ASEAN-Japan Centre (AJC) hosted a webinar on “Promoting Resilient Supply Chains in the Electronics Industry in ASEAN and Japan through Free Trade Agreements (FTAs)” on October 28, 2022. The webinar provided an avenue for discussion on how free trade agreements could help promote resilient supply chains in the electronics industry.
About 100 participants from the business, academe, and government sectors of Japan and ASEAN Member States participated in the webinar. Based on the online poll conducted during the webinar, 97% of the respondents found the session useful or informative and 86% believed that FTAs could promote inclusive and sustainable trade in the electronics industries.
Resource speakers for the webinar
1. Dato’ Seri Wong Siew Hai, the President of Malaysia Semiconductor Industry Association (MSIA) presented Malaysia’s Semiconductor & Electronics Industry which currently has 201 members, 44% of which are from Malaysia, US-Canada 29%, Asia 21%, and Europe 9%. He shared that the semiconductor market worldwide increased by 26% in 2021 and is predicted to grow by 11% in 2022. Malaysia is a key player in the global semiconductor supply chain with 7% of total global semiconductor trade flowing through Malaysia and 13% of global chip testing and packaging. In 2021, exports of the E&E industry reached USD 109 billion, contributing 37% to total exports, 6.85% to GDP, 3.8% to total employment and 48% to total investment. During the first 9 months of 2022 exports increased by 35%. Moreover, E&E is one of eight strategic and high impact industries on the twelfth Malaysia plan 2021-2025.
He also shared that Malaysia has ratified the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and will enter into force on November 29, 2022. He said that the CPTPP will provide the E&E sector with wider sourcing channels and the possibility of lowering the cost of raw materials through tariff elimination on imported input products.
2. Dr. Danilo C. Lachica, the President of the Semiconductor and Electronics Industries of the Philippines Foundation, Inc. (SEIPI) discussed “Towards a Resilient Supply Chain in the Philippine Electronics Industry”. SEIPI is composed of 346 multinational and Filipino-owned semiconductor and electronics manufacturing firms, suppliers, allied and support industry members and academic institutions. In 2021, electronics exports accounted for US$45.92 billion and contributed 61.5% to total commodity exports. The main export markets were Hongkong, US, China, Singapore, Japan, Taiwan, Germany, South Korea, Thailand, and the Netherlands. The top three electronics products exported to Japan were processors and controllers, other electronic integrated circuits, and radio navigational aid apparatus.
He shared that the Philippines has signed various trade agreements including the International Technology Agreement (ITA) and participated in the Indo-Pacific Economic Framework for Prosperity (IPEF) discussions which has “resilient economy” as one of its pillars.
3. Dr. Kondo Shinichi, Associate Professor of Faculty of Policy Studies, Iwate Prefectural University, Japan made a presentation based on his academic perspective on the globalization of Japanese companies in Asia. He presented the production strategies of Japanese multinational companies (MNCs) and how the trend shifted from ASEAN to China in the 1990s due to the introduction of China’s market economy system, and then back to ASEAN due to the region’s economic development. He also discussed how the COVID-19 pandemic, the US-China trade war, and Russia and Ukraine war have disrupted global supply chains especially of the electronics sector.
He shared that FTAs and EPAs could provide a guarantee for multinational companies to build supply chains in geopolitical situations but not for problems like the pandemic. He also said that although most electronic products may already have zero tariffs, some consumer devices such as home appliances could still have tariffs that could benefit from FTAs. As the conclusion of his presentation, he said that the strategic development and the rebuilding of glocal supply chains are necessary for Japanese companies.
