Monday, July 21, 2014

Why Competition Law and Policy in ASEAN Has a Long Way to Go

Last week the annual ASEAN Competition Workshop was held in Singapore.  Attendees focused on achieving the ASEAN Economic Community (AEC) Blueprint goal of having a uniform national competition (antitrust) law and policy in each of the ASEAN member states by 2015.  So far, only five member states – Indonesia, Malaysia, Singapore, Thailand and Vietnam – have done so, with the other member states currently in the legislative process of adopting such laws.

That only half of ASEAN currently has met the AEC Blueprint goal with one year to go is not surprising.  Of the remaining five countries, one (Philippines) has a mish-mash of laws affected by its American legal legacies, one is a small market (Brunei) that probably did not see the need for a competition law, and three (Cambodia, Laos and Myanmar) are less-developed countries. 

It is also not surprising when one views competition policy from a political economy point of view.  The exercise of disproportionate market power, whether through cartel behavior, predatory pricing, or other unfair trade practices, results in windfall economic gains for a small group of companies at the expense of a much larger number of consumers.  Because the consumers have more difficulty organizing themselves to counter would-be market abusers, the government acts on their behalf through state agencies or authorizing private legal actions against unfair competition.  Hence ASEAN members, like most countries, have created independent authorities to deal with competition issues (there is little appetite in ASEAN for American-style private antitrust litigation).

Yet the relative slowness in adopting such regimes is precisely because of this political economy dynamic.  Competition policy is a vital part of establishing a single market in the AEC.   However, the priority of ASEAN leaders has been to focus on the establishing the single production base first, with a true single market to be established later, beyond 2015 (despite the continuing rhetoric equating the two goals).  This reflects the greater political difficulty in ASEAN to implement either strong regional institutions (like the EU) and/or robust treaty obligations and dispute resolution (like NAFTA) that are necessary to have effective market regulation, including, inter alia, competition law and policy.

As a result, competition issues, like most other market-related issues like consumer protection, are pursued in ASEAN on a stop-start, inconsistent basis, and implemented in a patchy way in the ASEAN member states; it will remain that way until ASEAN leaders realize that an effective single market will require reform of the ASEAN institutions. The AEC, in its ultimate form, will need an ASEAN mechanism that deals with a single AEC market, rather than 10 separate member state markets.

Sunday, July 20, 2014

An ASEAN University Institute In All But Name

Last week my newsfeed alerted me to this article calling for the creation of an ASEAN University.  The article notes that in 1992, a previous initiative to create an ASEAN University failed, but that the current drive to integrate Southeast Asia into the ASEAN Community calls for such an institution now:

The original idea of an ASEAN University was based on the need to promote ASEAN-ness among its regional population as well as regional collaboration and integration.

The ASEAN University that I envision, however, looks to the European University Institute, or EUI, located in Florence, Italy.  The EUI is a graduate research institution funded by the 21 European Union member states, which not only serves as the historical archive for the European Union but is also engaged in research on various European issues and challenges usually focused on political science, social science and the humanities.

The ASEAN University should have an institutionalised funding arrangement with ASEAN member states, institutional autonomy and full academic freedom. As such, it will be free to engage in graduate research on ASEAN-related topics especially focused on political science, social science and the humanities.

Such an ASEAN University will not only serve the original idea for the institution but also create new knowledge on ASEAN-related challenges, serve as an authority on ASEAN topics and enhance the promotion, conservation and dissemination of the ASEAN region’s rich cultural diversity.

I would agree with the author’s sentiments.  The ASEAN Community needs intellectual support in its regional integration efforts.   However, I would disagree with the author’s belief that no existing institutions address this need:

No single ASEAN university or institution is focused on conducting research on ASEAN-related issues such as history, culture, society and the challenges and opportunities brought about by the establishment of an ASEAN Community.

Although it is correct that there is only an ASEAN University Network (AUN) of cooperating Southeast Asian institutions and there is no one institution with the ASEAN label, it is not correct that there is no “authoritative  institution that serves as a repository of ASEAN-related knowledge or serves as a think-tank focused on the current and future challenges of the ASEAN and its member states.”    

To confirm this, one should focus on what the attributes of an ASEAN University Institute (AUI) would look like:
  • The AUI would have sufficient distance, intellectually and geographically, from the center of power (Brussels in the EU, Jakarta in ASEAN), to encourage academic analysis.
  • The AUI would be located in a destination different enough from the rest of the region so as to make it appealing to ASEAN policymakers and global scholars. 
  • The AUI would be located in a country with a stake in regional integration yet not involved in any of the continuing controversies (e.g, not a South China Sea claimant).
  • Finally, the AUI would not have to fight for institutional resources and funding, a major issue when the ASEAN Secretariat has an annual budget less than the annual operating revenue of an American university football team.  

The National University of Singapore (NUS), with its Institute of Southeast Asia Studies, Lee Kuan Yew School of Public Policy and the Centre for International Law’s ASEAN integration through law project (and which is headed by Joseph Weiler, the head of the EUI), already serves much of the functions of an AUI.   NUS has all of the attributes of the putative AUI described above, and of course, NUS teaches in “Bahasa ASEAN”, e.g., English.

Perhaps what is lacking is greater distribution of the intellectual content.  However, the AUN both provides such an avenue and represents a relaxation of institutional rivalries that had prevented such cooperation in the past.

NUS thus already serves as the “ASEAN University Institute” put forward by the author.  However, that is not to say that more institutions are not needed; after all, the EU has both the EUI and the College of Europe.    My only point is that before embarking on the costly and time-consuming effort to create an ASEAN University Institute, let’s take a proper look at what we already have in the region.

Saturday, July 12, 2014

A Child's View of the ASEAN Community

Apologies for the delay in posting - we are in the middle of Ramadan, which is traditionally a slow period in much of ASEAN, and much of the region is holding its breath for the presidential election results in Indonesia, the largest ASEAN member.  I also have been finishing the edits on the ASEAN institutions book and the ASEAN rules of origin books that I co-authored with Stefano Inama of UNCTAD, which are scheduled to be published later this year by Cambridge University Press.  I'll be back with another post soon!

In the meantime, please enjoy this children's view of the ASEAN Community.