Canada Partially Lifts Burma Sanctions

Following the lead of other Western countries, Canada partially lifted its Burma sanctions yesterday.  As discussed in an earlier post, Canada had imposed the following sanctions against the Myanmar regime:

• a ban on all goods exported from Canada to Myanmar, excepting only the export of humanitarian goods;
• a ban on all goods imported from Myanmar into Canada;
• a freeze on assets in Canada of any designated Myanmar nationals connected with the Myanmar State;
• a ban on new investment in Myanmar by Canadian persons and companies;
• a prohibition on the provision of Canadian financial services to and from Myanmar;
• a prohibition on the export of any technical data to Myanmar;
• a prohibition on Canadian-registered ships or aircraft from docking or landing in Myanmar; and
• a prohibition on Myanmar-registered ships or aircraft from docking or landing in Canada and passing through Canada.

The above sanctions were lifted, but persons in Canada and Canadians abroad are still barred from commercial dealings with 44 companies and 38 persons, mainly Myanmar army generals and associates from the former military government, and their companies.   A Canadian arms embargo also remains in effect.

Again like the EU, Canadian sanctions are administratively based and so more flexible in their implementation and removal.  Further lifting of US sanctions will take significant time, probably months, because legislation and the US Congress is involved.

The EU Suspends Burma Sanctions for a Year

Sources indicated that the EU will suspend its Burma sanctions for period of one year, with the exception of the arms embargo.  The concept of a temporary lifting of sanctions was discussed during British Prime Minister David Cameron’s visit to Myanmar earlier this month.

The EU Burma sanctions include the following:

• a ban on the sale or transfer of arms and weapons expertise to Myanmar;
• visa restrictions on members of the Myanmar regime;
• a ban on visas for certain Myanmar nationals connected with the Myanmar regime;
• a freeze on officials’ overseas assets.
• a ban on the purchase, import or transport of
  (a) round logs, timber and timber products;
  (b) gold, tin, iron, copper, tungsten, silver, coal, lead, manganese, nickel and zinc;
  (c) precious and semi-precious stones, including diamonds, rubies, sapphires, jade and emeralds.
• a ban on the export of equipment and technology for enterprises involved in the above industries;
• a ban on loans, investment or joint ventures in the above industries;
• a ban on non-humanitarian aid or development  programs, other than human rights/civil society support, health and education or environmental programs.

The revised Burma sanctions will take effect after a formal meeting of EU foreign ministers on April 23.

The EU sanctions legislation gives its administering authorities great flexibility, such that a temporary suspension is possible. This contrasts with the US Burma sanctions legislation, which is complex and far less flexible. In fact, the EU approach may be  more optimal, as sanctions can be reimposed immediately should difficulties remain, and can be lifted permanently with sufficient progress in the country.

Myanmar is also suspended from the EU’s Generalized System of Preferences trade program.  This suspension is expected to be lifted in June, when a report on forced labor in Myanmar is due.

The 2012 ASEAN Customs Agreement

Earlier this month the ASEAN finance ministers signed a new ASEAN Customs Agreement, which supersedes the 1997 ASEAN Customs Agreement.  I’ve had a chance to review the 2012 Agreement and comment as follows:

1.             Article 3 states that the Agreement applies to “goods being imported into, exported from, in transit through, or trans-shipped through the territories of Member States in accordance with their respective laws and regulations.”  In other words, its provisions cover all goods, whether or not originating in ASEAN (e.g., qualifying for preferential treatment under the ASEAN Trade in Goods Agreement).

2.             Article 7 states that “Member States shall ensure that customs controls are limited to such extent as to ensure compliance with their respective customs laws.”  Customs controls refer to “inter alia, control of the movement of goods; examination of goods; taking of samples; verification of declaration data and the authenticity of documents; examination of the accounts; books and records of economic operators; inspection of means of transport, luggage and other goods carried by or on persons; and carrying out of official enquiries. “  This has been a controversial issue in ASEAN, as some ASEAN national customs authorities have used customs controls as a non-tariff barrier to trade. For example, in some ASEAN countries it can take many months to get a sample taken and approved by local customs authorities. 

