This report updates a scoping study that was carried out by the Asian Development Bank (ADB) in 2014 on the development of a border economic area between Malaysia and Thailand. Following that report, the two governments decided to initially focus on the border economic area (BEA) in the Malaysian state of Kadah and the Thai province of Songkhla since it handles the largest volume of cross-border movement of goods and people.

The present report updates development since 2014 in that area.The project builds on the IMT-GT connectivity corridors that serve as the channel through which development is to disseminate to areas throughout the sub-region. Impact of economic area along Malaysia-Thailand border is expected to link to Indonesia through connectivity to other corridors and serve as a sub-regional-level model for IMT-GT.

For a video on the project, see https://www.youtube.com/watch?v=BpgpN8Y2dYk&feature=youtu.be.

This monograph deals with the emergence and characteristics of special border zones in Thailand and how they are able to deal with the range of situations that exist along the country’s borders. It brings together practical tools and experiences surrounding Thailand’s border area development. Its emphasis is on new directions being adopted to drive economic growth and social development in those regions that could otherwise lag behind the rapid growth of agglomerations near major international gateways.

It provides the basic tools and methodologies required to adequately evaluate and plan the location, coverage, incentives and financing for border development areas. In so doing, it emphasizes practical issues needed to implement special border development zones in ways that ensure that the choice of projects, programs and institutions designated for the border areas are based on international best practices.

It covers special border zones at three levels: first, it describes their characteristics in terms of common features and operational components; second, it covers the overall strategic approach to their design and adaption to specific area requirements; and, third, it provides details on practical steps involved in their implementation and operationalization.

The present study explores opportunities and challenges for intra- and inter-regional trade in the Central and South Asia areas by analyzing a wide range of channels impacting trade. Trade enhancing channels are divided into two broad categories. The first set refers to disaggregated or product-level characterizations of trade affecting competitiveness and complementarities between trading partners within and between the regions. The second refers to price, non-price and structural determinants that tend to affect all products traded between countries. The analysis also includes a gravity model to gauge the effect of economic growth, distance and price, non-price and structural determinants of regional trade.

The report provides a review and analysis of the findings from the scoping study on the proposed Malaysian–Thailand Special Border Economic Zone (SBEZ). The coverage of the study is guided by the recommendations of the IMT-GT Special Implementation Task Force on the Establishment of a Special Border Economic Zone (hereafter TF-SBEZ) at its meeting in Penang, Malaysia on 22 November 2013. At that time, the TF-SBEZ determined that that present study should be a stand-alone study, comprehensive in nature and cover in-depth all the SBEZ components for each of the eight border crossing areas in the Thai-Malaysian border, including linkages to Indonesia.

Based on those findings, the TF-SBEZ requested that the present study make recommendations to the Task Force on the possible location(s) of the SBEZ. The study is part of a broader project that intends to support the establishment of an SBEZ that will help to attract investors in productive activities that promote subregional value chains in order to stimulate cross-border trade and investment, serve as a catalyst to commerce along the IMT-GT corridors and help to substantially improve the social and economic welfare of the population along the border provinces.

Laos benefits from the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA). The Agreement has eliminated tariffs on 90% of Australia’s and New Zealand’s imports, with the remaining tariff lines to be removed by 2020. For Laos, it provides for a much longer transition period for eliminating tariffs in recognition of the country’s status as a newer ASEAN member having as least developed country status.

The Agreement also eliminates non-tariff barriers like licensing requirements; offers procedures on standards and sanitary and phytosanitary (SPS) measures; facilitates communications and shipping services; and guarantees equal treatment to foreign investments. These preferential arrangements offer Laos significant opportunities for accessing the Australian and New Zealand markets in a wide range of products.

The present evaluation assesses the first phase of the Trade Development Facility (TDF-1) spanning the period between 2008 and March 2013. The evaluation follows a standard framework used by development partners to assess the performance of completed trade-related technical assistance. It uses a set of evaluation criteria to measure project outcomes in terms of (i) relevance, (ii) effectiveness, (iii) efficiency, and (iv) impact as measured in terms of (a) sustainability and (b) cross-cutting gender issues. The evaluation uses the World Bank’s rating scale for its monitoring and evaluation framework plus numerical scoring: (a) highly satisfactory (score = 6); (b) satisfactory (score = 5); moderately satisfactory (score = 4); (c) moderately unsatisfactory (score = 3); (d) unsatisfactory (score = 2); and (e) highly unsatisfactory (score = 1). The assessment is based on performance indicators, stakeholder questionnaires, program documents, interim reviews by TDF development partners, structured interviews and comments received from stakeholders at the meeting of the Program Executive Committee (PEC) on 3 April 2013.

