Tuesday, April 8, 2014

Malaysian PM Makes Major ASEAN Institutional Proposals

Today Malaysian prime minister Najib Razak made two major proposals for reforming the ASEAN institutions.  This is rather important as Malaysia will take over as ASEAN Chair in 2015.

First, Prime Minister Najib proposed the possible creation of a fourth “pillar” of the ASEAN Community, in addition to the existing political-security, economic and socio-cultural pillars.  The fourth pillar would deal with cross-sectoral issues which involve two or more pillars.  The prime minister specifically identified climate change and transboundary haze (air pollution) as such issues, but other issues that come to mind include food security, public health (e.g., regulation of liquor and tobacco) and law cooperation. 

Involving the ASEAN Economic Community (AEC), in particular, would be significant because this would raise the possibility of economic sanctions (e.g., withdrawal of ASEAN Trade in Goods Agreement (ATIGA) preferential tariffs) in order to achieve goals currently under the mandate of the ASEAN Socio-Cultural Community (ASCC).  For example, the Malaysian health minister had proposed withdrawing tobacco from the zero percent duty rates of ATIGA, but since health issues fall within the ASCC, and ATIGA falls within the AEC, this proposal was a dead letter. Similarly, some in ASEAN (particularly Malaysia and Singapore) have called for trade retaliation against countries that fail to control the origin of haze (e.g., Indonesia).

Prime Minister Najib’s suggestion is commendable, but I think it should be tweaked to make it more workable.  Creating a fourth ASEAN pillar is probably confusing and could create another policy “silo”, which his proposal attempts to avoid. It would be better to keep the existing three pillars but create another ASEAN Council of ministers that would deal with cross-sectoral issues.  This could be called the “ASEAN Inter-Pillar Council” or the like. More importantly is that the ministers serving on this council should have a proper cross-sectoral perspective; they preferably should not be on the current ASEAN Community Councils.  To maintain the cross-sectoral perspective that the ASEAN Summit of leaders itself has, this new council should be made up of ministers who report directly to the ASEAN leaders, at least in their own countries (the current ASEAN Coordinating Council of foreign ministers would maintain its necessary organizational role and support/coordinate this new Inter-Pillar Council). Hence instead of foreign ministers or economic ministers, the ASEAN Inter-Pillar Council would be made up of deputy prime ministers, vice-presidents, ministers in the prime minister’s office or even new “ASEAN” ministers.   To do otherwise by populating the new council with existing economic or foreign ministers would risk continuing the current “silo” effects that currently exist in the ASEAN Communities.

Second, Prime Minister Najib addressed the issue of ASEAN member states’ annual contributions to the ASEAN Secretariat.  Currently each member state contributes US$ 1.7 million annually.  The prime minister suggested that instead of a set amount, the contribution would be set as a minimum sum, which countries could exceed on a voluntary basis.  He also proposed that contributions be made on a three-to-five year basis rather than on a yearly basis, in order to promote funding predictability.

Again, these are good ideas that need some elaboration.  There is currently no formal restriction to prevent ASEAN members from making additional voluntary contributions to the ASEAN Secretariat.  What prevents this from happening is the potential negative reaction from other ASEAN members, e.g.,  that additional funding would mean additional influence over the ASEAN institutions, or that a revised funding formula could be established based on GDP or economic development.  Singapore, among others, has historically opposed changes to the contribution methodology for these and other reasons. On the other hand, the current overall funding of the ASEAN institutions (including the aid support for ad-hoc ASEAN projects) is much greater and much more dependent on donor funding from the US, EU, Australia and others, yet there is no (public) criticism that these countries have commensurate influence over the ASEAN institutions.   In any event, any change in the funding methodology for the ASEAN institutions, even the modest proposals made by Prime Minister Najib, are welcome and I hope that they are accepted by the other ASEAN member states in some form.

I had predicted that any lasting ASEAN initiatives would have to wait until Malaysia took over as ASEAN Chair in 2015, and it looks like I may be right.  In addition, Malaysia serves as chair of the ASEAN working group studying reforms of the ASEAN institutions so it can pursue these initiatives immediately.  Either way, I hope that Prime Minister Najib’s proposals are the beginning of a dialogue on these issues. 

Friday, April 4, 2014

Promoting ASEAN Economic Community Studies

This week I participated in a joint  Center for International Law, National University of Singapore Law School (NUS Law) and Diplomatic Academy of Vietnam plenary in Hanoi. We focused on developing teaching materials on the ASEAN Economic Community (AEC).



