Thursday, September 8, 2016

Japan Supports TPP Membership for ASEAN Members

During this week’s meetings in Laos, Japanese Prime Minister Shinzo Abe offered to support any ASEAN country that wishes to join the Trans Pacific Partnership (TPP), according to the Japan Times:

“The TPP will not divide ASEAN,” Abe said. The importance placed on the TPP by Japan and the U.S. has been interpreted as an effort to counter the regional influence of China, which is not party to the pact. “The TPP was agreed after clearing political hurdles,” Abe said. “Japan will support ASEAN countries wishing to participate in the TPP so that they can bring their plans to fruition.”

This is important for Cambodia, Laos and Myanmar because ASEAN members do not automatically qualify to accede to the TPP.  According to Article 30.4.1:

"1. This Agreement is open to accession by:

(a) any State or separate customs territory that is a member of APEC; and

(b) any other State or separate customs territory as the Parties may agree,

that is prepared to comply with the obligations in this Agreement, subject to such terms and conditions as may be agreed between the State or separate customs territory and the Parties, and following approval in accordance with the applicable legal procedures of each Party and acceding State or separate customs territory (accession candidate)."

Cambodia, Laos and Myanmar are not members of APEC, whereas Indonesia, the Philippines and Thailand are APEC members and satisfy these criteria.  Thus, Mr. Abe’s proposal will need to be supported by the other TPP members to qualify Cambodia, Laos and Myanmar for the TPP.  Given their less developed economies, these countries would probably be in a potential third group of TPP candidates, after countries like Indonesia, the Philippines, Thailand and South Korea who are currently considering joining in the next wave.

In any event, the TPP needs ratification by its existing parties, particularly the U.S.  Without U.S. ratification, the TPP will not come into force, and that will largely depend on domestic political conditions in America.

Wednesday, September 7, 2016

Wrap-up of the 2016 ASEAN Summit(s)

This week Laos hosted the 2016 ASEAN Summits in Vientiane.  The media will largely focus on the communiqué’s language on the South China Sea/West Philippine Sea.  However, as a result of efforts to downplay the dispute, including those of the new Philippine government, the document was not likely to adopt a more active stance on the issue. This, coupled with the bete noire with the United States over Philippine president Rodrigo Duterte’s choice of words, will cause some observers to view the Vientiane summits as a relative disappointment.  That would overlook some of the achievements announced in Laos in the Chair’s statement:
  •  ASEAN Summit -- The timing of the summits themselves reflects the inherent flexibility of ASEAN.  Laos felt that it did not have the infrastructure to hold two major summits in 2016, as is required by the ASEAN Charter.   Hence Laos was permitted to conduct both summits this week, but with the same participants.  This complied with the letter of the law, but it also meant that ASEAN decisions were delayed several months until the Vientiane meetings (with an excellent explanation of why this is the case here).  On the other hand, reducing the administrative burden of hosting the ASEAN Summit will help when smaller countries (e.g., Timor-Leste) serve as Chair, assuming that the 2016 Laos precedent is not followed too often.
  • Timor-Leste – The Summit announced that all 3 feasibility studies on the accession have been completed, and that the application is now with the ASEAN Coordinating Council Working Group (ACCWG). That means that the ACCWG is the last formal hurdle before the start of the official accession process.  The Summit also announced that Timor-Leste would participate in more ASEAN meetings for capacity building purposes.  Last year Timor-Leste attended its first ASEAN meeting (on connectivity) but since then has not attended any other meetings (although it was invited to, but did not participate in, the ASEAN Law Ministers meeting last year).
  • Development – The third work plan for the Initiative for ASEAN Integration (IAI III) was announced.  The IAI serves as ASEAN’s wish list for projects in the less developed parts of the region, with funding to come from donor countries.  The real question will be how the new Asian Infrastructure Investment Bank will interact with existing donor countries and entities in implementing the IAI as well as the Master Plan on ASEAN Connectivity, which covers the entire region.
  • Institutions – The communiqué states that ASEAN has addressed the recommendations of the High Level Task Force on Strengthening the ASEAN Secretariat and Reviewing the ASEAN Organs, noting that most of them are “perpetual” in nature and will require continuing implementation. 

Now the Chair passes to the Philippines, a founding member of ASEAN.  In addition to the usual responsibilities of the Chair, the Philippines also will supervise the celebrations of the 50th anniversary of ASEAN as well as the selection of the next ASEAN Secretary General (who will come from Brunei as per the national rotation).

Thursday, September 1, 2016

Whither Australia in ASEAN?

This week former Australian Prime Minister Paul Keating repeated his proposal that Australia join ASEAN.  According to the Australian Financial Review, “Australia ‘should become a member of ASEAN’, a membership that would ‘help Australia and help ASEAN’.”  Mr. Keating raised this idea previously in 2012.

The Australian Strategic Policy Institute (ASPI) provides thorough analysis of why Australia would never formally request ASEAN membership, here and here. It also discusses the reasons in favor of Australian membership here and here.

I’ll stick to a more legalistic analysis.  Article 6 of the ASEAN Charter sets forth the criteria for membership as follows:

“(a) location in the recognized geographical region of Southeast Asia;
(b) recognition by all ASEAN Member States;
(c) agreement to be bound and to abide by the Charter; and
(d) ability and willingness to carry out the obligations of Membership.”

The second criterion is not at issue, but the others are.

First, Australia is not part of the “recognized geographical region of Southeast Asia.”   Australia is considered to be its own continent, or a part of Oceania.  One of the ASPI articles cited above brushes this aside as Australia is a neighbor of ASEAN, like Papua New Guinea and Timor-Leste, other potential ASEAN members.  However, Timor-Leste is a recognized part of Southeast Asia.  Papua New Guinea is not, due to colonial history and issues related to Irian Jaya.

Second, would Australia agree “to be bound and to abide by the Charter”?  Article 7.2 of Charter states that “The ASEAN Summit shall be the supreme policy-making body of ASEAN.”   ASEAN membership would necessarily mean that Australia would be subject to decisions made by the leaders of ASEAN, who reflect a variety of systems including varying forms of democracy, Communists, a military junta and a monarch.  Would Australians accept this?

Third, would Australia have the “ability and willingness to carry out the obligations of Membership”?  At first glance, this should not be an issue for a developed country such as Australia.  However, agreeing to submit to arbitration (including investor-state dispute settlement (ISDS) under the ASEAN Comprehensive Investment Agreement) is part of the obligations of ASEAN membership. With Australia having a more skeptical view of ISDS, would the country really want to join a regional economic bloc where ISDS is part of the operating system?

Mr. Keating’s remarks seem to be intended to provoke discussion and promote greater Australian interest in ASEAN.  That’s a good thing.  However, these things take on a life of their own, meaning that they should be scrutinized on their substantive merits in addition to their intellectual points.   The ASPI articles and my own analysis indicate that this proposal will not get past the university seminar room.

Apologies for not posting recently.  I have been very busy advising Timor-Leste on its ASEAN accession and on a feasibility study on the Trans-Pacific Partnership for the Thai Ministry of Commerce. Also, frankly, there have not been very many AEC developments to discuss recently. Hopefully this will change soon.