Tuesday, April 28, 2015

Wrap-up of the 26th ASEAN Summit

The 26th ASEAN Summit concluded today in Malaysia.  As usual with most ASEAN Summits, the South China Sea/West Philippine Sea issue was the focus of most media reports, along with a reported terrorist bombing plot aimed at disrupting the Kuala Lumpur meeting.  The ASEAN Summit statement is available here.

With regard to the ASEAN Economic Community and the ASEAN institutions in general, there were a few notable developments:

ASEAN Common Time – this proposal, revived by Malaysia, was not accepted during the Summit. Reportedly Cambodia and Thailand objected to using Greenwich Mean Time + 8 (e.g., the time zone of China and Perth, Australia, as well as that of Singapore and Malaysia) as the common time.  The Summit statement noted that ACT would be further considered, although it is not known whether that means considered at the next ASEAN Summit in November or postponed indefinitely (which happened the last time the ACT had been proposed).

ASEAN InstitutionsASEAN members expressed concern regarding the burdens on the ASEAN institutions, particularly the large number of sub-ministerial level meetings and having two ASEAN Summits a year.  Issues regarding the former could be addressed by adopting the recommendations of the High Level Task Force on Strengthening the ASEAN Secretariat and Reviewing the ASEAN Organs, which call for increased use of communications technology and increasing the role of the Committee of Permanent Representatives.   The latter appeared to be resolved, at least in the short-term, by allowing next year’s ASEAN Chair Laos to conduct both of the annual summits on a back-to-back basis, e.g., a de facto single summit, in November 2016.

Timor-Leste – The Summit statement acknowledged that ASEAN was continuing to review the Timorese application to join ASEAN.  Separately, the Philippines reiterated its support of Timor-Leste’s membership efforts.

EU-ASEAN FTAThe EU and ASEAN announced that they would undertake a stock-taking review of resuming FTA talks by the end of the year.  Previous talks had started in 2007 but stopped in 2009, due to institutional/organization difficulties and political issues regarding the Myanmar military regime. 

ASEAN Economic Community The Summit statement noted that 90.5% of AEC measures had been implemented. However, this figure refers to "the fully implemented measures to date and the high-priority measures identified by the AEM for implementation within 2015." In other words, the 90.5% figure is not calculated on the same basis as the AEC Scorecard, but refers to a subset of measures from the AEC Scorecard.  Presumably using the AEC Scorecard methodology would result in a lower figure, perhaps closer to the 65-85% scores reported in the 2012 AEC Scorecard.

The ASEAN Trade Facilitation Joint Consultative Committee will be reactivated, as will be the ASEAN Consultation to Resolve Trade and Investment Issues (ACT), which is basically an internet- based “complaint box” for companies to raise AEC issues anonymously with the ASEAN Secretariat (reportedly the previous ACT system was inoperable for months or years due to internet security issues).  GOASEAN, a 24-hour ASEAN travel channel, was also launched.  The Summit statement discussed the Initiative for ASEAN Integration, which deals with the economic development gaps in the region, but did not mention the Asian Infrastructure Investment Bank, newly funded by China.

Regional Comprehensive Economic Partnership  (RCEP) – the Summit statement reiterated that RCEP talks should aim to be concluded by end-2015.  There are concerns that the RCEP talks could continue beyond 2015, mainly due to negotiating difficulties with certain RCEP negotiating parties.

Thursday, April 23, 2015

Hun Sen Unintentionally Helps TPP Talks

This week at the World Economic Forum on East Asia in Jakarta, Cambodian prime minister Hun Sen criticized the Trans Pacific Partnership (TPP).  However, Hun Sen’s denunciation of the TPP trade negotiations might actually have helped bring the TPP that much closer to completion, something the Cambodian leader probably did not intend.

According to Prashanth Parameswaran in the Diplomat, Hun Sen praised the Regional Comprehensive Economic Partnership (RCEP) talks, ASEAN’s attempt to harmonize its free trade agreements with China, India, Japan and Australia-New Zealand. However, he went on to denounce the TPP talks:

He stressed that TPP and RCEP should not contradict each other, but should be complementary. He then went on to blame the TPP for leaving half (or, more accurately, six out of ten) ASEAN countries outside of it.  “We should review again…why Trans-Pacific Partnership did not include ten ASEAN members,” Hun Sen said. “What is the purpose, real intention of establishing [the] Trans-Pacific Partnership…that they include half of ASEAN to be partners…and leaving half of ASEAN outside. That’s a point I would like the World Economic Forum on Asia-Pacific to provide consideration and debate,” Hun Sen said.

Prashanth goes on to note the errors in Hun Sen’s analysis: (1) the different scopes and ambitions of the RCEP and TPP (which I discussed previously here); (2) the TPP is open to later accession by the other ASEAN members and other Asian countries, including China; and (3) the US has attempted to engage economically with the ASEAN countries not currently in TPP (although this is a very difficult task, since many of these countries are unwilling or unable to undertake the efforts needed to improve their trade and investment regimes to meet TPP standards, as I discussed here).  All of these points are valid.

In fact, I would go on to say that Hun Sen’s comments have actually helped the TPP. The Obama administration currently is trying to get legislative authority from the US Congress to conclude the TPP talks and get any resulting agreement passed through the legislature through a special legislative process called Trade Promotion Authority (TPA).  Without TPA, the other TPP parties will refuse to conclude any agreement with the US, out of fear that the US Congress would later revise the agreement.  Although much of the arguments in Washington about the TPP and TPA have centered on the economic effects on the US economy, an undercurrent of geopolitical concern flows through the discussion, particularly with regard to the roles of the US and China in the region.  This was reflected in US Defense Secretary Carter’s comments on the TPP earlier this month.

The timing of Hun Sen’s comments therefore actually strengthens the geopolitical arguments in favor of the TPP.  After all, if someone strongly perceived to be a pro-China voice in ASEAN (as evidenced during his 2012 ASEAN Chair term) is so against the TPP, then surely TPP must be a good thing (at least geopolitically for the US), goes this line of reasoning.  If such arguments are enough to convince enough US legislators to support the TPA, this will bode well for the eventual successful completion of the TPP negotiations– and ironically, Hun Sen would have unintentionally helped bring this to fruition.

Thursday, April 16, 2015

ASEAN Economic Community Foundation Book Available Now

I am very happy to say that "The Foundation of the ASEAN Economic Community," which I co-authored with Stefano Inama of UNCTAD, is now available for purchase!  

I explain the premise of the book in the below video:

The book is intended to serve as a textbook for AEC law and policy courses. It also provides an overview of the AEC, building upon many of themes in this blog.  Finally, it elaborates on potential reforms of the ASEAN institutions and agreements.

The book can be ordered here at the Cambridge University Press website.

Thursday, April 9, 2015

Asia Foundation Presentation on the ASEAN Economic Community

Many thanks to the Asia Foundation for hosting the US book launch for "The Foundation of the ASEAN Economic Community" and "Rules of Origin in ASEAN" yesterday at the Carnegie Endowment in Washington, DC.  

Many thanks also to Bob Beckman of NUS Law and Natalie Morris-Sharma from the Singapore AGC's office for participating!