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April 23, 2013

Southeast Asian Nations Aim to Restore Unity at Annual Summit

by Daniel Schearf

Leaders of Southeast Asia are gathering in Brunei this week for an annual summit of the Association of Southeast Asian Nations. The regional group is trying to move forward with plans for economic integration and repair divisions about disputed territory with China in the South China Sea.

ASEAN has set a deadline to form an economic community, similar to the European Union, by the end of 2015.

Although countries have reduced many tariffs in anticipation of the merger, some analysts question whether the region will be fully prepared to handle the freer flow of goods, services and labor.

Rodolfo Severino, a former ASEAN secretary general and now heads the ASEAN Studies Center at the Institute of Southeast Asian Studies in Singapore, cautions those who say economic integration is moving too slowly.

"Some people are very impatient. They consider ASEAN should immediately transform its own domestic processes to achieve economic integration. Well, it's not going to happen," he said.

Southeast Asian countries have recorded solid economic growth despite the global slowdown.  But there are concerns whether the region’s highly developed economies, such as Singapore and Brunei, can successfully integrate with nations only recently opening up to outside investment and foreign trade, such as Laos and Burma.

ASEAN members also include Cambodia, Indonesia, Laos, the Philippines, Thailand and Vietnam.

Repairing divisions

ASEAN leaders are also expected to work on repairing divisions that surfaced during last year's meetings in Phnom Penh.

Host Cambodia sided with China to prevent a statement of concern about Beijing's aggressive claims on territory in the South China Sea.

It was the first time in ASEAN's 45-year history that it failed to issue a chairman's statement outlining the group consensus.

China claims almost all of the South China Sea, putting it in conflict with overlapping claims by Taiwan as well as Brunei, Malaysia, the Philippines and Vietnam.

"Last year was a set-back for ASEAN in terms of its division.  But, this year, as we can see from the outcome from the result of the ASEAN foreign ministers' meeting preparing for the summit, we can see that ASEAN has come up with a common position once again," said Prapat Thepchatree, director of Bangkok's Center for ASEAN Studies at Thammasat University

ASEAN foreign ministers meeting in Brunei, earlier this month, agreed to pursue dialogue with China on a Code of Conduct in the South China Sea.

China has asserted its claims for the South China Sea's rich mineral, oil and fishing grounds by increasing patrols and escorts for its fishing fleets. The ships’ excursions regularly raise regional tensions.

ASEAN wants a legally binding agreement to discourage such aggressive moves. It would replace a ten-year pledge by the claimants not to cause conflict, known as the Declaration of Conduct.

Despite the ongoing territorial tensions, political analysts say ASEAN host Brunei is likely to return to the tradition of consensus and instead focus on agreements related to economics and trade.

Regional Comprehensive Economic Partnership

Although last year's ASEAN summits in Cambodia were marred by tensions with China, one success was a free trade initiative known as the Regional Comprehensive Economic Partnership.

The RCEP is considered a rival to the U.S.-led Trans-Pacific Partnership as they both include ASEAN members Brunei, Malaysia, Singapore and Vietnam as well as Australia, New Zealand, Japan, and Korea.

But, unlike the TPP, the RCEP includes China, the world's second largest economy and biggest trading nation.

Political analyst Prapat dismisses suggestions the rival agreements are proxy trade wars between China and the U.S.

"You can see that the U.S. is the core of the TPP, is the leader of the TPP, this is very clear.  But, for the ASEAN FTA, it is not very clear that China is going to be the leader of the ASEAN FTA.  But, instead, ASEAN is going to be the core.  ASEAN [is] going to be on the driver's seat of the ASEAN FTA," said Prapat.

The RCEP grouping includes nations that account for some three billion people, with a combined gross domestic product of some $20 trillion. The agreement will cover trade in goods and services, processes for resolving disputes, protecting intellectual property rights and other issues.