In the interests of promoting the teaching of AEC law, within and without ASEAN, I am posting below the syllabus for my Law and Policy of the ASEAN Economic Community course that I teach at NUS Law School (and the first AEC law course in the world).  I hope that other academics can feel free to add or modify this syllabus; not everyone is going to teach this course in the same way.

Additionally, Stefano Inama of UNCTAD and I have a forthcoming book to be published by Cambridge University Press in 2014, entitled The ASEAN Market in Goods: An Institutional and Legal Profile (we also cover services, investment and other aspects of the AEC), which builds upon many of the topics  I’ve discussed in this blog, but in a more rigorous manner (we also have a book on the rules of origin used in the ASEAN free trade agreements, also due to come out in 2014 from Cambridge University Press).  Both can be used as course textbooks.

So to all those interested in studying the AEC, we wish you the best in your academic endeavors. This is a field well worth studying.



Law and Policy of the ASEAN Economic Community (Syllabus)

Edmund W. Sim
Adjunct Associate Professor and Partner, Appleton Luff


I.               Introduction to ASEAN
1.     The ASEAN Declaration (Bangkok Declaration), http://www.aseansec.org/1212.htm
2.     Rodolfo C. Severino, ASEAN, Southeast Asia Background Series No. 10 (ISEAS Publications, 2008)
3.     ASEAN Economic Community Blueprint, http://www.aseansec.org/5187-10.htm
4.     ASEAN Studies Centre, ASEAN Economic Community Blueprint (ISEAS Publications, 2009)
a. Chapter I: ASEAN Roundtable 2008: ASEAN Economic Community Blueprint

5.     Cha-am Hua Hin Declaration on the Roadmap for the ASEAN Community (2009-2015), http://www.aseansec.org/22331.htm
6.     Rodolfo C. Severino, Southeast Asia in Search of an ASEAN Community: Insights from the Former ASEAN Secretary-general (ISEAS Publishing, 2006)
a. Chapter 5: Integrating the Regional Economy (pp. 212-255)

7.     Michael G. Plummer and Chia Siow Yee, eds., Realizing the ASEAN Economic Community: A Comprehensive Assessment (ISEAS Publishing, 2009)
a. Chapter I: Introduction

II.              ASEAN institutions  
1.     Basic documents
1)     Declaration of ASEAN Concord II,  http://www.aseansec.org/15159.htm
2)     ASEAN Charter sections
2.     Organizational structure of Secretariat, Councils, Summit
1)     Summit
2)     Councils
3)     Secretariat
3.     K S Sandhu, Sharon Siddique, Chandran Jeshurun, Ananda Rajah, Joseph L H Tan, and Pushpa Thambipillai, complied, The ASEAN Reader (ISEAS Publishing, reprinted 2003)

III.            ASEAN Charter
1.     ASEAN Charter, http://www.aseansec.org/21829.htm
2.     EPG Report on the Charter, http://www.aseansec.org/19247.pdf
3.     Cebu Declaration on the Blueprint of the ASEAN Charter, http://www.aseansec.org/19257.htm.
4.     Tommy Koh, Rosario G. Manalo, and Walter Woon, eds, The Making of the ASEAN Charter (World Scientific Publishing, 2009)
5.     Simon S. C. Tay, “The ASEAN Charter: Between National Sovereignty and the Region’s Constitutional Moment” (2008) 12 Singapore Year Book of International Law 151-170
6.     Michael Ewing-Chow, “Translating the Design into a Bloc: The Domestic Implementation of the ASEAN Charter” in S. Tiwari, ed., ASEAN: Life after the Charter (ISEAS Publishing, 2010)
7.     Tommy Koh, “ASEAN at Forty: Perception and Reality” in Institute of Southeast Asian Studies, Regional Outlook: Southeast Asia 2008-2009 (ISEAS Publishing, 2008)