3.             Article 9 sets forth formal and substantive requirements for goods declaration. There have been frequent disputes among ASEAN member states regarding the Form D origin document and other documentation. 

4.             Articles 10-12 provide for electronic submission of declarations, where authorized by national customs authorities. 

5.             Articles 16-18 contain general principles regarding release of goods, customs clearance and free circulation of goods. 

6.             Article 20 explicitly adopts the WTO Customs Valuation Agreement as the basis for determining customs value in ASEAN.   Notably, the 2012 Agreement does not contain the 1997 Agreement’s directive that “Member States shall not use Customs valuation for protective purposes or as a barrier to trade.”

7.             Article 27 commits ASEAN member states to use a risk management approach to customs.   Customs agencies in developed countries use risk management techniques such as sampling, intelligence gathering and data analysis to subject “at risk” imports for further scrutiny and facilitate trade for the others.  Some ASEAN national customs authorities have had a reputation for the traditional “gatekeeper” approach which subjects all shipments to the same level of scrutiny.  Article 27 hopefully brings them closer to modern standards. 

8.             Article 34 provides for advance rulings by ASEAN national customs authorities.

9.             Article 35 provides for “Authorized Economic Operators,” a concept commonly used in the developed world to subject qualified companies to streamlined regulation. 

10.          Articles 37-41 provide for electronic data interchange and usage by ASEAN national customs authorities.

11.          Articles 42-45 provide for mutual assistance among ASEAN national customs authorities.  The provisions specify that they shall cooperate to extent possible, but “if the assistance sought would infringe upon a Member State’s sovereignty, security or other substantial national interests or prejudice the legitimate commercial interests of any enterprise, public or private, the customs authorities of the Member State may decline to provide that assistance or give it subject to certain conditions or requirements.”  Hence the 2012 Agreement encourages cross-border customs cooperation, extending it to areas such as IP and narcotics control, but preserves the right of ASEAN national customs authorities to reject cross-border cooperation.

12.          Article 48 requires ASEAN national customs authorities to designate an official enquiry point and to publish laws and regulations on the internet.

13.          Article 52 preserves the right of administrative and judicial appeal of customs decisions.

14.          Article 57 provides that the ASEAN Enhanced Dispute Settlement Mechanism shall apply to any disputes.

15.          Article 58 provides for confidentiality in the administration of the 2012 Agreement.

The 2012 Agreement is now being considered by the ASEAN Member States for ratification. 

These are significant steps towards full implementation of the ASEAN Economic Community. However, as with all ASEAN agreements, its effectiveness will depend on its implementation, particularly on cross-border cooperation and dispute resolution.  Without effective cross-border cooperation, an intransigent ASEAN national customs authority can create problems for supply chains. Without effective dispute resolution (not necessarily requiring arbitration), that same national customs authority can continue to create problems indefinitely.   Remember that the only WTO dispute settlement panel between two ASEAN members, the Philippine complaint against Thailand on cigarettes, involved customs issues.  Hopefully the 2012 Agreement will mean that future disputes can be avoided, and when they do arise, they will be handled by ASEAN and not through extra-ASEAN legal norms and forums.

US Allows Non-Profit Activities in Myanmar

The US Treasury Department's Office of Foreign Asset Control (OFAC), which administers the Burma sanctions on financial transactions, issued a partial relaxation of those sanctions yesterday.   The relevant text from OFAC"s general license regarding the approved activities is reproduced below:

(1) Projects to meet basic human needs in Burma, including, but not limited to, disaster relief; assistance to refugees, internally displaced persons, and conflict victims; the distribution of food, clothing, medicine, and medical equipment intended to be used to relieve human suffering; the provision of health-related services; and the provision of shelter, and clean water, sanitation, and hygiene assistance; 

(2) Democracy building and good governance in Burma, including, but not limited to, rule of law, citizen participation, govemment accountability, conflict resolution, public policy advice, and civil society development projects; 

