Professional Documents
Culture Documents
April 2015
The Association of Southeast Asian Nations with conflict. The Second Indochina War
(ASEAN) is the first comprehensive regional was raging in Vietnam, Cambodia, and
organization in East Asia established in Laos. Communist-led movements in these
1967 by Thailand, Malaysia, Singapore, countries were waging armed struggle
Indonesia, and the Philippines. The main against the US interventionist forces and its
goals of the organization as stipulated in sponsored dictatorial regimes. Meanwhile,
the ASEAN Declaration signed in Bangkok leaders from the founding nations were
are to preserve peace in the region, and also suppressing urban and rural unrest
to promote economic, social and cultural that fed vibrant trade unions, peasant
cooperation among these countries. struggles, youth rebellions, and communist
insurgencies in their home fronts. They
The underlying political-economic impetus also needed legitimacy at the local level
for establishing ASEAN was to prevent the through economic development that
spread of communism from Mainland China they hoped they could achieve through
and neighboring countries in Indochina. regional cooperation. Brunei Darussalam
During that time, Southeast Asia was rife joined ASEAN in 1984. After the Cold
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War, Vietnam was integrated into the methods of tariff reduction scheduling
ASEAN in 1995, Lao PDR and Myanmar in and rules of origin have been a standard
1997, and Cambodia in 1999. Collectively, format in East Asian FTAs and have been
these Indochinese countries would be applied in most of the ASEAN+1 FTAs.1
identified as the CLMV. Timor Leste
expressed its willingness to join but this The region is at the heart of Factory
is still up for review by member-states. Asia, wherein corporations have set up
their production networks. Transnational
Skepticism was abundant during the early corporations (TNCs), in their search for
stages of ASEAN because of various new markets and desire to cut operating
limitations and challenges, which still exist costs, have broken down their procurement,
today. Despite its members’ geographical production, distribution and sales processes
closeness, intra-ASEAN economic and relocated these across ASEAN
integration was very low. Members include countries. Developing Asia, particularly
countries with widely varying levels of Southeast Asia and China, became the
economic development. All members’ preferred locations for labor-intensive
economies are highly dependent on and and highly polluting resource extraction
competing with each other for foreign and assembly of products because of the
direct investment (FDI) from Japan, US, cheap labor, abundant natural resources,
and other industrialized countries. corporate-friendly environment, and
loose regulatory sanctions regarding
Indecision was not infrequent. The labor and environmental standards.
seemingly democratic decision-making Starting from the textile and garments
process of consultation and consensus- industries, this disaggregation process
building has been used to protect the has moved into footwear, automotive,
local elites’ economic interests and electrical equipment, electronics, precision
has hampered ASEAN’s institutional goods, publishing and others. Now, this
development. For example, the ASEAN has expanded to outsourced services,
Charter, which expresses the legal identity especially information technology-based
of the group and codifies its regional norms services such as business processes.
and commitments, came in force only in
2008 – four decades after it was established. The financial crisis of 1997-1998 had left
ASEAN member states severely weakened.
Much of the FDI in ASEAN was relocated
to China, which was already opening up
Push for Greater Integration to foreign markets and would soon join
the World Trade Organization (WTO).
With the establishment of the ASEAN This was devastating for the ASEAN
Free Trade Area (AFTA) in 1992, ASEAN countries whose economic development,
became the hub of free trade agreement social stability and international political
(FTA) networks in East Asia, thus, standing depended on an investment-
taking the “driver’s seat” in economic driven, export-oriented growth strategy.2
integration in region. The main goals of Member-states envisioned creating the
the AFTA are reflective of the ASEAN’s ASEAN Community by 2015 to assert its
character as FDI-dependent and export- relevance as a regional organization and
oriented. AFTA aims to increase ASEAN’s to attract more foreign investments by
competitive edge as a production using its integrated market as leverage.
base for the world market through the
elimination of tariff and non-tariff barriers Currently, the ASEAN is the 7th largest
within ASEAN and hence to attract more economy in the world, and the third largest
foreign investment in the region. AFTA’s in Asia with its collective GDP of USD 2.4
3
trillion in 2014. With the economies of China the 12th ASEAN Summit (2007), it was
and India slowing down, ASEAN is being decided to accelerate the attainment of
presented as an alternative destination for the ASEAN Community by 2015, in the
investments. The region has a population face of global and regional economic
of 600 million and its favorable geographic challenges and the need for ASEAN to
location puts it right at the center of major reassert its centrality and ensure that it
trade routes with USD 5.3 trillion of global remains the driving force in shaping the
trade passing through its sea lanes every constantly evolving regional architecture.
year. ASEAN is the third largest trading
partner both of the United States (US) and
the European Union (EU), and is the largest
destination of US investments in Asia.3 ASEAN Community Pillars
ASEAN also boasts of abundant human and
natural resources, which include minerals, The ASEAN Community has three pillars,
fossil fuels, and forest resources that can as stipulated in Bali Concord II: (1) Political
be utilized to support economic growth. and security community, (2) Socio-cultural
community, and (3) Economic community.
