ASEAN 50 + EU 60 = 40 years of cooperation

We are celebrating a special triple anniversary. The ASEAN (Association of Southeast Asian Nations) turned 50 this year. Also, the European Union celebrated its 60^th birthday this May, and the two organisations established an official relationship with each other exactly 40 years ago. This paper outlines the relationship of the two most successful economic integrations in the world on the occasion of this special triple anniversary.

The two most successful economic integrations in the world

Both organisations were established in turbulent times. Europe aimed to bridge the political tensions arisen from World War II with economic cooperation, while Asia set up an alliance against the ideology of communism. Both organisations started as some kind of economic cooperation; however, by today they have achieved good results in the fields of security policy, education and culture. Still, the European Union has established a much stronger bond among the Member States for 60 years than the ASEAN for 40 years. The EU is the second strongest economic power in the world; the common market gathering the developed countries numbers 510 million citizens. The ASEAN is the fifth economic unit in the world, although its membership mostly includes developing countries. The two markets together account for 15% of the global population. This cooperation has vast potential, in particular because the ASEAN is still in the period of catching-up growth with an economy of an average 5% increase.^[1]

The Association of Southeast Asian Nations

In 1967 the 5 founders (Indonesia, Malaysia, Singapore, the Philippines and Thailand) came to the decision to unite in order to stop the Communist ideology in the region. This collaboration was realised in the form of loose inter-governmental cooperation, with the primary aim of maintaining the stability of the region and preventing political radicalisation.^[2] In the subsequent years the organisation expanded to 10 members with the joining of the CVLM countries (Cambodia, Vietnam, Laos, Myanmar) and Brunei. In the 1990s, however, China’s rising and the Asian financial crisis led the members towards tighter closer cooperation.^[3] In 2015 the ASEAN Economic Community was established, representing much looser cooperation than its European version and aiming to provide the four freedoms (the free flow of goods, services, people and capital). In the future the cooperation will be extended and deepened in accordance with the three pillars specified in the document entitled ASEAN Blueprint 2025 (community vision, political and security as well as socio-cultural).^[4]

Decision-making in an ASEAN way

The defining feature of ASEAN is that its strength lies in the informal processes. In the beginning the founding fathers laid down two basic principles: national sovereignty is infrangible On the one hand, no community interests may overwrite the interests of the individual member states; on the other hand, no member state may intervene in the affairs of another member state by the right of “ASEAN interest”.^[5]

Unlike the European Union, there are no strong institutions that carefully prepare for, coordinates and enforce the decisions. Decision-making is based upon a consensus, which practically very often leads to indecision (we are talking about 10 very different members). If a decision is reached on any issue, the Member States themselves decide at what level they intend to implement it.^[6]

However, the ASEAN is not about decision-making but coordination. The ASEAN is a dialogue. It is a platform that brings together the appropriate leaders in appropriate circumstances in order to discuss their common affairs. This kind of operation is called “ASEAN way”. According to some ironic remarks, at ASEAN more decisions are passed on the gold course than at the negotiating table. Thanks to this, the processes of ASEAN are most slow and less transparent. As the Dean of Lee Kuan Yew School of Public Policy, Kishore Mahbubani describes, ASEAN is advancing as a crab: two steps forward, one step back, one step to the side and one step forward again.^[7] At the same time, we owe thanks to the organisation for bringing peace and development to the region for 50 years and managing focal points such as the South China Sea dispute.

ASEAN Centrality

Besides the “ASEAN way” of consultation mechanism, another frequently used descriptive term for the operation of the organisation is “ASEAN centrality”. The organisation operates in a geopolitical medium in which great powers distrust each other, mainly for historical or security reasons (China, Japan, USA, India). ASEAN is a perfect forum for the great powers to pursue a dialogue with each other, without commitment or any sensation.^[8] For the discussion of security issues, the ASEAN Regional Forum (1994) and later the ASEAN+3 dialogue with the participation of China, Japan and South-Korea (1997), the ASEAN+6 dialogue with the participation of the previous three countries and Australia, New-Zealand and India (2005), as well as the East Asia Summit with the participation of the previous six countries plus Russia and the United States of America were set up (2005).^[9] The ASEAN is about the dialogue rather than spectacular decision-making or the conclusion of agreements.

