Against, this background this paper offers a discussion of trade policy in health services for the ASEAN region. It draws on a set of national research studies that were conducted by researchers of the ASEAN Economic Forum. These studies covered 7 of the 10 ASEAN countries: Cambodia, Indonesia, Laos, Malaysia, the Philippines, Thailand, and Vietnam.<sup>2</sup> As will be shown later in this paper, trade in health services is already an important phenomenon in the ASEAN region. To a large extent, this trade occurs outside the framework of existing trade agreements. At the same time, ASEAN governments have established a framework for progressively liberalizing trade in services and, in particular, have identified healthcare as a priority sector for region-wide integration. Therefore, a key aim of this paper is to identify policy measures that would harness the benefits from trade in health services and address potential pitfalls that deeper integration may bring about.

The paper is structured as follows. To set the scene, the next section will offer a brief overview of the state of healthcare across the ASEAN region, focusing on the roles of the public and private sectors and the performance of the healthcare system in terms of access and quality. Section III will introduce the concept of international trade in health services and review the patterns of existing trade in the region. Section IV will document remaining barriers to trade in health services. Section V will outline the gains that further trade liberalization could offer and also point to possible pitfalls that expanded trade may hold. Section VI discusses several policy implications and makes several recommendations for policy initiatives that ASEAN countries could pursue. The final section offers concluding remarks.

# **II.  The state of healthcare in the ASEAN region**

This section reviews the performance of the healthcare sector across the seven ASEAN countries studied thus far and problems that remain. We focus on four dimensions of healthcare performance: (i) accessibility of basic healthcare services; (ii) provision of healthcare by the public sector, private sector and NGOs; (iii) sources of healthcare financing; and (iv) quality of healthcare services.

# _Accessibility of healthcare services_

Unsurprisingly, accessibility of healthcare services in the ASEAN region varies significantly with countries’ level of economic development. At the same time, income cannot explain everything. Countries’ histories and policies also play an important role.

Data from the World Health Organization (WHO) on immunization coverage among 1-year olds, antenatal care coverage and the proportion of births attended by skilled health personnel are revealing in terms of access to healthcare in the ASEAN region (Table 1). The health service coverage figures of Malaysia, Singapore and Thailand are comparable to those of the United

> 2 See Chea (2005) for Cambodia, Leebouapao (2004) for Laos; Akhmad (2005); Abidin, Alavi, and Kamaruddin (2005) for Malaysia; Avila and Manzano (2005); Arunanondchai (2005) for Thailand; and Thang (2005) for Vietnam.  In view of its economic importance, Singapore is also included in parts of this paper, drawing on information available from the seven country studies as well as publicly available data.

3