Liberalisation of professional services in asean through mutual recognition: engineering services

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Table of Contents

Abbreviations 5

1.Introduction 6

2.Mutual Recognition Arrangements in Engineering Profession 9

2.1Introduction 9

2.2Mutual Recognition Models 12

2.2.1The EU Model 13

2.2.2NAFTA Model 17

2.2.3GATS Model 18

2.3International MRA Frameworks 19

2.4ASEAN MRA for Engineering Profession 22

3.Qualifying and Practice Requirements in AMS 24

3.1Brunei Darussalam 24

3.1.1Laws and Regulations 24

3.1.2Professional Association 26

3.1.3Qualifying as a Professional Engineer 27

3.1.4Setting-up Engineering Practice 27


3.2.1Laws and Regulations 30

3.2.2Qualifying as a professional engineer 30

3.2.3Setting-up Engineering Practice 32


3.3.1Laws and Regulations 33

3.3.2Professional Associations 34

3.3.3Qualifying as a professional engineer 35

3.3.4Setting-up Engineering Practice 36

3.4LAO PDR 38

3.4.1Laws and Regulations 38

3.4.2Professional Association 39

3.4.3Qualifying as a professional engineer 39

3.4.4Setting-up Engineering Practice 39


3.5.1Laws Governing Engineering Profession 40

3.5.2Engineering Bodies in Malaysia 41

3.5.3Qualifying as an engineer 41

3.5.4Setting-up Engineering Practice 55


3.6.1Laws and Regulations 62

3.6.2Professional Association 62

3.6.3Qualifying as a professional engineer 63

3.6.4Setting-up Engineering Practice 65


3.7.1Laws and Regulations 66

3.7.2Professional Associations 67

3.7.3Qualifying as an engineer 68

3.7.4Setting-up Engineering Practice 82


3.8.1Laws and Regulations 85

3.8.2Professional Association 85

3.8.3Qualifying as a professional engineer 85

3.8.4Setting-up Engineering Practice 90


3.9.1Laws Governing Professional Engineering 92

3.9.2Professional Associations 92

3.9.3Qualifying as an engineer 92

3.9.4Setting-up an Engineering Practice 96

3.10VIET NAM 98

3.10.1Laws and Regulations 98

3.10.2Qualifying as a professional engineer 98

3.10.3Setting-up Engineering Practice 100

4Analysis of the Qualification and Practice Requirement 102

4.1Application of the education and professional qualification system 102

4.2Gaps and shortfalls within the qualification system in AMS 104

4.3Equal Opportunities 106

4.4Issues affecting Liberalisation of Engineering Services in ASEAN 107

5Proposal for Reform 112

6Conclusion 114

Figure 1: Four Modes of Supply under AFAS/GATS 8

Figure 2: Models of MRAs 13

Figure 3: Basis of EU MRAs 13

Figure 4: Qualifying as an engineer in the Philippines 82

Figure 5: Types of Professional Services Entity in the Philippines 84

Figure 6: Implementation of engineering core competencies 104

Figure 7: Gaps in Engineering Qualification System 105

Figure 8: Gender Composition in the engineering profession 107

Figure 9: Reform Proposal 112



Full Name


ASEAN Council of Professional Engineers


ASEAN Economic Community


ASEAN Framework Agreement on Trade in Services


ASEAN Member State


The Association of Southeast Asian Nations


Australian Qualification Frameworks


Coordinating Committee on Services of ASEAN


The European Community


The European Union


General Agreement on Trade in Services of the WTO


Mutual Recognition Agreements


Professional Engineers


Professional Regulatory Authority


Trans Tasmanian Mutual Recognition Agreement


United Kingdom of Great Britain and Northern Ireland


United Nations Conference on Trade and Development


The United States of America


World Trade Institute, University of Bern


World Trade Organisation

  1. Introduction

The main objective of the Handbook “LIBERALISATION OF PROFESSIONAL SERVICES IN ASEAN THROUGH MUTUAL RECOGNITION: ENGINEERING SERVICES” is to provide an important tool to disseminate informationand create greater understanding of the liberalisation of the trade in engineering services within ASEAN.