ASEAN and the European Union

The two regional organisations laid down their intent for cooperation in 1977. Since then a high-level dialogue has been organised two times a year in Europe and one time in Asia. In 1997 the two organisations alienated from each other. The EU had reservations in terms of human rights against the newly accessed ASEAN Member, Myanmar; therefore, they blocked its participation at the coming meeting in Brussels and introduced sanctions against it.^[10] The frosty relationship eased off only in 2007 and the EU and ASEAN Partnership was established. It may be the result of Catherine Ashton’s Asian opening policy that^[11] the first action plan was signed only for the period 2013-2017. Most of its 90 measures focus on the consolidation of economic cooperation, the enhancement of trade and investment, and the maintenance of peace, stability and security, and they also provide for the accreditation of a permanent EU ambassador to the ASEAN.^[12]

Economic relations

Primarily the trading relations are the most developed between the two regions.  ASEAN is the fourth most significant trading partner of the EU, while the EU is the second most significant one for ASEAN (excluding trade within ASEAN, which is the largest slice of the cake). As for the interest within the EU, the trading in goods (EUR 205 billion today) and the services (EUR 70 billion today) with ASEAN countries have nearly doubled over the past 10 years (EUR 205 billion today).^[13] Singapore is the most attractive partner in terms of both the goods and services as well as the investments. It is no wonder since it is regularly ranked high on the Ease of Doing Business index, while the remaining countries in the region are regularly listed low. It is easy to do business with Singapore. As a matter of interest: while in Singapore it takes 3 hours to complete the import documentation, in Lao PDR-ben the same procedure requires 216 hours.^[14] The ASEAN economic integration process has brought significant progress in the dismantling of tariffs and other limits between the member states; however, it

is still difficult to comprehend the Southeast Asian “noodle bowl” type of trade rules. In 2007 the EU started negotiations with the ASEAN about a free trade agreement but it soon realised that it is more efficient to make agreements with each country individually. Recently an agreement with Singapore and Vietnam has come into force, but negotiations are in process with Malaysia, Indonesia, Thailand and the Philippines, too.^[15] 

Capital investment from the EU is important to the ASEAN. Practically, investments within the region are followed by the EU as the second largest investor (16.7%), then by Japan (14.5%), the USA (11.3%) and China (6.8%). The EU capital investments are primarily directed to Singapore, while Thailand, having a higher risk owing to the weak democracy and the frequent military coups, is also a popular destination. Although statistics reveal quite a lot about the relationship of trust and confidence, according to which the EU Member States still invest more into Switzerland than the 600+ million ASEAN market as a whole.^[16]

Concerning the ASEAN outward countries, the key trading partners include the Western European countries: Great Britain, Germany, France, the Netherlands and Italy are the largest purchasers both in the trading of goods and services. In capital investments the Netherlands, Great Britain and Luxembourg attract the most capital but it mostly comes from Singapore. As for the Central European block, Hungary is the only noteworthy country as approx. 0.5% of capital investments flowing from the ASEAN was directed into our country in 2015, thanks to which we finished in sixth behind the popular Western countries.

Educational and Cultural Relations

European universities attract south-eastern youngsters; in 2014 more than 4,000 students and scholars studied with some scholarship in Europe.^[17] Since the introduction of the ERASMUS+ Program, this number has certainly risen. The EU SHARE Program is also worth mentioning since under this program the EU provides funds to the amount of EUR 10 million to the ASEAN countries to study the good practices of the European Higher Education Area (EHEA) and the Bologna process and adopt them for the establishment of a common higher education market in Southeast Asia (common recognition of degrees, mobility, etc.).^[18]

 

What can EU learn from ASEAN?

The European Union is the most developed economic integration in the world. Every year it provides support to ASEAN to the amount of USD 304 million^[20] in order to share their experience on integration. It is true that the Balkans of Asia, as C.A.Fisher British historian describes Southeast Asia, will probably never realise the European type of common market. The reason for this is diversity: Southeast Asia is the home to four civilisations (Jewish-Christian, Chinese-Confucian, Islam, Hindu-Buddhist). The nations that are diverse in terms of religion, culture, language and ethnicity would be reluctant to give up their sovereignty in favour of the community. However, they can learn good solutions from Europe in the fields of sustainable consumption, climate change, healthcare, the protection of human rights, good governance, etc. We speak less of what the EU could learn from the ASEAN. Therefore, let me take three examples of this, based on the ASEAN’s birthday greetings by the Dean of Lee Kuan Yew School of Public Policy, Kishore Mahbubani.^[21]

Engagement instead of isolation. The EU frequently imposes economic sanctions if they have any reservations against the values of their partners (in terms of human rights, democracy etc.). The last time sanctions were introduced against Russia owing to the Ukrainian conflict; however, it had become isolated from Thailand (military coup) and Myanmar (coup and minority rights) in the ASEAN region earlier. Ethically, the sanctions seemed to be right; however, they are not working in practice. The Member States evade them as much as they can since their economic interests are adverse. They do not help the conditions of the partner country.

