AN INTERNATIONAL OUTLOOK

Thailand 2017 | DIPLOMACY | FOCUS: ASEAN AT 49

ASEAN seeks to learn from Brexit to emerge as a global power player and, at the same time, benefit from working with other blocs and trade agreements.

On June 23, 2016 British voters sent shockwaves throughout the world by opting to leave the EU. Following years of slow recovery from the global economic crisis and rising sectarian tensions causing instabilities in key emerging markets, the Brexit vote seemingly signaled the end to an integrated global economy as the world once knew. On the other side of the globe in Southeast Asia, however, the 10 member states making up the Association of Southeast Asian Nations (ASEAN) has other ideas.

On New Year's Eve 2015—five years ahead of schedule—Indonesia, Malaysia, Vietnam, Cambodia, Laos, Brunei, the Philippines, Singapore, Myanmar, and the Kingdom of Thailand officially signed into effect the ASEAN Economic Community (AEC). With a population approximating 622 million people and a combined economy valued at a whopping $2.6 trillion, it aims to “implement economic integration initiatives" to create a single market.

However, despite the excitement of a consolidated, regional economy about to emerge onto the global stage, the roots of the AEC dates as far back as August 8, 1967, when ASEAN members, seeking greater cohesion in the midst of the Cold War, came together under the Bangkok Declaration. The logic behind such integration was both sound and simple: individually, the states were destined to get caught in the crossfire of global superpowers looking to extend their military and economic influence in Southeast Asia, yet together the ASEAN nations could stand up as a single bloc and develop its own center of gravity. As integration continued over the years, in the 1990s ASEAN emerged as the leading voice on regional trade and security issues, and began looking toward the next step.

Today, while the actors may have changed slightly, the logic behind the AEC remains the same: individually, the member states do not stand a chance against industrial powerhouses India and China, yet united they are strong competitors. In fact, when taken as a single entity market, the AEC represents the third-largest economy in Asia and the seventh biggest in the world behind the US, China, Japan, Germany, the UK, and France.
What is more, the member states are increasingly utilizing the regional framework in their dealings with others. Most recently, in August 2016 the 48th ASEAN Economic Ministers Meeting (AEM) in Laos was attended by China's Minister of Commerce, Gao Hucheng, who took the opportunity to celebrate his country's 25th anniversary of dialog with the bloc—with good reason. In 1991, when cooperation first began, trade levels stood at just under $8 billion. Last year, having grown at approximately 19% annually since, this figure surged to a staggering $472 billion, making China ASEAN's biggest trading partner. Looking ahead, the ASEAN 10+1 leaders have agreed to expand their existing FTA in a bid to boost bilateral trade levels past the $1 trillion mark by 2020.

Similarly, in May 2016, President Vladimir Putin commemorated his country's 20-year anniversary of dialog with the bloc by inviting each of the 10 heads of state to the Russia-ASEAN Summit in Sochi. With the resulting Sochi Declaration, the parties agreed to strengthen cooperation “across a wide range of areas, including political, security, trade and economic, culture, people-to-people exchange, and development cooperation." Most notably, however, political will paved the way for an upcoming feasibility study on an FTA between the AEC and the Eurasian Economic Union (EAEU), which includes Armenia, Belarus, Kazakhstan, Kyrgyzstan, and, of course, Russia.

Nonetheless, despite their consolidated approach, talks of a supranational entity through a EU-like narrative are premature, if not unwanted altogether. As explained by Thailand's Minister of Foreign Affairs exclusively to TBY, “to arrive at a win-win situation for all member states, one has to be patient, one has to exercise wisdom and tolerance. We have been observing some of the mistakes that the EU has made and we are learning from them. We are happy to be tackling issues as a group and reaching out to the world in a consolidated way but integration must come at a steady pace and be suitable for all."

On that note, if the EU failed to ever develop a credible common foreign policy, ASEAN's chances are set to be even bleaker. Regional issues such as the South China Sea crisis present a paradox, whereby the bloc's biggest trading partner is also the biggest threat to the territorial integrity of at least two member states: Vietnam and the Philippines. Similarly, the US-led Trans Pacific Partnership (TPP), one of the biggest and broadest trade deals in history that is likely to redefine global commerce for decades to come, has been met with mixed reactions in Southeast Asia; only Brunei, Malaysia, Vietnam, and Singapore have opted for membership. While the idea of a supranational union may well be undesired, it seems clear that disagreement on crucial issues such as regional security and international trade deals could become a destabilizing factor for the bloc and hamper further integration down the line.