AEC Blueprint Implementation Performance and Challenges: Service Liberalization

Abstract

This paper examines the progress of liberalization of the ASEAN Framework Agreement in Services (AFAS). It measures the changes in the rate of liberalization of the AFAS commitments from the 7th to the 8th package negotiations. The comparisons show only marginal improvement in the depth of services liberalization rate between the two packages, albeit significant increase in the number of subsectors covered in the 8th package. Deeper examination of the commitments suggests that many ASEAN Member States utilized a facility under AFAS (Flexibility Rule) to put a number of sensitive subsectors which are not subject to liberalization commitments. Mode 3 liberalization rate of package 8 increases significantly when the Flexibility Rule is considered. This suggests that many subsectors do not pass the threshold set by package 8.

ERIA-DP-2015-39