On the contrary, ASEAN successfully applied the means of engagement in their problematic geopolitical relations. An example of this is the system of ASEAN Pluses (Plus 3 and Plus 6), with meetings ensuring regular dialogues with the geopolitical great powers of the region. Another example is the accession of Vietnam (1995) and Myanmar (1997) to ASEAN. These two countries are politically unstable, economically isolated and have suffered from the crisis of values. Still, the founders of ASEAN decided that they would imply a risk on regional peace and development if they stay outside than if they are admitted to the community and pursued a dialogue with. But behold me, Myanmar ended 50 years of years of military dictatorship in 2015 and held the first democratic elections,^[22] while the economy of Vietnam was becoming more and more open, and today it produces an average growth of 6% annually. Finally, Chinese cooperation can be a good example of commitment. China deeply condemned the establishment of the ASEAN in the 1960s (remember that it was launched as an anti-communist block), while thirty years later it became a dialogue partner within the frames of the ASEAN+3  and it was the first great power to sign a free trade agreement with the ASEAN (2010).

Pragmatism. It is difficult to compare the organisational systems of two regional communities since they serve different purposes. By way of illustration, the annual budget for operating the EU’s institutional system is 8,000 times larger than the budget of the ASEAN Secretariat, although the EU has a lower number of citizens.^[23] However if we strictly consider the operation, the operation of the EU includes several elements which serve ideological purposes but have no practical aspects. An example of this is multilingualism. The EU uses 24 working languages, while the ASEAN only one. If the EU also used only English as a working language, it could use 1 billion euros annually. A similar example is the sessions of the European Parliament in Strasbourg, although this latter amounts to only EUR 140 a year.^[24] Another example of the pragmatism of the ASEAN is that it has always applied the principle of gradualness in the integration steps, while the advantages of multi-speed integration were admitted by the EU only with lots of difficulty. The idealistic optimism of the EU gains the victory even if no rules are laid down concerning the withdrawal from the eurozone or the European Union

Cooperation with the Islamic world. The strongest Member of ASEAN is Indonesia. 90% of its 220 million citizens are Muslim, still, it established excellent cooperation with the other Member States. It should be added that the Southeast Asian moderate Islam differs from the Near Eastern variant; however, Indonesia can still teach plenty of things to the European Union. Similarly, ASEAN can teach the EU about diversity, tolerance and peacekeeping, even if not everything can be perfect here either.^[25]

A parting thought

EU-ASEAN cooperation is an “unexploited opportunity” of the past 40 years. Will the fourth industrial revolution, the freer flow of persons, knowledge and technology bridge the geographical distance and all the differences? Will the stakeholders of the two region value the opportunity in working together?

 

References

[1] HA, Hoang Thi; THUZAR, Moe; BASU DAS, Sanchite; CHALERMPALANUPAP, Termsak. Diverging Regionalism: ASEAN and the EU. In: ASEAN Focus. Special Issue. August 2016. ISEAS-Yusof Ishak Institute. ASEAN and the EU in Perspective: Brexit and Beyond.

[2] MAHBUBANI, Kishore; SNG, Jeffrey. The ASEAN Miracle. A Catalist for Peace. NUS Press, Ridge Books Singapore. 2017. P 51.

[3] YEO, Lay Hwee; HURRELL Andrew. The Aspirations of ASEAN in the Political and Cultural Context: Constraints and Potential. NUS Center for International Law. https://cil.nus.edu.sg/wp/wp-content/uploads/2016/08/SD_Executive-Summary-Yeo-Hurrell.pdf (09.08.2017)

[4] ASEAN Secretariat website. http://asean.org/asean-economic-community/ (07.08.2017)

[5] The Economist. Is the ASEAN Way the Right Way? Extracted from a presentation by Professor Danny Quah, Director, Saw Swee Hock Southeast Asia Centre, London School of Economics. 28.07.2015 http://aseaninsight.economist.com/2015/07/28/is-the-asean-way-the-right-way/ (09.08.2017)

[6] BLIZKOVSKY, Petr; MERINO, Alberto De Gregorio. Asean and the European Union: From Strong Regional Integration to Closer External Links. International Journal of Asia Europe Relations. Volume 2, Number 1. January 2016. 42-63.

[7] MAHBUBANI, Kishore; SNG, Jeffrey. The ASEAN Miracle. A Catalist for Peace. NUS Press, Ridge Books Singapore. 2017. P 5.

[8] YEO, Lay Hwee. How should ASEAN engage the EU? Reflections on ASEAN’s external relations.

EU Centre in Singapore. Working Paper No. 13, April 2013

[9] MAHBUBANI, Kishore; SNG, Jeffrey. The ASEAN Miracle. A Catalist for Peace. NUS Press, Ridge Books Singapore. 2017. P 75.

[10] MAHBUBANI, Kishore; SNG, Jeffrey. The ASEAN Miracle. A Catalist for Peace. NUS Press, Ridge Books Singapore. 2017. P 112.