(3) Educational activities in Burma, including, but not limited to, combating illiteracy; increasing access to education at the elementary, high school, vocational, technical, college, or university level; foreign language instruction; and assisting education reform projects at all levels; 

(4) Sporting activities in Burma, including, but not limited to, amateur sporting events, activities promoting physical health and exercise, and the construction and maintenance of sports facilities open to the Burmese public; 

(5) Non-commercial development projects directly benefiting the Burmese people, including, but not limited to, preventing infectious disease; promoting maternal/child health, animal husbandry, food security, and sustainable agriculture; conservation of endangered species of fauna and flora and their supporting natural habitats; and the construction and maintenance of schools, libraries, medical clinics, hospitals, and other infrastructure necessary to support the aforementioned non-commercial development projects; and 

(6) Religious activities, including, but not limited to, religious education and training, including the training of missionaries; the establishment and maintenance of congregations; and the construction and improvement of houses of worship, schools, seminaries, and orphanages. 

Notably, OFAC still maintains the general prohibition on financial transactions related to commercial investment activities in Myanmar.  For example, the restrictions on the use of credit cards, a major practical difficulty to traveling to Myanmar, still stands.   

However, I believe that this relaxation could allow not-for-profits which promote "good governance" issues such as corporate social responsibility, rule of law, government accountability, etc., to go into Myanmar.  This could include the American Bar Association or the American Chamber of Commerce.  We can expect American entities to start following their EU and Australian counterparts on the plane to Yangon soon.

Australia Partially Relaxes Burma Sanctions

Yesterday Australia joined the United States in partially relaxing its Burma sanctions. Unlike the US, Australia does not have an import ban against Myanmar, as it is part of the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA).  However, it did impose sanctions on financial transactions and travel.

The relaxation reduces the number of individuals subject to financial and travel sanctions from 392 to 130.  Those removed from sanctions were civilian government officials. 

The Australian government also ended its policy of neither encouraging nor discouraging trade with Myanmar.  This means that the Australian government will have a more active role in trade, such as in the AANZFTA Work Programme.  Australia will maintain its arms embargo against the Myanmar regime.

The next big event in Burma sanctions will be the EU’s annual review of its own Burma sanctions to take place on April 23.  With Britain now supporting at least a suspension of Burma sanctions, the only question is the depth and width of the relaxation. 

The Limits of ASEAN+3 Financial Cooperation

In the past week there were two notable comments on the ASEAN+3  (ASEAN plus China, Japan and Korea) initiatives in regional financial policy. 

First, in last week’s Economist, the Banyan columnist reviewed the Chiang Mai Initiative Multilateralism (CMIM) and its limitations:

The first go at co-operation, the Chiang Mai Initiative of 2000, was to expand and formalise a network of bilateral swap agreements between central banks, under which they promised to provide each other with liquidity. This was accompanied by a “dialogue” on economic policy, which, as one participant puts it, amounted at best to no more than information-sharing, at worst to a “beauty contest”, with a lot of cosmetic data-enhancement.

In 2010 the 13 countries “multilateralised” the CMI, ie, turned it into a formal arrangement binding them all. Because the money remains in the individual central banks, the CMIM is a set of promises not a fund.

(emphasis added) Indeed, the absence of formal legal structure in the CMI is a fundamental problem that the ASEAN+3 nations are attempting to address.  The Economist goes on to note that that even the increased funding of US$ 240 billion would be insufficient in a future emergency:

Each CMIM country has access to the amount it has committed times a multiple (five for poor countries, 2.5 for the better-off ASEAN members, one for South Korea and 0.5 for China and Japan).  So for Thailand and Indonesia, for example, $11.4 billion is available. Compare that with their respective bail-outs in 1997 and 1998 of $17.2 billion and $42.3 billion (equivalent, in 2012 dollars, to $24.4 billion and $59.1 billion). Or compare it with Europe’s bail-out funds, worth several hundred billion dollars and still criticised for being too small.


