Silver Lining in ASEAN Foreign Ministers' Impasse?

The astute-as-usual Kavi Chongvittakorn writes in today’s Nation about the continuing impasse resulting from last month’s ASEAN Foreign Ministers meeting in Cambodia.  Khun Kavi writes that ASEAN is trying to issue a joint declaration that would substitute for the inchoate joint communiqué; he feels that ASEAN must issue this joint declaration by Wednesday, ASEAN Day, or risk a major embarrassment for the regional grouping. 

I would agree with this, but the real task will be what happens at the ASEAN Summit in November.  Even a delayed joint statement will not be as important as what happens in Cambodia later this year when the national leaders meet.

Khun Kavi does report on a possible silver lining from the entire impasse:

There have been some informal discussions among officials and academics about the need to come up with the rule of procedure to guide a rotating chair in the future. At the moment, there are no clear rules concerning the Asean chair and its relations with other Asean organs and how the Asean Secretary General and its staff can be of assistance. The Asean foreign ministers took things for granted that they would be able to form a consensus on any issue, albeit disagreements, as in the past four decades. But the Phnom Penh incident changed all that.

I think establishing such rules would be a natural progression of the formalization process established by the signing of the ASEAN Charter in 2007.  If the relationship between the ASEAN institutions, including the ASEAN Chair, ASEAN Summit, ASEAN Secretary General and ASEAN Secretariat, can be formalized, this will benefit the administration of the ASEAN Economic Community, which already has several major agreements and subsidiary agreements covering its implementation.

The other shoe to drop, of course, would be how such rules would be administered and enforced?   For example, should there be a repeat of the Cambodia ministerial meeting, who would resolve the dispute?  The ASEAN Charter states that the ultimate authority in ASEAN is the ASEAN Summit of leaders. Hence the current impasse can be resolved by the ASEAN Summit, and its resolution is following this path.  In all likelihood it will require the personal intervention of the ASEAN leaders in Cambodia to resolve the dispute. 

Clearly, however, such an approach is not good for ASEAN.  Waiting more than 3 months for the ASEAN leaders to resolve a dispute with the ASEAN Chair will subject the regional grouping to more diplomacy-by-press-release and criticisms via the media.  This is not good for ASEAN’s relatively weak institutions. 

Khun Kavi points out that next year, ASEAN will review the ASEAN Charter.  I agree that this would be a good time to discuss putting rules into place to govern intra-ASEAN relationships.  By then, Brunei will have taken over as ASEAN Chair.  In my view, Cambodia’s reluctance to raise the South China Sea issue will be less pronounced after its term as ASEAN Chair ends, because ultimately Hun Sen will act to form and rebalance its current pro-China tilt.  Hun Sen didn’t become the longest-serving ASEAN leader without some survival skills, so I don’t think he will either pursue a completely obstructionist approach at the ASEAN Summit or after Cambodia’s ASEAN Chair term ends. But while Cambodia is ASEAN Chair this year, Cambodia looks likely to keep whatever diplomatic commitments it has made to China.

In any event, the silver lining in the impasse may be recognization of the need to strengthen the ASEAN institutions and their relationships within and without ASEAN. Let’s hope that the informal discussion can go beyond the relatively small circle of academics and officials who study ASEAN and reach into the ASEAN leadership.

Even CLMV Countries Feel the AEC Blues

It is commonly believed that the CLMV countries (Cambodia, Laos, Myanmar and Vietnam) countries will benefit the most from the ASEAN Economic Community (AEC), with their large labor pool and reduced operating costs.  However, even the CLMV countries can have the same anxieties as more developed ASEAN members such as Thailand. See this from Vietnam News:

Businesses in HCM City are urging government agencies to create more technical barriers to trade to protect domestically manufactured goods from foreign competition. Nguyen Quang Anh, chairman of the HCM City Plastics and Rubber Manufacturers Association, said the country's technical barriers were inadequate, leaving local industries vulnerable.

Their proposed solution is to create even more non-tariff barriers (NTBs):

Nguyen Quoc Anh of the HCM City Enterprises Association said the association would work with government agencies to promote the establishment of more technical barriers to trade. Over the last five years, Viet Nam had set up only a few technical barriers to trade, while global trade expanded greatly, according to Do Duc Chi of the city's Planning and Investment Department.

Of course, eliminating existing NTBs, let alone creating new NTBs, is a core commitment of the ASEAN Trade in Goods Agreement (ATIGA).  Thus these  Vietnamese companies are -- perhaps innocently, perhaps ingeniously -- publicly articulating that their government adopt new NTBs to protect their domestic markets.

This is nothing new, and in fact happens within ASEAN countries all the time.  Only in this case, the Vietnamese made their demands public, rather than in the hushed halls of government ministries. 

NTBs can indeed be effective protective measures.  For example, in one ASEAN-6 country, it can take many months (in some cases exceeding a year) to qualify a steel shipment for customs clearance.  In another ASEAN-6 country, imports are channeled through a limited number of ports, with sensitive items subjected to more rigorous customs checks.  In both cases, exporters are discouraged from shipping goods to those countries.

As I wrote in the earlier blog post, eliminating NTBs is both a critical and continuing task for the ASEAN Secretariat to establish a single production base and single market.  Finding NTBs is difficult enough without ASEAN member states conjuring up even more NTBs, and not all of them will do us the favor of publicly advocating for them.  This task alone will require additional resources and powers for the ASEAN Secretariat.  

US Import Ban on Myanmar Renewed

The US Congress voted yesterday to extend the ban on imports from Myanmar. The import bans are authorized by the Burmese Freedom and Democracy Act (BFDA) of 2003.  Thursday’s US Congressional resolution extended authoritization for the BFDA ban for another three years, to July 2015.  The resolution also extended the ban itself for another year, to July 2013 (note the distinction between the authorization for the ban and the ban itself).  The ban can be renewed for another year by another Congressional resolution before July 2013.

The US President retains the ability to terminate the ban “upon request of a

democratically elected government in Burma” and when conditions in Section (3)(a)(3) of the BFDA — progress on human rights, release of all political prisoners, freedom of speech and the press, freedom of association, peaceful exercise of religion, democratic governance, not designated as “a country of interest” for narcotics trafficking—have been met.  That would require the Administration to submit a formal report to Congress on bilateral and multilateral efforts to promote human rights and democracy in Myanmar, the effectiveness of the trade sanctions on improving conditions in Myanmar and furthering U.S. policy objections towards Myanmar, and the impact of the trade sanctions on national security, economic, and foreign policy interests of the United States.

As I discussed earlier, the US Congress is supportive of current Obama administration policy, but was expected to renew the BFDA.  Not only is the Obama administration not prepared to make the case for the full waiver, those in Congress who are focused on the Burma issue would not accept that a “democratically elected government” exists in the country and that all of the Section (3)(a)(3) conditions have been met. 

In any event, another year of the ban should provide constructive pressure on the Myanmar regime to continue its reform efforts, with lifting the ban a useful incentive.  It also gives companies in Myanmar – particularly those who are not on the Specially Designated Nationals list – time to organize and prepare themselves to re-engage with the US market.  That re-engagement will take time, and I’ll have more on this after I get back from Yangon and Naypyidaw.