The Handbook will assist ASEAN engineering professionals understand requirements to qualify and to practice as an engineer in all ASEAN Member States (AMS) and the requirement to set-up commercial presence in the relevant profession in another AMS. The ability of engineers in ASEAN to move beyond national borders in ASEAN will assist ASEAN to achieve the ASEAN Economic Community (AEC) in 2015. The ability of engineers to provide services beyond national borders is also facilitated by the ASEAN Framework Agreement on Trade in Services (AFAS) 1995 and the Mutual Recognition Agreement (MRA) on Engineering Services 2005.

AFAS, which is the main legal documents facilitating liberalisation of trade in services aims to (1) enhance cooperation in services among AMS; (2) to improve the efficiency and competitiveness of ASEAN services industries, diversify production capacity and supply, and distribution of services; (3) eliminate substantial barriers to trade in services; and (4) liberalise trade in services by expanding the depth and scope of liberalisation beyond those undertaken under the General Agreement on Trade in Services (GATS) of the World Trade Organization (WTO).

The Handbook will first familiarise readers with the four modes of supply of services under AFAS which is adopted from Article I.2 of GATS. The definition of modes of supply of services trade under AFAS, as in GATS, is four-pronged, depending on the territorial presence of the supplier and the consumer at the time of the transaction.1

Pursuant to Article I:2 of GATS, services trade include services supplied

    1. from the territory of one Member into the territory of any other Member (Mode 1 - Cross border trade);

    2. in the territory of one Member to the service consumer of any other Member (Mode 2 – Consumption abroad);

    3. by a service supplier of one Member, through commercial presence, in the territory of any other Member (Mode 3 - Commercial presence); and

    4. by a service supplier of one Member, through the presence of natural persons of a Member in the territory of any other Member (Mode 4 - Presence of natural persons).

Examples of the four modes of supply are as follows:

Mode 1: Cross border

A user in country A receives services from abroad through its telecommunications or postal infrastructure. Such supplies may include consultancy or market research reports, tele-medical advice, distance training, or architectural drawings.

Mode 2: Consumption abroad

Nationals of A have moved abroad as tourists, students, or patients to consume the respective services.

Mode 3: Commercial presence

The service is provided within A by a locally-established affiliate, subsidiary, or representative office of a foreign-owned and – controlled company (bank, hotel group, construction company, etc.)

Mode 4: Movement of natural persons

A foreign national provides a service within A as an independent supplier (e.g., consultant, health worker) or employee of a service supplier (e.g. consultancy firm, hospital, construction company).

Commercial linkages may exist among all four modes of supply. For example, a foreign company established under mode 3 in country A may employ nationals from country B (mode 4) to export services cross-border into countries B, C etc. Similarly, business visits into A (mode 4) may prove necessary to complement cross-border supplies into that country (mode 1) or to upgrade the capacity of a locally established office (mode 3).

Figure 1: Four Modes of Supply under AFAS/GATS

To facilitate movement of ASEAN individual professional service providers (natural person)to another AMS, AMS entered into the ASEAN Agreement of the Movement of Natural Persons (MNP Agreement) signed on 19November 2012 in Cambodia.

The MNP Agreement covers temporary entry of skilled workers, professionals and executives. The scope of the MNP Agreement is limited to business visitors, intra-corporate transferees, business visitors and contractual service suppliers, and is subject to the commitments made in the Schedule of Commitments. The MNP Agreement does not cover professional service providers who seek access to employment market.

The Handbook also discusses the “mutual recognition agreement” (MRA) at the international and ASEAN levels. MRA is one of the important tools to increase the level of utilization of the liberalization of cross-border trade in professional services in ASEAN.

The Handbook is arranged in the following manner.

Part 2 of the Handbook discusses the definition of mutual recognition and MRAs, models of mutual recognition and MRAs in several jurisdictions, and MRAson engineering servicesat international and regional levels.

Part 3 of the Handbook provides an overview of educational requirement prior to qualifying as an engineering professional in the ten (10) AMS. Part 3 also discusses the pre-conditions required to set-up commercial presence of engineering practices (Mode 3) in AMS.

Part 4 analyses various issues surrounding the liberalisation of engineering in ASEAN, with particular attention on Mode 3 and Mode 4.

Part 5 of the Handbook provides several proposals for reform in the liberalisation of professional services in ASEAN.

Part 6 provides conclusions to the Handbook.

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