Unanimous support across a variety of sectors – education, travel and security all areas set to grow
Op-Ed Commentary: Chris Devonshire-Ellis
Oct. 10 – Despite the lack of U.S. President Barack Obama’s attendance, APEC ministers still got a lot done. Obama’s presence was missed, not just because the United States is still the largest trade partner for all the attending nations, but also due to the expected – but now receding – hopes of getting some push behind the proposed TPP Agreement. While some leaders were sympathetic to Obama’s predicament (Russian President Vladimir Putin saying if it had happened to him he also would have stayed at home) others were more critical (Singaporean Prime Minister stating “We need a U.S. president that can fulfill his international obligations”), however the meeting generally went well despite his absence.
There is a lot to pack in with four days of talks and meetings, and the overall declaration issued at the end of APEC concluded with the following commitments:
- To advance the implementation of the commitment to reduce tariffs on the APEC list of environmental goods (EGs) to 5 percent or less by 2015 (EGs are goods that also have an environmental impact in their production; such goods can only be subjected to the lower tariffs if they meet certain production criteria such as not having been grown on land previously rain forests or mangroves);
- To establish the APEC Public-Private Partnership Scheme on EGs and services, and to enhance work to address trade and investment issues related to this sector. To explore and develop trade in products that contribute to sustainable and inclusive growth through rural development and poverty alleviation;
- To acknowledge the work on local content requirements and the APEC best-practice scheme to create jobs and increase competitiveness;
- To continue to implement the APEC Investment Facilitation Action Plan, by advancing the Public-Private Dialogue on investment and encourage government officials to work with the private sector to build and improve upon corporate social responsibility practices and sustainable investment (this issue of key notice to China’s state-owned enterprises, who often ignore local citizens’ wishes and views);
- To advance and enhance the next generation of trade and investment issues, including finalizing the APEC Innovation & Trade Implementation Practices as soon as possible;
- To enhance physical connectivity (the practice of cutting out middle men in government and trade) and to cooperate in developing, maintaining and renewing physical connectivity through a multi-year plan on infrastructure development and investment;
- To endorse the target of 1 million intra-APEC university level students per year by 2020 (this impacts on easier-to-obtain student visas and the spread of APEC member campuses in other APEC members states) that will enhance the mobility of students, researchers and education providers, and the network of existing bilateral agreements; and
- To make progress on the Travel Facilitation Initiative as a way to promote tourism and facilitate business by making travel more accessible, convenient and efficient while also safe and secure.
Although there are no real immediate standouts in the declaration, there are positive signs in a number of industry sectors, not least in education, travel and tourism – and to some extent the security issues that go with that. Businesses engaged specifically in these fields will be able to take something concrete from these APEC talks and should be keeping an eye on incentives and access to these areas across APEC.
How can I examine what APEC means for me?
A good place to start is by looking at the various double taxation agreements (DTAs) that APEC members have with your own country of origin. These include specific agreements that can reduce tariffs and taxes in a number of key areas, many of which are directly related to a multitude of specific industries. We have listed a huge volume of DTAs that all ASEAN members enjoy with many other countries worldwide. These can be found under the “Treaties” section of our ASEAN Briefing website and include (as part of APEC) Singapore, Brunei, Malaysia, Indonesia, Philippines and Vietnam. Treaties that China has signed can be found here. Free trade agreements (FTAs) are also highly effective tools and can cover thousands of products.
The U.S.-Asian tax treaties
Treaties between the United States and China can be found here, with Singapore here, with Thailand here, with the Philippines here, Malaysia here and Indonesia here.
The EU-Asian tax treaties
An FTA between the EU and ASEAN has just been agreed, and details will be made public soon.
ASEAN also has a free trade agreement with Australia and New Zealand which can be found here.
Other significant tax treaties affecting Asia
With Singapore well-developed as a regional financial and services hub for Asia (it houses both the APEC and ASEAN secretariat) and as a low-tax jurisdiction in its own right, Singapore’s numerous free trade and double tax agreements make it a highly important regional base for foreign companies wishing to invest in Asia. Singapore’s many treaties can be found here.
Hong Kong is also a tax haven, although as is part of China does have many of its obligations covered under mainland China agreements. However in many specific areas, and especially in logistics and shipping, the territory does have its own agreements in place.
Chris Devonshire-Ellis is the Founding Partner of Dezan Shira & Associates – a specialist foreign direct investment practice providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam as well as liaison offices in Italy and the United States.
For further details or to contact the firm, please email china@dezshira.com, visit www.dezshira.com, or download the company brochure.
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