The Economist goes on to note that the CMIM, intended as a substitute for the International Monetary Fund (IMF), itself imposes IMF-related restrictions on its use:


Unless a country subjects itself to an IMF programme, it may draw on only 20% of the available liquidity from other central banks. The proportion will be increased, but only to 30% this year and 40% from 2014. Countries that see themselves as potential crisis-victims want to shake off the fund’s shackles. Potential creditors find them rather comforting.


The International Financing Review (IFR) has its own criticism of another ASEAN+3 financial initiative, this time the ASEAN+3 Bond Market Guide:


I’m reminded of those B-movies that kick off with a shot of the protagonist – in this case, he’s at the launch of the Asian Bond Markets Initiative back in 2003 (yes, that long ago), when APT finance ministers came up with a plan to recycle Asia’s hefty savings in Asia rather than in the West through the development of efficient and liquid bond markets.  Next, our hero goes into an unexplained coma and, then, miraculously wakes up nine years later to complete the guide he had been working on, as if nothing has happened in the interim.  That’s not far from the truth, because really nothing much has happened since then.


The IFR then goes on to note why the Guide will be helpful but does not represent a major advance in regional financial cooperation:


Although it is a very useful reference, I doubt the guide will change anything in and of itself. It covers (in detail) market infrastructure; transaction flows, settlement cycles, and numbering; as well as information about the regulatory framework and market practices in 11 jurisdictions. It’s all very worthy. It’s also, in some respects, 1,532 pages of “So what?”


The [ASEAN+3 Bond Market Forum] wants the guide to increase investor understanding of regional bond markets, and reckons it will assist in setting up the Asian Multi-currency Bond Issuance Programme, which it hopes to introduce before the end of 2013, including possible pilot bond issuance. Hmmm. Let’s wait and see.


Finally, the IFR concludes that politics is the real reason for a lack of movement in financial cooperation:


This is first and foremost a political project. Individual jurisdictions need to accept that ironing out regional funding imbalances means that surplus nations will lose some of their savings to deficit nations. That’s the point of a community. Also, the project needs to be endorsed not just via pan-regional communiqués at the political level, but by action.


I would agree.  In fact, the relatively limited scope of the CMIM described by The Economist is also due to a lack of political will within the ASEAN+3 nations.   Expanded development of both initiatives would require much greater regional harmonization of regulations, and perhaps even a supranational authority to administer or regulate them. The former is difficult in the region, and the latter is a non-starter in Asian capitals.


Yet the political will can be found, if the right conditions exist.  The problem is that current conditions aren’t right.  Asia looks with deep skepticism at the prime example of regional financial governance, the EU, with its problems partially brought about by the defects in Europe’s own financial system. As ASEAN Secretary-General Surin Pitsuwan put it recently at the Cambodia summit earlier this month, “"In 1997 the EU told us 'put your house in order'. This time, we appeal to Europe: put your house in order."

The elephant in the room, however, is which country will fund an expanded CMIM or buy the bulk ASEAN+3 bonds, particularly if the EU is barely out of its crisis (some say still in it), the US is in a weak recovery (some say headed down again) and Japan is rebuilding after its earthquake/tsunami/nuclear triple whammy (some say that it has never really recovered from the 1990s slowdown)?  That would be China, which is only slowly loosening its grip on outbound financial flows to protect its own economy.  Even if China were willing to let loose the flow of outbound capital into bond markets or take the lion’s share of CMIM funding, would the rest of ASEAN+3 want to be subject to greater financial influence by China? 


Both aspects make it difficult to see a faster expansion of the CMIM or Asia bond programs. Nevertheless, long-range planning for monetary crises and financial cooperation is still better than none. The question is whether the ASEAN+3 countries can find the will to establish institutions that will channel these competing considerations in a positive direction.

ASEAN Deputy Secretary General for the AEC Takes Office

Dr. Lim Hong Hin took office yesterday as the ASEAN Deputy Secretary General for the ASEAN Economic Community (DSG-AEC).   Dr. Lim was hired via open recruitment to replace former Deputy Secretary General S. Pushpanathan.  Dr. Lim's term is for 2012-2015.