[11] YOUNGS, Richard. Keeping EU-Asia Reengagement on Track. Carnegie Endowment for International Peace. 2015. Brussels. http://carnegieeurope.eu/2015/01/13/keeping-eu-asia-reengagement-on-track-pub-57698 (10.08.2017)

[12] BLIZKOVSKY, Petr; MERINO, Alberto De Gregorio. Asean and the European Union: From Strong Regional Integration to Closer External Links. International Journal of Asia Europe Relations. Volume 2, Number 1. January 2016. 42-63.

[13] Eurostat. 40 Years of EU-ASEAN Cooperation. Key Statistics. Luxembourg: Publications Office of the European Union, 2017. https://eeas.europa.eu/sites/eeas/files/eurostat_-_40_years_of_eu-asean_cooperation_-_key_statistics_2017.pdf

[14] World Bank. Ease of Doing Business Indicators. Trading across borders indicators. http://www.doingbusiness.org/data/exploretopics/trading-across-borders (10.08.2017)

[15] 40 Years of EU-ASEN Partnership and Prosperity. Trading and Investing Together. Mission of the European Union to ASEAN. Jakarta. 2017.

[16] YOUNGS, Richard. Keeping EU-Asia Reengagement on Track. Carnegie Endowment for International Peace. 2015. Brussels.

[17] H.E. Ambassador Luc Vandebon. The EU Relationship with ASEAN. AEI Occasional Paper 23.

Asia-Europe Institute, University of Malaya, Kuala Lumpur, Malaysia. 2014.

[18] H.E. Ambassador Luc Vandebon. The EU Relationship with ASEAN. AEI Occasional Paper 23.

Asia-Europe Institute, University of Malaya, Kuala Lumpur, Malaysia. 2014.

[19] ASEM DUO Program website. http://www.asemduo.org/01_about/about_01.php (08.08.2017)

[20] OECD Development Co-operation Directorate

[21] KISHORE, Mahbubani. Can the EU Learn Lessons From ASEAN? 08.08.2017. http://www.mahbubani.net/articles%20by%20dean/can-the-eu-learn-lessons-from-asean.pdf

[22] FISHER, Jonah. Myanmar’s 2015 Landmark Elections Explained. BBC. 03.12.2015. http://www.bbc.com/news/world-asia-33547036 (10.08.2017)

[23] MAHBUBANI, Kishore; SNG, Jeffrey. The ASEAN Miracle. A Catalist for Peace. NUS Press, Ridge Books Singapore. 2017. P 188.

[24] MENDICK, Robert. Tha Farce of the EU Travelling Circus. The Telegraph. 11.01.2014  ttp://www.telegraph.co.uk/news/worldnews/europe/10565686/The-farce-of-the-EU-travelling-circus.html (10.08.2017).

[25] SPANDLER, Kilian. What Can ASEAN Teach the EU? The Diplomat. 21 January, 2017.

http://thediplomat.com/2017/01/what-can-asean-teach-the-eu/ (10 August 2017.)

 

 

PICTURES

Source of cover photo: Mission of the European Union to ASEAN. https://eeas.europa.eu/delegations/association-southeast-asian-nations-asean_en

Picture 1. Comparison of EU and ASEAN. Own edition. Source of data: 40 Years of EU-ASEAN Partnership and Prosperity. Trading and Investing Together. Mission of the European Union to ASEAN. 2017. www.eeas.europa.eu/asean

Picture 2. The economic size of ASEAN. Source: ASEAN Secretariat. AEC at a Glance 2015. http://asean.org/storage/2015/11/AECat-a-glance-2016_web_version2.pdf

Picture 3. Az EU és ASEAN top kereskedelmi partnerei. Forrás: 40 Years of EU-ASEN Partnership and Prosperity. Trading and Investing Together. Mission of the European Union to ASEAN. Jakarta. 2017. www.eeas.europa.eu/asean

Picture 4. Ranking by Ease of Doing Business. Own edition. Source of data: World Bank Ease of Doing Business ranking. 2016.

Picture 5. The total trade in goods of the ASEAN countries with EU 28 countries. Source of data: Eurostat. 40 Years of EU-ASEAN Cooperation. Key Statistics. Luxembourg: Publications office of the European Union, 2017. https://eeas.europa.eu/sites/eeas/files/eurostat_-_40_years_of_eu-asean_cooperation_-_key_statistics_2017.pdf

Picture 6. The breakdown of EU capital investments by the ASEAN country. 2015. Own edition. Source of data: Eurostat. 40 Years of EU-ASEAN Cooperation. Key Statistics. Luxembourg: Publications Office of the European Union, 2017.  https://eeas.europa.eu/sites/eeas/files/eurostat_-_40_years_of_eu-asean_cooperation_-_key_statistics_2017.pdf