Wednesday, June 1, 2011

Extra-ASEAN Sources of Law OK; Indigenous ASEAN Law Would Be Better

This week Cambodia appeared before the International Court of Justice (ICJ) requesting a ruling on the Preah Vihear temple dispute between itself and Thailand.  Indonesia’s foreign minister, acting as a mediator (via Indonesia’s position as ASEAN chair) noted that this did not mean that ASEAN institutions had failed to resolve the dispute, since many aspects of the dispute resulted from the 1962 judgment of the ICJ.

Not only is this correct, but several other intra-ASEAN disputes have gone to extra-ASEAN dispute fora.   This is expressly allowed by Article 28 of  the ASEAN Charter (which Indonesia opposed during the drafting process).  Singapore and Malaysia, and Indonesia and Malaysia, have gone to the ICJ over disputed islands.   Singapore initiated the first use of the WTO dispute resolution process against Malaysia, and there currently is a WTO dispute between the Philippines and Thailand.   

In fact, even in a non-adversarial context, ASEAN members resort to extra-ASEAN sources of law.  For example, ASEAN members have often been reluctant to conduct cross-border customs inspections to verify whether goods qualify for the ASEAN Trade in Goods Agreement (ATIGA), despite the fact that ATIGA expressly authorizes such inspections.  For inspection of automotive industry exporters, ASEAN members have been using a 1958 UN agreement on the automotive industry as legal justification for such inspections.  The agreement allows importing countries to confirm whether the products have been produced in the claimed country of manufacture.  During such inspections, ASEAN authorities have also been checking the cost manufacturing statements and other data for compliance with ATIGA.   

Furthermore, when Canada invokes international arbitration against the United States on countervailing duties on softwood lumber, Mexico uses WTO dispute settlement against U.S. antidumping measures on oil pipe, or Argentina does the same against Brazilian antidumping measures on various products, the credibility of NAFTA or Mercosur is not questioned.  So why does ASEAN’s credibility get questioned when it resorts to extra-ASEAN legal fora? 

The difference is comes from history and expectations.  The NAFTA and Mercosur countries are relatively well-settled in their sovereignty and legal foundations. ASEAN is still quite young, with most of its members enjoying recently-won sovereignty in historical terms.   In this context, the use of extra-ASEAN legal sources is understandable.

The bigger question is whether ASEAN can apply the experience from its use of the ICJ, WTO and other sources of law to the implementation of an ASEAN-specific body of law and dispute resolution.  Extra-ASEAN law can help establish the legal foundations of the AEC, but without an indigenous source of law  and order, investors will either be reluctant to increase their stake in the AEC or demand a higher return on investments.  Not every dispute needs to go to the UN, just like not every dispute in the U.S. needs to go to the U.S. Supreme Court or requires congressional intervention.  ASEAN needs to adapt the extra-ASEAN norms of law and order for its own needs and uses.