We will participate actively to propagate free and open trading alliances as Asia grows and becomes more economically integrated. In this way, we help to unlock the value, spin off new opportunities and create good jobs for Singaporeans. ASEAN and AEC 2015 One key market for Singapore is ASEAN. ASEAN is a growing region and has a combined population of 600 million people. ASEAN also has a GDP that is the third largest in Asia, after China and Japan. In recent years, ASEAN has embarked on an enterprise to integrate our economies into a regional bloc. ASEAN today, through initiatives like the ASEAN Free Trade Area, has resulted in virtually no tariffs for flows of goods between our countries. Going forward, ASEAN is making good progress towards becoming the single market and product base envisioned in the ASEAN Economic Community (AEC). The realisation of the AEC by 2015 will result in an even more tightly integrated region, and this has opened up more opportunities for corporates as well as investors. A key principle underpinning the AEC 2015 is the free flow of goods, services and investment within the region by 2015. Let me update you on the progress so far. •  1  On trade in goods, virtually all goods in ASEAN already move throughout the region tariff-free1. We are now working on reducing non-tariff barriers. ASEAN-6 countries have eliminated tariffs on 99.65% of tariff lines effective 1 Jan 2010.
RCEP will be one of the biggest FTAs in the world, covering 3 billion people and accounting for one-third of the world’s GDP. RCEP is a significant agreement for ASEAN. It is an ambitious attempt to deepen regional economic integration and to link ASEAN’s various trading partners, many of whom do not have existing trade agreements with one another. One key partner for ASEAN in RCEP is China. China will continue to play an increasingly important role in trade with ASEAN, and this will grow even further with its participation in RCEP. In 2012, ASEAN-China trade volumes reached a record high of $ billion, and by 2015, ASEAN is expected to be China’s top trading partner. As a result, in the next few years, we can expect a greater acceptance and use of the Renminbi (RMB) as a trade settlement currency, especially in ASEAN. What does this mean for us? China has already signed bilateral currency swap arrangements with key ASEAN countries, such as Singapore, Malaysia and Indonesia. Corporates, investors and financial institutions need to be prepared if they are to capitalise on the opportunities brought on by the increasing internationalisation of the RMB. In February this year, Singapore became the first country outside Greater China to have a Renminbi clearing bank when the Singapore branch of the Industrial and Commercial Bank of China (ICBC) was designated as such. This was followed by MAS and the People’s Bank of China signing an enhanced bilateral currency swap agreement in April.