Pakistan, Sri Lanka and Timor Leste in ASEAN?

The headline “Pakistan needs Indonesian support for ASEAN membership” in yesterday’s Pakistan Daily Times was jarring to see on the Google news widget on this blog yesterday.  Only after reading the actual text of the article could one determine that the interviewee, an Indonesian diplomat, was actually talking about an ASEAN-Pakistan free trade agreement (FTAs), not actual membership in ASEAN itself. 

I write “jarring” but not absurd in the above paragraph because South Asian countries such as Pakistan have sought membership in ASEAN before.  Sri Lanka tried to join ASEAN at the time of its founding in 1967:

Suddenly the issue of Ceylon’s efforts to join ASEAN came up. Tun Abdul Razak, who led the Malaysian delegation, announced that the Malaysian Prime Minister Tunku Abdul Rahman “had made a promise” to the Prime Minister of Ceylon “regarding Ceylon’s admission to the group”. An “undertaking had been made and he, Razak, could not retract it”. The other delegates were “stunned”. The geographical limits proposed for the organization did not extend beyond Burma.  Reluctantly every body “decided to wait for the arrival of application from Ceylon. Nothing happened. The clock was ticking and the Thais wanted the birth of the organization to take place within an auspicious time. Before that deadline, the meeting was called to order”.

(Thanks to Dr. V. Suryanarayan for this discussion).  As Singaporean President S.R. Nathan recounts in his memoirs, the Sri Lankan government later decided to drop the application:

Nathan has mentioned in his book that few years later Gunasingham, Sri Lankan High Commissioner to Singapore, explained why Colombo “failed to take its application forward”. Gunasingham had sent an analysis of the emerging geo-political situation in Southeast Asia. In that note he had explained how the Southeast Asian countries wanted to “shore up the strategic environment …than the protective shield offered by the American presence and by the umbrella of Southeast Asia Treaty Organisation”. Gunasingham was of the view that the “dominoes will continue to fall” as things stood “at present”. There will be no “stopping the process”, unless the Southeast Asian States associate themselves in a regional organization, which will usher in “unity of will and purpose and co-operative setting”. Gunasingham discussed the subject with Thanat Khoman, the Thai Foreign Minister, who “seemed to welcome the idea” of Ceylon’s membership. Gunasingham also felt that other member states were sympathetic to the idea.

Gunasingham got no reply from Colombo. His analysis was that the Government came under pressure from the left parties and also from India “which feared that its sphere of influence might be eroded” China and Soviet Union also opposed the move. Some non-aligned countries also felt that Sri Lanka would be giving up its policy of non-alignment. Gunasingham concluded, “Sri Lanka’s hope of breaking away from its moorings in South Asia and becoming a trading nation with links to Southeast and East Asian nations as well as to all of littoral Asia was lost”. The application was shelved, and as Nathan concludes, in later years, Sri Lanka’s “internal security situation deteriorated”.

Frankly, the nature of ASEAN as a regional institution would have been irrevocably changed had Sri Lanka been considered seriously as a member.  History would have been much different had the meeting started a little later.  In any event, any application by Sri Lanka or Pakistan would now be barred by Article 6.2(a) of the ASEAN Charter, which requires a prospective applicant to have a “location in the recognised geographical region of Southeast Asia.”

Moving from the hypothetical to the actual, the current ASEAN membership application of Timor Leste is being considered by an ASEAN committee, which met this month.  This article in the Jakarta Post comments on Singapore’s supposed opposition to Timor Leste’s application. The author posits that Singapore may oppose Timor Leste’s membership because (1) it does not want Indonesia to have another ally in the grouping, (2) taking in Timor Leste now would delay the ASEAN Economic Community (AEC) implementation, and (3) Singapore is bargaining for economic advantage, particularly with regard to energy resources in Timor Leste.   

The article correctly notes that (1) is not relevant because of the “ASEAN way of consensus,” such that having another vote in ASEAN is not really so important. It also states that ASEAN has demonstrated flexibility in the implementation of the AEC, particularly for Cambodia, Laos, Myanmar and Vietnam (CLMV) countries, so why not for Timor Leste?  The author goes to note that Article 21(2) of the ASEAN Charter allows for this differential treatment pursuant to the “ASEAN – X” formula. Thus, the article posits that (2) is not a justifiable reason to delay Timor Leste’s ASEAN membership, such that continued reliance on these issues may lead to unwarranted speculation that (3) is the real reason for Singapore’s opposition.

In my view, the Jakarta Post article assumes that ASEAN’s institutions and structures for the AEC are sufficiently developed to handle another developing country member, one that is not a WTO member (Laos is not a WTO member but will join soon).  As regular readers of this blog know, I don’t think that the ASEAN institutions and structures are sufficiently developed, as I discussed here.   In other words, it is not just that Timor Leste is not ready for ASEAN, but that ASEAN is not ready for Timor Leste. 