IV.           Early Attempts at ASEAN Economic Integration
1.     1987 Basic Agreement on ASEAN Industrial Projects, http://www.aseansec.org/6373.htm
1)     ASEAN Urea Project, http://www.aseansec.org/6375.htm
2)     ASEAN Potash Mining Project, http://www.aseansec.org/6384.htm
2.     1987 Basic Agreement on ASEAN Industrial Joint Ventures, http://www.aseansec.org/1366.htm
3.     1996 Basic Agreement on ASEAN Industry Joint Ventures , http://www.asean.org/6385.htm
4.     AICO
1)     Basic Agreement on ASEAN Industrial Complementation, http://www.aseansec.org/6377.htm
3)     Basic Agreement on the ASEAN Industrial Cooperation Scheme, Apr. 26, 1996, http://www.aseansec.org/6400.htm.
4)     Protocol to Amend the Basic Agreement on the ASEAN Industrial Cooperation Scheme, http://www.asean.org/16333.htm
5)     AICO Reader

V.             ATIGA
1.     Agreement On The Common Effective Preferential Tariff (CEPT) Scheme For The ASEAN Free Trade Area, http://www.aseansec.org/1164.htm
2.     Framework Agreements on Enhancing ASEAN Economic Cooperation, http://www.aseansec.org/12374.htm
3.     Protocol for the Accession of the Socialist Republic of Vietnam to the Framework Agreements on Enhancing ASEAN Economic Cooperation, http://www.aseansec.org/12372.htm
4.     Protocol to Amend the Framework Agreements on Enhancing ASEAN Economic Cooperation, http://www.aseansec.org/12369.htm.
5.     Protocol on Notification Procedures, http://www.aseansec.org/12367.htm
6.     ASEAN Trade in Goods Agreement http://www.aseansec.org/22223.pdf
7.     “Rules of Origin,” AFTA Reader, Vol. 1, Nov. 1993, http://www.aseansec.org/10149.htm.
8.     Operational Certification Procedures for the Rules of Origin of the ASEAN Common Effective Preferential Tariff Scheme for ASEAN Free Trade Area,” AFTA Reader. Vol. 1, Nov. 1993, http://www.aseansec.org/10148.htm.
9.     Agreement to Establish and Implement the ASEAN Single Window, http://www.aseansec.org/18005.htm.
10.  Protocol to Establish and Implement the ASEAN Single Window,
11.  Paul Davidson, “The Role of International Law in the Governance of International Economic Relationships in ASEAN” (2008) 12 Singapore Year Book of International Law 213–224
12.  Kanya Satyani Sasradipoera , “ASEAN Trade in Goods Agreement (ATIGA)” in S. Tiwari, ed., ASEAN: Life after the Charter (ISEAS Publishing, 2010)
13.  David Parsons, “Challenges to Achieving the ASEAN Economic Community” in S. Tiwari, ed., ASEAN: Life after the Charter (ISEAS Publishing, 2010)
14.  Peter J. Lloyd, “What is a Single Market? An Application to the Case of ASEAN” in Denis Hew Wei, ed., Brick by Brick – the Building of an ASEAN Economic Community (ISEAS Publishing, 2007)