Many (including me) would have preferred a candidate, in principle, with direct business experience.  However, a review of Dr. Lim's background provided here shows that he has 5 degrees in business administration, management and computer science. He also headed investment promotion and facilitation at the Brunei Economic Development Board and trade liberalization at the ASEAN Secretariat.  In other words,  Dr. Lim is very familiar with the business community.  


Also, in his immediate prior position at the Economic Research Institute for ASEAN and East Asia (ERIA), he was working on the next version of the AEC scorecard, one which will go beyond its current quantitative approach (e.g., does this ASEAN member state have a bankruptcy law?) to a qualitative approach (e.g., how well does this ASEAN member state administer its bankruptcy law?).   The new AEC scorecard will be critical to ensuring compliance with ASEAN agreements by the member states.


Thus, although we did not get a businessman for the DSG-AEC role, we did get a business-friendly and experienced administrator from a smaller ASEAN member state (Brunei) that is traditionally pro-ASEAN. All in all, a good development.

US Partially Relaxes Burma Sanctions

As expected, the US State Department announced a partial relaxing of Burma sanctions following the April 1 by-elections won by Aung San Suu Kyi’s National League for Democracy (NLD) party.  I’ve explained before why the US cannot immediately relax all Burma sanctions, due to the myriad of regulations and legislation imposed and the need to involve the US Congress in the process. Nevertheless, the actions announced by US Secretary of State Hillary Clinton represents a major corresponding step by the US:

• The US will name a new ambassador (resident in Yangon) in the very near future. This is expected to be Derek Mitchell, the current State Department official in charge of Burma policy.
• The US will establish a USAID office in Myanmar, which should allow USAID funds for ASEAN support projects such as the ASEAN Single Window (which had been blocked) to be spent in the country.  This is critical as the country becomes ASEAN Chair in 2014, with responsibility for the ASEAN Economic Community.
• The US will support a normal country program for the UN Development Program.
• The US will allow private organizations to support non-profit activities such as democracy building, health and education. Presumably this could include education on economics and business, so we can expect US business organizations to start arriving on educational missions to Myanmar soon (their EU and Australian counterparts are already doing this).
• The US will allow certain Myanmar regime officials to visit the United States.
• The US will begin a review of its ban on the export of financial services and investment to Myanmar.  The US State Department said that priority would be given to investments in agriculture, tourism and perhaps telecommunications, but not investments in minerals and other natural resources. The financial services ban currently has the highest priority for US businesses and individuals. These sanctions prevent any direct financial transfers to the country, making the use of credit cards, for example, impossible.  As US competitors are not subject to such restrictions (such as the EU), they have been filling up Myanmar-bound flights and Yangon hotels.  

Understandably, unwinding the US Burma sanctions will take quite some time, due to their sheer complexity.  For example, under current sanctions, US officials cannot fly from Yangon to Naypyidaw because the only airlines available are linked to entities covered by the sanctions (and so they must spend the better part of the day in car motorcades to get up to the Myanmar capital). The expected “safe harbor” announcement by the US government of what can and cannot be done in Myanmar cannot come soon enough.

However, the prospects of making immediate returns on the country are relatively small, and the universe of Americans with practical experience in the country even smaller.  US companies looking to go to Myanmar just want to get a first hand view of the investment conditions, not necessarily invest immediately.  The most relevant comparison would be Vietnam; the initial US investors in Vietnam in the early 1990’s had heavy losses, but those who toughed it out are doing quite well now.  As we can expect Myanmar to be not so different, ending more stringent sanctions such as on the importation of Myanmar-origin goods are of lesser priority than relaxing those which make it impractical even to get on a plane to Myanmar.

Ironically, the NLD’s great electoral success on April 1, which motivated this partial relaxation by the US and others, may negatively impact foreign investor sentiment.  It raises the spectre of a backlash by hardliners in the Myanmar regime, as well as raising doubts about whether any deals made with the current government will stay in place after a 2015 election in which the NLD is more likely to take over.

