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By Srinivasa Madhur
The Association of Southeast Asian Nations (ASEAN) is now about 52 years old. ASEAN’s achievements on many dimensions of economic integration may compare less favourably with that of its 62-year old European counterpart – the European Union (EU).
Yet, the fact remains that from its humble beginnings in 1967, the Southeast Asian regional grouping has much to talk about its slow but steady progress in integrating its 10-member countries, that are so vastly different from each other in stages of economic development, political systems, legal traditions, and ethnic and cultural backgrounds.
For example, using an appropriate statistical measure of intra-regional trade integration— ‘trade introversion index’—rather than the often used, but flawed measure of ‘intra-regional trade share,’ shows that the degree of trade integration within ASEAN is similar to that within the EU.1
A steady reduction in intra-regional tariffs over time has helped solid trade integration among the 10 member countries of ASEAN. In terms of liberalisation of ASEAN’s intra-regional services, and even more so in terms of cross-border labour movement, progress has been less encouraging. The EU has hugely reduced barriers to intra-regional trade in services, as well as labour mobility.
For example, regionally harmonised qualification and competency requirements have removed legal impediments to cross-border labour mobility within the EU. Given the vast differences in the legal traditions across ASEAN countries (unlike the EU) – some based on the Anglo-Saxon common law system and others based on the continental European civil law codes, ASEAN is proceeding with a mixture of intra-regional harmonisation and mutual recognition of norms for labour mobility for a short list of eight categories of skilled labour.2 A drastic reduction in cross-border non-tariff barriers should help speed up intra-regional integration of services, including labour within the ASEAN.
The EU’s integration process has been institution-heavy, while that of ASEAN institution-lite. The EU has a set of supranational institutions with pooled sovereignty, but ASEAN is backed by only a network-type intergovernmental agreement. Unlike the EU, ASEAN does not have a regional-level parliament, council, commission, and a court of justice.3
In the EU, most decisions (with the exception of regional foreign and security policies), are taken by weighted voting with member countries being allocated varying numbers of votes, while ASEAN takes most decisions (except in some areas guided by the recently introduced ‘10 minus X’ formula) by consultations and consensus among the member states. In the European Commission, the EU has a very powerful regional secretariat while the role and powers of the ASEAN Secretariat pales in comparison.4
Unlike Europe, a number of factors underpin ASEAN’s reluctance to follow an institution-heavy model of regional integration. At the very beginning of the integration process in the 1950s, the overarching objective of Europe was to avoid wars, as the region had just then come out of two devastating world wars. Tighter legally-binding political and economic integration was considered critical by the founders of the European integration project. The US, then was very supportive of the European integration process.
The circumstances for the ASEAN were very different. The region being poor, its key objective was to foster economic development through regional integration. At the same time, given the vastly differing political regimes across the countries within the ASEAN, an institution-lite model of regional integration was considered more suited for its integration project. ASEAN, thus, also opted for regionalism without democratisation of member countries. Moreover, the US too remained far less supportive of a politically-focused regionalism in Asia than it was in Europe, as it was then considered to constrain American foreign policy toward Asia.5
It is, thus, natural that both the ASEAN’s integration ambitions and achievements have been far less than that of Europe in political as well as economic dimensions. Consider, for example, ASEAN’s four-year old economic community (AEC). It is a long distance away from the level of integration achieved by the EU in many dimensions of integration.
However, unlike the EU from which a key member country is now going through a painful process of exiting, the ASEAN can indeed boast of a new-born country in the region–Timor Leste–wanting to join it. Figuratively speaking, everyone likes the ASEAN and ASEAN likes everyone. ASEAN’s institution-lite method of regional integration, that has come to be known as the ‘ASEAN way,’ largely underpins its resilience and popularity.
Indeed, the lack of an EU-style politically and economically institutionalised integration process may not necessarily be a weakness, but rather a strength for ASEAN countries, as it keeps the integration processes ‘flexible’ and preserves its legally non-binding status.6 More broadly, ASEAN is influential because of how it has succeeded in developing a sense of shared values and accepted procedures. It has promoted informal and nonbinding institutional models governed by consensus decision-making.7
The Brexit process that has been under way since mid-2016 and the attendant political turmoil it has imposed on both Britain and other members of the EU makes one wonder if the European-style regionally heavy-handed integration model is the right choice for other regions in the world. By implication, it raises the question of whether countries in other parts of the world should instead consider embracing the alternative of some version of ASEAN’s institution-lite model of economic integration concomitant with more pragmatic ambitions.
From this perspective, it is possible to see ASEAN as the ‘vanguard institution’ for regionalism elsewhere. Thus the ‘ASEAN way’ indeed has the potential to become a role model for regionalism in other parts of the world.
[Dr. Srinivasa Madhur is the Senior Adjunct Professor at the Pannasastra University of Cambodia, Phnom Penh, and the former Senior Director at Asian Development Bank, Manila. The opinions expressed in this article are the author’s own and not the institutional views of LKI, and do not necessarily reflect the position of any other institution or individual with which the author is affiliated. This article was originally published on The Prospector, the blog of the Lakshman Kadirgamar Institute of International Relations and Strategic Studies (LKI). LKI is a think-tank that analyses Sri Lanka’s international relations and strategic interests, to provide insights and recommendations that advance justice, peace, prosperity, and sustainability. The Institute reflects the vision of the late Hon. Lakshman Kadirgamar by promoting the country’s intellectual profile in foreign policy research and engagement. More information at www.lki.lk.]
Notes
Hamanaka, S. (2012). Is Trade in Asia Really Integrating? Asian Development Bank Working Paper Series on Regional Economic Integration, January.
2 Hamanaka, S., and Jusoh, S. (2018). Understanding the ASEAN way of regional qualification governance: The case of mutual recognition agreements in the professional service sector. Regulation and Governance. John Wiley & Sons Australia, Ltd.
3 Koh, T. (2017). ASEAN and the EU: Differences and Challenges. The Straits Times, 25 August.
4 Ibid.
5 Furtak,T., F. (2015). Integration in Regional Organizations – A Comparison of EU, AU, OAS, and ASEAN. Journal of Civil & Legal Sciences 4/2.
6 Berkofsky, A. (2005). Comparing EU and Asian Integration Processes –The EU a role model for Asia?. European Policy Centre.
7 Asian Development Bank. (2010). Institutions for Regional Integration. Asian Development Bank, Manila.
