Speech of Secretary Ramon M. Lopez
3rd ASEAN-India Business Conference
27 November 2018, Kuala Lumpur, Malaysia


India has been a strategic partner for the past six years. And we would like to thank of course India for its Look East, and later on upgraded to Act East policy. Now, we have about 30 sectoral dialogues in place. These are the mechanisms to continue the discussions and these are in the areas of external affairs, defense, connectivity, commerce, telecommunications, agriculture, energy, environment, and tourism.

Importance of Economic Cooperation

Allow me to share first the spirit of economic cooperation within ASEAN and with its Dialogue Partners that include India, which was apparent two weeks ago in Singapore at the 33rd ASEAN Summit and Related Summits held on 11 – 15 November. At this event, we—the ASEAN economic ministers—signed the ASEAN Agreement on E-commerce, which would govern cross-border e-commerce in the region. We also concluded the negotiations for the ASEAN Trade in Services Agreement (ATISA), and finalized the Fourth Protocol to Amend the ASEAN Comprehensive Investment Agreement (ACIA). The ATISA, which is on service, aims to deepen services sectors in ASEAN, while ACIA will help maintain the attractiveness of the region as an investment destination.

Likewise, we convened with Trade Ministers of India, Australia, China, Japan, Korea, and New Zealand to announce the substantial progress made in the negotiations for the Regional Comprehensive Economic Partnership (RCEP). We had 24 rounds of RCEP negotiations, 7 chapters have been concluded. These are in the areas of: Customs Procedures and Trade Facilitation (CPTF); Government Procurement (GP); Institutional Provisions; Sanitary and Phyto-Sanitary (SPS) Measures; Standards, Trade Regulations, and Conformity Assessment Procedures (STRACAP); Small and Medium Enterprises (SME); and Economic and Technical Cooperation (ECOTECH). We also agreed that RCEP is at the final stage. We had substantial progress this year in Singapore and we are poised to conclude for next year in Thailand by 2019. The urgency of concluding RCEP is highlighted given the rising trade tensions and protectionism, in order to give boost to free, fair, and open trade. RCEP will be the largest free trade deal in the world in terms of population (covering about 3.6B), income (covering 1/3 of the world’s income), about a third also of the world’s trade, and investment close to 27%.

The spirit of economic cooperation was likewise evident at APEC Papua New Guinea just a week ago or two weeks ago.  Here, our Philippine President Rodrigo Roa Duterte called on his fellow leaders for “inclusive globalization” to empower the smaller member-nations. This means giving smaller member-nations and their MSMEs greater capacity to manufacture even as they provide services to bigger countries. And the bigger countries are then expected to open up more market access. President Duterte likewise pushed for digitalization of the MSMEs so that jobs can be sustained, and the MSMEs will have to be also retrained and empowered so they can ride on the growth of digitalization, especially of the economy.

On the sidelines, the Philippines signed also the Memorandum of Understanding with Papua New Guinea on Joint Economic and Trade Committee (JETC).

Of course as you know already, APEC was not able to issue a joint statement. And the Chairman’s statement was actually issued in consideration of certain disagreements. And I must tell you, these are disagreements in terms of words and I believe also of certain principles.

But ultimately, we believe that the results of the summits at APEC and ASEAN have great significance in creating opportunities for trade and investments that would generate income and jobs for our people.

ASEAN as trade platform

That’s why events like the ASEAN-India Business Conference are important as they give members in our region the opportunity to strengthen trade and investment ties. These events also support the ASEAN Economic Community (AEC), which promotes the economic integration in ASEAN.

Furthermore, ASEAN is now virtually tariff-free. Efforts are now focused on trade facilitation initiatives. But of course, one thing that we have to address would be the challenge of Non-Tariff Measures (NTMs). If we are to grow intra-ASEAN trade and trading also with our dialogue partners, we will have to settle and address all these Non-Tariff Measures.

ASEAN-India Relations

Decades after the cold war and geopolitical alignments that limited past relations between ASEAN and India, the ASEAN-India collaborations have started to prosper. It is in the right direction but definitely there’s still a big room for improvement.

The importance of ASEAN’s collective strength in leveraging greater trade and investments can be seen in the current relationship of ASEAN and India.

The ASEAN-India Free Trade Area (AIFTA) was made with the signing of the Framework Agreement on Comprehensive Economic Cooperation between ASEAN and India in 2003; as well as the signings of the Protocol to Amend the Framework Agreement and of the AIFTA Trade in Goods Agreement (AITIGA) in 2009. Our FTA’s objectives were the following: bolster economic cooperation; liberalize trade in goods and services in a progressive manner; and facilitate economic integration between ASEAN and India, among others.

