ASEAN Economic Cooperation and Integration: Progress, Challenges, and Future Directions by Siow Yue Chia and Michael G. Plummer (review)

This book provides a comprehensive overview of economic cooperation and integration in ASEAN through law since its early days. Chapters 1 to 3 give an introduction to the regional organization and a summary of broad economic indicators of its members, such as growth, population, trade and direct investment. While the first three chapters contain factual and statistical information on ASEAN, the subsequent three contain the core analyses of the book, which starts with the history of economic cooperation and integration among Southeast Asian economies (Chapter 4). This chapter includes an assessment of measures undertaken before the inception of the ASEAN Economic Community (AEC), borrowing from previous studies and in particular, from a book by the former ASEAN Secretary-General, Rodolfo Severino. Chapter 5 discusses initiatives that have been introduced in the AEC and Chapter 6 suggests possible directions for integration.

There are two issues worth mentioning related to the book. First, various initiatives related to economic cooperation and integration launched as part of the AEC are not new concepts in ASEAN. In fact, they were introduced many decades ago, including preferential trade agreements like the ASEAN Free Trade Area (AFTA, 1992) and other forms of economic cooperation such as the ASEAN Industrial Joint Venture (AIJV, 1983), Brand-to-Brand Complementary (BBC, 1988) and the ASEAN Industrial Cooperation (AICO, 1996). These agreements have not been substantially utilized as they were driven largely by common external threats to the region, such as the reintegration of China and India into global markets in the late 1980s and early 1990s as well as the initiation of free trade agreements in North America and Europe. Most of these were reactive responses to keep up the perception that Southeast Asian countries are attractive investment locations for multinationals, instead of actually promoting intra-ASEAN trade and investment. As a consequence, these agreements have been implemented slowly. Often, there has been a reluctance among governments in member countries to implement ASEAN-initiated policies.

Second, the book discusses in detail initiatives that are part of the AEC and how each has been implemented. In particular, the authors use the AEC scorecards — the main tool used to measure the extent to which AEC goals have materialized — as an example of an ASEAN initiative and discusses elements included and excluded in the scorecards. The key finding from the authors’ analysis is while the scorecards can inform us of the extent to which the AEC has been implemented, they fail to expound on implementation problems in reaching these goals. Another shortcoming of the scorecards is that full implementation of all items in the AEC blueprint does not imply that economic integration is fully achieved. Regardless, the scorecards provide needed information to formulate expectations on the actual effect of the AEC to strengthen market-driven economic integration in Southeast Asia.

The last chapter of the book presents the authors’ opinion on what ASEAN members can do to enhance economic cooperation and integration. Three possible areas are raised for discussion. They include: formulating a customs union among ASEAN members; governing flows of unskilled workers; and being active in regional initiatives like the Regional Comprehensive Economic Partnership (RCEP). There is no doubt that these are upcoming challenges for the regional bloc. Among them, a proposal to create a custom union out of the AEC seems less convincing, at least to me. Given the vast gap among ASEAN members in many aspects including economic development, policy ideology and living standards, it would be unlikely to see ASEAN members come together to set up a custom union in the foreseeable future.

The suggestion on governing the flow of unskilled workers seems like a more plausible area of cooperation. ASEAN has countries that import and export workers and their intra-regional flow is increasingly important. Malaysia is the largest importing country followed by Thailand, whereas Indonesia and newer members like Myanmar, Cambodia, and Laos are increasingly exporting their...