All of this makes the next few months critical both in the international community as it relaxes the Burma sanctions, and within Myanmar itself, as President Thein Sein and Aung San Suu Kyi try to lay down a new operating framework for the country that will satisfy both Myanmar regime hardliners and opposition activists who have been waiting so long for real change.  In any event, both processes will take time, but the US and other Western countries can and should take expedited and cautious steps to support this reform.

Establishing a Hierarchy of Legal Norms for the AEC

A student at this week’s Utrecht-Airlangga conference on harmonizing legal principles in ASEAN asked me why some ASEAN agreements require ratification by the ASEAN member states and some don’t. The obvious answer is that domestic ratification by an ASEAN member state makes the agreement binding under international law (although it is usually not directly applicable to that ASEAN member’s domestic law, unless specified otherwise).  From a structural point of view, however, what is the legal hierarchy of norms in ASEAN, an important question for the governance of the ASEAN Economic Community, and a major question at the National University of Singapore Center for International Law’s ASEAN Integration Through Law project (meeting later this August)?

At the top of the hierarchy would indeed be ratified agreements such as the ASEAN Charter, ASEAN Trade in Goods Agreement and ASEAN Comprehensive Investment Agreement.  As ratified agreements, they are binding under international law, with relevant avenues for dispute resolution should an ASEAN member state not comply with their terms.  In other words, these agreements are sufficiently vital to ASEAN that the member states want them to be legally binding on a continuing basis and not easily subject to later revision or revocation (see below).

ASEAN members have other agreements that may or may not be ratified under their domestic procedures. Ostensibly an agreement signed by the prime ministers of Malaysia or Singapore, which follow a Westminster parliamentary system, could be conceivably be viewed as international agreements.  However, that would not be the case for the Philippines, where the issue of Senate ratification arises almost every time the Philippine president signs an international agreement.  Thus, one could not view such unratified but signed agreements as binding under international law.

However, I do think that such agreements still have binding force as ASEAN commitments.  Article 7.2(a) of the ASEAN Charter states that the ASEAN Summit of national leaders is “the supreme policy-making body of ASEAN.”  Hence decisions and agreements made at the ASEAN Summit represent the final word on ASEAN matters – that is, until the ASEAN Summit decides otherwise at a later meeting.  That would mean that unratified but signed agreements are binding as ASEAN commitments but are subject to later amendment or revision. This is not different from what happens in all forms of government, where the state makes policy decisions which can, and often are, later revised or amended.  In either case, unratified but signed ASEAN agreements can be invoked by other ASEAN member states.

There are even more agreements and declarations made at the ASEAN Coordinating Council, the ASEAN Economic Community Council, and the various ASEAN ministerial bodies. What is the relative legal value of those agreements?  Well, there seems to be a sentiment within ASEAN (including with some in the ASEAN Secretariat) that such agreements, if signed off at the ministerial level or otherwise backed by the authority of the ASEAN national leaders, would also be viewed as having some legal force. In other words, if the political leadership of an ASEAN member state has directly authorized its minister to make a commitment to the other ASEAN member states, then that commitment has legal value in determining rights and obligations within ASEAN.   That commitment may not have as much weight as one signed off by the national leaders, and it may be subject to later revision, but it still has some weight.  This organic approach is consistent both with the structure of the ASEAN Charter and political realities within the region: all lines of authority go back to the national leadership of ASEAN.

Finally, there are agreements and commitments made by non-political officials such as the Senior Economic Officials Meeting or at the various committee levels of ASEAN.  Based on the foregoing, these agreements and commitments should be viewed as the lowest rung of the legal hierarchy, as they do not have such explicit endorsement by the ASEAN national leadership. They are useful for understanding how the ASEAN member states are administering and implementing their AEC commitments, but they should not be viewed as establishing binding obligations on ASEAN member states.   Nevertheless, as they are useful for investors to understand the administration of the AEC, it would be beneficial for ASEAN to make these agreements and commitments publicly available, as is the case for documentation coming out of the ASEAN Summit, Councils and ministerial bodies.