Laos benefits from the comprehensive ASEAN-Korea Free Trade Agreement (AKFTA), which in large part has supported the fast growing exports of Laos to Korea. Since Laos became a member of ASEAN in 1997, its exports destined for Korea have increased 10-fold. That expansion is nearly twice as large as Lao exports to all destination and has contributed to Korea being one of its top 10 export destinations.

The AKFTA has separate lists for products on the normal and sensitive tracks. The Most Favored Nation (MFN) tariffs for products on the normal track covering 90% of all tariff lines were eliminated by Korea in 2010. For the remaining 10% of tariff lines, which cover sensitive products, Korea’s customs duties on imports were reduced to 20% in 2010 and are now in the process of being reduced to between 0% and 5% by 2016. In the case of Laos, customs duties on the 90% of tariff lines listed in the normal track are gradually being eliminated by 2018. Customs duties on the remaining 10% of tariff lines are being lowered to 0%-5% by 2024.

This guide shows how to determine (a) whether there are benefits to using the AKFTA, and (b) whether a particular product being exported from Laos is eligible for a preferential rate. It is important to check these two conditions in order to avoid spending time and money in applying for the preferential rate if a product is already subject to a low customs duty outside AKFTA.

Laos benefits from the ASEAN-India Free Trade Agreement in Goods (AIFTA) by gaining preferential access to the large Indian market. Under the Agreement, India commits to eliminating customs duties on imports for 90% of its tariff lines under two separate lists: one being completed by the end of 2013; the other, by end-of-2016. For products on the sensitive list, India’s tariffs are being reduced to no more than 5% by the end of 2016. For its part, Laos has until 2021 to eliminate tariffs on its normal and sensitive tracks.

There are two normal tracks in the AIFTA: (a) Tariff lines in Normal Track 1 are eliminated for India in 2013 and for Laos in 2018; (b) Tariff lines in Normal Track 2 are eliminated for India in 2016 and for Laos in 2018. For products on the sensitive list, India commits to lowering tariffs above 5% to no more than 5% by 2016; Laos has until 2021 to apply those tariff reductions. For tariffs equal to 5%, the tariff can be maintained at the same rate for up to 50 tariff lines by both countries.

This guide shows how to determine (a) whether there are benefits to using the AIFTA, and (b) whether a particular product being exported from Laos is eligible for a preferential rate. It is important to check these two conditions in order to avoid spending time and money in applying for the preferential rate if a product is already subject to a low customs duty outside the AIFTA.

China is the second most important export destination of Laos, and export growth to that market has far outpaced exports to Thailand, the leading export destination. One of the major drivers of this growth is the comprehensive ASEAN-China Free Trade Agreement (ACFTA) under which Lao benefits in trade of goods and services and in investment measures.

The ACFTA has a separate list for products on the normal and sensitive tracks. The Most Favored Nation (MFN) tariffs for products on the normal track are being progressively eliminated by 2015 on about 90% of all products. For the remaining products, tariffs are being eliminated based on a schedule for products on a so-called Sensitive List and another one called the Highly Sensitive List covering rice, sugar, plant oils, among others.

This guide shows how to determine (a) whether there are benefits to using ACFTA, and (b) whether a particular product being exported from Laos is eligible for a preferential rate. It is important to check these two conditions to avoid spending time and money in applying for the preferential rate if a product is already subject to a low customs duty outside ACFTA.

The present evaluation is the midterm assessment of EIF Tier 1. It aims to examine and provide feedback on
whether the project is performing well and moving towards the achievement of its objectives and targets. It
also identifies obstacles to performance and, where applicable, suggests remedial actions where the project
might not be on track. In this way, it provides justification for the extension of Tier 1 for an additional two
years. Finally, the evaluation serves as a possible input to any separate evaluation of the global EIF program
that may take place in the future.