VI.           Other ASEAN economic agreements
1.     Investment
1)     Agreement among the Government of Brunei Darussalam, the Republic of Indonesia, Malaysia, the Republic of the Philippines, the Republic of Singapore and the Kingdom of Thailand for the Promotion and Protection of Investments, http://www.aseansec.org/6464.htm
2)     Protocol to amend the ASEAN Agreement for the Promotion and Protection of Investments, http://www.asean.org/6465.htm
3)     Framework Agreement on the ASEAN Investment Area, http://www.aseansec.org/6466.htm.
5)     Michael R. Reading, “The Bilateral Investment Treaty in ASEAN: A Comparative Analysis” (1992) 42 Duke Law Journal 679-705
6)     Yap Lai Peng, “The ASEAN Comprehensive Investment Agreement 2009: Its Objectives, Plans and Progress” in S. Tiwari, ed., ASEAN: Life after the Charter (ISEAS Publishing, 2010)
7)     M. Sornarajah and Rajenthran Arumugam, “An Overview of the Foreign Direct Investment Jurisprudence” in Denis Hew Wei, ed., Brick by Brick – the Building of an ASEAN Economic Community (ISEAS Publishing, 2007)
2.     Services
1)     Overview:  http://www.aseansec.org/6626.htm
2)     ASEAN Framework Agreement on Services: http://www.aseansec.org/6628.htm
3)     Protocol to Amend the ASEAN Framework Agreement on Services: http://www.aseansec.org/AFAS_Amendment_Protocol.pdf.
4)     ASEAN Sectoral Integration Protocol for the Logistics Services Sector: http://www.aseansec.org/20881.htm
a.     Appendix 1 – Roadmap for the Integration of Logistics Services: http://www.aseansec.org/20883.pdf
5)     Roy Clogstoun, Ray Trewin, and Malcolm Bosworth, “Would Emergency Safeguard Measures Work for Services” (2006) 20 Asian-Pacific Economic Literature 56-69
3.     ASEAN Framework Agreement on Mutual Recognition Agreements http://www.aseansec.org/6674.htm
4.     Agreement on ASEAN Energy Cooperation, http://www.aseansec.org/6570.htm
5.     ASEAN Framework Agreement on Intellectual Property Cooperation,  http://www.aseansec.org/24526.htm
6.     Transport
1)     ASEAN Framework Agreement on the Facilitation of Inter-State Transport, http://www.aseansec.org/19867.htm
2)     ASEAN Multilateral Agreement on Air Services, http://www.aseansec.org/22628.htm
3)     ASEAN Multilateral Agreement on the Full Liberalisation of Air Freight Services, http://www.aseansec.org/22621.htm
4)     ASEAN framework Agreement on Multimodal Transport, http://www.aseansec.org/17877.htm
5)     ASEAN Framework Agreement on the Facilitation of Goods in Transit, http://www.aseansec.org/7377.htm
7.     Finance
1)     Overview: http://www.aseansec.org/6319.htm
2)     Protocol to implement the 2nd Package of Commitments on Financial Services under the ASEAN Framework Agreement on Services: http://www.aseansec.org/pdf/fin1.pdf
a.     Horizontal Commitments: http://www.aseansec.org/pdf/fin2.pdf
b.     Schedule of Specific Commitments: http://www.aseansec.org/pdf/fin3.pdf
c.     List of MFN Exemptions: http://www.aseansec.org/pdf/fin1.pdf
3)     Protocol to Implement the 3rd Package of Commitments on Financial Services under the ASEAN Framework Agreement on Service: http://www.aseansec.org/20368.pdf
a.     Schedule of Specific Commitments: http://www.aseansec.org/20369.pdf
4)     Protocol to Implement the 4th Package of Commitments on Financial Services under the ASEAN Framework Agreement on Services: http://www.aseansec.org/agreements/AEC/Finance/Protocol-4th-round.pdf
5)     1997 Ministerial Understanding on ASEAN Finance Cooperation in Finance http://www.aseansec.org/6306.htm
6)     Memorandum of Understanding on the ASEAN Swap Arrangements http://www.aseansec.org/1388.htm
a.     Supplementary Agreement to the Memorandum of Understanding on the ASEAN Swap Arrangement: http://www.aseansec.org/6299.htm
b.     Amendments to the Memorandum of Understanding on the ASEAN Swap Arrangement: http://www.aseansec.org/6300.htm
c.     Third Supplementary Agreement to the Memorandum of Understanding on the ASEAN Swap Arrangement: http://www.aseansec.org/6301.htm
d.     Fourth Supplementary Agreement to the Memorandum of Understanding on the ASEAN Swap Arrangement: http://www.aseansec.org/6302.htm
e.     Fifth Supplementary Agreement to the Memorandum of Understanding on the ASEAN Swap Arrangement: http://www.aseansec.org/6305.htm

VII.          Trade remedies
1.     WTO antidumping agreement
2.     Indonesian, Singaporean and Thai antidumping legislation
3.     Sample AD case materials (I have some of these)
1)     BOPP from Thailand (Indonesian AD )
2)     Mosquito Coils from Indonesia (Philippine AD)
3)     Reinforcing Bar from Malaysia (Singapore AD)
4.     Safeguard clauses in ASEAN FTAs, WTO, etc.
5.     WTO SCM agreement and ASEAN legislation