The foregoing hierarchy of legal norms is admittedly not as clear-cut as would be the case in more mature systems like that of the EU or the US.  But it is still early days for the more formalized rule-based system introduced by the ASEAN Charter, so we should give ASEAN time to flesh these and other legal issues (such as how domestic courts and institutions in ASEAN member states should apply these agreements and commitments).  Ultimately, the AEC needs a transparent and comprehensible legal system in order to attract investment into the region.

Beyond the Phnom Penh Headlines

The first of two ASEAN Summits to be held in Cambodia this year concluded today. As expected, the major headline was the ASEAN leaders’ call for an immediate end to Burma sanctions imposed by the West against Myanmar.  Given the size of the victory in the April 1 elections by Aung San Suu Chi’s party, there will be intense pressure on the EU to relax sanctions in its annual review due later this month.  However, the somewhat more skeptical US will likely take at least a year to relax sanctions, due to the need to have the US Congress approve such actions.  In any event, it may be advisable to move carefully in case hardliners in the Myanmar regime decide to roll back on reform. Nevertheless, it appears that Myanmar has taken another step forward.

The other major headline was the naming of Le Luong Minh as ASEAN Secretary General-designate, which we reported on yesterday. 

There were other AEC-related developments coming out of Phnom Penh:

• ASEAN leaders promised to “double” support for realization of the AEC by 2015. They noted that AEC Scorecard has a cumulative score of 67.9% for 2008-2011, although as usual, they did not disclose how the score was prepared.  They also agreed to study a visa-exemption regime for intra-ASEAN travel for ASEAN nationals and a single visa for non-ASEAN nationals.
• ASEAN leaders also said that they would aim to start negotiations with ASEAN trading partners under the ASEAN Framework on Regional Comprehensive Economic Partnership by the November 2012 ASEAN summit in Cambodia.
• ASEAN foreign ministers signed the Instrument of Incorporation of the Rules for Reference of Non-Compliance to the ASEAN Summit to the Protocol to the ASEAN Charter on Dispute Settlement Mechanisms. This document allows the Protocol to become legally operational, after it is ratified, and provides for dispute resolution on non-economic matters.
• ASEAN transport ministers signed the Protocol to Implement the 7th Package of Commitments on Air Transport Services under the ASEAN Framework Agreement on Services (AFAS).
• ASEAN finance ministers signed a new ASEAN Agreement on Customs that will further encourage cooperation among customs officials in the region (we’ll have more on this after we get a full text).
• ASEAN published the full lists of member country reservations to the ASEAN Comprehensive Investment Agreement (ACIA).  The lists are available here.
• ASEAN and Indonesia signed a host country agreement regarding the privileges  and immunities of ASEAN as an international legal person operating in Indonesia. The agreement replaces one signed in 1979.
• EU Trade Commissioner Karel De Gucht, who attended an EU-ASEAN meeting in Phnom Penh, announced that the EU and Vietnam had signed a “scoping paper” on FTA talks. This represents another step in preliminary talks to begin FTA talks, which had been initiated in 2010. Myanmar, for its part, said that with its reform process in place, the EU should resume EU-ASEAN FTA talks. Separately, De Gucht threatened WTO action against differential import tariffs imposed by Thailand on liquor.
• Finally, the ASEAN Committee on Consumer Protection issued the ASEAN Consumer Complaints leaflet, which is reproduced below.  Although the immediate effect is not great, putting priority on consumer issues is a way to make the AEC more relevant to the average ASEAN citizen.  The next step is to put some actual regulatory teeth behind such efforts, which will take a long time reach international standards.

Le Luong Minh Confirmed as ASEAN Secretary General-Designate

This morning ASEAN Secretary General Surin Pitsuwan confirmed that Vietnam's Deputy Foreign Minister Le Luong Minh has been nominated as the next ASEAN Secretary General.  “ASEAN welcomes the designation of the Vice Minister of Vietnam as the next Secretary General and I feel relieved already," according to VietnamNet.  I have commented on Mr. Minh's considerable strengths here.


Mr. Minh will be formally presented to ASEAN leaders at the November 2012 ASEAN Summit in Phnom Penh and will take office in January 2013.