Since then, ASEAN-India merchandise trade has garnered positive momentum. Bilateral merchandise trade between ASEAN and India expanded to US$73B in 2017 from US$56.7B in 2010, according to data culled from the ASEAN database. Annual growth of ASEAN-India merchandise trade averaged 9.8% for 2010-2017 period. Mineral fuels and oils have been the top tradeable item, representing US$14B, or 20% of ASEAN-India merchandise trade. ASEAN’s merchandise exports to India were valued US$45B in 2017, accounting for 62% of the trading relationship. Meanwhile, ASEAN’s imports from India amounted to US$28B, or 38% of the total. Between 2010 and 2017, ASEAN’s exports to India grew by an annual average rate of 8.1%, whereas ASEAN’s imports from India climbed by annual rate of 13.5%. So now, ASEAN has imported more from India. Last year, ASEAN accounted for 10.4% of India’s export and about 10% as well of India’s imports. And these series of 10 percents, in terms of FDI, the FDI inflow to India from ASEAN is about 10% also of India’s FDI.

Despite this, we believe that there is still so much unexplored potential for trade and investment partnership between India and ASEAN. With ASEAN’s population of over 600M and India’s 1.3B, these two giant economies—both dynamic and fast-growing, and undergoing reforms and liberalization—should consider further trade and investment opportunities that are more open to each other.

With India, ASEAN can maximize trade and investment opportunities in the areas of pharmaceuticals, automotive, manufacturing, textile, and business process outsourcing. What’s more, a strengthened partnership between ASEAN and India can give SMEs a larger free trade area to work with as we make them part of the global value chain. How do we do this? During the APEC meeting, I advocated for greater focus on training, retraining, digitalization, and the importance of cooperation in pushing for SME training.

Likewise, as our President had said during APEC, we need to push for “inclusive globalization” to empower the smaller member-nations and their MSMEs.

Certainly, economics, connectivity, security have always been at the center of ASEAN-India relations.

Now, moving quickly to the India-Philippine Relations. On the part of the Philippines, we have a lot in common with India as the two of the world’s fastest growing economies. Philippine GDP growth averaged 6.3% in the three quarters of 2018, and for several quarters since 2010 has been averaging over 6%.  Meanwhile, India’s GDP growth averaged around 8% in the first half of the year. For both economies, the growth drivers are similar: capital formation and government spending on the expenditure side; and services and industry—which include construction and for the Philippines’ case, more manufacturing or higher growth in manufacturing on the production side.
Presently, India is our 14th top trading partner, and our 18th export market, our 14th import supplier. In 2017, total trade between our two countries amounted to US$2.24B. Not too much but definitely a big room for improvement.

The visit of President Duterte in New Delhi early this year likewise gave a clear signal that India is an important trading partner. In fact, that visit resulted into several business and commercial agreements, most of which are in fruition stages already. All of this means that there is much room for improvement and the opportunities are numerous between the Philippines and India. With both countries experiencing robust economic growth, there’s good ground for many industry complementation. The Philippines’ consistent growth of over 6%, supported by growing manufacturing sector, offers lots of prospects where we can work together.

For example, we can gauge assistance and learn best practices from each other in the fields of industry development, BPO, and pharmaceutical industry. Both countries have emerged as well as frontline service sectors in the BPO industry. In fact, most of the top Indian companies in Information and Communications Technologies (ICT) have chosen to locate in the Philippines as their strategic second location to service global markets.

Among the priority sectors that the Philippines is considering for promotion to India include cooperation in the fields of ICT, telecom, automotive components, pharmaceuticals, and Public-Private-Partnership (PPP) in infrastructure development, as well as in energy and power development. We also want to explore market potentials for products such as high innovation and design driven products for niche markets, electronics and semi-conductors, hospitality, and education.

Speaking of pharmaceuticals, we hope to attract Indian pharmaceutical companies to set up operations in our country. This will not only create more jobs for Filipinos, it will address the high prices of medicine in the local market for the Philippines. The Philippines offers expanded manufacturing base and market for Indian companies.

To this end, the Philippines is seeking to capitalize on the Indian Government’s Act East policy, which focuses on strengthening trade and investment relations with its neighbors in the East. We are also in a unique and strategic location as an entry point for Indian businesses to enter the Philippines and ASEAN market.

I must note also that the Philippines has established a market access partnership with GSP in the US and GSP+ privileges in the EU.


This brings us full circle to where we are today. As our discussions in the ASEAN-India Business Summit will surely help us deepen trade and investment ties in the region. But through the application of “inclusive globalization,” we can warrant that the economic growth that will result from greater trade balance between ASEAN and India. This will be inclusive for all our people towards peace, progress, and shared prosperity. I am sure that the goal everyone here will appreciate will be that we need to attain shared prosperity for all.

Good afternoon.