To put it in more stark terms, if Timor Leste is accepted as an ASEAN member, by my estimate, Timor Leste would become ASEAN Chair by 2020.  A lot can happen in eight years, as occurred in Cambodia after it joined. But there would really need to be major leaps in development and infrastructure assistance for the country, similar to what happened in Cambodia.  That effort would be highly distracting from current efforts to complete the AEC. 

Finally, I really don’t think that Singapore is jockeying for economic advantage in Timor Leste.  The country is not traditionally part of Singapore’s trading patterns, and as the Jakarta Post article notes, the Australians and Indonesians have already filled most of the major economic roles there.

Again, I have no doubt that Timor Leste will eventually join ASEAN, given the high level of support from ASEAN member states and the need to promote regional stability by including the country in ASEAN. But ASEAN needs to complete the AEC by 2015 before taking on another member.  Both Timor Leste and ASEAN will benefit from having a longer time horizon for ASEAN membership.

Thoughts on US Trade Policy Regarding China

I am interviewed by John Richardson in today's ICIS report on US trade policy regarding China.  It is not directly related to ASEAN but touches upon some issues also raised during the APCAC "doorknock" described in my previous post.  Follow the link for more.

Gauging US Thoughts on Myanmar and the TPP

This week I attended the annual Washington Doorknock of the Asia-Pacific Council of American Chambers of Commerce (APCAC).   This is an opportunity for American Chambers of Commerce in Asia to hear from the Obama administration and the US Congress about their thoughts and opinions on Asia.   There were a few items that impact the ASEAN Economic Community (AEC):

First, State and Treasury department officials indicated that the official suspension of US Burma sanctions against the Myanmar regime will take place soon, and no later than Secretary of State Hillary Clinton’s visit to the ASEAN Regional Forum in Cambodia on July 12-13.  The suspension had been announced in May during a visit by the Myanmar foreign minister to Washington, but the formal suspension, in the form of a “general license” to do business with Myanmar, has not yet been issued by the Treasury department, which administers the Burma sanctions. 

The suspension will likely cover all of the issues discussed in my previous blog entry, with the additional likelihood that companies investing in Myanmar will have to file a periodic report on corporate social responsibility efforts.  The suspension will not likely result in a lifting of the ban on imports from Myanmar, as the U.S. Congress will likely pass an extension of the ban and other sanctions for an additional year (although President Obama’s ability to waive the sanctions will also continue).  The suspension comes as the US-ASEAN  Business Council and the American Chamber of Commerce plans two separate business missions to Yangon and Naypyidaw in July and August (I am going in the August mission).

Second, thoughts on the Trans Pacific Partnership (TPP) were mixed.  Most thought it would not be practical for the TPP to be completed this year although progress had been noted.  Some (mostly Republicans) thought that without Trade Promotion Authority (TPA), a statutory delegation of authority by the Congress to the President along with expedited consideration and voting procedures for Congress, a TPP result would be difficult to achieve.  Along with the long-stalled WTO Doha Roud, the TPP is the first major trade agreement the US has attempted to negotiate without TPA (or its predecessor Fast-Track) since the 1970’s, and trading partners will be reluctant to negotiate and conclude deals if they know that Congress will later rewrite the agreement during the consideration process.  In addition, TPA traditionally comes with formal notice and consultation processes to be followed by the Administration, which USTR has been following without statutory authority for TPP anyway.  Nevertheless, there were some complaints that without the TPA stipulations, USTR’s consultation process with Congress has been less satisfactory than its outreach efforts to other stakeholders such as non-governmental organizations. 

There was concern about how TPP could be linked up with US efforts to engage ASEAN more.  Major ASEAN members such as Malaysia, Indonesia and the Philippines are not in the TPP talks, and may not be ready to join for the foreseeable future due to their domestic political concerns.  One State official opined that perhaps a “half-way house” for these ASEAN members could be created so that ASEAN could have some linkages with the TPP; other officials thought that economic development in these ASEAN members would be better served by their joining the TPP talks in full, noting that Thailand had had its opportunity for a bilateral FTA with the US in the last decade and would already be in the TPP talks now if it had entered into an FTA.

Third, this was an opportunity to meet several US officials who have had a major impact on ASEAN, including Senator Daniel K. Inouye, the US Senate president pro tem, whom I have long admired as an Asia-Pacific American political pioneer:

During the meeting, he remembered his last visit to Yangon in 1966, making him one of the first US legislators to visit Myanmar/Burma.  Another notable legislator is Rep. Xavier Becerra, who had been offered the USTR position by President Obama.  USTR Ron Kirk has done an excellent job, but seeing Rep. Becerra in action during a panel makes me wonder what could have been achieved with him at USTR.