VIII.        Dispute resolution
1.     ASEAN Agreement for the Promotion and Protection of Investments, http://www.aseansec.org/8007.htm
2.     Protocol on Dispute Settlement Mechanism, http://www.aseansec.org/16654.htm
3.     Protocol to Amend the 1987 Agreement for the Promotion and Protection of Investments, http://www.aseansec.org/6465.htm.
4.     ASEAN Protocol on Enhanced Dispute Settlement Mechanism, http://www.aseansec.org/16754.htm
5.     Protocol to the ASEAN Charter on Dispute Settlement, http://cil.nus.edu.sg/2010/2010-protocol-to-the-asean-charter-on-dispute-settlement-mechanisms/
6.     Yaung Chi Oo Trading Pte. Ltd. v. Government of Myanmar, 42 ILM 540 (2003).
7.     Thailand-Customs and Fiscal Measures on Cigarettes from the Philippines, WT/DS/371 (Feb. 7, 2008) (panel report)
8.     Malaysia-Prohibition of Imports of Polyethylene and Polypropylene, WT/DS/1 (Jan. 10, 1995) (Request for Consultation by Singapore; Request for Establishment of Panel; Communication from Malaysia).
9.     ASEAN Charter sections
10.  Walter Woon, “The ASEAN Charter Dispute Settlement Mechanisms”, in Tommy Koh, Rosario G. Manalo, and Walter Woon, eds, The Making of the ASEAN Charter (World Scientific Publishing, 2009)
11.  Relevant FTA sections
1)     ASEAN-Korea FTA DSM, http://www.aseansec.org/18129.htm
2)     ASEAN-China, http://www.aseansec.org/16635.htm
3)     ASEAN-India, http://www.aseansec.org/16635.htm
4)     ASEAN-Australia-NZ sections
5)     ASEAN-Japan sections
12.  Michael Ewing-Chow, “Culture Club or Chameleon: Should ASEAN Adopt Legalization for Economic Integration?” (2008) 12 Singapore Year Book of International Law 225-237

IX.            Deviation from ASEAN Agreements
1.     Protocol on the Special Arrangement for Sensitive and Highly Sensitive Products, http://www.aseansec.org/1207.htm
2)     First Protocol to Amend the Protocol on Special Arrangements on Sensitive and Highly Sensitive Products, http://www.aseansec.org/22976.pdf
2.     Protocol Regarding the Implementation of the CEPT Scheme Temporary Exclusion list, http://www.aseansec.org/12365.htm
3.     Documents related to delay in CEPT for car imports into Malaysia
4.     Documents related to Indonesia’s request to renegotiate ACFTA
5.     Joseph Weiler, “The Transformation of Europe” (1991) 100 The Yale Law Journal (No. 8 Symposium: International Law) 2403-2483

X.             ASEAN’s relations with other countries and institutions (FTAs, coordination overseas, legal personality of ASEAN)
1.     ASEAN Committees Abroad, http://www.aseansec.org/20062.htm
2.     ASEAN-Australia-New Zealand FTA, http://www.aseansec.org/22260.pdf
3.     ASEAN-China agreements on trade in goods, http://www.aseansec.org/16646.htm, and in services, http://www.aseansec.org/documents/acfta/TIS/ASEAN-CHINA-TIS.pdf, and in investment, http://www.aseansec.org/19105.htm
4.     ASEAN-India agreement on trade in goods, http://www.aseansec.org/22677.pdf
6.     ASEAN-Korea FTA on goods http://www.aseansec.org/akfta.htm, services, http://www.aseansec.org/21111.pdf and  investment, http://www.aseansec.org/22973.pdf
7.     Singapore FTAs
1)     Singapore- India, http://www.fta.gov.sg/fta_ceca.asp?hl=6
2)     Singapore- Japan, http://www.fta.gov.sg/fta_jsepa.asp?hl=7
3)     Singapore-Korea, http://www.fta.gov.sg/fta_ksfta.asp?hl=22
4)     Singapore- China, http://www.fta.gov.sg/fta_csfta.asp?hl=27
8.     Simon Chesterman, “Does ASEAN Exist? The Association of Southeast Asian Nations as an International Legal Person” (2008) 12 Singapore Year Book of International Law 199-211
9.     Michael Ewing-Chow, “Southeast Asia and Free Trade Agreement: WTO Plus or Bust?” (2004) 8 Singapore Year Book of International Law 193-206
10.  Saw See-Hock, ed., ASEAN-China Economic Relations (ISEAS Publishing, 2006)
11.  Sueo Sudo, Evolution of ASEAN-Japan Relations (ISEAS Publishing, 2005)
12.  Nagesh Kumar, Rahul Sen and Mukul G. Asher, eds. India-ASEAN Economic Relations: Meeting the Challenges of Globalization (ISEAS Publishing, 2005)
13.  Razeen Sally, Southeast Asia in the WTO (ISEAS Publishing, 2004)