3 - Critical nexuses of law and policy

Summary

If the primary goals of the AEC are to create a single production base and a single market, how well has ASEAN laid down the legal and institutional foundations (as described above) for pursuing those goals? An overview of how legal and institutional factors currently interact in ASEAN indicate that the regional bloc has major deficiencies in its operational infrastructure. Of note is the absence of certain policy areas from binding obligations by ASEAN treaties like the ATIGA, such as competition, government procurement, movement of unskilled labor, economic aspects of environmental policy, intellectual property, and the like.

In any event, this survey of critical nexuses of law and policy covers areas where, in the authors' view, stronger obligations have been undertaken by the ASEAN member states with regard to the AEC. In conducting this survey, the authors compare the AEC with the most well-known regional economic integration projects, the EU and NAFTA. The EU represents an integration model with very strong and active regional institutions formulating and implementing policy in the bloc. On the other hand, NAFTA represents an integration model based on detailed agreements and robust dispute resolution processes that implement those agreements. The authors offer these comparisons with the EU and NAFTA to provide meaningful terms of reference, not necessarily to posit that the AEC should follow either of these examples. Indeed, the authors fully expect that ASEAN's leaders will choose a regional economic integration model that will follow the best interests of ASEAN's citizens, regardless of whether the foundational sources of that model come from the EU, NAFTA, or elsewhere. Since we need to start the discussion with common reference points, we start with the EU and NAFTA.

The ASEAN Charter and ASEAN institutions

The first mention of the objectives of economic integration in the ASEAN Charter is found in paragraph 5 of Article 1:

Purposes of chapter 1 of the Charter:

5. To create a single market and production base which is stable, prosperous, highly competitive and economically integrated with effective facilitation for trade and investment in which there is free flow of goods, services and investment; facilitated movement of business persons, professionals, talents and labour; and freer flow of capital.