With its collective economic growth and Each pillar has a blueprint for the part-by-
resources, ASEAN is seen as the next part realization of the ASEAN Community.
engine of growth in Asia, provided that
it becomes successful in achieving the The ASEAN Political-Security Community
ASEAN Community in 2015. Investors and (APSC) was created to address threats
corporations are especially anticipating to regional security and political
ASEAN’s economic integration in the stability and to promote democracy
hopes of exploiting the opportunities to and human rights in the region.
expand and consolidate their business
operations in the region. Recognizing The commitment to APSC upholds existing
its strategic value, economic giants such ASEAN political instruments such as the
as China and the US are competing for Declaration on the Zone of Peace, Freedom
influence over ASEAN on economic, and Neutrality (ZOPFAN), the Treaty of
socio-political, and security issues. Amity and Co-operation in Southeast Asia
(TAC) and the Treaty on the Southeast Asian
As the ASEAN Community looms into Nuclear Weapon-Free Zone (SEANWFZ). It
existence by the end of 2015, civil also promotes regional security dialogues
society organizations (CSOs) in its such as the ASEAN Regional Forum (ARF),
member countries are questioning the East Asia Summit (EAS), and ASEAN
integration process and how it will affect Defense Ministers Meeting (ADMM).
the people’s rights in the region. However, there has not been much progress
in handling actual conflicts such as the
Cambodian-Thailand border incident in
2011 and the current territorial disputes
between China and some ASEAN countries.
ACHIEVING REGIONAL INTEGRATION:
THE ASEAN COMMUNITY 2015 The blueprint envisions joint regional efforts
for effective and early response to disasters
During the 9th ASEAN Summit (2003), through the ASEAN Agreement on Disaster
member-states agreed to transform the Management and Emergency Response
organization into an ASEAN Community. (AADMER). However, this is non-binding, as
Originally, the ASEAN community was in the case of the voluntary earmarking of
set to commence in 2020 as stipulated in national resources to be set on standby for
the Vision 2020 adopted in 1997. During disaster relief and emergency response.
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Table 1. ASEAN Community Pillars
ASEAN Economic ASEAN Socio-Cultural
ASEAN Political Security
Community Community
• ASEAN Ministerial • ASEAN Economic • Culture and Arts
Meeting Ministers • Disaster Management
• ASEAN Regional Forum • ASEAN Free Trade Area • Education
• Defense • Energy • Environment
• Law • Food, Agriculture • Hazard Health
• Transnational Crimes and Forestry Information
• Finance • Labor
• Investment • Rural Development and
• Minerals Poverty Eradication
• Mekong Basin • Science and Technology
Development • Social Welfare and
Cooperation Development
• Transport • Women
• Telecommunications • Youth
and IT
• Tourism
• Sectoral Bodies under
the Purview of ASEAN
Economic Ministers
These factors, combined with differences in The APEC Business Advisory Council (ABAC)
culture and governance systems, determine first floated the idea of an FTAAP in 2004 as
the ASEAN’s character as a loose, politically a long-term vision for regional integration
non-binding organization that will encounter of the APEC economies to achieve the
indecisiveness and difficulty in addressing full global liberalization in the WTO and
sensitive issues of regional importance.8 For to minimize the complications brought
example, when faced with maritime dispute by the complex web of regional trade
over the South China Sea, ASEAN nations agreements and free trade agreements in
(many of which identify their interests the APEC region.9 However, talks on the
according to the competing interests FTAAP did not progress due to member-
of either China or US), were not able to economies’ lack of interest to pursue a
form a unified position on the dispute. binding FTA, and because China and
the US had difficulties agreeing on the
The undemocratic tendencies in the ASEAN provisions of an FTA. As the FTAAP talks
become evident in the fact that CSO are stalled, RCEP and TPP negotiations
participation is very limited to the point of continue. APEC’s 2010 summit released
non-existent, in shaping the policies and a communiqué stating that the FTAAP
processes governing the integration. In would be pursued by developing and
the first place, ASEAN was borne out of building on ongoing regional undertakings
a highly exclusivist process wherein the such as the RCEP and the TPPA.
