Sunday, November 19, 2017

Wrap-up of the 31st ASEAN Summit

In today’s post, I provide a wrap-up on last week’s ASEAN Summit.  Given the focus of this blog, I will not analyze issues (such as the South China Sea) which have been well covered elsewhere. Instead, I review some institutional developments:

New ASEAN Secretary-GeneralLim Jock Hoi of Brunei was named the next ASEAN Secretary-General. Lim will serve during the 2018-2022 term (this post is rotated among the ASEAN countries based on alphabetical order, so the next Secretary General will be from Cambodia).   This is a positive development for the AEC, as Lim has deep experience in trade and investment issues, having served as Brunei’s chief negotiator during the Trans Pacific Partnership talks.  By my reckoning, Lim has the most experience in regional economic integration of any Secretary General.

ASEAN-Hong Kong FTA (AHKFTA) – ASEAN and Hong Kong signed their FTA.  With ratification not expected to be an issue, the AHKFTA will take effect before the completion of the Regional Comprehensive Economic Partnership (RCEP) talks (which have again missed a self-imposed deadline for completion).  The real value-added for the AHKFTA is in investment and services, as virtually all goods coming out of Hong Kong have China-origin and thus already qualify for the ASEAN-China FTA.  Rather, the AHKFTA will give Hong Kong companies better access and protection for investments and services, meaning that Chinese companies can use Hong Kong for their investment vehicles rather than an ASEAN country or China itself.  This may mean some small market share loss in investments for Singapore, particularly in the Philippines and perhaps northern Vietnam (due to distance and stronger links) but overall both ASEAN and Hong Kong will benefit from the FTA.

Timor-Leste – The Minister of Foreign Affairs and Cooperation Aurelio Guterres was in Manila representing Timor-Leste instead of the Timorese president.  However, this was not a downgrading by ASEAN but instead resulted from internal protocol issues in Timor-Leste (and Guterres, whom I know from the Diplomatic Institute and the National University of Timor-Leste, represented the country well). The ASEAN Summit did not issue any finding on Timor-Leste’s application to join ASEAN, referring the matter to the working group that meets on December 5 in Bali. Hopefully the Bali meeting will be the end of the beginning for the Timorese accession to ASEAN.

I will update this post as more documentation comes out.