Following the signing of the General Agreement on Trade in Services (GATS) of the World Trade Organization (WTO) in 1994, the ASEAN Economic Ministers (AEM) signed the ASEAN Framework Agreement on Services (AFAS)7 on 15 December 1995 during the 5th ASEAN Summit in Bangkok, Thailand.
The signing of AFAS was a gesture of recognition of ASEAN on the growing importance of services to its economy and the need to enhance and strengthen trade in services within ASEAN. AFAS aims to:
• Enhance cooperation in services amongst Member States in order to improve the efficiency and competitiveness, diversify production capacity, and supply and distribution of services of their service suppliers within and outside ASEAN.
• Eliminate substantially restrictions to trade in services amongst Member States.
• Liberalise trade in services by expanding the depth and scope of liberalisation beyond those undertaken by Member States under the GATS with the aim to realising a free trade area in services.
AFAS provides the legal framework for setting out the broad parameters that enables Member States to progressively improve market access and provide national treatment to services suppliers of ASEAN Member States. All AFAS rules are consistent with international rules for trade in services as provided for under the GATS .
One of the objectives of AFAS is to liberalise services trade towards achieving liberalisation beyond Member States’ commitments under GATS. This is often referred to as the GATS-plus principle. It means that ASEAN Member States shall schedule commitments under AFAS that go beyond their GATS commitments or offer new service sectors/sub-sectors that have not been scheduled under GATS10 . With the adoption of the ASEAN Economic Community (AEC) Blueprint in 2007, ASEAN stepped up its effort to further liberalise towards the goal of free flow of services, according to the bi-annual targets and thresholds as laid out under the AEC Blueprint and additional parameters set forth by the AEM.
Service libralization rounds under AFAS
AFAS Article IV requires Member States to enter into negotiations on measures affecting trade in specific service sectors, and the results shall be set out in schedules of commitments. Initially, the negotiations were organised in rounds of negotiations, each round lasted for three-year. Approach and parameter for liberalisation were set for each respective round. After four rounds, liberalisation was undertaken based on a set of targets and timelines as stipulated in the ASEAN Economic Community (AEC) Blueprint as well as other applicable decisions of the AEM. The results of negotiations are formalised as Packages of Schedules of Commitments under the AFAS, which provide for details of liberalisation of the services sub-sectors where commitments are made. The AFAS Packages are implemented via Protocols signed by the AEM. ASEAN has so far concluded nine packages of commitments in a wide range of services sectors under the purview of ASEAN Economic Ministers (AEM). These packages are implemented via Protocols signed by the AEM and provide details of liberalisation of the services sub-sectors where commitments are made.
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