TOPIC: ASEAN Economic Community by 2015

An ASEAN Economic Community was adopted as one of the three pillars of the ASEAN Community in 2003; economy along with security and socio-cultural issues. Originally, this aspiration was projected to be realized in 2020, in line with ASEAN Vision 2020 (which, it should be noted, was issued in 1997, thus implying the foundational intention of economic community since the early conception of ASEAN).  However, in August 2006, the ASEAN Economic Ministers decided to push forth the initiative, declaring the establishment of an ASEAN Economic Community (AEC) by 2015. Rodolfo Severino presents the rising challenge from China and India in Asia as the underlying reason for this acceleration; the ASEAN nations cannot allow their competitiveness to be undermined and all possible foreign investment sucked away into the two neighbouring giants.

The first definition of what this AEC was to be is outlined in the 1997 ASEAN Vision 2020: “a stable, prosperous and highly competitive ASEAN Economic Region in which there is a free flow of goods, services and investments, a freer flow of capital, equitable economic development and reduced poverty and socio-economic disparities”. Since this vague and largely inclusive inception, there has been an increasingly detailed proliferation of determined measures, action plans, programmes, blueprints, and schedules towards the establishment of the AEC. The process integrates both regional and global efforts. The literature culminates in two central documents: the Roadmap for an ASEAN Community 2009-2015, and the “Strategic Schedule for ASEAN Economic Community”.

For the most part, the Roadmap and Strategic Schedule follow the normative diction of regional and global organization; most measures highlighted are general or bereft with loopholes the members of ASEAN can exploit. However, the plans also call for several precise critical measures that demand strict compliance and accountability.

To list a few: the elimination of non-tariff and tariff barriers to intra-ASEAN trade; simplification, harmonization, standardisation and automation of customs processes; adoption of national ‘single windows’ for customs transactions; implementation of common regimes for the sectors agreed upon (cosmetics, electrical and electronic equipment, pharmaceuticals and medical devices; implementation of mutual recognition of professional credentials that have been agreed upon (in architecture, accountancy, surveying, and medical and dental devices); reduction or elimination of investment restrictions; implementation of regional measures to extend connectivity and access between ASEAN countries via high-speed networks; and harmonisation of capital-market standards. [ASEAN Customs Vision 2015, Strategic Schedule, and Roadmap for an ASEAN Community]

Complementary to the measure to be taken, appropriate benchmarks, milestones and performance standards were also set, to monitor and review the process of implementing the decided activities for the realization of AEC.

Beyond the literature, the negotiation table has come upon troubling times in regards to a fully functional AEC – and by fully functional, I mean to say an AEC that fulfills the intentions and strict criteria now set out - by 2015.

At the 18th ASEAN Summit at Jakarta, the ongoing conflict between Cambodia and Thailand consumed the discussion. Additionally, Timor Leste’s application for membership to the ASEAN has the potential to widen already existing cracks in the fundamental structure of ASEAN – cracks, which experts on the subject argue have been present since the original ASEAN six admitted Cambodia, Laos, Myanmar and Vietnam. The time and institutional adjustment required with a new member puts the successful establishment of an AEC at jeopardy.

To add onto the crowded agenda, the theme at both the 18th Summit (May 2011) and the 19th Summit (November 2011) was not AEC by 2015, instead it was the launching of deliberation on ASEAN’s priorities beyond 2015. This strategy, under the name of ‘ASEAN Community in a Global Community of Nations’, does include important conditions on the necessity to have an AEC. However, AEC is treated at most as a bridge on the road towards regional integration; towards cohesion of positions on global issues and a strengthening of ASEAN as a rules-based organization.

The key problem with AEC by 2015 is the need to fill the gap between plans and action. ASEAN has plenty of plans for an AEC. What it lacks is concrete action: even when all the member state of ASEAN will have ratified the agreements on economic integration, laws will still have to be passed at the national and local levels. And as all followers of regional integration well know, there’s the rub.

Reference Documents: Roadmap to ASEAN Community 2015, Strategic Schedule for ASEAN Economic Community

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