Wednesday, September 21, 2011

Is ASEAN the English Premier League or the Big 12?

Recent events in U.S. collegiate (university) sports reminded me of a post I wrote last year for the late OpinionAsia website comparing ASEAN to a professional soccer (football) league.  For those not familiar with U.S. collegiate sports, suffice it to say that several university conferences (Big 12, Big East) have been hit with sudden defections to more competitive conferences (SEC, Pac-12) for economic reasons.   So, for the benefit of our American readers, I am reposting my OpinionAsia post (hint: replace "league" with "conference" and "English Premier League" with Big 10, SEC, ACC or Pac-12, depending on your preference).

Can ASEAN Become a Premier League?

Observers of the Association of South East Asian Nations (ASEAN) and its regional integration process often grasp for analytical analogues.  Is ASEAN a developing supranational entity, like the EU?  Or is it only a loose grouping?  ASEAN is definitely not a proto-state, but it has progressed beyond an informal grouping, thanks to the recent introduction of the ASEAN Charter. 

Although the Charter formalizes the rules and structure of ASEAN, it stops far short of the supranational aspirations of the EU’s Treaty of Rome.  The Charter provides ASEAN with legal personality but not with legal authority over its members. The ASEAN Secretary General has ministerial rank but can neither impose sanctions on members who do not comply with ASEAN measures, nor provide benefits to members who comply with ASEAN measures.  The Charter also does not provide any means for ASEAN nationals to invoke dispute resolution regarding ASEAN measures that affect them.

Rather, ASEAN can be likened conceptually to a league of sports teams which have decided to cooperate and institute common rules for operation and cooperation.  The Charter provides the newly formalized fundamental principles of the sport, with the various subsidiary agreements providing the more detailed rules for contests.  In this analogy, the ASEAN Secretary General operates the league office, organizing meetings and coordinating activities, but without the mandate to compel compliance among the members.  In this “league,” the team “players” (ASEAN nationals) have no ability to invoke league rules or to seek relief when rules are breached; that remains entirely the province of each team’s management (the ASEAN governments).

If ASEAN can be compared with a sports league, then its purpose is to promote its own popularity among potential “fans” (investors).   Standardized and improved rules and operation encourage more investment in ASEAN, and not in competitors such as China, Japan and the EU.    Similarly, better play and exciting matches encourage fans to watch the sports league in person or via television or the internet.

The difficulties in such an operation, where sovereignty remains with the teams’ management (ASEAN governments) and not with a “league office”, are both external and internal in nature. 

In external matters, ASEAN has been able to act in a united manner. In multilateral fora, ASEAN members coordinate, with the relevant ASEAN member representing the rest. For example, Indonesia speaks for ASEAN at the G-20.  In free trade agreement (FTA) negotiations, the ASEAN members coordinate as a group.  This occurred with the various FTAs that ASEAN negotiated and concluded with China, Korea, India, Japan and Australia/New Zealand.  Using the sports league analogy, this coordination effort resembles the negotiations between television networks and sports leagues for broadcast rights.

However, when the coordination among ASEAN members does not meet the expectations of others, this arrangement can break down. This occurred in the EU-ASEAN FTA talks, which the EU abandoned in favor of bilateral negotiations with individual ASEAN members such as Singapore.  The EU cited insufficient institutional development in ASEAN as necessitating the shift.  Again, resorting to the sports league analogy, this is akin to individual teams breaking away from the league committees and striking their own deals with television networks.

In internal matters, the lack of authority to enforce sanctions or provide rewards limits the efficiency of ASEAN. Rather than use the existing ASEAN dispute resolution procedures, ASEAN members use more established alternative fora.  Trade disputes between Malaysia and Singapore, and between Thailand and the Philippines, went to the WTO instead.  Territorial disputes between Malaysia and Singapore, and between Indonesia and Malaysia, went to the International Court of Justice instead.  Applying our sports league analogy, such occurrences are akin to teams resorting to court litigation rather than league procedures to resolve a dispute.

Also, the limited role of ASEAN nationals in the operation of ASEAN institutions can result in frustration.  This year’s open criticism of the ASEAN-China FTA by industries in Indonesia, Malaysia and the Philippines was caused in large part by ASEAN’s failure to engage the private sector during the negotiations and implementation of the agreement.    

Investors also often express frustration that they cannot directly invoke dispute resolution and must depend on their national governments to do so.  Often the national governments will decline to pursue dispute resolution due to other diplomatic or political reasons.   Again, under our sports league analogy, this would be akin to players having to rely solely on their team management to resolve salary and rules disputes.  Yet both in ASEAN and our sports analogy, disaffected participants have recourse: the players can go to another league with better pay and working conditions (and the fans can watch another league), and investors can abandon ASEAN for more attractive venues.

Despite all of these difficulties, there is every sign that the ASEAN institutions understand their limitations and are attempting to work around them. ASEAN Secretary General Surin Pitsuwan has made strenuous efforts to expand the moral and suasive authority of his office, filling the gaps left between the Charter and his legal authority.  He and the ASEAN Secretariat have also increased outreach efforts to the private sector and increase their involvement. 

These efforts should be encouraged and supported. However, the ASEAN member states should go further and consider sharing or releasing some sovereign authority to the Secretariat and other ASEAN institutions.  The ASEAN member states should also consider allowing ASEAN nationals to invoke dispute resolution and have more involvement in the operations of ASEAN institutions, particularly with regard to economic integration. 

The real-world experience of the sports leagues is instructive.  In the most successful leagues, such as the English Premier League, the league offices began with little or no authority and the players had little or no bargaining rights.  Yet the teams learned that assigning authority for negotiating to the league offices increased the payments from the television networks.   A stronger league office with disciplinary powers over both teams and players also improved the quality of play.  With better working conditions and play, better players joined the leagues.  Better players and quality of play led to more fans.

Throughout the evolution of the sports leagues, the teams have retained their ultimate sovereignty. They can always leave to join another league or negotiate their own marketing and broadcast rights. Some do.  However, in successful leagues,  teams understand that by sharing and pooling their sovereignty, the league becomes more attractive to players and fans.  If ASEAN can learn and apply similar lessons, it too can be successful in its competition for foreign investment and trade.