decision to join the ASEAN, or even just
the drafting of the ASEAN Charter, was As part of its pivot-to-Asia strategy, the
not subjected to national consultations US is promoting the TPPA in the region
or voting process with the people of the and working fast to achieve its completion
member-states. In fact, most of the ASEAN by 2015. The US-led TPPA is considered
as a “gold standard” pact that deals
8
Figure 1. FTAAP, RCEP, TPPA, and ASEAN
TPP
Australia
RCEP
Canada Brunei
Chile Japan
Mexico Malaysia
United States New Zealand
Peru Singapore
Vietnam
India
Cambodia
China Lao
Hong Kong
South Korea Myanmar
Papua New Guinea
Indonesia
Russia
Philippines
Taiwan
Thailand
FTAAP-21
with more “behind-the-border” issues needs than the TPPA would. The RCEP
such as investment, financial services, also aims to solve the “noodle bowl”
transfers, transparency, regulatory problem of a complicated net of bilateral
coherence, competition, state-owned and multilateral FTAs with different rules,
enterprises, government procurement, especially in ASEAN, by creating common
intellectual property, most-favored-nation rules and standards for the participating
treatment, sectoral disciplines, supply countries. Initially, China wanted an FTA
chains, and more. The TPPA is considered only with the ASEAN, Japan, and South
restrictive, especially in its intellectual Korea. Japan, on the other hand, wanted
property rules (IPR) and ISDS provisions. to counterbalance China’s influence in
As of 2015, 12 countries are involved in the region while ensuring its interest in
the TPPA talks: the US, Canada, Chile, accessing the large market of China. It
Peru, Mexico, Australia, New Zealand, thus advocated for the inclusion of India,
Malaysia, Brunei Darussalam, Singapore, Australia, and New Zealand, the last
and Japan. China is not included. two being close US allies like Japan.
On the other hand, RCEP has a flexibility ASEAN participation in the two agreements
principle that provides relatively more is key to the two superpowers’ success
consideration of each state’s development in their competition for influence in the
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region’s trade architecture and in leveraging the clamor of communities to stop
their opportunities to exploit the region’s investment projects that adversely affect
vast resources. The US needs its ASEAN them are justified by invoking national
allies’ cooperation in order to hold up the security and public interest. Such state
RCEP talks long enough for the TPPA to actions are upheld by the AHRD provision
conclude earlier and thus be able to set “to meet just requirements of national
the rules for trade and investment in the security, public order, public health,
FTAAP. Through the TPPA and various public safety, public morality, as well
bilateral economic and military deals with as the general welfare of the peoples
Southeast Asian nations, the US hopes to in a democratic society.” (Article 8)
contain China’s growing economic strength
and political clout not only in Southeast The ASCC’s major flaw, on the other hand,
Asia but also in the whole of Asia. is its premise that poverty is caused by the
lack of access to education, health, food,
jobs and capital, which can be remedied
by providing access to these and providing
social safety nets against the impacts
INTEGRATION FOR WHOM? of globalization. It clearly ignores the
IMPLICATIONS OF ASEAN structural impoverishment of the people of
INTEGRATION developing countries caused by decades
of colonialism and neo-colonialism, which
ASEAN integration has been proclaimed until now continues to exploit the natural
as one of the means to sustain economic resources and labor of the people in favor
growth for poverty eradication and inclusive of the big capitalist powers. Strengthening
sustainable development in the region. ASEAN’s economic integration into the
However, this regional integration, as long global market will merely reinforce such
as it follows the same old logic of the unequal relationships, as ASEAN becomes
neoliberal model of development, is likely a vast supplier of natural resources and
to worsen problems brought by the uneven cheap labor to more developed economies.
and inequitable economic growth in Asia
and will more likely create new problems,
especially for the poor and marginalized.
