Southeast Asian leaders are expected to put in place more building blocks for regional integration, especially for the ASEAN Economic Community, a key pillar of the ASEAN Community at an upcoming summit here.
Leaders of ASEAN, or the Association of Southeast Asian Nations, have targeted the end of 2015 as the deadline for creating the ASEAN Economic Community with the vision of creating a single market and production base in the region with free flow of goods, services, investments, capital and skilled labor.
The ASEAN leaders insist that they are confident for the economic community to be achieved on time. Surin Pitsuwan, former secretary-general of the regional bloc, said at the last ASEAN summit in November that some 75 percent of the major instruments of cooperation among ASEAN were in place, and the bloc will work on the rest 25 percent before the deadline.
Observers expected the ASEAN leaders would declare the establishment of the ASEAN Economic Community by the said time, but the new-born will be different from a super-state institution like the European Union.
"We will not have the gold standard FTAs. But we will have the ASEAN kind of FTA, with flexibility depending on the countries' standards," said Sanchita Basu Das, lead economic researcher at the ASEAN Study Center, a unit of Singapore's Institute of Southeast Asian Studies.
"For the deadlines they set, I think they will have the framework but they will be adjusted to the different countries. So I think it is achievable in that sense," she added.
Nevertheless, the ambitious integration plan has been helpful.
"It does not force any actions on its member nations. It is flexible and moves ahead not by interfering. This is a different approach. While there may be a long way to go to achieve the higher level of economic community, it is nevertheless a framework that gives you a guiding target," said Zhao Hong, senior research fellow at the East Asian Institute, the National University of Singapore.
ASEAN INTEGRATION
ASEAN ministers have been preparing for the summit recently with a series of meetings covering economic integration, interconnectivity and security. They are obviously aware that they have to make breakthroughs if they are to achieve the goal of establishing the ASEAN Community (AEC) by late 2015.
Sanchita said the major agreements are mostly in place for the AEC, such as the pacts on trade in goods and services, the comprehensive investment agreement, and the connectivity masterplan.
ASEAN member nations signed the ASEAN Free Trade Area agreement in 1992, and agreed in 2003 to establish an ASEAN Economic Community by 2020. The deadline was brought forward by five years to 2015 at the ASEAN Summit in Cebu, the Philippines, in January 2007.
The AEC Blueprint serves as a comprehensive action plan with clear targets and timelines. According to the official scoreboard published last year by the ASEAN Secretariat, its members had achieved 68.2 percent of the target by 2011.
In 2010, the average tariff rates on imports in the first six members of the ASEAN -- Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand, were cut to 0.05 percent, while the rates for the other four -- Cambodia, Laos, Myanmar and Vietnam, were reduced to 2.47 percent.
The ASEAN Trade in Goods Agreement came into effect in 2010.
ASEAN has also completed seven packages of commitments to liberalize services trade under the ASEAN Framework Agreement in Services. They signed the ASEAN Comprehensive Investment Agreement in the aftermath of the regional financial crisis in 1997.
However, Sanchita said while the ASEAN countries may declare the establishment of the AEC by 2015, it may take even longer for the agreements to be fully implemented in reality.
Yang Razali Kassim, senior research fellow at the Rajaratnam School of International Studies, Nanyang Technological University, also believed the commitment to the ASEAN Community by 2015 can be a challenge for some of the member nations.
"Commitment means that they have to not just talk about being committed to the ASEAN Community by 2015, they must also deliver. And that means they must pass legislation, and they must put aside budget for the various programs of ASEAN 2015. And they must implement. Not every ASEAN country has the internal will to implement the idea of 2015," he said.
However, Kishore Mahbubani, dean of the Lee Kuan Yew School of Public Policies, National University of Singapore, said he is confident.
"My view of ASEAN is that ASEAN never grows in a straight line forward. ASEAN takes two steps forward, one step backward, one step sidewards. Yet eventually it moves forward," he said.
WIDER REGIONAL ECONOMIC COOPERATION
The vision of building an ASEAN Economic Community also calls for the region to be fully integrated into the global economy.
Discussions have started since the last summit on the building blocks of the Regional Comprehensive Economic Partnership (RCEP), with the deadline for the conclusion of the negotiations also set at the end of 2015. The agreements on trade in goods, services and investment are expected to be based on various existing ASEAN+1 agreements between ASEAN and its dialogue partners.
Observers said ASEAN takes an approach of moving by consensus and its characteristic of giving consideration to its member countries' economic development and capabilities of coming to an economic integration process has made it especially successful.
Zhao said the approach of ASEAN and its partner countries to the RCEP is expected to be flexible, too.
Sanchita said the RCEP will be different from the Trans-Pacific Partnership, which involves competition laws, the environment and intellectual property right under one single undertaking.
"The ASEAN agreements are based on adjustment, flexibility and longer time horizons for meeting the requirements," she said. " TPP is going much beyond the trading of goods and services and investment."
Zhao said there have been calls for the ASEAN to nurture more binding cooperative mechanism as the 10-member bloc moves towards a higher level of integration, which would possibly result in making some of the commitments binding.
"As the awareness of the Southeast Asian countries as members of ASEAN continues to be raised, I think they will gradually realize that they may have to concede certain powers. As the awareness grows further, I don't think we can rule out that possibility," he said.
ECONOMIC COOPERATION IS UNDERLYING TREND
The economic pillar has been leading the ASEAN regional integration. Sanchita said she expected the ASEAN to gradually move from the economic pillar to socio-cultural and eventually to include political disputes on its agenda.
ASEAN has been a successful multilateral platform for communications and negotiations. Mahbubani said ASEAN, with its status as a platform convened by a group of smaller countries, has been especially important as a geopolitical platform that has drawn together leaders from not only the ASEAN countries but also their dialogue partners such as China, Japan, South Korea, India, New Zealand and Australia, as well as the United States and Russia.
While issues related to the South China Sea disputes may surface or even looms in the upcoming summit, scholars believe the underlying trend is still economic cooperation and integration.
"I think there could be impact from the South China Sea issue. But it is up to both sides to keep politics and economy separate and prevent the issue from affecting the larger cooperation. China and Vietnam so far have been doing good," Zhao said.
The senior scholar said he expects detailed questions on economic cooperation to be discussed, including perhaps how to help Myanmar speed up its economic development.
"The economy is obviously what matters most to the ASEAN nations. Security issues will be discussed, but I don't think it will overshadow the economic side," he said.
China has taken the lead in signing the free trade agreement with ASEAN, partly thanks to its generous concessions in cutting tariffs for goods including agricultural products.
Zhao said he saw still further huge potential for the cooperation between ASEAN and China, especially in services trade, investment as well as culture and technology.
"The Chinese economy is diverse, with both the high-tech sectors and the labor-intensive industries. It may appear at first that the advanced economies are more complementary to the ASEAN economies, but the truth is you can find cooperation opportunities at almost all levels if you look carefully (into the China-ASEAN cooperation)," he said.
