Prioritizing Integration Goals in the ASEAN Economic Community in a Changing World
29 Pages Posted: 15 Mar 2016
Date Written: March 2016
According to the Charter of the Association of Southeast Asian Nations (ASEAN), by 2015 ASEAN countries should have established the ASEAN Economic Community (AEC) to “create a single market and production base which is stable, prosperous, highly competitive and economically integrated” in paragraph 5 of Article 1.
Unfortunately, in its current condition, ASEAN is not well-prepared to undertake such ambitious objectives. ASEAN does not have strong regional institutions to deal with economic integration, unlike the EU. Nor does ASEAN have detailed legal agreements and robust dispute settlement procedures, unlike NAFTA. As a result, the AEC faces structural problems in dealing with regional economic integration, particularly the cross-pressures coming from the Trans Pacific Partnership (TPP) and the EU’s bilateral FTAs with individual ASEAN members.
This paper therefore advocates strengthening the ASEAN institutions and processes so that all of the AEC participants can interact in conjunction with the TPP and EU-ASEAN FTAs, and not become caught up in the cross-pressures of these modern FTAs. We present a series of potential reforms ranging from the modest to the ambitious that would allow the AEC to flourish and go beyond its current limitations. Ultimately that choice needs to be made by the ASEAN leaders themselves – but that choice needs to be made, and soon.
Keywords: AEC, ASEAN, TPP, trade integration.
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