Erosion of People’s Sovereignty,
The three community pillars are supposedly Increase of Corporate Power
mutually reinforcing each other. Through
the APSC and ASCC, the rights of ASEAN In principle, the ASEAN Charter protects
people are supposedly upheld and people the member-states’ political independence.
are able to enjoy the benefits of economic Historically, the principle of non-interference
integration as pursued by the AEC. has been used by member-states to invoke
However, the pillars are being built in a way sovereignty and avoid other states from
that proves otherwise. The APSC and ASCC meddling in domestic political and social
were not designed to protect the ASEAN affairs. However, the principle of non-
peoples from the negative impacts of interference is essentially void when it
economic integration as envisioned by AEC. comes to building the AEC. In the process
of transforming the region into a single
The APSC is too much focused on state market and production base, member-
security instead of paying attention to states are compelled to deregulate and
people’s security against the human rights liberalize trade, services, and investments
violations and other social perils brought to attract greater foreign direct investment
about by the pursuit of globalization. (FDI) to the region. This process may involve
For example, state actions to suppress legislation of reforms to change charters
10
and remove protectionist measures, which Diminishing Access to Social Services
impinge on the people’s sovereignty over
their domestic policy space to direct the use Liberalization of services strongly
of resources for their country’s development. encourages big foreign-owned service
providers to come in and take over social
A case in point is the ongoing debate services. Private-sector efficiency and
in the Philippines on calling for charter government budget limits are oft-cited
change to allow 100% foreign ownership of reasons to privatize social services.
natural resources, land ownership, strategic
enterprises, public utilities, education, The strong neoliberal push for privatization
mass media and advertising. Proponents and deregulation inherent in ASEAN
of charter change are using the impending integration is endangering the public’s
establishment of the ASEAN Economic access to basic services such as electricity,
Community as the raison d’etre for removing water, health and education. Benefits from
restrictions on foreign ownership to allow liberalization of services in developing
the country to reap the benefits of ASEAN countries will go to corporations loaded with
integration. Nationalist Filipino legislators foreign capital who take over the operations
and grassroots movements are opposing of these services, which are normally run
charter change since this will undermine the by the government at subsidized rates.
Filipino people’s control over the country’s Public utilities and essential services are
resources. Furthermore, there is no direct being transformed into lucrative profit-
evidence proving that increased FDI and making businesses. That privatization
greater deregulation and liberalization does not necessarily lead to cheaper and
policies have created a strong domestic more efficient services has been shown
economy that creates jobs and expands by many case studies. Privatized water
domestic capital on a sustainable basis, services of Jakarta, for example, led to
since foreign investors are by nature averse steep prices when the state-owned PAM
to developing the comprehensive domestic Jaya signed contracts with two foreign
economy that will compete with them in companies – PT Pam Lyonnaise Jaya
exploiting and profiting from markets, (Palyja) and PT Aetra Air Jakarta – to
labor power, and natural resources.10 take over the operations delivering clean
drinking water to Jakarta residents.11
Meanwhile, corporate power is further
strengthened and people’s sovereignty
is further weakened through increased
investment protection measures, of which Worsening Inequalities Between
the most notable is the investor-state dispute and Within ASEAN Countries
settlement (ISDS) provision of the AEC
through the ACIA. The ISDS gives investors According to a study conducted by the
the right to sue government when their International Labor Organization (ILO)
profits are in danger, through international and the Asian Development Bank (ADB),
arbitration including the International although ASEAN integration can generate
Center for the Settlement of Investment jobs and investment opportunities, it
Disputes (ICSID) and the UN Commission can also worsen existing inequalities
on International Trade Law (UNCITRAL). This between and within member countries.
may prevent governments from legislating According to the study, “the gains will not
laws that are favorable for the people be distributed evenly among countries,
but detrimental to corporate profits. economic sectors or women and men.
Unless it is decisively managed, regional
integration could increase inequality and
worsen existing labor-market deficits, such
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as vulnerable and informal employment, actions were taken to remedy the adverse
and working poverty.”12 The sectors FTA impacts. ASEAN integration will further
that stand to gain across the region are aggravate this situation between and within
construction and trade and transport member states. Integrating the ASEAN
– sectors that are prone to be informal into the greater global economy means
and vulnerable, and wherein women getting FTAs with the US and EU, in which
are less employed compared to men. industries and businesses in ASEAN may
lose in the stiff competition with foreign
As the ASEAN aspires to be a region fully monopolies allowed to invest in the
integrated into the global economy, its ASEAN.13 This is especially true for small
combination of 10 small and medium-sized and medium enterprises, which compose
economies are pushed into an arena where 50% to 85% of domestic employment in
they have no choice but fight each other many ASEAN countries.14 These SMEs
for better positioning in the “global value remain as producers of low-value goods
chains” even as they seek to be a single or provider of cheap contractual services
market and production base. Reaping in the whole scheme of the regional and
benefits from economic integration will global value chains. At the same time, their
depend on the resources and the level of operations are threatened by global TNCs
economic development of each country. who have more capital and resources.
ENDNOTES
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