for sharing knowledge andR&D.

Lao P.D.R.

[in-country level] Need to issue some transport legislation to manage its service.
[neighbouring-country level] Need to build Inland Container Depot along bordering crossing point
for transshipment.
[ASEAN-wide] -Both truck and bus including drivers should be upgraded.
- Infrastructure, such as road capacity and lanes of road, must be expanded.

Malaysia

Create hub for distribution of cargos from all over the country.

Myanmar..

Philippines..

Singapore[in-country level] Explore autonomous driving solutions and improve ride-sharing applications.
[neighbouring-country level] Improve capacity for customs clearance at road CIQ [customs,
immigration and quarantine] facilities (Causeway and Second Link). Mutual recognition ofcommercial vehicles to facilitate cross-border trade.
[ASEAN-wide] Improve rural-urban road connectivity in ASEAN. Improve driving conditions atnight with lighting solutions.
Road transport of Thailand. Thailand has road infrastructure and transport service covering thewhole country. It can support the transport of passengers and goods across the country andeffectively connects with neighbouring 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 ofmultinational companies specializing in transportation. The competition is higher. More diversified
forms of service. Modern technology is used to improve management.

Viet Nam- Restructuring means of transport in favour of public transportation development, high-quality
facilities; protective and friendly to the environment.
- Taking advantage of road transport capacity focusing on short and average distancetransportation.
-Applying high technologies to the transportation business, enhancing quality of transportation
services in accordance 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.

ISBN 978-4-910293-49-3